Process: 181/2016-T

Date: October 10, 2017

Tax Type: Selo

Source: Original CAAD Decision

Summary

This CAAD arbitration decision (Process 181/2016-T) addresses the application of stamp duty under Verba 28.1 of the TGIS to building land with a taxable property value exceeding €1,000,000. The taxpayer, a limited company, challenged stamp duty assessments totaling €18,764.00 for 2014 on a property registered as land for construction with residential building approval. The central legal dispute concerns whether land qualifies as 'building land' under Verba 28.1 when construction permits have lapsed or building potential lacks proper administrative documentation required by Article 6(3) of the CIMI Code. The taxpayer argued that despite the property's registration as building land, it did not meet the legal and administrative requirements on the relevant tax date (31 December 2014), making the stamp duty levy illegal. The Tax Authority contended that the property's registration as building land, combined with a taxable value corresponding to the building viability permitted by the Municipal Master Plan (PDM) and confirmed by municipal authorities, justified the tax assessment under Verba 28.1 TGIS, which applies to building land for housing purposes with values at or above €1,000,000. The initial arbitral decision of 11 October 2016 ruled against the taxpayer, maintaining the stamp duty assessments and the dismissal of the administrative complaint. However, this decision was subsequently declared null by the Administrative Court (TCA South) on 23 March 2017, and the case was reopened at CAAD for a new decision. This case illustrates the complexities of applying stamp duty provisions to building land and the importance of proper administrative documentation in determining tax liability.

Full Decision

ARBITRAL DECISION

I – REPORT

A… Ltd., CF[1]…, with registered office at Rua…, …–…, …, filed a request for arbitral pronouncement, pursuant to the provisions of paragraph a) of no. 1 of article 2, of no. 1 of article 3 and of paragraph a) of no. 1 of article 10, all of the RJAT[2], requesting the ATA[3], for the purpose of reviewing the legality of tax acts for the levy of stamp duty, for the year 2014, relating to the ownership of an immovable property (land for construction) registered in the matrix under urban article no. … of the parish of …, area of the SF[4] of …, as per attached property schedule, concerning the 1st and 2nd instalments, collection notes 2015… and 2015…, demonstration of stamp duty levy no. 2015…, to which corresponds the demonstration of account settlement no. 2015…, all in the total amount of € 18,764.00.

This was done without exercising the option of designating an arbitrator, and came to be accepted by His Excellency the President of the CAAD[5] and automatically notified to the ATA on 23/03/2016.

Pursuant to the terms and for the purposes of the provisions of no. 2 of article 6 of the RJAT by decision of His Excellency the President of the Deontological Council, duly communicated to the parties, within the legally applicable periods, on 18/05/2016, arbitrator of the tribunal Arlindo José Francisco was designated, who communicated acceptance of the charge within the legally established period.

The tribunal was constituted on 03/06/2016 in accordance with the provisions contained in paragraph c) of no. 1 of article 11 of the RJAT, in the wording introduced by article 228 of Law no. 66-B/2012, of 31 December.

With its request, the petitioner seeks the annulment of stamp duty, for the year 2014, as per the collection notes referred to, concerning the immovable property identified whose VPT[6] is greater than € 1,000,000.00, as well as of the Order of dismissal that fell upon the administrative complaint duly filed against the aforementioned tax levy acts.

It supports its position, in summary, that on 31 December 2014, in light of the wording of item 28.1 of the TGIS[7] introduced by Law 83-C/2013 of 31 December, the property in question did not meet the legal and administrative requirements provided for in no. 3 of article 6 of the CIMI[8].

Notwithstanding the property registration as land for construction, its building potential is not documented by the documents and administrative authorizations provided for in no. 3 of article 6 of the CIMI.

Thus, the taxation provided for in the aforementioned item 28.1 of the TGIS could not be applied, whereby the tax levy acts placed in question herein are afflicted with the defect of illegality, due to error on the factual and legal premises.

For the same reasons imputed to the tax levy acts, the order dismissing the administrative complaint is equally illegal and therefore should be annulled.

In its response the ATA, also in summary, states that the fact that the petitioner abandoned the construction of the multifamily building does not have the ability to interfere with the validity of the property registration under article …, as land for construction, but rather to the contrary, given that the VPT registered therein corresponds to the building viability permitted by the PDM[9] of the property area, which was confirmed by information from the Municipal Council of … .

Item 28.1 of the TGIS, with the wording of 83-C/2013, now clearly applies to lands for construction whose authorized or planned building use is for housing, provided that the VPT is equal to or greater than € 1,000,000.00, as is the case.

Concluding that the challenged tax levy act corresponds to a correct application of the Law, as well as the order dismissing the administrative complaint, should be maintained, and the respondent absolved of the claim, with all legal consequences.

II - SANITATION

The tribunal was regularly constituted, the parties have legal standing and capacity, show themselves to be legitimate and are regularly represented in accordance with articles 4 and 10, no. 2 of the RJAT and article 1 of Ordinance no. 112-A/2011, of 22 March.

In the response to the ATA it raised the exemption from the meeting provided for in article 18 of the RJAT, and, on 27/08/2016, the tribunal issued the following order: "The ATA requested exemption from holding the meeting provided for in article 18 of the RJAT, notify the petitioner, to within 10 days, if it so wishes, pronounce itself on the respondent's request. Within the same period the parties shall declare whether or not they intend to produce written or oral arguments".

It issued on 22/09/2016 a new order: "In light of the order of 27/08/2016 and the silence of the parties as to its content, the tribunal exempts the holding of the meeting provided for in article 18 of the RJAT, as well as the production of oral or written arguments and considers the conditions met to issue a decision, fixing the day 11/10/2016 for its pronouncement. The petitioner is warned of compliance with the rule provided for in no. 3 of article 4 of the RCPAT[10]".

The Tribunal issued a decision on 11 October 2016 in which it declared the request for arbitral pronouncement unfounded, maintaining the stamp duty levies placed in question and the order of dismissal of the administrative complaint.

This decision was declared null, as per the Judgment of 23 March 2017, of the TCA[12] of the South and ordered the return of the files to the CAAD, which, in turn, reopened the case and notified the tribunal, on 07/09/2017, of the reopening.

Although article 23 of the RJAT considers the tribunal dissolved with the notification to the parties of the archival of the files, after notification of the decision, the fact is that, once the decision was annulled and the reopening of the case notified, we understand there to be a new constitution ex novo of the tribunal and, taking into account that the position of the parties is perfectly defined and supported by the evidentiary means already contained in the files, the tribunal issued an order on 23 September 2017, fixing the date for the pronouncement of the decision.

Thus, the case not being afflicted with nullities, it is incumbent to decide.

III- GROUNDS

1 – The matters to be resolved, with interest for the files, are the following:

To determine whether the stamp duty levy acts placed in question here are afflicted with illegality or not and to draw the respective consequences.

Similarly, to evaluate the order dismissing the administrative complaint and to declare or not its annulment.

2- Statement of Facts

The petitioner acquired by deed of 04/04/1984 a rural property at the location of … of the parish and municipality of …, with an area of 24,720 square meters, described in the registry of … under the article under no. … of Book–B6 and registered in the respective rural matrix of the parish of …, under the rural articles … (1/4), …, …, …, …, … and … .

On 26/07/2016, the petitioner submitted to the Municipal Council of … a request for issuance of an administrative license, for the purpose of constructing a residential multifamily urban building to be implemented in part of the aforementioned rural property, as per Pº …/2006.

By letter of 29/11/2007, the petitioner was notified of the approval, in general, of the aforementioned project, conditioned on the obligation to present the specialty project designs necessary for the execution of the work.

In light of such approval, the petitioner submitted, on 10/01/2008, via internet a model 1 declaration of IMI[13] for registration of a parcel of land for construction with an area of 13,197.90 m² to be divided from the rural property registered under article … of the parish of … already referred to, attaching a certificate issued by the Municipal Council of … on 17/12/2007, evidencing the division and that it met the requirements imposed by nos. 4 and 6 of article 6 of Decree-Law 555/99 of 16 December, in the wording given by Decree-Law 177/2001 of 4 June.

It also attached a location plan and a draft design for construction of a multifamily building (82 units) with 7 floors, including cellars, with the stamp of the Municipal Council of … evidencing that the licensing process had been approved at a Municipal Council meeting on 28/11/2007.

The divided parcel was registered in the urban property matrix of the parish of … under article …, as land for construction, in accordance with the terms declared and documents submitted by the petitioner, with the area of the rural property remaining unchanged in the matrix due to the delay justified by the need for intervention of the IGC[14].

The construction license was never issued, with the petitioner allowing the procedure to lapse, by not submitting, within the 6-month period granted, the specialty project designs.

In light of the administrative complaint from the petitioner, aimed at eliminating article …, corresponding to the parcel of land divided, the SF of …, on 12/03/2014, requested from the petitioner a certificate evidencing that there was construction infeasibility on the parcel or that it had been reduced, for the purpose of evaluating the aforementioned request for elimination.

By letter … the Municipal Council of …, received on 26 February 2015, at the SF of …, communicated that the land in question not only was located in a urbanizable zone, classified in the land use plan of the PDM of …, Urban Expansion Zone 4 (Z4) being applicable to it the coefficients established in article 45 no. 3 paragraph a) of the PDM regulations of …, but confirmed the non-existence of any construction infeasibility, quite to the contrary.

On 08/07/2015, a 2nd appraisal of the land was conducted, with the respective report stating that, upon visiting the site, it was verified that on the land in question there is no construction whatsoever, that the project approved at the Municipal Council meeting on 28/11/2007 was archived by order of 07/02/2014 due to abandonment of the licensing process, with the taxpayer having submitted a right to information request where the soil occupation coefficients applicable to the land in question are verified, as per the PDM of …, being consequently altered the values of the implantation area and the gross construction area and the consequent alteration of the VPT to € 1,876,400.00.

The stamp duty in arrears of € 18,764.00 was not paid, with the respective PEF's[30] suspended.

The statement of facts considered proven has its origin in the documents attached to the files whose authenticity was not put in question, neither by the tribunal nor by the parties.

There is no factuality given as unproven that is relevant to the decision.

– Statement of Law

The Judgment of the TCA of the South, already referred to, considered unfounded the defect of contradiction between the factual grounds and the decision, invoked in the challenge, having considered founded the lack of specification of the factual and legal grounds that justified the challenged decision adduced by the petitioner, with the consequent declaration of nullity of the challenged decision.

In light of the statement of facts proven, it is important to make its legal framework, with a view to deciding whether or not we are in the presence of land for construction and consequently on the legality or illegality of the levies in question.

Pursuant to the terms of paragraph u) of article 5 of the CIS[15] the tax obligation of stamp duty is deemed to be constituted, in the case of the situations provided for in item 28 of the TGIS at the moment and in accordance with the rules provided for in the CIMI.

Item 28 of the TGIS, in the wording of Law 83-C/2013, subjects stamp duty to "ownership, usufruct or right of superficies of urban properties whose VPT contained in the matrix, pursuant to the CIMI, is equal to or greater than € 1,000,000.00" and item 28.1 highlights two categories of properties that are covered by the tax: "residential urban properties and lands for construction whose authorized or planned building use is for housing, pursuant to the CIMI".

In the petitioner's view the property in question does not meet the requirements to be considered land for construction pursuant to the CIMI.

The concept of land for construction is contained in no. 3 of article 6 of the CIMI, which is transcribed: "lands for construction are those situated within or outside an urban agglomeration, for which a license or authorization of subdivision or construction operations has been granted, and also those that have been declared as such in the acquisition title, with the exception of lands where the competent entities prohibit any of those operations, namely those located in green areas, protected areas or which, in accordance with municipal land planning plans, are allocated to public spaces, infrastructure or facilities".

Let us then examine:

The property subject to the challenged levy is classified and described in the respective matrix under article … of the parish of …, as land for construction, as such declared by the petitioner, pursuant to the model 1 IMI declaration, duly presented, together with a location plan, a copy of the approved construction design for a multifamily building and a certificate from the Municipal Council of … evidencing the division of the parcel from the parent property and that it met the requirements imposed by nos. 4 and 6 of article 6 of Decree-Law 555/99 of 16/12, in the wording given by Decree-Law 177/2001 of 4 June.

The municipal council's construction authorization, delivered by the petitioner to the SF of …, is sufficient to classify "the land for construction" without the need for issuance of a license, pursuant to the normative in question.

The Municipal Council of … communicated to the SF of … that the land in question is located in a space classified in the land use plan of the PDM of …, as a urbanizable zone, being applicable to it the coefficients established in article 45 no. 3 paragraph a) of the PDM regulations of … .

It is the tribunal's conviction that the property in question, at the time of levy, met the requirements to be classified as land for construction and was thus registered in the respective matrix.

However, it is not sufficient that the property is classified as land for construction for its taxation in stamp duty to occur; items 28 and 28.1 of the TGIS which are transcribed: Item 28 "Ownership, usufruct or right of superficies of urban properties whose taxable patrimonial value contained in the matrix, pursuant to the Property Tax Code (CIMI), is equal to or greater than € 1,000,000.00- based on the patrimonial value for purposes of IMI": 28.1 "Residential property or land for construction whose building, authorized or planned, is for housing, pursuant to the provisions of the Property Tax Code 1%".

The aforementioned norms impose that the requirements provided for in the aforementioned items are met, that is, that the VPT of the immovable property in question be equal to or greater than € 1,000,000.00 and that the building use planned or authorized thereon be for housing.

As to the VPT (€ 18,764.00) there is no doubt whatsoever that its value is greater than that provided for in the norm (item 28 of the TGIS).

But, for taxation to occur, it is not sufficient that the property be classified as land for construction and the VPT be equal to or greater than € 1,000,000.00; it is also necessary that the building use planned or authorized be for housing pursuant to the CIMI.

No. 3 of article 6 of the CIMI merely classifies the category of lands for construction, making no distinction regarding the type of building use planned or authorized for them. However, no. 2 of the same article of the CIMI, which is transcribed: "Residential, commercial, industrial or for services are buildings or structures licensed for such purposes or, in the absence of a license, that have as their normal purpose each of these uses", as well as no. 2 of its article 45, which is also transcribed: "the value of the implantation area varies between 15% and 45% of the value of authorized or planned buildings", which allows us to conclude that there will be residential use when the planned or authorized building use has that purpose.

And in what circumstances does land for construction have a building use planned or authorized for residential purposes?

The authorization of the building use must be requested from the competent municipal council services and be granted. In the case at hand, a request was made for issuance of an administrative license, for the purpose of constructing a residential multifamily urban building to be implemented in part of the aforementioned rural property, as per Pº …/2006, which was authorized, with the procedure lapsing due to a fact attributable to the petitioner, since it did not submit, within the granted period, the specialty project designs. It is concluded that despite the authorization, the license was not issued, as already seen, due to sole responsibility of the petitioner.

Will there be a planned building use? A plan may or may not be realized and both hypotheses are, in our view, addressed in the provision of the norm of item 28.1 of the TGIS; what mattered to the legislator was the plan for building use at the moment of taxation, regardless of its future realization.

In the concrete case, the municipal council services not only authorized the construction of a residential multifamily urban building, but also confirmed to the SF of … that the land in question is located in a space classified in the land use plan of the PDM of …, with a urbanizable zone, being applicable to it the coefficients established in article 45 no. 3 paragraph a) of the PDM regulations of … .

The tribunal therefore understands that, at the time of taxation, the plan for residential building use was maintained, which may or may not come to be realized, there was only no granted authorization due to a fact attributable to the petitioner who allowed the procedure to lapse, but from the analysis made of the normative, the plan is sufficient for taxation in stamp duty.

It is thus concluded that the property in question is land for construction, pursuant to no. 3 of article 6 of the CIMI, with VPT equal to or greater than € 1,000,000.00, as required by item 28 of the TGIS and that at the time of the challenged levy it was foreseeable that the residential building use required in item 28.1 of the TGIS would occur.

From this perspective the stamp duty levy acts placed in question here should be maintained in the legal order, by not being afflicted with any illegality, just as the order dismissing the respective administrative complaint should be maintained.

IV DECISION

In light of the foregoing, the tribunal decides as follows:

Declare the request for arbitral pronouncement unfounded, maintaining the stamp duty levies placed in question herein, as well as maintain the order dismissing the administrative complaint.

Fix the value of the case at € 18,764.00 in accordance with the provisions contained in article 299, no. 1, of the CPC[16], article 97-A of the CPPT[17], and article 3, no. 2, of the RCPAT.

Fix the costs, pursuant to no. 4 of article 22 of the RJAT, in the amount of € 1,224.00 in accordance with the provisions of Table I referred to in article 4 of the RCPAT, which are charged to the petitioner.

Notify

Lisbon, 10 October 2017

Text prepared by computer, pursuant to article 131, no. 5 of the CPC, applicable by referral of article 29, no. 1, paragraph e) of the RJAT, with blank lines and reviewed by the tribunal.

The arbitrator

Arlindo José Francisco

Arbitral Decision replaced by the decision of 10 October 2017.

Arbitral Decision

I – REPORT

A…, CF[18]…, with registered office at Rua…, …–…, …, filed a request for arbitral pronouncement, pursuant to the provisions of paragraph a) of no. 1 of article 2, of no. 1 of article 3 and of paragraph a) of no. 1 of article 10, all of the RJAT[19], requesting the AT[20], for the purpose of reviewing the legality of tax acts for the levy of stamp duty, for the year 2014, relating to the ownership of an immovable property (land for construction) registered in the matrix under urban article no. … of the parish of …, area of the Financial Services of …, as per attached property schedule, concerning the 1st and 2nd instalments, as per collection notes 2015… and 2015…, demonstration of stamp duty levy no. 2015…, to which corresponds the demonstration of account settlement no. 2015…, all in the total amount of € 18,764.00.

This was done without exercising the option of designating an arbitrator, and came to be accepted by His Excellency the President of the CAAD[21] and automatically notified to the AT on 23/03/2016.

Pursuant to the terms and for the purposes of the provisions of no. 2 of article 6 of the RJAT by decision of His Excellency the President of the Deontological Council, duly communicated to the parties, within the legally applicable periods, on 18/05/2016, arbitrator of the tribunal Arlindo José Francisco was designated, who communicated acceptance of the charge within the legally established period.

The tribunal was constituted on 03/06/2016 in accordance with the provisions contained in paragraph c) of no. 1 of article 11 of the RJAT, in the wording introduced by article 228 of Law no. 66-B/2012, of 31 December.

With its request, the petitioner seeks the annulment of stamp duty, for the year 2014, as per the collection notes already referred to, concerning the immovable property already identified whose VPT[22] total is greater than € 1,000,000.00, as well as of the Order of dismissal that fell upon the administrative complaint duly filed against the aforementioned tax levy acts.

It supports its position, in summary, that on 31 December 2014, in light of the wording of item 28.1 of the TGIS[23] introduced by Law 83-C/2013 of 31 December, the property in question did not meet the legal and administrative requirements provided for in no. 3 of article 6 of the CIMI[24].

Notwithstanding the property registration as land for construction, its building potential is not documented by the documents and administrative authorizations provided for in no. 3 of article 6 of the CIMI.

Thus, the taxation provided for in the aforementioned item 28.1 of the TGIS could not be applied, whereby the tax levy acts placed in question herein are afflicted with the defect of illegality, due to error on the factual and legal premises.

For the same reasons imputed to the tax levy acts, the order dismissing the administrative complaint is equally illegal and therefore should be annulled.

In its response the AT, also in summary, states that the fact that the petitioner abandoned the construction of the multifamily building does not have the ability to interfere with the validity of the property registration under article …, as land for construction, but rather to the contrary, given that the VPT registered therein corresponds to the building viability permitted by the PDM[25] of the property area, which was confirmed by information from the Municipal Council of … .

Item 28.1 of the TGIS, with the wording of 83-C/2013, now clearly applies to lands for construction whose authorized or planned building use is for housing, provided that the VPT is equal to or greater than € 1,000,000.00, as is the case.

Concluding that the challenged tax levy act corresponds to a correct application of the Law, as well as the order dismissing the administrative complaint, should be maintained, and the respondent absolved of the claim, with all legal consequences.

II - SANITATION

The tribunal was regularly constituted, the parties have legal standing and capacity, show themselves to be legitimate and are regularly represented in accordance with articles 4 and 10, no. 2 of the RJAT and article 1 of Ordinance no. 112-A/2011, of 22 March.

In the response to the AT it raised the exemption from the meeting provided for in article 18 of the RJAT, and, on 27/08/2016, the tribunal issued the following order: "The AT requested exemption from holding the meeting provided for in article 18 of the RJAT, notify the petitioner, to within 10 days, if it so wishes, pronounce itself on the respondent's request. Within the same period the parties shall declare whether or not they intend to produce written or oral arguments".

It issued on 22/09/2016 a new order: "In light of the order of 27/08/2016 and the silence of the parties as to its content, the tribunal exempts the holding of the meeting provided for in article 18 of the RJAT, as well as the production of oral or written arguments and considers the conditions met to issue a decision, fixing the day 11/10/2016 for its pronouncement. The petitioner is warned of compliance with the rule provided for in no. 3 of article 4 of the RCPAT[26]".

Thus, the case not being afflicted with nullities, it is incumbent to decide.

III- GROUNDS

1 – The matters to be resolved, with interest for the files, are the following:

To determine whether the stamp duty levy acts placed in question here are afflicted with illegality or not and to draw the respective consequences.

Similarly, to evaluate the order dismissing the administrative complaint and to declare or not its annulment.

2- Statement of Facts

The petitioner acquired by deed of 04/04/1984 a rural property at the location of … of the parish and municipality of …, with an area of 24,720 square meters, described in the registry of … under article under no. … of Book–… and registered in the respective rural matrix of the parish of …, under the rural articles … (1/4), …, …, …, …, … and … .

On 26/07/2016 the petitioner submitted to the Municipal Council of … a request for issuance of an administrative license, for the purpose of constructing a residential multifamily urban building to be implemented in a part of the aforementioned rural property, as per Pº …/2006.

By letter of 29/11/2007 the petitioner was notified of the approval, in general, of the aforementioned project, conditioned on the obligation to present the specialty project designs necessary for the execution of the work.

In light of such approval, a parcel for construction with an area of 13,197.9 square meters was divided from the rural property, registered in the urban property matrix under article … of the parish of …, leaving the rural property now with an area of 11,522.1 square meters and registered under rural article … of Section AC of the parish of … .

However, the area of the rural property was never altered, maintaining the initial area, a delay justified by the need for intervention of the IGC[27].

The administrative authorization for construction was never issued, with the procedure lapsing and coming to be archived, given that the petitioner did not request within the granted period the specialty project designs.

The petitioner submitted, on 10/01/2008, via internet a model 1 declaration of IMI[28] for registration of a parcel of land for construction with an area of 13,197.90 m² to be divided from the rural property registered under article … of the parish of … already referred to, attaching a certificate issued by the Municipal Council of … on 17/12/2007, evidencing the division.

On 12/03/2014 the SF[29] of … requested from the petitioner a certificate evidencing that there was construction infeasibility on the parcel or that it had been reduced, for the purpose of evaluating the request for elimination from the matrix of article… .

By letter … of 26/02/2015 from the Municipal Council of …, it was communicated to the SF of … that the land in question is located in a space classified in the land use plan of the PDM of …, with a urbanizable zone, being applicable to it the coefficients established in article 45 no. 3 paragraph a) of the PDM regulations of … .

On 08/07/2015 a 2nd appraisal of the land was conducted, with the respective report stating that upon visiting the site it was verified that on the land there is no construction whatsoever, that the project approved at the Municipal Council meeting on 28/11/2007 was archived by order of 07/02/2014 due to abandonment of the licensing process, with the taxpayer having submitted a right to information request where the soil occupation coefficients applicable to the land in question are verified, as per the PDM of …, being consequently altered the values of the implantation area and the gross construction area and the consequent alteration of the VPT to € 1,876,400.00.

The stamp duty in arrears of € 18,764.00 was not paid, with the respective fiscal execution processes[30] suspended.

There is no factuality given as unproven that is relevant to the decision.

– Statement of Law

In light of the statement of facts proven, it is important to make its legal framework, with a view to deciding whether or not we are in the presence of land for construction and consequently on the legality or illegality of the levies in question.

Pursuant to the terms of paragraph u) of article 5 of the CIS[31] the tax obligation of stamp duty[32] is deemed to be constituted, at the moment and in accordance with the rules of the CIMI and, on the other hand, if the provision of the norm of item 28 and 28.1 of the TGIS is verified.

Thus pursuant to no. 3 of article 6 of the CIMI, lands for construction are considered to be: "those situated within or outside an urban agglomeration, for which a license or authorization of subdivision or construction operations has been granted, and also those that have been declared as such in the acquisition title, with the exception of lands where the competent entities prohibit any of those operations, namely those located in green areas, protected areas or which, in accordance with municipal land planning plans, are allocated to public spaces, infrastructure or facilities".

In the concrete situation and according to the petitioner, a request was submitted by it to the evaluation of the Municipal Council of … for issuance of an administrative license for the purpose of constructing a residential multifamily urban building to be implemented on the land in question, having, in due course, presented the model 1 IMI declaration for the purpose of its registration in the matrix as land for construction.

It is certain that the petitioner came to request the elimination from the matrix of the respective urban article supported on the fact that there is no construction there nor is there any authorized project, however, the AT dismissed such request, justifying that it was the Municipal Council itself corroborating the land's suitability for construction, which was authorized, with the petitioner allowing the procedure to lapse by not submitting the specialty project designs, a fact that can only be imputed to it and that does not invalidate the classification of the land for construction.

In fact, the law even refers to license or authorization, whereby we understand that the issuance of the license is not necessary; it is sufficient that there be authorization; in the concrete case there was authorization, the issuance of the license will be at the discretion of the interested party.

Thus, there is no doubt whatsoever that we are faced with land for construction, not only because a construction design for a multifamily residential building was authorized, but also because it was the petitioner that, initially, declared it as such to the AT, and it is certain that the building potential is defined and has not lapsed, what has lapsed is the administrative procedure due to a fact attributable to the petitioner.

The provision of the norm of articles 28 and 28.1 of the TGIS is also verified; in fact, the petitioner owns property with a VPT equal to or greater than € 1,000,000.00, being land for construction with authorized or planned building use for housing.

From this perspective we understand that the stamp duty levy acts placed in question here are not afflicted with any illegality, insofar as we are faced with land for construction with a VPT equal to or greater than € 1,000,000.00, and therefore subject to taxation in stamp duty pursuant to item 28.1 of the TGIS.

For the same reasons, no illegality is found in the order dismissing the administrative complaint which is to be maintained.

IV DECISION

In light of the foregoing, the tribunal decides as follows:

Declare the request for arbitral pronouncement unfounded, maintaining the stamp duty levies placed in question herein, as well as maintain the order dismissing the administrative complaint.

Fix the value of the case at € 18,764.00 in accordance with the provisions contained in article 299, no. 1, of the CPC, article 97-A of the CPPT[33], and article 3, no. 2, of the RCPAT.

Fix the costs, pursuant to no. 4 of article 22 of the RJAT, in the amount of € 1,224.00 in accordance with the provisions of Table I referred to in article 4 of the RCPAT, which are charged to the petitioner.

Notify.

Lisbon, 11 October 2016

Text prepared by computer, pursuant to article 131, no. 5 of the CPC, applicable by referral of article 29, no. 1, paragraph e) of the RJAT, with blank lines and reviewed by the tribunal.

The arbitrator

Arlindo José Francisco

[1] Acronym for Tax Identification Number

[2] Acronym for Legal Framework of Arbitration in Tax Matters

[3] Acronym for Tax Authority and Customs Authority

[4] Acronym for Financial Services

[5] Acronym for Administrative Arbitration Centre

[6] Acronym for Taxable Patrimonial Value

[7] Acronym for General Table of Stamp Duty

[8] Acronym for Property Tax Code

[9] Acronym for Municipal Master Plan

[10] Acronym for Regulations on Costs in Tax Arbitration Proceedings

[12] Acronym for Central Administrative Court

[13] Acronym for Property Tax

[14] Acronym for Cadastral and Geographic Institute

[15] Acronym for Stamp Duty Code

[16] Acronym for Civil Procedure Code

[17] Acronym for Code of Tax Procedure and Process

[18] Acronym for Tax Identification Number

[19] Acronym for Legal Framework of Arbitration in Tax Matters

[20] Acronym for Tax Authority and Customs Authority

[21] Acronym for Administrative Arbitration Centre

[22] Acronym for Taxable Patrimonial Value

[23] Acronym for General Table of Stamp Duty

[24] Acronym for Property Tax Code

[25] Acronym for Municipal Master Plan

[26] Acronym for Regulations on Costs in Tax Arbitration Proceedings

[27] Acronym for Cadastral and Geographic Institute

[28] Acronym for Property Tax

[29] Acronym for Financial Services

[30] Fiscal execution processes

[31] Acronym for Stamp Duty Code

[32] Stamp Duty

[33] Acronym for Code of Tax Procedure and Process

Frequently Asked Questions

Automatically Created

Is stamp tax (Imposto do Selo) applicable to building land (terrenos para construção) with a taxable value exceeding €1,000,000 under Verba 28 of the TGIS?
Yes, stamp tax is applicable to building land (terrenos para construção) with a taxable property value equal to or exceeding €1,000,000 under Verba 28.1 of the TGIS, introduced by Law 83-C/2013 of 31 December. This provision specifically targets building land where the authorized or planned building use is for residential housing purposes. The tax applies when the property is registered as building land and its VPT (valor patrimonial tributário) meets or exceeds the €1,000,000 threshold.
What conditions under Article 6(3) of the CIMI code must be met for a property to qualify as building land subject to Verba 28.1 of the TGIS?
Article 6(3) of the CIMI Code establishes that for property to qualify as building land (terreno para construção), it must possess valid construction permits, licenses, or administrative authorizations that properly document its building potential. The taxpayer in this case argued that mere registration as building land is insufficient if these administrative requirements are not met or have lapsed. The Tax Authority countered that registration as building land, combined with a taxable value corresponding to building viability permitted by the Municipal Master Plan (PDM) and confirmed by municipal authorities, satisfies the legal requirements for stamp tax purposes under Verba 28.1 TGIS.
Can a taxpayer challenge stamp tax assessments on building land through arbitration at CAAD (Centro de Arbitragem Administrativa)?
Yes, taxpayers can challenge stamp tax assessments on building land through arbitration at CAAD (Centro de Arbitragem Administrativa). The procedure involves first filing an administrative complaint (reclamação graciosa) against the stamp tax assessment. If the complaint is dismissed, the taxpayer may file a request for arbitral pronouncement at CAAD under Articles 2(1)(a), 3(1), and 10(1)(a) of the RJAT (Legal Framework for Tax Arbitration). The arbitration tribunal is constituted with a designated arbitrator, parties submit their legal positions and evidence, and the tribunal issues a binding decision that can either annul the tax assessment or maintain it as legal.
Does the absence of valid construction permits or administrative authorizations affect the legality of stamp tax levied under Verba 28.1 of the TGIS?
This is the central legal issue disputed in the case. The taxpayer argued that the absence of valid construction permits or current administrative authorizations means the property does not meet the requirements of Article 6(3) of the CIMI Code, and therefore stamp tax under Verba 28.1 TGIS cannot be legally levied. The Tax Authority maintained that the property's registration as building land, with a taxable value reflecting building viability permitted by the Municipal Master Plan and confirmed by municipal information, is sufficient for the tax to apply. The legal question is whether formal compliance with administrative documentation requirements is necessary or whether registration and permitted building potential suffice for stamp tax purposes.
What is the procedure for filing a gracious complaint (reclamação graciosa) against stamp tax assessments and seeking annulment through CAAD arbitration?
The procedure for challenging stamp tax assessments involves two main stages: (1) Filing a gracious complaint (reclamação graciosa) with the Tax Authority against the stamp duty assessment and collection notices. This is an administrative review mechanism. (2) If the complaint is dismissed, the taxpayer may seek annulment through CAAD arbitration by filing a request for arbitral pronouncement within applicable legal deadlines, citing the relevant provisions of the RJAT. The arbitration process includes tribunal constitution, submission of written claims and responses by both parties, optional hearings, and issuance of a binding arbitral decision. The CAAD decision can be appealed to administrative courts only on limited grounds, such as procedural nullities.