Stamp Tax on Building Land (Verba 28 TGIS): CAAD Arbitration on Taxability of Plots Below €1M Per Unit

ARBITRATION DECISION

I. REPORT

A…, LDA., legal entity no. …, with registered office at Street …, no. …, …, …– … …, filed a petition for establishment of a Single Arbitral Tribunal, pursuant to the combined provisions of Articles 2 and 10 of Decree-Law No. 10/2011, of 20 January (Legal Framework for Arbitration in Tax Matters, hereinafter referred to only as RJAT), in which the Tax and Customs Authority (hereinafter TA) is Respondent, with a view to obtaining the annulment of the assessment acts No. 2017… and No. 2017…, relating to the year 2015, in the total amount of €14,535.04.

The petition for establishment of the Arbitral Tribunal was accepted by His Excellency the President of CAAD on 30 March 2017 and was automatically notified to the TA.

In accordance with the provisions of paragraph c) of Article 11(1) of the RJAT, the Single Arbitral Tribunal was constituted on 1 June 2017.

The TA responded by contesting the merits of the claim.

The meeting referred to in Article 18 of the RJAT was dispensed with, given the nature of the matter contained in the case file.

The Arbitral Tribunal is duly constituted and materially competent, pursuant to paragraph a) of Article 2(1) of the RJAT.

The parties have legal standing and capacity, are properly represented (Article 4 and Article 10(2) of the RJAT and Article 1 of Order No. 112/2011, of 22 March).

There are no nullities, exceptions, or preliminary matters that would prevent immediate consideration of the merits of the case.

II. STATEMENT OF FACTS

Based on the evidence contained in the case file, the following facts are deemed proven:

A) The Claimant is the owner of ½ of the land for construction corresponding to articles … and …, of the union of parishes of … and …, of the municipality and district of Aveiro;

B) The aforesaid land for construction has a tax patrimonial value (VPT) of €1,870,420.00, with the VPT of the portion that permits the construction of residential buildings being €1,453,481.07;

C) The Detailed Plan of the Centre (PPC), which regulates the feasibility of construction on the aforesaid land parcels, provides for the construction on each of them of 37 units under a horizontal property regime (building with 5 floors) – nos. 30 and 31 of Sector V with an area of 1,925m²;

D) On 5 January 2017, the Claimant was notified of the acts of assessment of IS No. 2017… and 2017…, relating to item 28.1 of the TGIS and to the year 2015, in the total amount of €14,535.04;

Taking into account the positions adopted by the parties, in light of Article 110(7) of the CPPT and the documentary evidence attached to the file, the aforesaid facts are deemed proven and relevant to the decision.

III. LEGAL ARGUMENT

The principal issue raised in the present case comes down to determining whether the norm contained in item 28 and 28.1 of the TGIS underlying the assessment acts sub judice is materially unconstitutional due to violation of the principle of tax equality and ability to pay.

A – THE POSITION OF THE PARTIES

The Claimant alleges in its petition for arbitral decision the following:

• Item No. 28.1 of the TGIS applies to the ownership, usufruct, or right of superficies of residential buildings or land for construction whose authorized or contemplated construction is for habitation, whose tax patrimonial value recorded in the property register is equal to or exceeding €1,000,000;

• This norm was introduced by the legislator with a view to the taxation of situations of ownership of high-value real estate and, therefore, demonstrating increased ability to pay, justifying a greater contribution to the effort of financial consolidation and budgetary balance of the State;

• As results from the discussions and presentation in the Parliament of the bill underlying this amendment to the IS Code, it forms part of a framework of "measures that effectively reinforce a just and equitable distribution of the adjustment effort across a broad and comprehensive set of sectors of Portuguese society," with item No. 28 of the TGIS having been initially created with respect to "the highest-value residential urban buildings" and extended in 2014 through the State Budget Law for that year to land for construction whose authorized or contemplated construction is for habitation;

• In this light, being the owner of a building of value equal to or exceeding €1,000,000 or being a co-owner of the same building are situations to be valued differently, since the ability to pay revealed in each of the situations is distinct;

• For this reason, the subjection of the co-owner to the IS provided for in item 28.1 of the TGIS depends on his pro-rata share having a value equal to or exceeding €1,000,000, as that is the threshold of tax relevance provided for in law;

• To this end, the co-owner must be treated the same as a single owner, in order to observe the principles of equality and ability to pay;

• The ability to pay manifested by the co-ownership of half of a land for construction with the patrimonial value of €1,000,000 is exactly equal to that of the ownership of a land for construction with the patrimonial value of €500,000;

• Thus, by subjecting the first situation to taxation and not the second, when there exists identity with respect to the ability to pay revealed, the principle of material equality is not being respected;

• In fact, there is nothing that distinguishes, in terms of ability to pay, the ownership of a land for construction with a tax patrimonial value of €500,000 – which is not taxed – from the ownership of a pro-rata share of a building to which a patrimonial value of €500,000 corresponds;

• In the present case, the claimant is a co-owner, in the proportion of ½, of the aforesaid land parcels for construction, whose tax patrimonial value is €1,870,420.00, with the patrimonial value of the portion that permits the construction of residential buildings being €1,453,481.07;

• This means that its property right corresponds, in this portion and in each of them, to an ideal pro-rata share of €726,740.54;

• If it were a single owner of a land for construction with a tax patrimonial value of €726,740.54 and whose authorized or contemplated construction was for habitation, it would not be subject to IS, because, in the legislator's view, it was not the owner of a building that reflected an increased ability to pay;

• For this reason and in light of the criterion of ability to pay and equal treatment under the law, the IS assessments at issue here represent unequal treatment of equal situations;

• It is thus necessary, in the present case, that an interpretation be made in accordance with the Constitution of the Portuguese Republic (CRP) and the aforesaid principles, in order to ensure its safeguard and prevent unequal treatment of materially equal situations;

• Such interpretation requires that, in the application of item 28 of the TGIS, ownership be treated the same as co-ownership, making the incidence of the tax, in cases of co-ownership, depend on the value of the co-owner's pro-rata share being equal to or exceeding €1,000,000, as that is the taxation criterion applicable to single owners;

• That is, in cases of co-ownership, subjection to IS must take into account the value of the pro-rata share and not the total tax patrimonial value of the property, under penalty of violation of the principles of equality and ability to pay;

For its part, the TA alleges, in summary, the following:

1. The contested assessments were based on the VPT of the land for construction in the portion destined for construction affecting habitation, authorized or contemplated;

2. Item 28.1 of the TGIS, as worded by Law No. 83-C/2013, of 31 December, provides that IS applies to: "28- the Ownership, usufruct or right of superficies of urban buildings whose tax patrimonial value recorded in the property register, pursuant to the Code of Municipal Property Tax (CIMI), is equal to or exceeding €1,000,000 - on the tax patrimonial value used for IMI purposes; 28.1- For a residential building or land for construction whose authorized or contemplated construction is for habitation, pursuant to the provisions of the IMI Code - 1%";

3. And as is known, pursuant to Article 67(2) of the IS Code as amended by Law No. 55-A/2012, of 29 October, to matters not regulated in the Code, relating to item 28.1 of the TGIS, the provisions of the IMI Code apply subsidiarily;

4. The determination of the VPT of land for construction presupposes the determination of the value of the authorized or contemplated buildings, for which purpose, pursuant to the provisions of Article 38 of the IMI Code, consideration must be given to the affectation of such buildings;

5. To this end, Article 37(3) of the IMI Code requires the presentation of the subdivision permit, or failing that, the building permit, approved project, preliminary notice, favorable prior information, or document proving constructive viability.

6. In sum, in the assessment of land for construction, account is necessarily taken of the area authorized for construction and the use to be given to such construction, that is, the characteristics of the urban building to be constructed on it, but not the VPT of the building or fraction of the building that will be constructed, as the Claimant appears to intend in Articles 47, 48, and 49 of the learned Initial Petition;

7. In this sense, cite José Manuel Fernandes Pires, in Lectures on Property and Stamp Taxes (Coimbra, Almedina, 3rd ed., 2015, p. 110 to 112), when referring to the fact that "The right to build is not inherent in the property right, but only arises anew in the owner's patrimony when an administrative act by the competent public entity recognizes and authorizes the owner to build or subdivide. (…) only when this right is constituted in the owner's legal sphere is the IMI Code establishing that we are facing land for construction. As this constitutive act is performed by the public entity at the request of the owner, then the classification of a property as land for construction always depends on the owner's will."

8. In the same line of understanding, António Santos Rocha and Eduardo José Martins Brás state: "properties situated in urbanized areas or included in areas covered by approved urbanization plans (…) should only be considered as land for construction when, by action undertaken by the respective owner, there is, alternatively, the issuance of any of these documents - granting of permits, authorizations to build or subdivide, preliminary notices or favorable prior information for the same purpose." (Taxation of Heritage. IMI-IMT and Stamp Tax Annotated and Commented (Coimbra, Almedina, 2015, p. 44).

9. The incidence of IS on land for construction involves, in concrete terms, the effective constructive potential of the land in question, as results from Article 45 of the IMI Code;

10. Concluding, the assessment acts in question embody a correct interpretation and application of item 28.1 of the TGIS, as worded in Law No. 83-C/2013, which expressly prescribes as the objective element of incidence land for construction whose authorized or contemplated construction is for habitation with a VPT equal to or exceeding €1,000,000.00;

11. From what has been stated, neither is it seen, nor has the Claimant managed to demonstrate, how and to what extent the assessment act under challenge violates the constitutional principle of equality enshrined in Article 13 of the CRP in the aspect of ability to pay;

12. The legislator, with item 28.1 of the TGIS, introduced a principle of taxation on the wealth externalized in the ownership, usufruct, or right of superficies of urban buildings with residential affectation of the highest value, so-called luxury buildings, which resulted in the establishment of a measurable value - VPT equal to or exceeding €1,000,000.00;

13. The legislative criterion would be based on the fact that ownership of properties devoted to habitation of value equal to or exceeding €1,000,000.00 demonstrates a superior ability to pay of the respective owner in that it presupposes financial means capable of being mobilized in the acquisition of a single property of that value for his own habitation;

14. The norm of item 28.1 cannot fail to fit within the express objective of the legislator to place an additional burden on residential buildings of higher value in the achievement of distributing, beyond those with income and pensions, also among those with certain real estate patrimony, the sacrifices imposed by austerity in a specific economic and financial situation of the country.

15. It is in this framework that the conformity of item 28.1 with the principle of equality and the principle of ability to pay can be assessed.

16. The content and conformation of the principle of equality in the dimension of ability to pay has been extensively addressed by Jurisprudence and Doctrine, concluding that the norm of item 28.1 of the TGIS does not violate the principle of ability to pay and does not contain arbitrary and unjustified legislative definitions of taxes;

17. The legislator chose in a rational and objective manner a certain factual presupposition as a basis of incidence: the establishment of a VPT of €1,000,000.00 based on increasing and decreasing elements contained in the tables of Article 43 of the IMI Code;

18. In the case at hand, a situation of co-ownership, the VPT to be taken into account is the overall VPT of the properties that corresponds to each of the co-owners.

19. On the other hand, as was evidenced in the Arbitration Decision issued in process No. 366/2014-T, the ability to pay of someone who acquires for consideration a residential building with a VPT of €1,000,000.00 will not necessarily have to be identical to that of someone who acquires ten urban buildings devoted to habitation with a VPT of €1,000,000.00, in that the rate to be applied is substantively different.

20. The legislator, in choosing the basis of incidence of item 28.1 of the TGIS, had in view land for construction with single or predominantly residential destination, in obedience to the express political objective in the Bill translated into just distribution of tax effort, as referred to above, whereby item 28.1 of the TGIS does not incur in any arbitrariness or in any way violates the principle of tax equality in the aspect of ability to pay, contrary to what is alleged by the Claimant;

21. In conclusion, taking into account the ratio of item 28.1 of the TGIS, the nature and structure of the tax, as well as the manifestation of wealth or income that the legislator intended to capture, the assessments contested in the present case do not incur in any illegality or embody violation of the principle of equality enshrined in Article 13 of the CRP in all its aspects.

Given the foregoing, concerning the position of the Parties and the arguments presented, to determine whether the acts of assessment of IS sub judice are or are not illegal, it will be necessary to verify a) what interpretation should be given to items 28 and 28.1 of the TGIS, in order to determine how the VPT of €1,000,000 should be assessed and b) whether the taxation of land for construction is or is not unconstitutional.

Let us see what should be understood.

IV. DECISION

A. Incidence of item 28 of the TGIS

Article 11 of the General Tax Law (LGT) establishes the principle that the interpretation of tax law must be carried out taking into account the general principles of interpretation.

The general principles of interpretation are established in Article 9 of the Civil Code (CC), as follows:

"1. Interpretation must not be confined to the letter of the law, but must reconstruct from the texts the legislative intent, taking especially into account the unity of the legal system, the circumstances in which the law was elaborated, and the specific conditions of the time in which it is applied.

1. The legislator's intent that does not have in the letter of the law a minimum of verbal correspondence, even if imperfectly expressed, cannot, however, be considered by the interpreter.

2. In determining the meaning and scope of the law, the interpreter shall presume that the legislator adopted the most appropriate solutions and knew how to express its intent in adequate terms."

It is in light of the aforesaid norms that the provision contained in items 28 and 28.1 of the TGIS should be assessed, which determines the incidence of IS on:

"Ownership, usufruct, or right of superficies of urban buildings whose tax patrimonial value recorded in the property register, pursuant to the Code of Municipal Property Tax (CIMI), is equal to or exceeding €1,000,000 – on the tax patrimonial value used for IMI purposes:

28.1. – For a residential building or land for construction whose authorized or contemplated construction is for habitation, pursuant to the provisions of the IMI Code… 1%."

Thus, from the standpoint of the literal meaning of the norm, it is observed that the tax applies to a) the "ownership" (…) b) of urban buildings c) whose VPT is equal to or exceeding €1,000,000.

Now, in the case under analysis, the Claimant is the owner, in ½ of the land for construction that is the subject of the contested assessment acts.

Land for construction constitutes urban buildings for the purposes of tax incidence, with densification in item 1 of point 28 that the tax incidence covers land for construction "whose authorized or contemplated construction is for habitation, pursuant to the provisions of the IMI Code."

It results from the proven facts that, following a claim filed, the IS assessed applies only to the area with construction provided for habitation, so there is no doubt that the IS assessed applied to the area of construction provided for in the detailed center plan.

Finally, it is verified from the analysis of the urban property records attached to the file that the VPT of the land for construction in question is greater than €1,000,000.

The Claimant contends that, as it is only the owner in ½ of the property or a co-owner, the VPT should be reduced according to its pro-rata share.

From the analysis of item 28.1, it results that the value of €1,000,000 is assessed according to the VPT of the property, as determined for IMI purposes.

In fact, according to a literal interpretation of the norm, the determination of the relevant VPT must be assessed according to the property and not the taxpayer, and in accordance with the terms provided for in the IMI Code.

The IMI Code establishes in its Articles 7 and 45 the manner of determining the VPT of land for construction, and it does not result in any case that the co-ownership of land for construction determines the reduction of VPT for purposes of items 28 and 28.1 of the TGIS.

In fact, contrary to what occurs with horizontal property, in which each of the autonomous fractions constitutes, in essence, a property for IMI purposes, land for construction held under co-ownership remains a single property, despite the fact that construction of units under a horizontal property regime is contemplated. For this reason, land for construction has only one VPT, and it is on this VPT that IS applies, it being certain that the value of the assessed tax must be apportioned among the various taxpayers according to their pro-rata shares.

The Claimant contends that, taking into account the historical and teleological element of the norm under analysis, the principle of ability to pay and the principle of equality would only be respected if IS taxation were to apply to the pro-rata share of each taxpayer and not to the total VPT of the properties.

It is understood, however, that what results from the purposes stated at the time of creation of the commonly designated "luxury tax" is the intention to tax the wealth externalized in the ownership, usufruct, or right of superficies of luxury urban buildings which, due to their value considerably higher than that of the generality of urban buildings, reveal greater indicators of wealth, capable of founding the imposition of an additional contribution for the remediation of public accounts to their holders, in realization of the aforesaid "principle of social equity in austerity, ensuring an effective distribution of the sacrifices necessary to comply with the adjustment program." – (See Bill No. 96/XII).[1]

In view of the foregoing, it is understood that, taking into account the elements of interpretation of the norms, the incidence of IS, in light of items 28 and 28.1 of the TGIS, on land for construction held by the Claimant, as a co-owner, whose VPT is greater than €1,000,000 is not illegal.

Let us now see whether there will be unconstitutionality of the taxation.

B. The Principles of Tax Equality and Ability to Pay

According to the Claimant, the acts of assessment of IS sub judice are afflicted by the vice of unconstitutionality, since none of the fractions whose construction is authorized or contemplated has value exceeding €1,000,000, and thus it is discriminatory and arbitrary to subject them to taxation.

To analyze the Claimant's argument, it is important to consider what is provided in the Constitution of the Portuguese Republic (CRP), which establishes in its Article 13 the principle of equality, as follows:

"1. All citizens have the same social dignity and are equal before the law.

1. No one may be privileged, benefited, prejudiced, deprived of any right, or exempt from any duty on grounds of ancestry, sex, race, language, territory of origin, religion, political or ideological convictions, instruction, economic situation, social condition, or sexual orientation."

In turn, Article 103 of the CRP determines the following:

"1. The tax system aims at satisfying the financial needs of the State and other public entities and a just distribution of income and wealth.

1. Taxes are created by law, which determines the incidence, the rate, tax benefits, and taxpayer guarantees.

2. No one may be obligated to pay taxes that have not been created pursuant to the Constitution, that are retroactive in nature, or whose assessment and collection are not carried out in accordance with the law."

And, finally, Article 104 of the CRP establishes the following:

"1. Personal income tax aims at reducing inequalities and shall be single and progressive, taking into account the needs and income of the family unit.

1. The taxation of enterprises focuses fundamentally on their actual income.

2. The taxation of patrimony should contribute to equality among citizens.

3. The taxation of consumption aims at adapting the structure of consumption to the evolution of the needs of economic development and social justice, and should burden luxury consumptions."

Let us then proceed to assess the parameter of constitutionality of the provision contained in items 28 and 28.1 of the TGIS, which determines the incidence of IS on the VPT of land for construction as determined pursuant to the IMI Code.

The constitutional principle of tax equality constitutes a specific expression of the general structural principle of equality, "which expresses not only a formal equality – an equality before the law, (…), but also and above all a material equality – an equality of the law, which obliges, in various ways, also the legislator."[2]

Thus, the principle of tax equality unfolds in two aspects: the aspect of the universality of taxes and the aspect of the uniformity of taxes.

In the aspect of the universality of taxes, the principle of tax equality determines that the duty to pay taxes is universal, while in the aspect of the uniformity of taxes the aforesaid principle implies the adoption of a same criterion for all taxpayers.

In essence, "the principle of tax equality requires that what is (essentially) equal be taxed equally, and what is (essentially) unequal be taxed unequally in the measure of that inequality."[3]

To assess what is equal and what is unequal, the criterion of ability to pay then emerges, which is made concrete in the aspect of horizontal equality when it imposes that taxpayers with the same ability to pay pay the same tax, and in the aspect of vertical equality, in that it leads to taxpayers with different ability to pay paying taxes that are different (qualitatively and/or quantitatively), with arbitrariness being prohibited.

In this regard, the Claimant contends that the IS on the ownership, usufruct, or right of superficies of urban buildings with residential affectation and land for construction of tax patrimonial value exceeding €1,000,000, at the rate of 1%, does not respect the principle of equality, in that it subjects to IS taxation the ownership of land for construction whose tax patrimonial value is equal to or exceeding €1,000,000, regarding which the authorized or contemplated construction does not include any individual habitation of value equal to or exceeding that amount.

The Claimant is not correct, however.

In fact, from the principle of tax equality, it does not result in the prohibition of the freedom of choice by the Legislator of the taxation of certain tax facts at the expense of others, but rather the prohibition of arbitrariness.

In the case under analysis, the Legislator considered that on urban residential buildings and (later) on land for construction whose construction is for habitation the commonly designated "luxury tax" should apply, within the scope of budgetary consolidation effort.

The intention with such taxation was to distribute the sacrifices demanded from owners of high-value residential buildings to those who live from the income of their labor (See Economic and Financial Adjustment Program (PAEF), agreed between the Portuguese Government and the IMF, the European Commission, and the ECB).

The creation of this new tax fact occurred in the context of economic crisis and serious crisis in public finances, with the purpose of increasing State tax revenues, through the taxation of those who reveal greater indicators of wealth.

In this context, taxation applies to the VPT of land for construction whose construction is for habitation, in accordance with item 28.1 of the TGIS, with the legislator not making the VPT of such land for construction depend on the value of the future fractions individually considered.

Although it is understood that both tax facts – the land for construction and the residential fractions that result from subsequent construction - are potentially subject to taxation in accordance with the law, such taxation occurs in relation to different tax facts and at different temporal moments. Being unable to compare the incomparable, that is, existing buildings and future buildings, due to absence of a comparative term. There is thus no positive discrimination.

In this regard, it has been understood that "Only those legislative choices can be censured on the grounds of lesion of the principle of equality, in those cases in which it is proven that they result in differences of treatment among persons that do not find justification in reasonable, perceptible, or intelligible grounds, having the constitutional ends that, with the measure of the difference, are pursued (…) this principle, in its dimension as prohibition of arbitrariness, constitutes an essentially negative criterion (…) which, not eliminating 'the legislator's freedom of conformation' – understood as the freedom that belongs to the legislator to 'define or qualify the factual situations or life relations that are to function as reference elements to be treated equally or unequally' – it falls to the courts not the faculty of withdrawing themselves from the legislator, 'considering the situation as if they were in his place and imposing their own idea of what would be, in the case, the reasonable, just, and opportune solution (of what would be the ideal solution for the case)', but rather that of 'setting aside those legal solutions altogether incapable of rationally crediting themselves.'"[4]

Taking into account the foregoing, it is considered that the tax facts contemplated by item 28.1 of the TGIS were not chosen in an arbitrary manner, with their choice being justified by the underlying political-economic context. This understanding has already been expressed, for that matter, several times by the Constitutional Court[5] which, in Judgment No. 590/2015, understood as follows:

"no arbitrary fiscal measure is found in the incidence norm in question, because devoid of rational foundation. (…) the legislative amendment was intended to expand the taxation of patrimony, making it fall more intensely on property which, due to its value considerably higher than that of the generality of urban buildings with residential affectation, reveals greater indicators of wealth and, as such, is capable of founding the imposition of an additional contribution for the remediation of public accounts to its holders, in realization of the aforesaid 'principle of social equity in austerity.'

(…)

Thus being, the assessment of respect for the principle of tax equality in its material dimension must be referred to the unit of the building with residential affectation, which implies the conclusion that (…) there does not exist arbitrary discrimination among taxpayers in the uniform operation of the relevant substantive criterion, embodied in the attribution to each building with residential affectation of tax patrimonial value equal to or exceeding €1,000,000.00."

The Claimant's argument that the incidence norm here in discussion violates the principle of equality does not thus hold.

For the reasons set forth above, this Tribunal also does not consider that the principle of ability to pay is impaired by the exclusion of other properties, beyond those contemplated in the norm, that reveal equal ability to pay.

In fact, the principle of ability to pay does not apply equally with respect to every type of tax, having a first-degree expression in income taxes, a second-degree expression in property taxes, and a third-degree expression in consumption taxes.

In this manner, it is understood that as to the taxation of patrimony, the Legislator is essentially obligated to contribute to equality among citizens (Article 104(3) of the CRP), which does not prevent it from proceeding to the discrimination of patrimony, taxing the higher amounts and exempting the lower amounts.

Taking into account the principle of ability to pay, as a criterion for determining respect for the principle of tax equality, it is observed that the tax fact elected by the legislator in item 28.1 of the TGIS is revelatory of ability to pay, there also being connection between the tax obligation and the economic presupposition selected by the Legislator.

In fact, the norm under analysis elected as an economic presupposition the right of ownership, usufruct, or right of superficies of urban buildings or land for construction whose construction is for habitation of tax patrimonial value exceeding €1,000,000.00, and to such economic presupposition it made correspond a rate of 1%.

In sum: taking into account that the urban property record of the land for construction under analysis shows that the VPT is greater than €1,000,000, the rate provided for in item 28.1 of the TGIS is applicable here, with there being no violation of the principle of tax equality.

V. DECISION

For these reasons, this Arbitral Tribunal decides to render completely unfounded the petition for a declaration of illegality and consequent annulment of the acts of assessment of IS, relating to the year 2015, concerning the land for construction entered in the urban property register under articles … and …, of the union of parishes of … and …, of the municipality and district of Aveiro.

VI. VALUE OF THE PROCEEDINGS

In accordance with the provisions of Article 306(2) of the Code of Civil Procedure, Article 97-A(1)(a) of the CPPT and Article 3(2) of the Regulation of Costs in Tax Arbitration Proceedings, the value of the claim is fixed at €14,535.04.

VII. DECISION

For these reasons, this Arbitral Tribunal decides:

A) To render completely unfounded the petition for annulment of the rejection of the gracious appeals filed with respect to the acts of assessment of IS identified;

B) To condemn the Claimant in the costs of the present proceedings, as the unsuccessful party.

VIII. VALUE OF THE PROCEEDINGS

In accordance with the provisions of Article 306(2) of the Code of Civil Procedure, Article 97-A(1)(a) of the CPPT and Article 3(2) of the Regulation of Costs in Tax Arbitration Proceedings, the value of the claim is fixed at €14,535.04.

IX. COSTS

Pursuant to the provisions of Articles 12(2) and 22(4), both of the RJAT, and Article 4(4) of the Regulation of Costs in Tax Arbitration Proceedings, the value of the arbitration fee is fixed at €918, in accordance with Table I of the aforementioned Regulation, to be charged to the Claimant.

Notify accordingly.

Lisbon, 27 July 2017

The Arbitrator

Magda Feliciano

(The text of this decision was prepared by computer, pursuant to Article 131(5) of the Code of Civil Procedure, applicable by reference to Article 29(1)(e) of Decree-Law No. 10/2011, of 20 January (RJAT), and its writing is governed by the orthography prior to the Orthographic Agreement of 1990.)

[1] See Judgment of the Constitutional Court No. 590/2015, issued in the context of process No. 542/2014

[2] José Casalta Nabais, in The Fundamental Duty to Pay Taxes, Theses Almedina, 2009, pp. 435.

[3] Ibid. pp. 442.

[4] See Judgment of the Constitutional Court No. 187/2013, of 5 April, nos. 33 and 35:

[5] Judgments of the Constitutional Court No. 590/2015, No. 83/2016, No. 247/2016, and No. 568/2016.