Process: 19/2012-T

Date: October 26, 2012

Tax Type: IMI

Source: Original CAAD Decision

Summary

Process 19/2012-T examines a fundamental challenge to Portugal's IMI (Municipal Property Tax) assessment methodology, specifically targeting the application of the maximum location coefficient of 2.4 to an urban property valued at €105,490. The claimant contested the second assessment, arguing that Ordinance 982/2004, which established zoning and location coefficients for the municipality, suffers from multiple illegalities. The primary grounds included: (i) absolute lack of substantiation, as the ordinance failed to disclose the criteria justifying the 2.4 coefficient assignment; (ii) manifest error in the coefficient's magnitude, evidenced by its subsequent reduction to 1.9 through Ordinance 1022/2006 just two years later; and (iii) violation of the constitutional principle of equality under Article 13. Additionally, the claimant argued the zoning was ineffective due to publication only on the e-financas website rather than in the Official Journal (Diário da República). The Tax Authority defended by raising procedural exceptions, arguing the arbitral tribunal lacked competence since the municipality, not the Tax Authority, is the active tax subject, and claiming lack of passive legitimacy. On the merits, it contended the zoning properly considered relevant characteristics including road delimitation, development permits, proximity to coast, construction quality, accessibility, tourist demand, and essential services, with the 2006 amendment reflecting real estate market changes. The CAAD tribunal dismissed both procedural exceptions, confirming its competence and the Tax Authority's legitimacy as respondent. This decision establishes important precedent regarding arbitral jurisdiction over municipal property tax disputes and the reviewability of administrative zoning determinations that directly impact property valuations and tax burdens.

Full Decision

Case no. 19/2012 - T

REPORT

1. PARTIES

…, S.A., a legal entity no. …, with headquarters at Street … (Claimant), requested, pursuant to clause a) of item 1 of article 10 of Decree-Law no. 10/2011, of 20 January, the establishment of an Arbitral Court with the intervention of a single arbitrator with a view to examining a dispute in which the Tax and Customs Authority (ATA or Respondent) is the respondent.

2. REQUEST FOR ARBITRAL PRONOUNCEMENT

The object of the present arbitral pronouncement is the request for annulment of the second assessment act of the fraction … of the urban property located in the parish of …, registered in the respective urban property register under article …, valued at €105,490.00.

The same request had previously been filed with the Administrative and Tax Court of … in judicial challenge proceedings, which were pending in that court under no. …, awaiting decision for more than two years, before being submitted to this Arbitral Court, pursuant to the provisions of article 30 of Decree-Law no. 20/2011, of 20 January.

3. BASIS OF CLAIM

To support the stated request for annulment, the Claimant alleges, in summary, that the application of the maximum location coefficient of 2.4 in determining the disputed tax property value is unlawful, either by virtue of the illegality of the zoning approved by Ordinance no. 982/2004, of 4 August, which determined the calculation of that coefficient, or as a result of its ineffectiveness.

The Claimant specifically identifies the following illegalities attributable to the zoning: (i) absolute lack of substantiation, as it does not disclose the elements that led to the fixing of the maximum coefficient of 2.4 in the zone where the property is located; (ii) manifest error regarding the magnitude of the coefficient applicable to that area of location, revealed by its replacement with a coefficient of 1.9 in 2006, pursuant to the amendment by item 2 of Ordinance no. 1022/2006, of 20 September; and (iii) violation of the principle of equality enshrined in article 13 of the Constitution of the Portuguese Republic.

The Claimant further contends that, even if the zoning were not considered unlawful for those reasons, it would nonetheless be declared ineffective due to lack of publication in the Official Journal.

4. RESPONDENT'S ANSWER

Upon notification of the request for arbitral pronouncement, the Tax Authority, in response, sought the maintenance of the contested second assessment act, arguing, for brevity:

  • that the arbitral court lacks competence to hear the request filed by the Claimant, as it is not the Tax Authority but the Municipality of … that is the active subject of the tax legal relationship, and the latter is not subject to arbitral jurisdiction due to lack of binding consent;

  • that it lacks passive procedural legitimacy, as it is not a party to the tax legal relationship disputed in the proceedings;

  • that the second assessment act does not suffer from any illegality inasmuch as, on the one hand, in defining the zones for the municipality of …, the characteristics of each zone were considered (such as delimitation by roads, approved development permits, location of zones in the municipality, construction quality, accessibility, tourist demand, and the existence of essential services), and on the other, the grounds for the zoning amendment proposal are based on changes in the real estate market;

  • that the legal norms informing the assessment act do not violate the principle of equality;

  • that by being made available for consultation by any interested party on the finance portal, the necessary publicity is ensured to guarantee knowledge of the zoning and respective location coefficients, and therefore does not suffer from ineffectiveness.

5. CASE MANAGEMENT

By interlocutory arbitral decision of 13 May 2012, the Court decided, with a view to case management and definition of further procedural developments, to dismiss as unfounded the exceptions of incompetence of the arbitral court and lack of passive legitimacy raised by the Respondent Tax Authority.

The Court further decided, in the said interlocutory decision, to reject the evidentiary requests for testimonial and expert evidence and the joinder of the tax judicial proceedings, as requested by the claimant, considering that the case file already provides all the elements necessary for a conscientious decision on the merits of the case, rendering any additional evidence unnecessary.

6. ORAL SUBMISSIONS

With no other evidence to be produced at the hearing, the parties presented their oral submissions, in accordance with article 18 of Decree-Law no. 10/2011, of 20 January, in which both reaffirmed the positions expressed in the procedural documents filed.

7. GROUNDS FOR DECISION

The arbitral court is regularly constituted. It is materially competent in accordance with article 2, item 1, clause a) of Decree-Law no. 10/2011, of 20 January. The parties have judicial capacity and are legitimate. The case does not suffer from nullities that would invalidate it.

There being, therefore, no obstacle to examination of the merits, it is necessary to decide.

7.1. Factual Findings

Based on the documents submitted to the case by the parties, the following facts are found to be proven and relevant to a proper decision of the dispute:

A) On 5 April 2004, the Local Expert … issued the Zoning Report of the Municipality of … for purposes of proposing zoning and determining the Location Coefficient values for the area covered by the parishes of that municipality, among which that of …;

B) In the said Report, it was considered, for purposes of substantiation of the proposed zoning, that "the zones were defined considering market values as homogeneous as possible, considering current and predicted development, and also taking into account the indications of Municipal Plans and approved development permits";

C) It further states that "the zones were delimited considering the following: Delimitation by roads (express routes, national and municipal roads, streets and pathways) and in their absence by the limits of Development Permits; Approved Development Permits; Location of zones in the Municipality, for example proximity to the coast and accessibility; characteristics of zones, as regards construction quality, accessibility, tourist demand, existence of Golf Courses, etc.;

D) The zoning proposal was analyzed and discussed at the meeting of the National Commission for Assessment of Urban Properties (CNAPU) in … July 2004;

E) As a result of that meeting, a homogeneous zone corresponding to the parish of … was determined as part of the Municipality of …, to which a location coefficient of 2.40 was assigned;

F) The proposed zoning and location coefficient were approved by Ordinance no. 982/2004, of 4 August, and published on the website www.e-financas.gov.pt.

G) On 20 April 2004 [sic], a standard IMI declaration form was submitted for updating the tax property value of the urban property better described above, due to its first transfer during the period of the CIMI;

H) On 25 January 2006, amendments to the zoning in the parish of … were approved by the CNAPU, contained in the proposal presented by the local expert of …;

I) Such amendments were subsequently approved by Ordinance 1022/2006, of 20 September, to apply to urban properties whose standard IMI declaration forms were delivered from that date;

J) On 11 January 2007, the property in question was assigned, as a result of assessment, the value of €105,490.00;

K) Upon notification of the assessment, the Claimant requested a second assessment, in accordance with article 76 of the CIMI;

L) On 4 August 2008, the Claimant was notified that, as a result of the second assessment, the tax property value of the property had been maintained at €105,490.00;

M) On 31 October 2008, a judicial challenge was filed with the Administrative and Tax Court of … against the act fixing the tax property value resulting from the second assessment;

N) The said challenge proceeded in that court under no. …, with no decision having been issued as of the date of submission of the arbitration request.

Of the facts with relevance to the decision of the case and contained in the challenge, all subject to concrete analysis, those not contained in the factuality described above were not proven.

7.2. Analysis

The question to be decided in the present case is whether the second assessment act suffers from the defects that the Claimant attributes to it, namely those of illegality due to lack of substantiation, error, and violation of the principle of equality, as well as the defect of ineffectiveness.

As a starting point for the correct decision of the dispute in question, it must be stressed that, although it is true that, as the Respondent Tax Authority systematically states in its response, the act being examined here is the second assessment act and not the zoning and the definition of location coefficients, this does not necessarily mean that the validity of those acts and of the Ordinance that gives them normative force cannot be subject to examination in the context of assessing the legality of the assessment act that incorporates them.

What truly matters to determine, in order to verify that justiciability, is whether such acts or normative regulations, produced in the course of the procedure and presuppositions of the assessment, are susceptible to autonomous contentious challenge – in which case the question of their legality constitutes "a matter adjudged" in the procedure, if not raised through the legally prescribed means and timeframe – or not, in which case, being directly injurious to the interests of the taxpayer, they must be examined in the context of verifying the legality of the final act that incorporates them, under the principle of unitary challenge.

In this context, it is necessary to recognize that, although administrative regulations may be subject to autonomous contentious challenge under the proceedings provided in the Code of Procedure in Administrative Courts, in the case of the Ordinance which, in accordance with item 3 of article 62 of the CIMI, approves zoning proposals presented by the CNAPU, only its application in the concrete act of fixing the tax property value constitutes an act injurious to the rights of the administrated, susceptible, therefore, of vitiating that assessment.

If this is the case, as we believe, it does not appear to us, however, that, in concreto, the zoning approved by Ordinance no. 982/2004, of 4 August, suffers from the defects attributed to it by the Claimant.

Beginning with the alleged defect of lack of substantiation. The Claimant contends that the zoning proposal approved by the said Ordinance contains no basis for assigning the same maximum location coefficient to properties located throughout the zone extending from the beaches to the far north of the urbanized perimeter of the parish of …, when it is common knowledge that, in a parish like that one, the market value of properties varies considerably depending on their distance from the coast.

However, the Claimant is not correct.

This same question has already been decided by the Supreme Administrative Court in a Decision of 7 March 2012 (case no. 01100/11), which we subscribe to in its entirety as we agree with it in full, and which, for its timeliness and relevance, we cite in the relevant part:

"As is known, a regulation is a decision by an organ of public administration which, under the authority of norms of public law, aims to produce legal effects in general and abstract situations, and thus differs from the administrative act, first of all, by being general and abstract, whereas the administrative act produces legal effects in a concrete case (On this matter, see FREITAS DO AMARAL, in 'Administrative Law', III, 1989, p. 36 et seq., ESTEVES DE OLIVEIRA, in 'Administrative Law' (Lectures), 1979, p. 144 et seq., MARCELO REBELO DE SOUSA AND ANDRÉ SALGADO DE MATOS, in 'General Administrative Law', Volume III, 2nd Edition, p. 248.). Now, the provisions of Ordinance no. 982/2004 and those that followed for the approval of zoning and location coefficients corresponding to each zone of homogeneous value for land use types for housing, commerce, industry and services, in accordance with and for the purposes of article 42 of the CIMI, have the characteristics of generality and abstraction that characterize normative acts, since they are directed at an indeterminate and indeterminable number of persons, establishing coefficients for non-individualized citizens/residents, applicable to the entire national territory and to all those whose urban real estate property is valued for tax purposes, and no administrative act can be discerned in them which, as such, is subject to the duty of substantiation enshrined in article 268, item 3 of the CRP and embodied in the LGT and the CPA.

It is true that the geographic delimitation made there, by municipalities and zoning, seems to approximate the nature of an individual act, as it interferes more directly with the patrimonial sphere of owners, like the Appellant, who see their urban properties included in it, but that would be merely an instrumental aspect of the normative order that the statute introduces, bound to it and inseparable from it, with no possibility of being made autonomous as an administrative act considered 'per se'.

The cited Ordinances are therefore regulations, subject, as a form of administrative activity, to the principle of legality, both in its dimension of preference for law and in its dimension of reservation of law. From their subjection to preference for law it follows that, as happens with all administrative conduct that violates the body of legality to which they are subject, they may be unlawful and, as such, susceptible to contentious challenge in the administrative courts, which may declare their illegality with binding general force (art. 204 of the CRP, and arts. 72 and 76 of the CPTA). And from subjection to reservation of law it follows that regulations must necessarily be authorized by law, but the degree of normative density of the authorizing law may vary between total binding of the regulatory content and the opposite pole of granting quasi-total freedom of regulatory shaping, limiting itself, in this latter case, to identifying the competence, in a subjective and objective sense, for its issuance (On this matter, see MARCELO REBELO DE SOUSA AND ANDRÉ SALGADO DE MATOS, work cited, p. 251.)

They are not, however, subject to the duty of substantiation or explanation of the reasons why it was regulated in this way and not differently. Unlike administrative acts, normative acts do not have to provide citizens with the elements necessary to perceive the motivation that determined the concrete content of the norm, nor provide them with the reconstruction of the cognitive and evaluative itinerary followed by the issuing entity, simply requiring the express statement of the law it aims to regulate or of the law that defines the subjective and objective competence for its issuance (art. 112, item 7, of the CRP), so that interested parties may monitor the regulatory shaping against the enabling law.

Regulatory acts, practiced in the exercise of administrative activity generically regulated by articles 114 to 119 of the CPA, and, in the concrete case, in execution of the duty imposed on the Administration by item 1 of article 13 of Decree-Law no. 287/2003, of 12 November, and items 1 and 3 of article 62 of the CIMI, are not therefore subject to the duty of substantiation as defined by article 77 of the LGT and by article 124 of the CPA, nor is the mechanism provided for in article 37 of the CPPT applicable to them, of providing a certificate containing those grounds, without prejudice to the right of interested parties to access the preparatory administrative documents that support the regulatory act, more specifically, the right of access to the content of the proposals formulated by the CNAPU that were subject to approval by ministerial act, in conformity with Law no. 46/2007, of 24 August, which regulates Access to Administrative Documents.

In conclusion, the defect of lack of substantiation alleged by the Applicant is located in the regulation and not in the tax assessment act that fixed the tax property value of its fractions, and since a regulation cannot suffer from this type of defect, the application seeking, through that illegality, the annulment of that tax act necessarily fails."

If this is the case, as we believe, not only should the alleged defect of lack of substantiation be rejected, but also all the other defects attributed to the concrete zoning proposal by the Claimant, as presuppositions of the illegality of the assessment examined.

In effect, the Claimant contends that, apart from being totally unfounded, the zoning proposal also suffers from manifest error in fixing an excessive location coefficient for the zone where the property is located, and from illegality due to violation of the principle of equality enshrined in article 13 of the CRP, by including in the same homogeneous zone areas of location that are completely disparate.

Now, if, as we saw above, the provisions of Ordinance no. 982/2004 have the characteristics of a normative act, which is not subject to the duty of substantiation, and the administrated cannot therefore access the elements necessary to perceive the motivation that determined the concrete content of the norm, neither can it, a fortiori, attempt to examine the volitional process of that decision on grounds that it is unaware of and does not have to be aware of.

As the zoning proposal conforms, after approval by ordinance of the Minister of Finance, as an act with the characteristics of a regulation, of general and abstract nature, the criteria underlying the legal choice to create a certain homogeneous zone for the purposes of fixing the location coefficient cannot be degraded as the Claimant intends, into errors that are examinable in their application to the concrete case.

Equally, that legal choice, if shielded normatively by the legal criteria defined in a general and abstract manner in the authorizing norm, cannot be subject to examination due to violation of the principle of legality. If this were not the case, it would have to be admitted, absurdly, that the zoning should create as many homogeneous zones as there are objective factors distinguishing market value, varying, for example, from street to street, and, within these, according to the amount of sunlight and shade. That is manifestly not the objective of the assessment process created by Decree-Law no. 287/2003, of 12 November.

It should be noted that it is not denied that, in concreto, the normative definition of zoning may lead to situations of treating alike real estate with different commercial value. This is, however, a normal and possible effect of the general and abstract definition of the delimiting elements of legal relationships under public law, tolerated by the legal order, insofar as they do not exceed the limits imposed by higher-value norms.

But even if this were not the case, and it were understood, under some legal construction which we reject, that zoning proposals are susceptible to suffering from the defects attributed to them by the Applicant, still it would appear to us that the same would be concretely unassailable.

And this is because, as follows from the provisions of articles 42 and 62 of the CIMI, local experts and members of the CNAPU enjoy, in the definition of homogeneous zones and location coefficients, a broad margin of discretion. Provided that the criteria envisaged in item 3 of the said article 42 are weighed, which constitute the parameters of their respective binding, the entities competent for the assessment are authorized by law to stipulate the homogeneous zones they deem most appropriate in accordance with the technical knowledge that their recognized expertise would determine.

The choice of how to articulate the said criteria in the definition of zoning, in the procedure for determining location coefficients, is an activity that falls within their margin of free appreciation, also sometimes referred to in doctrine and case law as "technical discretion", falling within the sphere of what is called administrative justice, in the domain of which the Administration acts and decides on the aptitude and personal qualities, an activity which, in principle, is not subject to examination by the court, except with reference to binding aspects or manifest error, as well as with the adoption of ostensibly unsuitable criteria or abuse of power.

Now, in the case at hand, as appears from the zoning report of the Municipality of … attached to the administrative process to which article 111 of the CPPT refers, it is the local expert herself who, in defining the criteria by which she was guided in the definition of the zones, expressly indicates that she bound her activity "considering market values as homogeneous as possible, considering current and predicted development" and, as well, that "the zones were delimited considering the following: delimitation by roads (…); Approved development permits; location of zones in the Municipality, for example, proximity to the coast and accessibility; characteristics of zones, as regards construction quality, accessibility, tourist demand, existence of golf fields, etc.";

By expressly indicating the criteria she adopted, which include, but are not exhausted by, those provided for in item 3 of article 42 of the CIMI, it is necessary to recognize, even without knowing the scope of the validation carried out by the CNAPU, that the extent of the homogeneity deemed as "possible" by the expert, within the scope of the Municipality of … considered as a whole, is not susceptible to being called into question, under penalty of calling into question the entire system of assessment of real estate property.

And such a conclusion does not appear to be affected, in our view, by the fact that the zoning approved on the basis of that report was altered after only 18 months of validity. This is first of all because, as was moreover expressly recognized by the Claimant, the Tax Authority does not justify that change on the basis of any error in the initial zoning, but instead on grounds related to changes in the real estate market and urban planning considerations, which, within the framework of the competences and margin of discretion conferred on experts by law, objectively constitute legally acceptable grounds for the revision of the initially determined zoning.

Then because, even if this were not the case, it does not appear to us that the circumstance of coming to admit, with the evaluation of the results and effects of the initial proposals, revealed by practice, that the zoning should be refined in the direction of conferring even greater differentiation within zones considered as homogeneous, under the broader criterion previously adopted, permits the conclusion that the zoning previously effected, on the basis of that criterion, was inevitably tainted with error. Or at least, that such error might be subject to contentious examination.

Moreover, it was the legislator itself who, foreseeing that possibility, came to determine, from the beginning, that the coefficients be subject to periodic evaluation, with a view to their refinement, with any updates producing merely prospective effects, if not based on error.

It is certain that Ordinance 1022/2006, of 20 September, which approved the amendment to the zoning in the Municipality of …, expressly indicates that that amendment would apply only to urban properties whose standard IMI declaration forms were delivered from 21 September of the year of entry into force.

Wherefore, also for this reason it appears to us that the defects attributed to the zoning and to the fixing of the location coefficient should not succeed.

The Claimant finally contends that, even if it were not unlawful in those terms, the zoning would nevertheless be ineffective due to lack of publication in the Official Journal.

However, the Claimant is not correct.

In effect, in line with what has been systematically and unanimously decided by the Supreme Administrative Court, it appears to this arbitral court that the making available of the approved zoning and location coefficients on the finance portal does not contradict any constitutional or legal principle, insofar as the law only establishes the need for the CNAPU's proposals regarding zoning and respective location coefficients to be approved by Ordinance of the Minister of Finance, and not their publication in official journal, it being certain that the location where they may be consulted was publicized, thus ensuring their knowledge to interested parties and the public in general.

As succinctly summarized by the STA in the already cited Decision of 7 March 2012, in an understanding that we fully subscribe to (emphasis ours):

"The referred Ordinances (Ordinance no. 982/2004, of 4 August, and Ordinance no. 1022/2006, of 20 September) contain the act of approval of the zoning and applicable location coefficients, thus fulfilling the legal requirement that the CNAPU's proposals in this regard be approved by Ordinance of the Minister of Finance.

Those Ordinances were published in the Official Journal, as they had to be in accordance with the principle of publicity of regulatory acts of the Government contained in article 119 of the Constitution of the Portuguese Republic. In fact, clause h) of item 1 of that provision determines the mandatory publication in the Official Journal of 'regulatory decrees and other government decrees and regulations, as well as decrees of the Ministers of the Republic for the autonomous regions and regional regulatory decrees' and item 2 provides that failure to publicize those acts implies their legal ineffectiveness.

What does not prevent the Ordinance itself from establishing that the data and values that flow from that act of approval be publicized in a different location where they may be freely consulted, thus ensuring their knowledge to interested parties and the public in general. That is, that it refers the publicity of the concrete data and values resulting from it to the finance website for consultation by any interested party and that requires their availability in all finance services.

And in the absence of a norm or constitutional principle that requires or imposes that those data and concrete values that result from the normative act of approval of the CNAPU's proposal be contained in a statute with force of law and be published in the Official Journal, it cannot be considered that the constitutional principles invoked by the Appellant have been violated.

Wherefore, also for this reason the request for annulment of the contested assessment act should be rejected."

7.3. Ruling

Accordingly, it is decided to reject the request for annulment of the second assessment act examined, with all corresponding consequences.

The value of the action is set at €105,490.00 (one hundred five thousand four hundred ninety euros).

The costs of the arbitration process in the amount of €3,060 (three thousand sixty euros) are borne by the Claimant, in accordance with the provisions of articles 12, item 2 and 22, item 4, of Decree-Law no. 10/2011, of 20 January, and article 4, item 3, of the Regulation of Costs in Tax Arbitration Processes.

Notify the parties.

Lisbon, 24 October 2012

Benjamim Silva Rodrigues
(Arbitrator President)

Joaquim Silvério Dias Mateus

José Manuel Pedroso de Melo

Frequently Asked Questions

Automatically Created

What is the location coefficient (coeficiente de localização) in Portuguese property tax (IMI) valuation?
The location coefficient (coeficiente de localização) is a multiplier factor applied in calculating the taxable patrimonial value of urban properties for IMI purposes. It reflects the relative location advantages of a property, ranging from below 1.0 to a maximum of 2.4 (later reduced to 1.9 in certain areas). The coefficient is determined through municipal zoning that considers factors such as proximity to the coast, road accessibility (express routes, national and municipal roads), approved development permits, construction quality, tourist demand, existence of golf courses, and availability of essential services. Zoning proposals are prepared by local experts, analyzed by the National Commission for Assessment of Urban Properties (CNAPU), and formalized through ministerial ordinances (Portarias). The coefficient directly multiplies the base property value, making it a critical determinant of the final IMI tax burden.
Can a taxpayer challenge the legality of zoning regulations used to determine IMI property valuations at CAAD arbitration?
Yes, taxpayers can challenge the legality of zoning regulations determining location coefficients at CAAD arbitration. Despite arguments by the Tax Authority that arbitral tribunals lack competence when the municipality is the active tax subject, the CAAD tribunal in Process 19/2012-T explicitly dismissed this exception of incompetence. The tribunal confirmed its material competence under Article 2(1)(a) of Decree-Law 10/2011 to examine disputes involving the legality of administrative acts underlying IMI assessments, including the zoning ordinances that establish location coefficients. This extends to reviewing both the substantive legality of coefficient determinations and procedural requirements such as adequate substantiation and proper publication. The tribunal also rejected the Tax Authority's claim of lack of passive legitimacy, establishing that the Tax Authority is the proper respondent in arbitral proceedings even when the municipality benefits from the tax revenue.
What grounds can be used to contest the maximum location coefficient of 2.4 applied in a second property valuation?
Several grounds can be used to contest the maximum location coefficient of 2.4 in a second property valuation: (i) Absolute lack of substantiation - arguing the zoning ordinance fails to disclose the specific elements and criteria that justified assigning the maximum 2.4 coefficient to the particular zone, violating administrative transparency requirements; (ii) Manifest error in assessment - demonstrating that the coefficient magnitude was objectively incorrect, as evidenced by its subsequent reduction (in this case from 2.4 to 1.9 just two years later through Ordinance 1022/2006), suggesting the original determination was fundamentally flawed; (iii) Violation of the constitutional principle of equality (Article 13 of the Portuguese Constitution) - arguing the coefficient creates unjustified discriminatory treatment compared to similar properties in comparable locations; and (iv) Ineffectiveness of the zoning regulation due to improper publication, specifically if published only on websites rather than in the Official Journal as required for regulatory acts.
Does the lack of publication in the Diário da República render a zoning regulation ineffective for IMI purposes?
The question of whether publication solely on the e-financas website (www.e-financas.gov.pt) renders a zoning regulation ineffective for IMI purposes was contested in Process 19/2012-T but the excerpt does not provide the tribunal's final ruling. The claimant argued that Ordinance 982/2004 was ineffective because it was not published in the Diário da República (Official Journal), the traditional means of official publication for regulatory acts in Portugal. The Tax Authority counter-argued that making the zoning available for consultation by any interested party on the finance portal ensures the necessary publicity to guarantee knowledge of the zoning and respective location coefficients, thus satisfying publication requirements and avoiding ineffectiveness. This issue raises important questions about the adequacy of electronic publication for administrative acts affecting taxpayer rights, balancing traditional formalities against modern digital accessibility and the specific publicity requirements for subordinate regulatory instruments like zoning determinations.
Can CAAD arbitral tribunals review municipal property tax assessments when the municipality is the active tax subject?
Yes, CAAD arbitral tribunals can review municipal property tax assessments even when the municipality is the active tax subject rather than the Tax Authority. In Process 19/2012-T, the Tax Authority raised exceptions arguing: (i) the arbitral court lacked competence because the Municipality, not the Tax Authority, is the active subject of the IMI legal relationship, and the municipality had not consented to arbitral jurisdiction; and (ii) the Tax Authority lacked passive procedural legitimacy as it was not a party to the disputed tax relationship. The CAAD tribunal rejected both exceptions through its interlocutory decision of 13 May 2012, confirming its competence under Article 2(1)(a) of Decree-Law 10/2011 and establishing the Tax Authority's legitimacy as the proper respondent. This decision clarifies that the Tax Authority, as the entity responsible for tax administration and assessment procedures, has standing to defend IMI assessments in arbitral proceedings regardless of the municipality's status as the beneficial recipient of the tax revenue.