Stamp Tax on Vertical Ownership Properties: CAAD Ruling on Independent Units and VPT Threshold (28.1 TGIS)

ARBITRATION DECISION

I. REPORT

1. On 12 April 2016, A…, TIN…, resident in …, …, B…, TIN…, resident at …, …, Lisbon, C…, TIN…, resident at …, …, Lisbon and D…, TIN…, (hereinafter, Claimants), filed a request for constitution of an arbitral tribunal, pursuant to the combined provisions of articles 2, no. 1, paragraph a), and 10, nos. 1, paragraph a), and 2, of Decree-Law no. 10/2011, of 20 January, which approved the Legal Regime for Arbitration in Tax Matters, as amended by article 228 of Law no. 66-B/2012, of 31 December (hereinafter, abbreviated as RJAT), seeking the declaration of illegality and annulment of Stamp Tax assessments [Item 28.1 of the General Table of Stamp Tax (hereinafter, TGIS)] relating to the years 2013, 2014 and 2015 and concerning an urban property, in vertical co-ownership with floors or divisions capable of independent use, registered under article … in the urban property register of the parish of …, municipality and district of Lisbon, of which the first and second Claimants are bare owners and the remaining Claimants are usufructuaries, in the total amount of € 32,347.50.

The Claimants attached 176 (one hundred and seventy-six) documents and listed 2 (two) witnesses, having requested no other evidence.

The Respondent is the AT – Tax and Customs Authority (hereinafter, Respondent or AT).

1.1. In essence and in brief summary, the Claimants alleged as follows:

• The first and second Claimants are bare owners, with the remaining being usufructuaries of an urban property, in vertical co-ownership with floors or divisions capable of independent use, composed of sub-basement, basement, ground floor and 3 floors, with a tax patrimonial value of € 1,078,250.00;

• Since the year 2013 to the present, that urban property has been subject to Stamp Tax, at the rate of 1%, pursuant to item 28.1 of the TGIS;

• The Claimants contend that the subjection to Stamp Tax should be assessed not by the total value of the property – as the tax administration understands it – but by the value attributed to each of the parts, according to their respective tax patrimonial value, thus following the same criterion as the determination of Municipal Tax on Real Estate (IMI);

• Given that the Stamp Tax Code refers to the IMI Code, properties registered in the real estate register in vertical co-ownership, consisting of different parts, floors or divisions with independent use, must be subject to the same registration rules as properties constituted in horizontal co-ownership;

• Therefore, both IMI and Stamp Tax are assessed individually in relation to each of the parts;

• The tax administration may only impose that Stamp Tax on properties with residential purpose and that have a tax patrimonial value exceeding € 1,000,000.00, which is not the case here;

• The said Stamp Tax that has been assessed – in the annual amount of € 10,782.50 – has been paid;

• The Stamp Tax assessments made by the tax administration are illegal, as the criterion adopted violates the principles of tax legality and tax equality;

• The Claimants therefore request that the sums illegally collected by the tax administration be refunded to them, relating to the years 2013, 2014 and 2015.

The Claimants conclude their initial pleading by petitioning as follows:

"In these circumstances, and always with Your Honours' most learned dispensation, the following should occur:

a) The assessments made in respect of Stamp Tax be annulled and the amounts in question be refunded to the Claimants;

b) That the Fiscal Administration refrain in the future from collecting Stamp Tax, in the manner in which it has been effected, insofar as each part, floor or division of a property (whether in horizontal co-ownership or not) does not, individually, have a tax patrimonial value (TPV) exceeding 1 million euros."

1. The request for constitution of an arbitral tribunal was accepted and automatically notified to the AT on 28 April 2016.

2. The Claimants did not appoint an arbitrator, therefore, pursuant to the provisions of no. 1 of article 6 and paragraph a) of no. 1 of article 11 of the RJAT, the Chairman of the Deontological Council of CAAD appointed the undersigned as arbitrator of the singular Arbitral Tribunal, who communicated acceptance of the appointment within the applicable period.

3. On 17 June 2016, the parties were duly notified of that appointment, having manifested no intention to refuse the appointment of the arbitrator, in accordance with the combined provisions of article 11, no. 1, paragraphs b) and c), of the RJAT and articles 6 and 7 of the CAAD Deontological Code.

4. Accordingly, in conformity with the provision of paragraph c) of no. 1 of article 11 of the RJAT, the singular Arbitral Tribunal was constituted on 4 July 2016.

5. On 14 September 2016, the Respondent, duly notified for that purpose, presented its Response in which it raised the peremptory exception of lapse of the right of action and specifically contested the arguments put forward by the Claimants, concluding that said exception should be upheld, with its consequent discharge from the claim or, should that not be the case, that the present action should be judged without merit, equally with its discharge from the claim.

The Respondent attached no documents, nor did it request the production of any other evidence.

On the same occasion, the Respondent attached to the case file its administrative file (hereinafter, abbreviated as PA).

6.1. In essence and also briefly, it is important to extract the most relevant arguments on which the Respondent based its Response:

The Respondent begins by invoking the peremptory exception of lapse of the right of action, invoking the following reasoning:

• The Claimants request the annulment of the Stamp Tax assessments for the years 2013, 2014 and 2015;

• There was no amicable claim regarding those assessment acts;

• Regarding the Stamp Tax assessment for the year 2013, the deadlines for voluntary payment occurred on 30.04.2014, 31.07.2014 and 30.11.2014;

• With respect to the Stamp Tax assessment for the year 2014, the deadlines for voluntary payment occurred on 30.04.2015, 31.07.2015 and 30.11.2015;

• The request for constitution of an arbitral tribunal presented by the Claimants was filed on 12.04.2016;

• Having regard to what follows from the combined provisions of article 10, no. 1, of the RJAT and article 102, nos. 1 and 2, of the CPPT, the request of the Claimants regarding both the year 2013 and the year 2014 is untimely;

• Untimeliness constitutes a peremptory exception, under article 576 of the CPC, which results in the discharge of the AT from the claim, as it prevents the legal effect of the facts alleged by the Claimants;

• Therefore, the AT should be discharged from the claim regarding the Stamp Tax assessments for the years 2013 and 2014;

• Consequently, the value of the claim should be reduced to the amount of the 2015 assessments.

Subsequently, the Respondent proceeds to defend itself by contestation, arguing the following which we highlight here:

• What is at issue here are assessments resulting from the direct application of the legal norm – item 28.1 of the TGIS – which translates into objective elements, without any subjective or discretionary appreciation;

• It follows from the analysis of article 2, nos. 1 and 4, of the IMI Code that a property in full ownership with floors or divisions capable of independent use is different from a property in a horizontal co-ownership regime, consisting of autonomous fractions, that is, several properties;

• Regarding the assessment of IMI, if it is a property in full ownership the tax patrimonial value serving as the basis for its calculation shall be the total value of the property;

• Although the assessment of Stamp Tax, in the situations provided for in item 28.1 of the TGIS, is carried out in accordance with the rules of the IMI Code, the truth is that the legislator makes an exception regarding aspects that require appropriate adaptations, namely those in which, as is the case with properties in full ownership, even though with floors or divisions capable of independent use (even though IMI is assessed in relation to each part capable of independent use) for purposes of Stamp Tax the property in its totality is relevant because divisions capable of independent use are not considered as property, but only autonomous fractions in the horizontal co-ownership regime, in accordance with no. 4 of article 2 of the CIMI;

• The subjection to Stamp Tax of item 28.1 of the TGIS results from the combination of two factors: the residential purpose and the tax patrimonial value of the urban property registered in the property register being equal to or exceeding € 1,000,000.00;

• The Stamp Tax assessments in dispute were made taking into account the nature of the urban property, at the date of the tax event (31.12.2013, 31.12.2014 and 31.12.2015), based on the tax patrimonial value and in relation to the taxpayers that were listed in the register on 31 December of the years to which they relate;

• The property being in full ownership regime, it does not have autonomous fractions, to which the law attributes the qualification of property, because from the concept of property in article 2 of the IMI Code it results that only autonomous fractions of property in horizontal co-ownership regime are considered as properties (no. 4 of that article);

• The vice of violation of law by error regarding the presuppositions of law should be judged without merit, maintaining in the legal order the impugned assessments as they constitute a correct application of the law to the facts.

The Respondent concludes its pleading thus:

"In the terms set out above and in the remaining terms of Law that Your Honour will duly supply, the Tax Authority should be discharged from the case before this tribunal due to the manifest untimeliness of the request for constitution of the Arbitral Tribunal, which occurred after 90 days from the end of the deadline for voluntary payment of the amount relating to Stamp Tax – item 28, for the years 2013 and 2014.

Beyond these conclusions, and should the learned Arbitral Tribunal understand otherwise, the present request for arbitral pronouncement should be judged without merit, given the legality of the Stamp Tax assessments – years 2013, 2014 and 2015, discharging the Tax Authority from the claim."

1. On 26 September 2016, the Claimants, duly notified for that purpose, came forward to pronounce themselves regarding the matter of exception alleged by the Respondent, as well as to waive the production of witness evidence, the holding of the meeting referred to in article 18 of the RJAT and the presentation of any closing arguments.

2. On 26 September 2016, given the converging positions taken by the Parties in that respect, a ruling was issued dispensing with the holding of the meeting referred to in article 18 of the RJAT, as well as the presentation of any closing arguments and fixing 16 December 2016 as the deadline for the issuance of the arbitration decision.

II. PRELIMINARY MATTERS

The Arbitral Tribunal was regularly constituted.

The case is free from defects of nullity.

The parties have legal standing and capacity, are duly represented and are legitimate.

The joinder of claims is admitted – at issue are several Stamp Tax assessment acts, with the declaration of illegality and annulment of each of them being requested – because it is verified that the merit of the claims formulated by the Claimants depends essentially on the appreciation of the same circumstances of fact – rooted in the bare ownership of the first and second Claimants and in the usufruct of the remaining Claimants over an urban property in vertical co-ownership with floors or divisions capable of independent use – and in the interpretation and application of the same principles or rules of law – in this case, item 28.1 of the TGIS (cf. article 3, no. 1, of the RJAT).

II.1. ON THE LACK OF MATERIAL COMPETENCE OF THE ARBITRAL TRIBUNAL

The Claimants, in addition to the declaration of illegality and consequent annulment of the acts of Stamp Tax assessment in dispute, further petition as follows:

"b) That the Fiscal Administration refrain in the future from collecting Stamp Tax, in the manner in which it has been effected, insofar as each part, floor or division of a property (whether in horizontal co-ownership or not) does not, individually, have a tax patrimonial value (TPV) exceeding 1 million euros."

Regarding this claim, it is necessary to ascertain whether or not it falls within the scope of the competence of arbitral tribunals, in reason of the subject matter, as it appears defined in article 2, no. 1, of the RJAT, which provides as follows:

"Article 2

Competence of arbitral tribunals and applicable law

1. The competence of arbitral tribunals comprises the appreciation of the following matters:

a) The declaration of illegality of acts of tax assessment, self-assessment, withholding and payment on account;

b) The declaration of illegality of acts of determination of taxable matter when they do not give rise to the assessment of any tax, of acts of determination of taxable income and of acts of fixing tax patrimonial values."

Given that the scope of material competence of the tribunal is of public order and its examination precedes that of any other matter (article 13 of the CPTA applicable ex vi article 29, no. 1, paragraph c), of the RJAT) and that the violation of the rules of competence in reason of subject matter determines the absolute incompetence of the tribunal, which is to be examined ex officio (article 16 of the CPPT applicable ex vi article 29, no. 1, paragraph a), of the RJAT), it is necessary to appreciate this issue as a primary matter.

In the legislative authorization on which the Government based itself for approving the RJAT, granted by article 124 of Law no. 3-B/2010, of 28 April, it is proclaimed as a primary directive of the institution of arbitration as an alternative form of jurisdictional resolution of conflicts in tax matters, that "the tax arbitration process must constitute an alternative procedural means to the judicial challenge process and to the action for recognition of a right or legitimate interest in tax matters".

The judicial challenge process is a procedural means that has as its object an act in tax matters, aiming to appreciate its legality and to decide whether it should be annulled or its nullity or non-existence declared, as follows from article 124 of the CPPT.

From the analysis of articles 2 and 10 of the RJAT, it is verified that only the legality of assessment acts or acts of determination of taxable matter and second-instance acts that have as their object the appreciation of the legality of acts of those types, acts whose appreciation falls within the scope of judicial challenge processes, as results from paragraphs a) to d) of no. 1 of article 97 of the CPPT, were included in the competences of arbitral tribunals functioning in CAAD.

That is, it is observed that the legislator did not implement in the legislative authorization, in the part in which it was provided to extend the competences of arbitral tribunals to matters that are appreciated in tax tribunals through action for recognition of a right or legitimate interest.

But, in line with the intention underlying the legislative authorization to create an alternative means to the judicial challenge process, it should be understood that, as regards claims for declaration of illegality of acts of the types referred to in its article 2, the arbitral tribunals functioning in CAAD have the same competences as state tribunals have in judicial challenge proceedings, within the limits defined by the undertaking made by the Tax and Customs Authority through Ordinance no. 112-A/2011, of 22 March, pursuant to article 4, no. 1, of the RJAT.

Although there is no express norm to that effect, it has also been peacefully understood that notwithstanding the judicial challenge process having as its primary object the declaration of nullity or non-existence or the annulment of acts of the types referred to, therein can be issued condemnations of the Tax Administration to pay interest compensation and compensation for undue guarantee.

But, in the absence of any legal provision allowing conclusion to the contrary, the scope of the judicial challenge process and arbitration proceedings is restricted to matters concerning the legality of acts of the types referred to in article 2 which are encompassed by the undertaking made in Ordinance no. 112-A/2011.

Given this legal framework, it is necessary to conclude that the competence of arbitral tribunals functioning in CAAD is not provided for to pronounce themselves on claims such as those formulated by the Claimants in the cited paragraph b), which objectively and unequivocally has nothing to do with the appreciation of the legality of acts of the types listed in article 2 of the RJAT.

However, this incompetence to appreciate one of the claims, when there are others for which this Arbitral Tribunal is competent – the one formulated in paragraph a) – only has the consequence that the claim for which the Tribunal is incompetent be considered without effect, as may be inferred from what, although for another purpose, is referred to in no. 4 of article 186 of the CPC, when it alludes to situations in which "one of the claims is rendered without effect due to incompetence of the tribunal".

Accordingly, it is found that there is material incompetence of the Arbitral Tribunal regarding the claim formulated in paragraph b) – "That the Fiscal Administration refrain in the future from collecting Stamp Tax, in the manner in which it has been effected, insofar as each part, floor or division of a property (whether in horizontal co-ownership or not) does not, individually, have a tax patrimonial value (TPV) exceeding 1 million euros" – which results in the discharge of the Tax and Customs Authority from the case regarding this claim (article 99, no. 1, of the CPC applicable ex vi article 29, no. 1, paragraph e), of the RJAT), without prejudice to the examination of the remaining claims.

II.2. ON THE LAPSE OF THE RIGHT OF ACTION: REFERRAL

The Respondent raised the peremptory exception of lapse of the right of action regarding the Stamp Tax assessments for the years 2013 and 2014, for whose examination and decision it becomes necessary, however, to first establish the facts proven and not proven, after which a decision will be rendered.

II.3. ON THE VALUE OF THE CASE

Following the invocation of the exception of lapse of the right of action and foreseeing the hypothesis of its merit being upheld, the Respondent raises the question of the value of the claim, which, in its view, should be reduced to the amount of the Stamp Tax assessments relating to the year 2015.

As follows from the provision of article 10, no. 2, paragraph e), of the RJAT, in the request for constitution of an arbitral tribunal must appear, among other elements, "an indication of the value of the economic benefit of the claim".

The determination of that value should be made by reference to the provision of article 97-A of the CPPT (applicable ex vi article 29, no. 1, paragraph a), of the RJAT), from which it follows, in what is relevant to retain here, that when an assessment is challenged, the value to be considered, for purposes of costs or other provided for in law, for actions that take place in tax tribunals – state or arbitral – is that of the amount whose annulment is sought.

On the other hand, it is also important to cite article 299, no. 1, of the CPC (applicable ex vi article 29, no. 1, paragraph e), of the RJAT), which provides, in the part relevant here, that in the determination of the value of the case, regard should be had to the moment at which the action is filed, and article 306, no. 1, of the same legal compendium, which establishes that it is the judge's responsibility to fix the value of the case, which in this case must be done in the decision.

Returning to the present case, we have that the Claimants petitioned for the annulment of the aforementioned Stamp Tax assessments relating to the years 2013, 2014 and 2015, the sum total of their respective unit values amounts to € 32,347.50, and the Respondent invoked the exception of lapse of the right of action regarding the tax acts relating to the years 2013 and 2014.

As referred to in the preceding point of this arbitration decision (II.2. On the lapse of the right of action: referral), for the examination and decision of said exception it is necessary to first establish the facts proven and not proven, after which a decision will be rendered.

However, the possible merit of that exception – with the consequent reduction both of the universe of assessment acts that may be the subject of this proceeding and of their respective total value in dispute – will have no impact on the value of the case, having regard to the provision of article 299, no. 1, of the CPC, that is, that value shall remain unchanged as to that attributed by the Claimants in the request for constitution of an arbitral tribunal.

It being certain that, it should be emphasized, article 299, no. 4, of the CPC does not apply here, which provides that "in assessment proceedings or others in which, analogously, the economic benefit of the claim is only defined as a result of the action, the initially accepted value shall be corrected as soon as the proceeding provides the necessary elements". Indeed, the proceedings to which this norm refers are those in which a generic claim is formulated, under paragraphs a) and b) of article 556 of the CPC and which comes to be subject to assessment through the incident referred to in articles 358 to 361 of the CPC.

Accordingly, the value of the present case is fixed at € 32,347.50 (thirty-two thousand three hundred and forty-seven euros and fifty cents).

There are no other exceptions or preliminary issues that prevent examination of the merits and of which it is necessary to now take cognizance.

III. REASONING

III.1. ON THE FACTS

§1. FACTS PROVEN

The following facts are considered proven:

a) In the years 2013, 2014 and 2015, Claimants A… and B… were bare owners and Claimants C… and D… were usufructuaries of the urban property, in full ownership with floors or divisions capable of independent use, located at Avenida…, no.…, parish of…, municipality and district of Lisbon, registered in the respective property register under article…. [cf. Docs. nos. 1 and 2 attached to the Initial Pleading]

b) In those years, the said urban property was thus described in its respective property register [cf. Doc. no. 2 attached to the Initial Pleading and PA attached to the case file]:

[property register entry]

c) The floors or divisions capable of independent use comprising that same urban property are allocated to housing and have their own tax patrimonial value, determined in accordance with the IMI Code, and in 2015 the following unit tax patrimonial values were determined for them [cf. Doc. no. 2 attached to the Initial Pleading and PA attached to the case file]:

d) On 17 March 2014, the AT assessed Stamp Tax, in the total amount of € 10,782.50, relating to the year 2013 and concerning the floors or divisions with independent use listed in the previously proven fact. [cf. PA attached to the case file]

e) The Stamp Tax assessments referred to in the previously proven fact resulted from the application of item 28.1 of the TGIS to each and every one of the floors or divisions with independent use listed in the previously proven fact c). [cf. PA attached to the case file]

f) In the name of Claimant C… the following Stamp Tax assessments relating to the year 2013 were then issued [cf. PA attached to the case file]:

[detailed list of assessments]

g) As a result of the Stamp Tax assessments referred to in the previously proven fact, the respective collection notices were issued in the name of Claimant C…, with voluntary payment deadlines of 30.04.2014, 31.07.2014 and 30.11.2014, which were paid timely and in full. [cf. PA attached to the case file]

h) On 20 March 2015, the AT assessed Stamp Tax, in the total amount of € 10,782.50, relating to the year 2014 and concerning the floors or divisions with independent use listed in the previously proven fact c). [cf. PA attached to the case file]

i) The Stamp Tax assessments referred to in the previously proven fact resulted from the application of item 28.1 of the TGIS to each and every one of the floors or divisions with independent use listed in the previously proven fact c). [cf. PA attached to the case file]

j) In the name of Claimant C… the following Stamp Tax assessments relating to the year 2014 were then issued [cf. PA attached to the case file]:

[detailed list of assessments]

k) As a result of the Stamp Tax assessments referred to in the previously proven fact, the respective collection notices were issued in the name of Claimant C…, with voluntary payment deadlines of 30.04.2015, 31.07.2015 and 30.11.2015, which were paid timely and in full. [cf. PA attached to the case file]

l) On 5 April 2016, the AT assessed Stamp Tax, in the total amount of € 10,782.50, relating to the year 2015 and concerning the floors or divisions with independent use listed in the previously proven fact c). [cf. PA attached to the case file]

m) The Stamp Tax assessments referred to in the previously proven fact resulted from the application of item 28.1 of the TGIS to each and every one of the floors or divisions with independent use listed in the previously proven fact c). [cf. PA attached to the case file]

n) In the name of Claimant C… the following Stamp Tax assessments, in the total amount of € 5,391.25, relating to the year 2015 were then issued [cf. PA attached to the case file]:

[detailed list of assessments]

o) In the name of Claimant D… the following Stamp Tax assessments, in the total amount of € 5,391.25, relating to the year 2015 were then issued [cf. PA attached to the case file]:

[detailed list of assessments]

p) As a result of the Stamp Tax assessments referred to in the previously proven fact n), the following collection notices were issued in the name of Claimant C… [cf. PA attached to the case file]:

[detailed list]

q) As a result of the Stamp Tax assessments referred to in the previously proven fact o), the following collection notices were issued in the name of Claimant D… [cf. PA attached to the case file]:

[detailed list]

r) On 2 June 2016, the collection notices referred to in the previously proven facts p) and q), with payment deadline of 30.04.2016, remained unpaid, and enforcement proceedings were instituted for their coercive collection in the Finance Office of Lisbon-…. [cf. PA attached to the case file]

s) On 12 April 2016, the Claimants filed the request for constitution of an arbitral tribunal that gave rise to the present proceeding. [cf. case management system of CAAD]

§2. FACTS NOT PROVEN

It was not proven that the Claimants paid the amounts of Stamp Tax resulting from the disputed assessments and respective collection notices relating to the year 2015 (contained in the previously proven facts n), o), p) and q)).

§3. REASONING ON THE FACTS

Regarding the proven facts, the Tribunal's conviction was based on the facts alleged by the Parties, whose correspondence to reality was not called into question, in the documents and in the administrative file attached to the case.

Regarding the unproven facts, this was so considered as a result of the absence of any probative elements capable of unequivocally proving them.

III.2. ON THE LAW

III.2.1. ON THE LAPSE OF THE RIGHT OF ACTION

The Respondent raised this exception, invoking the following reasoning which we here recover:

• The Claimants request the annulment of the Stamp Tax assessments for the years 2013, 2014 and 2015, regarding which they presented no amicable claim;

• Regarding the Stamp Tax assessments for the year 2013, the deadlines for voluntary payment occurred on 30.04.2014, 31.07.2014 and 30.11.2014;

• With respect to the Stamp Tax assessments for the year 2014, the deadlines for voluntary payment occurred on 30.04.2015, 31.07.2015 and 30.11.2015;

• The request for constitution of an arbitral tribunal presented by the Claimants was filed on 12.04.2016, and having regard to what follows from the combined provisions of article 10, no. 1, of the RJAT and article 102, nos. 1 and 2, of the CPPT, the request of the Claimants regarding both the year 2013 and the year 2014 is untimely.

The Claimants pronounced themselves on this exception, arguing for its lack of merit, in the following terms which we here extract:

"Notwithstanding these being continuous facts, never did the Claimants come to be notified of the right that was theirs, in order that they might, if they so understood, present a Judicial Challenge or Amicable Claim (...)

Merely because never did they default, (...)

Always having paid the taxes in a timely manner, (...)

Only when they became aware of the power that the Law confers upon them, in view of the arguments already presented in the request for Constitution of the Arbitral Tribunal, (...), did they come to exercise such right, (...)

Furthermore, the fact that the Claimants intend to see beyond the reimbursement of the amounts already assessed by the Right that is theirs, they also intend recognition that in the future, such assessment shall not be imputed to them, also here by the facts and grounds previously presented, with the Request for Constitution of the Tribunal, (...)

In the view of the Claimants, they are before continuous facts, insofar as there is configured the existence of an infraction committed by the Respondent, of a continuous nature, (...)

Which before such circumstances, such prescription is only verified after three years, counted from the moment in which each one is due or known. (...)

By which reason the Claimants argue that the exception deduced should be considered without merit by the facts and grounds now invoked and contained in the present pronouncement now deduced by them."

Appreciating and deciding.

The deadlines for bringing actions are substantive deadlines, of lapse, and form an integral part of the material legal relationship in dispute. They aim to determine the period for the exercise of a right and are peremptory, as their expiry extinguishes the right itself (in this sense, inter alia, the judgment of the TCA North, case no. 01811/09.7BEBRG, of 23 September 2010).

Before an action is filed there is yet no proceeding; therefore, there are no judicial or procedural deadlines before there is a proceeding.

In fact, a judicial or procedural deadline presupposes that the action is before a court and marks the lapse of time necessary, according to law, for a certain procedural effect to be produced or, according to another definition, for the performance of a judicial act. This is not what occurs with the deadline fixed for bringing an action, whether in state tribunals or arbitral tribunals.

In this manner, the counting of the deadline for bringing the action must observe the rules of article 279 of the Civil Code, as expressly provided for in no. 1 of article 20 of the CPPT, with respect to judicial challenge. For that reason, the counting of such deadline is continuous and is not suspended during judicial vacations, with the provision of article 138 of the CPC being inapplicable, whose scope is restricted to judicial or procedural deadlines.

On this matter, it is emphasized that the arbitral nature of this tribunal and the application of the tax arbitration regime do not entail any modification relative to the nature, modalities and form of counting deadlines, as may be extracted from reading the RJAT, and much less with respect to substantive deadlines, which form an integral part of the material status of the right of tax credit itself.

And, if any doubt existed, article 29 of the RJAT provides for the subsidiary application of norms of a procedural or tax procedural nature, norms on organization and proceedings in administrative and tax tribunals, the Administrative Procedure Code and the Code of Civil Procedure.

Article 10, no. 1, paragraph a), of the RJAT determines that the request for constitution of an arbitral tribunal is presented within 90 days of the facts foreseen in nos. 1 and 2 of article 102 of the CPPT – expiry of the deadline for voluntary payment of tax obligations legally notified to the taxpayer (no. 1, paragraph a)), notification of other tax acts, even when they do not give rise to any assessment (no. 1, paragraph b)), service on secondary liable parties in tax enforcement proceedings (no. 1, paragraph c)), formation of the presumption of tacit rejection (no. 1, paragraph d)), notification of other acts that may be subject to autonomous challenge under the terms of the CPPT (no. 1, paragraph e)) and knowledge of acts injurious to legally protected interests not encompassed in the preceding paragraphs (no. 1, paragraph f)) –, "regarding acts susceptible of autonomous challenge and, likewise, of notification of the decision or expiry of the legal deadline for decision of the hierarchical appeal".

In the situation sub iudice the counting of said 90-day deadline begins as of the expiry of the deadline for voluntary payment of tax obligations legally notified to the taxpayer, that is, began as of 30.04.2014, 31.07.2014 and 30.11.2014, regarding the year 2013 (cf. fact proven g)), and as of 30.04.2015, 31.07.2015 and 30.11.2015, regarding the year 2014 (cf. fact proven k)).

The request for constitution of the arbitral tribunal had to be submitted, as noted above, within a maximum deadline of 90 days, which is evident did not occur – without it being necessary to undertake a detailed temporal calculation – as it was filed with CAAD on 12 April 2016 (cf. fact proven s)), that is, after the expiry of the legal 90-day deadline.

In these terms, without need of further considerations, because the request for constitution of an arbitral tribunal was presented after the expiry of the 90-day deadline provided for in article 10, no. 1, paragraph a), of the RJAT, combined with article 102, no. 1, paragraph a), of the CPPT, it is concluded that the request for constitution and pronouncement of this arbitral tribunal is untimely, regarding the Stamp Tax assessments relating to the years 2013 and 2014 (see, in this sense, inter alia, the decisions rendered by arbitral tribunals constituted under CAAD, in cases nos. 356/2014-T, 357/2014-T, 358/2014-T, 800/2014-T, 122/2015-T, 211/2015-T and 618/2015-T[1]).

Consequently, the peremptory exception raised by the Respondent is judged to have merit and, consequently, it is discharged from the claim regarding those Stamp Tax assessment acts (article 576, no. 3, of the CPC, ex vi article 29, no. 1, paragraph e), of the RJAT).

III.2.2. ON THE APPRECIATION OF THE MERITS OF THE CASE

The essential question to be resolved on the merits of the dispute relating to the claim for declaration of illegality of the Stamp Tax assessments in dispute, relating to the year 2015, concerns determining whether, for purposes of the application of item 28.1 of the TGIS, in cases of a property in full ownership with floors or divisions capable of independent use, regard should be had to the total value of the property resulting from the sum of the tax patrimonial values of the various floors or divisions with residential purpose, as the tax administration understands it, or whether instead weight should be given to the tax patrimonial value of each floor or division with residential purpose.

Appreciating and deciding.

§1. ON THE INTERPRETATION AND DEFINITION OF THE SCOPE OF OBJECTIVE APPLICATION OF ITEM 28.1 OF THE TGIS

At the center of the disagreement that opposes the Parties in this proceeding is the norm of tax incidence contained in item 28.1 of the TGIS, therefore it is necessary to naturally begin by proceeding with the interpretation of this norm, with a view to ascertaining its scope and, thereby, delimiting its field of application.

Law no. 55-A/2012, of 29 October, introduced various amendments to the Stamp Tax Code and added item 28 to the TGIS (cf. article 4), with the following wording:

"28 — Ownership, usufruct or right of superficies of urban properties whose tax patrimonial value recorded in the register, in accordance with the Municipal Tax on Real Estate Code (CIMI), is equal to or exceeding € 1,000,000 — on the tax patrimonial value used for purposes of IMI:

28.1 — Per property with residential purpose — 1%;

28.2 — Per property, when the taxpayers who are not natural persons are resident in a country, territory or region subject to a clearly more favorable tax regime, contained in the list approved by ordinance of the Minister of Finance — 7.5%."

Subsequently, Law no. 83-C/2013, of 31 December (State Budget Law 2014), amended the wording of item 28.1 of the TGIS (cf. article 194), which then took on the following content [applicable ratione temporis to the situation sub iudice]:

"28.1 — Per residential property or per land for construction whose construction, authorized or planned, is for housing, in accordance with what is provided in the Municipal Tax on Real Estate Code — 1%"

The interpretation of the norm of tax incidence contained in item 28.1 of the TGIS cannot fail to be effected on the basis of the hermeneutical guidelines that flow from article 11 of the LGT and article 9 of the Civil Code, norms which provide as follows:

"Article 11 [LGT]

Interpretation

1. In determining the meaning of tax norms and in qualifying the facts to which they apply, the general rules and principles of interpretation and application of laws are observed.

2. Whenever, in tax norms, terms specific to other branches of law are employed, they should be interpreted in the same sense as they have there, unless otherwise follows directly from the law.

3. If doubt persists regarding the meaning of the norms of tax incidence to be applied, regard should be had to the economic substance of the tax facts.

4. Gaps resulting from tax norms encompassed in the constitutional reservation of law of the Assembly of the Republic are not susceptible of analogical integration."

"Article 9 [CC]

Interpretation of law

1. Interpretation must not confine itself to the letter of the law, but must reconstruct from the texts the legislative thought, having especially in 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.

2. However, the interpreter cannot regard the legislative thought that does not have in the letter of the law a minimum of verbal correspondence, even if imperfectly expressed.

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

On this interpretive task, with respect, we adopt here the following considerations set forth in the arbitration decision rendered in case no. 53/2013-T of CAAD:

"The relevance of the letter of the law is specially emphasized in the matter of interpretation of norms of tax incidence of Stamp Tax, which are reduced to an amalgam, under a common denomination, of an incongruous set of taxes of completely distinct natures (on income, on spending, on patrimony, on acts, etc.), which leaves little room for application of the primary interpretive criterion, which is the unity of the legal system, which calls for its overall coherence.

The recognized lack of coherence of Stamp Tax is particularly exuberant in the case of item no. 28.1, hastily included at the margin of the General State Budget, by a fiscal legislator without perceptible overall fiscal guidance, which is successively implementing norms of tax aggravation as measures of the setbacks in budget execution, of the impositions of international institutional creditors (represented by the 'troika') and of the oversight of the Constitutional Court.

In truth, although in the 'Statement of Grounds' of the Draft Law no. 96/XII/2ª, which formed the basis of Law no. 55-A/2012, reference is made to the praiseworthy concern of the Government to 'strengthen the principle of social equity in austerity, guaranteeing an effective distribution of the necessary sacrifices for the fulfillment of the adjustment program' and to its commitment 'to ensure that the distribution of these sacrifices will be made by all and not merely by those who live from the income of their work', it is manifest, on the one hand, that those reasons for equity, certainly existing, did not begin to apply in the middle of 2012, already existing at the beginning of the year, when the General State Budget came into force, and on the other hand, that the scope of item no. 28.1, by additionally taxing properties with residential purpose and not also properties without residential purpose, lets one see that the concerns for social equity and the proclaimed intention of distribution of sacrifices by all, reaches much more some than properly all.

In this context, given the absence of safe interpretive elements that permit discovering legislative coherence in the solution adopted in said item no. 28.1 or the rightness or wrongness of the adopted solution (relevant for interpretive purposes in light of no. 3 of article 9 of the Civil Code), the tenor of the legal text must be the primary element of interpretation, in accordance with the presumption, imposed by that same no. 3 of article 9, that the legislator knew how to express its thought in appropriate terms."

Having said this. Upon analysis of the wording – both the original and the current – of item 28.1 of the TGIS, we find that this norm possesses a fundamentally referential character, as its relevant regulatory content depends on the normativity ad quam contained in the IMI Code.

In fact, whether as regards objective incidence, with reference to "urban properties" and to "the tax patrimonial value recorded in the register, in accordance with the Municipal Tax on Real Estate Code", whether as regards the fixing of taxable income, with reference to "the tax patrimonial value used for purposes of IMI", the regulatory tenor of this item 28 of the TGIS results from the devolution – in terms of a general referential – to the regulatory body that is found in the IMI Code.

Indeed, this aspect is reinforced by no. 2 of article 67 of the CIS, which determines that to matters not regulated in the CIS relating to item 28 of the TGIS, the provisions of the IMI Code are applied, subsidiarily.

Within these parameters, it is necessary to then gather the norms of the IMI Code that appear relevant to the understanding and, therefore, to the application of item 28.1 of the TGIS.

In the IMI Code, the concept of "property" is defined as follows in its article 2:

"1. For purposes of this Code, property is any fraction of territory, encompassing waters, plantations, buildings and constructions of any nature incorporated therein or built thereupon, with a character of permanence, provided that it forms part of the patrimony of a natural or legal person and, in normal circumstances, has economic value, as well as waters, plantations, buildings or constructions, in the circumstances stated above, endowed with economic autonomy in relation to the land on which they are located, although situated in a fraction of territory that constitutes an integral part of a diverse patrimony or does not have a patrimonial nature.

1. Buildings or constructions, although movable by nature, are considered as having a character of permanence when devoted to non-transitory purposes.

2. The character of permanence is presumed when buildings or constructions have been situated at the same location for a period exceeding one year.

3. For purposes of this tax, each autonomous fraction, in the horizontal co-ownership regime, is considered as constituting a property."

Subsequently, in articles 3 to 5 of the CIMI, the species of existing properties are enumerated, namely:

Rural properties (article 3):

"Rural properties are lands situated outside an urban agglomeration that are not to be classified as land for construction, in accordance with no. 3 of article 6, provided that:

a) They are allocated to or, in the absence of concrete allocation, have as their normal destination an allocation generating agricultural income, as are considered for purposes of tax on income of natural persons (IRS);

b) Not having the allocation indicated in the preceding paragraph, they are not built or have only buildings or constructions of an accessory nature, without economic autonomy and of reduced value.

2 – Rural properties are also lands situated within an urban agglomeration, provided that, by force of a legally approved provision, they cannot have an allocation generating any income or can only have an allocation generating agricultural income and are in fact having this allocation.

3 – Also rural properties are:

a) Buildings and constructions directly allocated to the production of agricultural income, when situated in the lands referred to in the preceding numbers;

b) Waters and plantations in the situations to which no. 1 of article 2 refers.

4 – For purposes of this Code, urban agglomerations are considered, in addition to those within legally fixed perimeters, nuclei with a minimum of 10 dwellings served by public roads, with their perimeter delimited by points distanced 50 m from the axis of the roads, in the transverse direction, and 20 m from the last building, in the direction of the roads."

Urban properties (article 4):

"Urban properties are all those that should not be classified as rural, without prejudice to the provision of the following article."

Mixed properties (article 5):

"1. Whenever a property has rural and urban parts it is classified, in its entirety, in accordance with the principal part.

1. If neither of the parts can be classified as principal, the property is considered as mixed."

Subsequently, in article 6 of the CIMI, the species of urban properties are indicated:

"1. Urban properties are divided into:

a) Residential;

b) Commercial, industrial or for services;

c) Land for construction;

d) Others.

1. Residential, commercial, industrial or for services are buildings or constructions licensed for such by the municipalities or, in the absence of a license, that have as their normal destination each of these purposes.

2. Land for construction are lands situated within or outside an urban agglomeration for which a license or authorization has been granted, prior communication admitted or favorable prior information issued for a division or construction operation, and also those that have thus been declared in the acquisition title, excepting lands in which the competent entities forbid any such operations, namely those located in green areas, protected areas or which, in accordance with municipal land planning plans, are allocated to spaces, infrastructure or public facilities.

3. Encompassed in the provision of paragraph d) of no. 1 are lands situated within an urban agglomeration that are not land for construction nor are covered by the provision of no. 2 of article 3, and also buildings and constructions licensed or, in the absence of a license, that have as their normal destination purposes other than those referred to in no. 2 and also those in the exception of no. 3."

On the "tax patrimonial value", article 7 of the CIMI provides as follows:

"1. The tax patrimonial value of properties is determined in accordance with this Code.

1. The tax patrimonial value of urban properties with parts that may be classified in more than one of the classifications of no. 1 of the preceding article is determined:

a) If one of the parts is principal and the other or others merely accessory, by application of the evaluation rules of the principal part, taking into account the increase in value resulting from the existence of the accessory parts;

b) If the different parts are economically independent, each part is evaluated by application of the corresponding rules, and the value of the property is the sum of the values of its parts.

1. The tax patrimonial value of mixed properties corresponds to the sum of the values of their rural and urban parts determined by application of the corresponding rules of this Code."

Under the heading "concept of property registers", article 12 of the CIMI provides as follows:

"1. Property registers are records of which appear, in particular, the characterization of properties, the location and their tax patrimonial value, the identity of the owners and, if applicable, of usufructuaries and superficiaries.

1. There are two registers, one for rural property and another for urban property.

2. Each floor or part of property capable of independent use is considered separately in the register entry, which also discriminates the respective tax patrimonial value.

3. The registers are updated annually with reference to 31 December.

4. Register entries constitute, for tax purposes only, a presumption of ownership."

Also regarding property registers, it is important to consider no. 1 of article 13 of the CIMI, from which it follows that "[t]he registration of properties in the register and the updating thereof are effected on the basis of a declaration presented by the taxpayer".

With respect to the determination of tax patrimonial value, it is important here to invoke article 38 of the CIMI, entitled "Determination of tax patrimonial value":

"1. The determination of the tax patrimonial value of urban properties for housing, commerce, industry and services results from the following formula:

Vt = Vc x A x Ca x Cl x Cq x Cv

where:

Vt = tax patrimonial value;

Vc = base value of built properties;

A = gross construction area plus the area exceeding the implantation area;

Ca = allocation coefficient;

Cl = location coefficient;

Cq = quality and comfort coefficient;

Cv = age coefficient.

1. The tax patrimonial value of urban properties determined is rounded to the nearest ten euros."

As norms specifying the values and coefficients referred to in this legal provision, we have articles 39 ("Base value of built properties"), 40 ("Types of areas of built properties"), 40-A ("Area adjustment coefficient"), 41 ("Allocation coefficient"), 42 ("Location coefficient"), 43 ("Quality and comfort coefficient") and 44 ("Age coefficient") of the CIMI.

In view of the literal tenor of item 28.1 of the TGIS (wording applicable ratione temporis to the situation sub iudice), subject to this norm of tax incidence are urban properties with residential purpose having a tax patrimonial value equal to or exceeding € 1,000,000.00.

In view of the norms of the CIMI cited above, we have that residential properties are buildings or constructions licensed by the municipalities for that purpose or, in the absence of licensing, that have such use as their normal destination (article 6, no. 2, of the CIMI); thus, residential properties are those referred to buildings or constructions, and these are therefore subject to item 28.1 of the TGIS.

The correctness of this interpretation, as to the scope of application of item 28.1 of the TGIS is confirmed by the perceptible ratio legis of the restriction of the field of application of the norm to residential properties – a restriction that was maintained as to the allocation (housing) in the legislative amendment that came to extend the scope of application to land for construction – in the context of the "circumstances in which the law was elaborated and the specific conditions of the time in which it is applied", which article 9, no. 1, of the Civil Code also enshrines as interpretive elements.

In fact, the limitation of the application of the tax to residential properties and subsequently to land for construction in which the construction of housing is planned or authorized reveals the intention not to burden the productive sector and companies in general and, in that sense, it was not intended to encompass within the scope of application of the tax nor properties allocated to services, industry or commerce, that is, properties allocated to economic activity, nor land for construction regarding which the construction for those other purposes is planned or authorized. This is comprehensible in a context in which the economy was in a recessionary spiral, publicly proclaimed at the highest level, with unemployment rates reaching historic levels, with an avalanche of closures of companies due to economic unsustainability. On the ratio legis of the introduction of item 28 of the TGIS, see, inter alia, the decisions rendered in cases nos. 50/2013-T, 132/2013-T, 132/2013-T, 181/2013-T, 182/2013-T, 183/2013-T, 185/2013-T, 100/2014-T, 238/2014-T, 290/2014-T, 428/2014-T, 518/2014-T, 707/2014-T and 756/2014-T of CAAD.

Having this situation in mind and it being well known and public that the reanimation of economic activity and the increase of exports are the gateways out of the crisis, it is understood that, albeit the pressing need to increase tax revenues, legislative measures were not taken that would hinder economic activity, namely the aggravation of the tax burden that hinders it and affects competitiveness in international terms.

Therefore, it is to be concluded that the available interpretive elements, including the "circumstances in which the law was elaborated and the specific conditions of the time in which it is applied", clearly point to the direction that it was not intended to encompass within the scope of application of item 28.1 of the TGIS non-residential properties and, subsequently, also land for construction regarding which the construction is authorized or planned for purposes other than housing.

In closing this exegesis of item 28.1 of the TGIS, it is important to further emphasize that the cited articles 38 to 46 of the CIMI have no relationship with the classification of urban properties, as in those norms only the factors to be considered in their respective evaluation are indicated (in this sense, see the decision rendered in case no. 53/2013-T of CAAD).

Having stated this. It results from the combined analysis of the cited provisions of the CIMI that in this legal compendium no distinction is made between properties constituted in the horizontal co-ownership regime or in full ownership. In fact, despite no. 4 of article 2 expressly referring to autonomous fractions of properties constituted in the horizontal co-ownership regime as constituting, each one of them, a property, the truth is that it does not exclude from such classification the divisions with independent use of properties constituted in full ownership or vertical co-ownership regime.

And, where the law does not distinguish, the interpreter cannot do so.

Upon analysis, then, of the definition of property inherent in no. 1 of article 2 of the CIMI, we do not discern any reason not to include therein the divisions with independent use of properties constituted in the full ownership regime, as these constitute a fraction of territory that forms an integral part of the patrimony of a natural or legal person and that has economic value.

It is noted that to each one of those divisions or fractions a tax patrimonial value is attributed.

It being established that the classification of divisions with independent use of properties constituted in the full ownership regime as "properties", in the terms and for the purposes of the CIMI, it seems evident to us that each one of these divisions, when that is the purpose to which they are destined, constitute residential properties.

In the case at hand, each one of the divisions of the urban property in question are capable of independent use and are allocated to housing.

Indeed, were the divisions in the present case not individually classified as "properties" it would have no sense or logic the elaboration, in this case, of a Stamp Tax assessment for each one of those units.

It is true that the subsidiary application of the CIMI could inculcate the idea that only autonomous fractions, in the horizontal co-ownership regime, are considered as properties in light of the provision of no. 4 of article 2 of the CIMI.

However, if one attends to the wording of that legal norm, one will immediately verify that the prerequisite of the constitution of the horizontal co-ownership regime is only necessary for purposes of taxation in IMI.

It is further noted that, in light of the provision of article 12, no. 3, of the CIMI, "each floor or part of property capable of independent use is considered separately in the register entry, which also discriminates the respective tax patrimonial value".

It is further added that, as stated above, the introduction of item 28 in the TGIS had as its objective the taxation of urban properties of high value with residential purpose, taxing the wealth, externalized in ownership, usufruct or right of superficies, of luxury urban properties, or their fractions or autonomous divisions, with residential purpose.

Now, if the objective of the law was to adapt taxation under Stamp Tax to the taxpaying capacity of the taxpayers, it seems to have no relevance whatsoever the distinction between properties constituted in the horizontal co-ownership regime or vertical co-ownership regime.

Manifestly, it is not there that the greater or lesser taxpaying capacity is revealed, all the more so because, as is well known, horizontal co-ownership is a relatively recent legal institute, and it is true that a large part of old properties are not even constituted in this regime, despite functioning as such in practice.

Now, the principle of the prevalence of substance over form imposes that the AT should value material truth. And, in the case at hand, the material truth consists in the non-existence of any substantive difference between the divisions owned by the Claimants and the fractions of a property constituted in horizontal co-ownership.

Or, stated otherwise, the constitution of horizontal co-ownership being merely a juridical operation and not a factual one, there are no reasons discerned for differences in taxation on this basis, inasmuch as what shall be relevant is always the individual value of each one of the fractions, whether or not the property is constituted in the horizontal co-ownership regime.

In view of all that has been set forth, no doubts remain that the tax patrimonial value relevant for purposes of the application of Stamp Tax in cases of properties constituted in the full ownership regime, composed of several divisions with independent use, some of which with residential purpose, is the tax patrimonial value of each one of the divisions of the property and not the total tax patrimonial value of the property, corresponding to the sum of all the tax patrimonial values of the divisions composing it.

Thus, in conclusion, regarding properties in full ownership with floors or divisions capable of independent use, exclusive regard should be had to the tax patrimonial value of each floor or division with residential purpose, recorded in the register, for purposes of the application of item 28.1 of the TGIS.

§2. ON THE CASE SUB JUDICE

As was proven, none of the floors or divisions with independent use, described in the property register as allocated to housing, of the urban property in question, possesses a tax patrimonial value equal to or exceeding € 1,000,000.00 (cf. fact proven c)).

In that measure and having regard to what is stated above, since the tax patrimonial value of each one of the indicated floors or divisions with independent use allocated to housing is below that value to which item 28.1 of the TGIS relates, it follows that such floors or divisions do not come under the norm of tax incidence contained in that item 28.1, therefore such assessments are vitiated by a violation of law, due to error regarding the presuppositions of law, embodied in the incorrect interpretation and application of item 28.1 of the TGIS, which implies the declaration of its illegality and consequent annulment, with all the inherent legal consequences (cf. article 24, no. 1, paragraph b), of the RJAT).

IV. DECISION

In the terms set forth, this Arbitral Tribunal decides:

a) To find the Arbitral Tribunal materially incompetent to appreciate the claim formulated in paragraph b) – "That the Fiscal Administration refrain in the future from collecting Stamp Tax, in the manner in which it has been effected, insofar as each part, floor or division of a property (whether in horizontal co-ownership or not) does not, individually, have a tax patrimonial value (TPV) exceeding 1 million euros." – and, consequently, to discharge the Tax and Customs Authority from the case regarding this claim;

b) To find merit in the peremptory exception of lapse of the right of action regarding the acts of Stamp Tax assessment in dispute, relating to the years 2013 and 2014 and concerning the urban property registered under article … in the property register of the parish of…, municipality and district of Lisbon, and, consequently, to discharge the Tax and Customs Authority from the claim regarding those tax acts;

c) To find the request for arbitral pronouncement partially well-founded and, consequently, due to a violation of law, due to error regarding the presuppositions of law, embodied in the incorrect interpretation and application of item 28.1 of the TGIS, to declare illegal and to annul the Stamp Tax assessments challenged in the present case, in the total amount of € 10,782.50, relating to the year 2015 and concerning the urban property registered under article … in the property register of the parish of…, municipality and district of Lisbon, with the legal consequences thereof;

d) To condemn both Parties to the payment of the costs of the proceeding, in the proportion of their respective default.

VALUE OF THE CASE

In accordance with the provisions of articles 306, no. 2, of the CPC, 97-A, no. 1, paragraph a), of the CPPT and 3, no. 2, of the Regulation of Costs in Tax Arbitration Proceedings, the value of the case is € 32,347.50 (thirty-two thousand three hundred and forty-seven euros and fifty cents).

COSTS

In accordance with article 22, no. 4, of the RJAT, the amount of the costs is fixed at € 1,836.00 (one thousand eight hundred and thirty-six euros), in accordance with Table I attached to the Regulation of Costs in Tax Arbitration Proceedings, to be borne by Claimants and Respondent, in the proportion, respectively, of 67% and 33%.

Lisbon, 27 October 2016.

The Arbitrator,

(Ricardo Rodrigues Pereira)

[1] All arbitration decisions cited are available at www.caad.org.pt/tributario/decisoes.