Stamp Tax on Vertical Property: CAAD Arbitration on Verba 28.1 TGIS Legality (237/2015-T)

ARBITRAL DECISION

REPORT

A… – …, with registered office at Rua …, Torre …, … floor, unit …, in Lisbon, registered at the Commercial Registry Office of Lisbon under registration number and tax identification number for collective persons … (hereinafter referred to as "Applicant"), submitted on 06/04/2015 a request for arbitral decision with a view to the examination and declaration of illegality of the assessment acts for Stamp Duty of the year 2012, relating to the application of Item 28.1 of the General Schedule of Stamp Duty (General Schedule), in the total amount of € 16,330.20 (sixteen thousand three hundred and thirty euros and twenty cents) to properties of which it is the owner.

His Excellency the President of the Deontological Council of the Centre for Administrative Arbitration (CAAD) designated, on 03/06/2015, as sole arbitrator the signatory of this decision.

On 22/06/2015 the arbitral tribunal was constituted.

In compliance with the provisions of Article 17, paragraph 1 of the Legal Framework for Tax Arbitration (RJAT), the Tax and Customs Authority (AT) was notified on 22/06/2015 to, if it so wished, submit its response and request the production of additional evidence.

On 07/08/2015 the AT submitted its response, requesting the waiver of the holding of the meeting described in Article 18 of the RJAT.

The arbitral tribunal on 10/08/2015 decided to waive the holding of the meeting referred to in Article 18, paragraph 1 of the RJAT, on the grounds of the principle of autonomy of the arbitral tribunal in the conduct of proceedings, inviting both parties to, if they so wished, submit optional written submissions and scheduled the date for rendering the final decision.

The Applicant did not submit written submissions.

The AT did not submit written submissions.

PRELIMINARY RULING

The arbitral tribunal was regularly constituted and is materially competent.

The parties have legal personality and capacity and are legitimate, with no defects of representation.

There are no nullities, exceptions or preliminary issues that prevent the examination of the merits and which must be examined ex officio.

The request for constitution of the arbitral tribunal was submitted within the time limit provided for in Article 10, paragraph 1, subparagraph a) of the RJAT, counted from the notification of the decision dismissing the hierarchical appeal filed against the requests for administrative review submitted by the Applicant with reference to the Stamp Duty assessments identified above, and is therefore timely.

Consequently, the conditions are met for the final decision to be rendered.

POSITIONS OF THE PARTIES

There are two positions in conflict: that of the Applicant, set out in the request for arbitral decision, and that of the AT in its response.

In summary, the Applicant contends that:

"(…) the Applicant is the owner of a property located at …, plots …/… to …/…, Faro district, Council of …, Parish of …, with property matrix article …, on parts of which the Assessments (…) are levied";

"The Property is described in the Urban Property Register as a 'Property in Total Ownership with Floors or Divisions Capable of Independent Use', consisting of 'Urban property, intended for housing, designated as "Block …", composed of 4 buildings' Number of storeys: 3; Number of floors or divisions with independent use: 10; total patrimonial value: € 957,240.00" [emphasis by Applicant];

"As is evident, in reality, the Property has, in its entirety, a 'residential use'" [emphasis by Applicant];

"As the applicant understands, the Assessments in question were made as follows: (i) the Tax and Customs Authority added the taxable patrimonial value of parts of the Property, capable of independent use, with 'residential use' determining a taxable patrimonial value of those same parts, at that time, of € 1,088,680.00 (…) and, subsequently, (ii) made a tax assessment of parts of the property capable of independent use (with 'residential use').";

"It so happens that the taxable patrimonial values of the floors (autonomous units) of the property in question with residential use vary between 90,000.00 and 117,000.00, that is, none of the independent units that make up the Applicant's property present a patrimonial value greater than € 1,000,000." [emphasis by Applicant];

"(…) it appears that the patrimonial value of the 'property' constituted by floors or parts capable of independent use is, for tax purposes, the sum of various taxable patrimonial values determined according to autonomous criteria.";

"Therefore, accordingly, only properties, including floors or parts capable of independent use, individually considered, which have 'residential use' and a taxable patrimonial value, used for IMI purposes, equal to or greater than € 1,000,000 (one million euros) are capable of falling within the scope of incidence of Item 28.1 of the General Stamp Duty Schedule." [emphasis by Applicant];

"Therefore, in light of the Property Tax Code, each autonomous part of the property has its own taxable patrimonial value, constituting the taxable value for purposes of this tax, and should therefore be that value which is taxable for purposes of Stamp Duty, namely, in the field of the application of item 29.1 of the General Stamp Duty Schedule which, moreover, expressly requires it (…)";

"The AT cannot sum the taxable patrimonial value determined individually for each floor of a property to arrive at a value exceeding one million euros and apply stamp duty on it (particularly when this is not possible when condominium ownership has been constituted on the property).";

On the other hand, "The existence of a property in vertical or horizontal ownership cannot, by itself alone, be an indicator of any contributory capacity.";

"The Applicant does not see the reason why the differentiated treatment of fractions or parts of a property should be based merely and exclusively on the fact that it is in horizontal ownership, provided that the fractions or parts have independent use.";

"In light of the above, the Applicant believes that there is a total absence of legal basis that legitimates the criterion applied by the AT in this particular case, by considering the sum of the taxable patrimonial value attributed to the divisions with independent use, on the grounds that the property is not in a horizontal ownership regime." [emphasis by Applicant].

On the other hand, the AT maintains that:

"It was the patrimonial value of the floors/parts with residential use corresponding to a taxable patrimonial value of € 1,088,680.00 that was taken into account in the assessments made relating to the year 2012.";

"It was on the basis of that taxable patrimonial value of € 1,088,680.00 that the AT assessed the stamp duty of item 28.1 of the General Schedule for the year 2012, under the terms of Articles 6, paragraph 1, subparagraphs a) and f) of the aforementioned Law No. 55-A/2012 of 29 October, at the rate of 0.5% for 2012.";

"The now applicant is the owner of two properties in full or vertical ownership regime. From the concept of property under Article 2 of the Municipal Property Tax Code, only autonomous fractions of property in horizontal ownership regime are deemed to be properties - paragraph 4 of the aforementioned Article 2 of the Municipal Property Tax Code. Therefore, (…)";

"Since the properties of which it is the owner are in full ownership regime, it does not possess autonomous fractions, to which tax law attributes the qualification of property.";

"Thus, the now applicant, for purposes of Property Tax and also of stamp duty, by virtue of the wording of the said item, is not the owner of 10 autonomous fractions, but rather of one property, according to its property register.";

"Having taken this as established, what the now applicant seeks is that the AT consider, for purposes of assessment of the present tax, that there exists analogy between the full ownership regime and the horizontal ownership regime, since there should be no discrimination in the legal-fiscal treatment of these two property ownership regimes, as this would be unlawful.";

"We cannot, therefore, accept that it be considered that for purposes of item 28.1 of the General Schedule attached to the Stamp Duty Code, the parts capable of independent use have the same tax regime as autonomous fractions of the horizontal ownership regime.";

"The unity of the urban property in vertical ownership composed of several floors or divisions is not, however, affected by the fact that all or part of those floors or divisions are capable of independent economic use.";

"Such property does not cease to be a single property by virtue of this, and thus its parts are not legally equated with autonomous fractions in a horizontal ownership regime.";

Moreover, "The fact that the Property Tax was determined based on the taxable patrimonial value of each part of the property with independent economic use does not equally affect the application of item 28, paragraph 1 of the General Schedule.";

"This results from the fact that the determining factor for the application of that item of the General Schedule is the total patrimonial value of the property and not separately that of each of its portions.";

"Any other interpretation would violate the letter and spirit of item 28.1 of the General Schedule and the principle of legality of the essential elements of the tax provided for in Article 103, paragraph 2 of the Constitution of the Portuguese Republic (CRP).";

"It is, therefore, unconstitutional, as violative of the principle of tax legality, the interpretation of item 28.1 of the General Schedule to the effect that the patrimonial value upon which its incidence depends is determined globally and not floor by floor or division by division.";

"It is not clear how, on the other hand, the taxation in question could have violated the principle of equality referred to by the applicant.";

In conclusion, "(…) the tax acts in question, in terms of substance, did not violate any legal or constitutional provision, and should thus be maintained.".

SUBJECT MATTER OF THE REQUEST

The issue that the Applicant seeks to have decided is whether Item 28.1 of the General Schedule, in the case of properties not constituted in a horizontal ownership regime, applies to the sum of the taxable patrimonial value attributed to the different parts or floors, or rather to the taxable value of each part of the property with independent economic use.

FACTUAL MATTERS

FACTS DEEMED PROVEN

In light of the documents submitted in the proceedings, it is established that:

The Applicant is the owner of a property located at …, plots …/… to …/…, with three storeys, recorded in the urban property register of the parish of ..., municipality of …, under property matrix article number ….

The property subject to these proceedings is in full ownership with floors or divisions capable of independent use, composed of four buildings intended for housing, totalling 10 divisions with independent use, namely: Building 1 Ground Floor; Building 1 1st Floor; Building 2 Ground Floor; Building 2 1st Floor; Building 3 Ground Floor; Building 3 1st Floor; Building 3 2nd Floor; Building 4 Ground Floor; Building 4 1st Floor and Building 4 2nd Floor.

The property in question was recorded in the register in 1997 and the taxable patrimonial value ("TPV") at the date of the assessments in question varied between € 102,960.00 and € 132,500.00, totalling for the 10 divisions the amount of € 1,088,680.00.

The Applicant was notified of the assessment acts for Stamp Duty of the year 2012 (single instalment) for each floor or division with independent use dedicated to housing of the aforementioned urban property, at the rate of 0.5%, with the payment deadline in December 2012, as follows:

The voluntary payment of the Stamp Duty assessments challenged (single instalment) was made on 19/12/2012.

The Applicant was notified of the assessment acts for Stamp Duty of the year 2012, contained in the collection documents for payment of the first instalment of the tax assessed for each floor or division with independent use dedicated to housing of the aforementioned urban property, at the rate of 1%, with the payment deadline in April 2013, as follows:

The voluntary payment of the Stamp Duty assessments challenged, 1st instalment, was made on 29/04/2013.

The Applicant was notified of the assessment acts for Stamp Duty of the year 2012, contained in the collection documents for payment of the second instalment of the tax assessed for each floor or division with independent use dedicated to housing of the aforementioned urban property, at the rate of 1%, with the payment deadline in July 2013, as follows:

The voluntary payment of the Stamp Duty assessments challenged, 2nd instalment, was made on 30/07/2013.

The Applicant was notified of the assessment acts for Stamp Duty of the year 2012, contained in the collection documents for payment of the third instalment of the tax assessed for each floor or division with independent use dedicated to housing of the aforementioned urban property, at the rate of 1%, with the payment deadline in November 2013, as follows:

The voluntary payment of the Stamp Duty assessments challenged, 3rd instalment, was made on 29/11/2013.

The Applicant submitted, on 18/04/2013 and on 28/11/2013 respectively, requests for administrative review against the assessment acts for Stamp Duty of the year 2012, requesting their annulment.

On 18/12/2013, the Applicant was notified of the draft total dismissal of the request formulated in the administrative reviews identified in 5.1.12.

On 31/12/2013, the property subject to these proceedings was revalued and the taxable patrimonial value from that date onwards is recorded as € 957,240.00.

Subsequently, the Applicant submitted, on 02/01/2014, a prior hearing within the scope of the draft dismissal of the administrative reviews of the assessment acts for Stamp Duty of the year 2012, requesting their annulment.

On 15/01/2014, the Applicant was notified of the decision dismissing the request formulated in the administrative reviews identified in 5.1.12.

On 15/02/2014, the Applicant submitted a hierarchical appeal against the assessment acts for Stamp Duty of the year 2012, requesting their annulment.

On 09/01/2015, the Applicant was notified of the decision dismissing the hierarchical appeal identified in 5.1.16.

FACTS NOT DEEMED PROVEN

There are no facts relevant to the decision that have not been deemed proven.

THE LAW

The issue to be decided consists of whether the tax assessment acts for Stamp Duty are unlawful due to erroneous interpretation and application of Item No. 28.1 of the General Schedule, added by Law No. 55-A/2012 of 29 October, in considering that the taxable patrimonial value ("TPV") of an urban property constituted in a full ownership regime with floors or divisions of independent use dedicated to housing, which is relevant for purposes of the incidence of that item, is constituted by the value resulting from the sum of the taxable patrimonial value (TPV) attributed to each of those floors or divisions. Moreover, whether the Stamp Duty assessments are further burdened by the vice of unconstitutionality due to violation of the principles of legality, of tax equality, of justice and of the prevalence of material truth over legal-fiscal reality.

On this matter there is already abundant jurisprudence from the Supreme Administrative Court (STA) and arbitral jurisprudence in proceedings No. 245/2014-T, 152/2015-T and 021/2015-T, whose arbitral jurisprudence we adopt. [1]

As emerges from the established facts, the AT assessed Stamp Duty by considering that the TPV of the urban property constituted in a full ownership regime is greater than € 1,000,000.00, taking into account the sum of the TPV of each of the 10 floors or divisions with independent use dedicated to housing that make up the said property.

Let us examine this.

Article 4 of Law No. 55-A/2012 of 29 October made an addition to the General Schedule of Item No. 28, with the following wording (in its original version):

"28 - Ownership, usufruct or right of superficies of urban properties whose taxable patrimonial value appearing in the register, under the terms of the Municipal Property Tax Code (Municipal Property Tax Code), is equal to or greater than € 1,000,000 - on the taxable patrimonial value used for purposes of Municipal Property Tax:

28.1 - For property with residential use - 1%;

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

With Article 6, paragraph 1 of the aforementioned Law providing, for the year 2012, that, "the taxable patrimonial value to be used in the assessment of the tax corresponds to that which results from the rules provided for in the Municipal Property Tax Code by reference to the year 2011;".

At the date of the facts, the prerequisites for incidence of Item 28.1 of the General Schedule are therefore urban properties with residential use, whose TPV appearing in the register and used for purposes of assessing Municipal Property Tax is equal to or greater than € 1,000,000.00.

Law No. 55-A/2012 of 29 October, by reference to item 28 of the General Schedule, further established various amendments to the Stamp Duty Code, namely regarding its assessment and payment, expressly referring to the rules provided for in the Municipal Property Tax Code [2] with the necessary adaptations, and also providing in Article 67, paragraph 2 of the Stamp Duty Code that, "For matters not regulated in this Code relating to item No. 28 of the General Schedule, the provisions of the Municipal Property Tax Code apply subsidiarily.".

From the analysis of the aforementioned rules, it is therefore verified that the concept of "property with residential use" provided for in the aforementioned Item No. 28, paragraph 1 of the General Schedule is not defined in the Stamp Duty Code, nor in the aforementioned Law No. 55-A/2012 of 29 October, nor indeed in the Municipal Property Tax Code, whose rules apply subsidiarily, having regard to the provisions of Article 67, paragraph 2 of the Stamp Duty Code.

On this matter, the arbitral tribunal has already pronounced itself in the decision rendered in proceedings No. 53/2013-T, which we adopt here, by understanding that a "property with residential use" must have "already effective use for that purpose".

It is thus clear that a property in full ownership or in a vertical ownership regime constitutes an urban property, under the terms of Article 2, paragraph 1 and Article 4, paragraph 1 of the Municipal Property Tax Code, applicable subsidiarily, and it is likewise certain that, both for purposes of the incidence of Item 28.1 of the General Schedule and for purposes of classification of urban properties [3], the legislator makes no distinction between properties constituted in vertical ownership and in a horizontal ownership regime (as mentioned in the arbitral decisions rendered in proceedings No. 50/2013-T and No. 132/2013-T), and the tax prerequisite of Item 28.1 of the General Schedule is urban properties that are effectively already dedicated to housing, since what is relevant is the effective and current use of each of the properties.

What then will be the taxable patrimonial value relevant in the case of urban properties in a full ownership regime composed of floors or divisions capable of independent use with "residential use", for purposes of incidence of Item 28.1 of the General Schedule?

As emerges from the very wording of Item 28.1 of the General Schedule (in its original wording) and from Article 6, paragraph 1 of Law No. 55-A/2012 of 29 October, Stamp Duty will apply to the TPV used for purposes of Municipal Property Tax.

Let us therefore see what TPV is used for purposes of Municipal Property Tax.

The TPV of each property is determined under the terms of Articles 38 et seq. of the Municipal Property Tax Code, in accordance with the provisions of Article 7, paragraph 1 of the Municipal Property Tax Code. In the case of a property in a full or vertical ownership regime, each floor or division with independent use that comprises it is likewise subject to valuation, and a taxable patrimonial value is attributed to each one of those floors or divisions, in accordance with the provisions of Articles 12 and 38 of the Municipal Property Tax Code.

In fact, Article 12, paragraph 1 of the Municipal Property Tax Code provides that "property registers are records which include, in particular, the characterization of properties, their location and taxable patrimonial value, the identification of owners (…)", also providing in paragraph 3 that, "Each floor or part of property capable of independent use is considered separately in the matrix entry, which also discriminates the respective taxable patrimonial value", and in accordance with the provisions of Article 119, paragraph 1 of the Municipal Property Tax Code, it is on that patrimonial value considered separately that Municipal Property Tax will be determined and assessed in relation to each floor or part with independent use that comprises an urban property in a vertical or full ownership regime, having regard to the autonomy of each of those units.

As stated by Silvério Mateus and Corvelo de Freitas [4], "Another aspect that must be highlighted in the register concerns the need to make evident the autonomy that, within the same property, can be attributed to each of its parts, functionally and economically independent.

In these cases, the matrix entry should not only refer to each of these parts but should expressly refer to the taxable patrimonial value corresponding to each of them. An example that can illustrate this situation is the case of an urban property, not constituted in a horizontal ownership regime and composed of several floors. (…) However, since each of these units can be the object of leasing or any other use by the respective owner, the register must make these units evident and must assign a taxable patrimonial value to each of them." [emphasis added].

As evidenced in the arbitral decision rendered in proceedings No. 194/2014-T, which we also adopt, "the Municipal Property Tax Code establishes, both as regards the matrix entry and discrimination of the respective taxable patrimonial value, and as regards the assessment of the tax, the autonomization of the parts of urban property capable of independent use and the segregation/individualization of the TPV relating to each floor or part of property capable of independent use.

Thus each property, under the terms conceptually defined by Article 2 of the Municipal Property Tax Code, corresponds to a single entry in the register (paragraph 2 of Article 82 of the Municipal Property Tax Code) but, according to paragraph 3 of Article 12 of the same Code, referring to the concept of property register (…), "each floor or part of property capable of independent use is considered separately in the matrix entry, which also discriminates the respective taxable patrimonial value (…).

That is, the rule is the autonomization, the characterization as a "property" of each part of a building, insofar as it is functionally and economically independent, capable of independent use, in accordance with the concept of property defined in paragraph 1 of Article 2 of the Municipal Property Tax Code: property is any fraction (of land, encompassing waters, plantations, buildings and constructions of any nature incorporated or resting in it, with a permanent character) insofar as it is 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 above, endowed with economic autonomy.".

Taking into account that under the Municipal Property Tax Code, the floors or divisions with independent use that compose an urban property in a full or vertical ownership regime are taxed autonomously, since Municipal Property Tax is assessed individually on the TPV attributed to each of those floors or divisions with independent use, having regard to the relevance of their autonomy, necessarily the principles and rules must be the same in the field of Stamp Duty (particularly as to the entry in the register and assessment of Municipal Property Tax), both by virtue of what Item 28.1 of the General Schedule provides at the end, and by subsidiary application, pursuant to Article 67, paragraph 2 of the Stamp Duty Code.

Consequently, and assuming that the legislator in question "established the most correct solutions and was able to express its thought in adequate terms" (cf. Article 9, paragraph 3 of the Civil Code ("CC"), by reference to Article 11 of the General Tax Law), only those floors, parts or divisions with independent use with residential use, whose TPV is equal to or greater than € 1,000,000.00, are covered by the rule of incidence of Item 28.1 of the General Schedule.

Thus, and as stated in the arbitral decision rendered in proceedings No. 132/2013-T, "The uniform criterion that is thus required is that which determines that the incidence of the rule in question only takes place when any of the parts, floors or divisions with independent use of property in horizontal or full ownership with residential use possesses a TPV greater than € 1,000,000.00" and not when this value results from the sum of the TPV attributed to each floor or division with independent use.

As likewise mentioned in the arbitral decision rendered in proceedings No. 50/2013-T, "The criterion sought by the AT, of considering the value of the sum of the TPVs attributed to the parts, floors or divisions with independent use, on the grounds that the property is not constituted in a horizontal ownership regime, finds no legal support and is contrary to the criterion applicable under the Municipal Property Tax Code and, by reference, under Stamp Duty Code.

Moreover, it should be noted that the law itself expressly establishes, in the final part of item 28 of the General Stamp Duty Schedule, that Stamp Duty to apply to urban properties with a value equal to or greater than €1,000,000.00 – "on the taxable patrimonial value used for purposes of Municipal Property Tax.".

For all the above reasons, we cannot agree with the AT's understanding.

In fact, if it is the very rule set out in Item 28.1 of the General Schedule at the end which determines that Stamp Duty applies "on the taxable patrimonial value used for purposes of Municipal Property Tax", what is relevant for purposes of tax incidence is the taxable patrimonial value individualized for each of the parts, floors or divisions with independent use on which Municipal Property Tax is assessed annually, that is, the assessment of Stamp Duty follows the rules provided for in the Municipal Property Tax Code, by express reference of the aforementioned Item 28 of the General Schedule and Article 67, paragraph 2 of the Stamp Duty Code.

It is precisely for this reason that the AT, to assess Item 28.1 of the General Schedule under examination, starts from each of those floors or divisions with independent use, making the respective rate apply to the taxable patrimonial value attributed to each of those divisions with residential use, in accordance with the rules of the Municipal Property Tax Code, and then sums that taxable patrimonial value.

The interpretation to the effect that what is relevant in the rule of incidence of Item 28.1 of the General Schedule is the TPV attributed to each of the autonomous parts, floors or divisions with independent use with residential use and not the value resulting from the sum of those taxable patrimonial values is that which equally results from its ratio legis, as required by Article 9, paragraph 1 of the CC, applicable by virtue of the provisions of Article 11 of the General Tax Law.

In fact, in the presentation and discussion of Proposed Law No. 96/XII/2nd (available in the Parliamentary Gazette - DAR, I Series No. 9/XII/2012 of 11-10-2012) in Parliament, the Secretary of State for Fiscal Affairs declared the following:

"This is the first time in Portugal that special taxation is created on properties of high value intended for housing. This rate will be 0.5% to 0.8%, in 2012, and 1%, in 2013, and will apply to houses with a value equal to or greater than 1 million euros. With the creation of this additional rate, the tax burden required of these owners will be significantly increased in 2012 and in 2013" [emphasis added].

On this point, we adopt the arbitral decision rendered in proceedings No. 50/2013-T when it states that "The legislator in introducing this legislative innovation considered as the determining element of contributory capacity urban properties with residential use of high value (luxury), more precisely, with a value equal to or greater than € 1,000,000.00, on which it proceeded to impose a special rate of stamp duty, intending to introduce a principle of taxation on wealth evidenced in the ownership, usufruct or right of superficies of urban properties of luxury with residential use. Therefore, the criterion was the application of the new rate to urban properties with residential use, whose TPV is equal to or greater than € 1,000,000.00.

This is precisely the conclusion from the analysis of the discussion of proposed law No. 96/XII in Parliament, available for consultation in the Parliamentary Gazette, I series, No. 9/XII/2, of 11 October 2012.

The justification for the measure designated "special rate on the most valuable residential urban properties" is thus based on the invocation of the principles of social equity and tax justice, requiring those holding properties of high value intended for housing to contribute more intensely, making the new special rate apply to "houses with a value equal to or greater than 1 million euros".

Clearly the legislator understood that this value, when attributed to a dwelling (house, autonomous fraction or floor with independent use) expresses an above-average contributory capacity and, as such, susceptible of determining a special contribution to ensure just distribution of the tax burden.".

Thus, and in accordance with the established facts, the TPV of each of the 10 floors or divisions with independent use dedicated to housing that make up the property constituted in full ownership and which was determined according to the rules of the Municipal Property Tax Code is less than € 1,000,000.00, and the prerequisites for taxation under Item 28.1 of the General Schedule are thus not met.

Therefore, the tax assessment acts for Stamp Duty, object of the present arbitral proceedings, in the total amount of € 16,330.20, are burdened by the vice of violation of Item 28.1 of the General Schedule and Article 67, paragraph 2 of the Stamp Duty Code, due to error regarding their legal prerequisites, and the illegality of those assessment acts is hereby declared, with the consequent annulment thereof.

In fact, the examination of the other issues raised by the Applicant is thus rendered moot, namely the alleged vice of unconstitutionality, having been declared the illegality of the assessments identified above due to a substantive vice that prevents the renewal of the acts, effectively ensuring the protection of the rights of the Applicant, in accordance with the provisions of Article 124 of the Code of Tax Procedure and Process [5].

DECISION

With the grounds set out above, the arbitral tribunal decides:

To uphold the request for arbitral decision and, in consequence, to declare illegal the Stamp Duty assessments contained in the identified collection documents, with all legal consequences;

To uphold the Applicant's claim for recognition of the right to compensation interest;

To order the AT to refund to the Applicant the unduly paid Stamp Duty in the amount of € 16,330.20;

To order the AT to pay the costs.

VALUE OF THE PROCEEDINGS

The value of the proceedings is fixed at € 16,330.20 (sixteen thousand three hundred and thirty euros and twenty cents) pursuant to Article 97-A of the Code of Tax Procedure and Process (CPPT), applicable by virtue of Article 29, paragraph 1, subparagraphs a) and b) of the RJAT and Article 3, paragraph 2 of the Regulation of Costs in Tax Arbitration Proceedings (RCPAT).

COSTS

Costs to be borne by the AT, in the amount of € 1,224.00 (one thousand two hundred and twenty-four euros), pursuant to Table I of the Regulation of Costs in Tax Arbitration Proceedings, in accordance with Article 22, paragraph 2 of the RJAT.

Notify.

Lisbon, 26 October 2015

The Arbitrator,

(Hélder Filipe Faustino)

Text prepared by computer, pursuant to Article 131, paragraph 5 of the Code of Civil Procedure, applicable by reference from Article 29, paragraph 1, subparagraph e) of the RJAT. The drafting of this decision is governed by the spelling prior to the 1990 Spelling Agreement.

[1] Cf. Andreia Gabriel Pereira, "The 'Luxury Houses' and Stamp Duty. Commentary to the Judgment of the Supreme Administrative Court (2nd Section) of 5 February 2015, rendered in proceedings No. 0993/14, Reporter Counsellor Francisco Rothes", Journal of Public Finance and Tax Law, Year VII, No. 4, July 2015, pp. 235 et seq.

[2] Cf. Article 23, paragraph 7, Article 44, paragraph 5, Article 46, paragraph 5 and Article 49, paragraph 3 of the Stamp Duty Code.

[3] Cf. Article 6 of the Municipal Property Tax Code (also of subsidiary application).

[4] "Taxes on Real Property and Stamp Duty, Annotated and Commented", pp. 159 and 160.

[5] Subsidiarily applicable by virtue of Article 29, paragraph 1, subparagraph a) of the RJAT.