Process: 24/2018-T

Date: September 26, 2018

Tax Type: IMT

Source: Original CAAD Decision

Summary

This CAAD arbitration decision (Process 24/2018-T) addresses IMT exemptions for Real Estate Investment Funds for Residential Leasing (FIIAH). A fund management company challenged IMT assessments totaling €73,610.90 levied on property acquisitions in Portimão after the Tax Authority determined the FIIAH exemption had expired because properties weren't leased within the mandatory three-year period under Article 8(14) of the FIIAH special regime. The claimant argued two grounds for exemption: first, the specific FIIAH exemption under Article 8(7) of CIMT; second, a general exemption under Article 1 of Decree-Law 1/87 for property acquisitions by fund managers intended for integration into real estate investment funds. The claimant contended both exemptions remain valid and serve distinct purposes—one specific to residential rental contracts, the other general to fund asset integration. The company also demonstrated legal standing despite the fund's dissolution, having succeeded to all active and passive legal relations when the fund's assets transferred to the management company in April 2017. The case raises critical questions about concurrent tax exemptions, the applicability of pre-existing Sisa exemptions to IMT, and whether failing to meet specific FIIAH rental requirements negates all exemption claims when alternative exemption grounds exist.

Full Decision

ARBITRAL DECISION

The arbitrators Maria Fernanda dos Santos Maçãs (Presiding Arbitrator), Dr. Ricardo Marques Candeias and Prof. Doctor Miguel Patrício (Adjunct Arbitrators), appointed by the Ethics Council of the Centre for Administrative Arbitration to form the present Arbitral Tribunal, agree as follows:

I. REPORT

  1. A..., SA, with registered office at Rua ..., ..., ...-... Lisbon, tax identification number..., (Claimant) holder of the real estate investment fund B...— Closed Real Estate Investment Fund for Residential Rental, (hereinafter, Fund) filed, on 17.01.2018, in accordance with the provisions of art. 2, 1, a), and 10, of Decree-Law 10/2011, of 20 January, which approves the Legal Regime of Arbitration in Tax Matters (RJAMT), a request for an arbitral pronouncement, in which the Tax and Customs Authority (TA or Defendant) is the respondent, seeking to declare illegal the orders dismissing the administrative complaints (reclamação graciosa) issued by the TA, within the scope of proceedings nos. ...2017..., ...2017..., ...2017... and ...2017... based on the annullability of the tax acts levying the Municipal Tax on Onerous Transfers of Immovable Property (IMT) that gave rise to proceedings with nos...., ..., ... and ..., in the total amount of € 73,610.90, on the grounds that they suffer from errors in the factual and legal premises, and consequent reimbursement of the amount paid, increased by indemnificatory interest at the legal rate, until full reimbursement.

  2. The Claimant did not proceed with the appointment of an arbitrator, so, pursuant to the provisions of no. 1 of article 6 and paragraph b) of no. 1 of article 11 of Decree-Law no. 10/2011, of 20 January, as amended by article 228 of Law no. 66-B/2012, of 31 December, the Ethics Council appointed Councillor Dr. Maria Fernanda dos Santos Maçãs as Presiding Arbitrator, Dr. Henrique Nunes and Dr. Ricardo Candeias as arbitrator members, whose appointment was accepted in accordance with legal provisions.

  3. The parties were duly notified, and did not manifest their intention to challenge the appointment of the arbitrators, in accordance with article 11, no. 1, paragraphs a) and b), of the RJAT and articles 6 and 7 of the Code of Ethics.

  4. Thus, in accordance with the provisions of article 11, 1, c), of the RJAT, as amended by art. 228 of Law no. 66-B/2012, of 31 December, the collective arbitral tribunal was constituted on 27 March 2018.

  5. To support the claim, the Claimant alleges, in summary, that the orders dismissing the administrative complaints mentioned above concerned the levying of IMT of which the tax debtor was the real estate investment fund B...— Closed Real Estate Investment Fund for Residential Rental. However, the latter was, on 6 April 2017, subject to dissolution and liquidation. Following this act, the overall assets were transferred to the legal sphere of the present Claimant, having the latter succeeded to the ownership of the active and passive legal relations of that collective investment entity. By virtue of this, the present Claimant has standing to intervene in the present proceedings, because it has a direct, personal and legitimate interest in the success of the present claim.

It further states that C...— SOCIEDADE GESTORA DE FUNDOS DE INVESTIMENTO, SA, as manager entity of the Fund, and in that capacity, acquired, in 2013, a portfolio of immovable property intended for housing, located in the parish and municipality of Portimão.

The legal acts benefited from exemption from IMT as we were dealing with the acquisition of urban buildings or autonomous portions of buildings intended exclusively for residential rental operated by a FIIAH.

However, as the aforementioned immovable properties were not subject to a contract under the conditions required by art. 8, 14, of the Special Regime of the FIIAH, the TA decided on the expiry of the IMT exemption previously granted, inasmuch as the aforementioned immovable properties were assigned to a different purpose from that assigned in the acquisition act.

Consequently, the TA issued assessments for IMT and corresponding compensatory interest on the acts of acquisition of the aforementioned urban buildings ..., ..., ... and ..., in the total amount of € 73,610.90, which were paid by the Fund.

Nevertheless, the manager entity, C..., filed an administrative complaint against these tax assessment acts, a complaint that did not receive acceptance from the TA, having been subject to an order of dismissal, deciding on the non-granting of IMT exemption to the aforementioned operations.

It is this order that is now sought to be challenged. To that effect, the Claimant puts forward several arguments concluding by the illegality of the acts. It argues that, in addition to the tax benefits established in the special regime applicable to these collective investment bodies, other IMT exemptions should also be considered, applicable to acquisitions of immovable property by manager entities with the objective of integrating them into the real estate investment funds managed by them.

To that effect, and to support its reasoning on the first point of its argument, it cites art. 8, 7, of the CIMT (which provided for the exemption of this tax in operations of acquisition of urban buildings or autonomous portions of urban buildings intended exclusively for permanent residential rental by investment funds), art. 8, 14, and 16, idem, added by art. 235, Law 83-C/2013 (the rental within three years from the moment the building becomes part of the fund's assets, and if the building is sold or the fund liquidated before the said period, the tax should be levied), and art. 236, Law 83-C/2013 (the three-year period would begin on 1 January 2014 if the building had been acquired before that date).

As for the second point, after discussing the legal-tax regime of real estate investment funds (Decree-Law 246/85, of 12 July, Decree-Law 1/87, of 3 January, Decree-Law 60/2002, of 20 March, Law 16/2015, of 24 February) and the regime of IMT (Decree-Law 287/2003, of 12 November), the Claimant concludes that the exemptions applicable to the extinct tax of Sisa currently also apply in the context of IMT, namely, art. 1 of Decree-Law 1/87, by virtue of the provisions of articles 28, 2, and 31, 6, both of Decree-Law 287/2003, of 12 November, to then support the applicability of IMT exemption for acquisitions of immovable property by a manager company when they are to become part of the assets of a real estate investment fund. It reinforces this understanding by citing the arbitral decision 544/2016-T, to sustain that the entry into force of a rule introducing a tax exemption (in casu, art. 46, EBF) does not necessarily imply the repeal of another exemption rule already in force (in casu, art. 1, Decree-Law 1/87), where there is no unequivocal intention of the legislator to that effect, namely, when both have distinct purposes and objectives.

Having reached this point, the Claimant operates the judicial syllogism that it argues, in its perspective, supports the illegality of the acts in question: if art. 1 of Decree-Law 1/87 is currently in force, since it was never repealed, and if the acquisition of the immovable properties, in 2013, was carried out by a manager entity (C...), with the intention of including them in the sphere of the Fund, then it is necessary to conclude that, notwithstanding the exemption of art. 8, 7, a), special regime of the FIIAH being in force, the exemption provided for in art. 1, Decree-Law 1/87 will also apply, since the exemptions are structurally distinct and exempt factual situations that are also distinct from each other (the first, only for contracts and residential rental; the second any operations of acquisition of immovable property to integrate into real estate investment funds in general).

The Claimant further requests reimbursement of the amount it paid for the purposes of payment of the assessments already identified (€ 73,610.90) and respective indemnificatory interest in accordance with articles 43 and 100, both of the LGT.

  1. Duly notified, the TA came forward, briefly, to contest the petition, arguing that although the acts in question benefited from IMT exemption, in accordance with art. 8, 7, a), and 8, of the legal regime of the FIIAH, because they were acquired by the Fund in the scope of its activity, to be intended for residential rental, the fact is that this purpose was not realized within the three-year period, in accordance with articles 235 and 236 of Law 83-C/2013, of 31 December. This resulted in the expiry of the referred exemption.

For the TA, art. 1 of Decree-Law 1/87 is not in force, inasmuch as it is a tax exemption rule, hence exceptional or extraordinary, and furthermore, if the contrary were admitted, the legislator would be benefiting the Funds doubly in relation to other economic actors in the real estate market, without any justification. Hence, it concludes by the total dismissal of the claim.

  1. No matter of exception having been invoked nor production of witness testimony having been requested, and giving procedural follow-up, the meeting referred to in article 18 of the RJAT was dispensed with and the parties were notified, should they wish to present written arguments.

  2. Notified, the Claimant came forward and waived the production of arguments.

  3. The Defendant presented arguments raising in an innovative manner that "To the extent the violation of art. 1 of Decree-Law 1/87, of 23 January is understood as the grounds for the IMT assessments issued on 10.03.2017, 24.03.2017 and 03.04.2017, one cannot but take into account the period provided for in art. 10, al. a) of the RJAT (…) of 90 days, counted from the facts provided for in art. 102 of the CPPT, for purposes of expiry of the present arbitral claim, filed on 17.01.2018" (point 7 of the counter-arguments).

9.1. "The fact is that the defect that the Claimant now attributes to the IMT assessments—violation of art. 1 of Decree-Law 1/87, of 3 January – was never invoked in the context of administrative complaint nor did the administration have an opportunity to pronounce itself on the same" (point 8 of the counter-arguments).

  1. Duly notified, the Claimant exercised the right of reply on the matter contested by it, arguing for its dismissal.

  2. Following an allegation of disqualification by arbitrator member Dr. Henrique Nunes and his replacement by arbitrator member Prof. Doctor Miguel Patrício, an order was issued with the following content:

"Proc no. 24/2018-T

Pursuant to the provisions of no. 3 of art. 9 of the Legal Regime of Tax Arbitration: "In the event of arbitrator replacement, the arbitral tribunal decides whether any procedural act should be repeated in view of the new composition of the tribunal, taking into account the state of the proceedings".

It is necessary, in these terms, following the arbitrator replacement verified in the present action, to ascertain whether it is justified that there be repetition of procedural acts performed.

In the present proceedings only the submission of pleadings took place.

Representing these procedural acts for whose production, effectiveness and interpretation, the maintenance in court of the arbitrators who were in office in the proceedings when such acts were performed is not essential, it is not justified that any procedural acts be repeated, the proceedings continuing in their other regular and proper course.

Both parties are hereby notified of this order.

Lisbon, 23 July 2018.

The Presiding Arbitrator, with the assent of the co-arbitrators

Fernanda Maçãs"

II. PRELIMINARY DETERMINATIONS

  1. The arbitral tribunal was regularly constituted and is materially competent in accordance with articles 2, 1, a), and 30, 1, both of Decree-Law 10/2011, of 20 January.

The parties have legal personality and capacity, are legitimate and are duly represented (articles 4 and 10, 2, idem, and 1, of Portaria no. 112-A/2011, of 22 March).

As to the exception of expiry [untimeliness of the claim, in accordance with the provisions of article 89, nos. 2 and 4, paragraph k) of the CPTA], invoked by the Defendant in its counter-arguments, it does not merit acceptance, inasmuch as it is established and reiterated jurisprudence of the STA that the powers of cognition of the courts are not delimited by the powers of cognition of the Tax Administration in the administrative phase.

In this matter, it was established notably in the Judgment of the Plenary of the STA of 3 June 2015, proceeding no. 0793/14, that "In the impugnation subsequent to a decision of the TA on an administrative complaint or request for official review of the tax act, may and must the judicial bodies take cognizance of all substantive illegalities affecting the tax act in question, whether such illegalities have been or have not been raised in the gracious phase of the dispute, imposing upon them an increased duty when dealing with matters of official cognizance".

Thus the alleged exception is without merit.

The proceedings do not suffer from any nullities that prevent cognizance of the claim.

It is necessary to decide.

III. ON THE MERITS

III.1. Established Facts

The factual matter relevant to the decision of the case is as follows:

a) "B...— Closed Real Estate Investment Fund for Residential Rental", is a closed real estate investment fund for residential rental (the FUND), regulated by the General Regime of Collective Investment Bodies, approved by Law 16/2015, of 24 February.

b) Through its manager entity, C...— SOCIEDADE GESTORA DE FUNDOS DE INVESTIMENTO, SA, the FUND acquired, on 23 December 2013, by public deed of purchase and sale and release of mortgages, a portfolio of immovable property intended for housing, located in the parish and municipality of ..., better identified in accordance with document 7, the content of which is hereby deemed fully reproduced.

c) The FUND benefited, at the time, from IMT exemption upon the acquisition of the immovable properties referred to in B), pursuant to art. 8, 7, a), and 8, of the Special Regime of the FIIAH, approved by art. 102 of Law 64-A/2008, of 31 December, as amended by art. 235 of Law 82-B/2014, of 21 December.

d) The TA assessed the Municipal Tax on Onerous Transfers of Immovable Property (IMT) nos...., ..., ... and ..., respectively, in the amounts of € 37,702.37, € 13,478.49, € 11,242.79 and 11,187.90, on 10.03.2017, 24.03.2017, idem, and 03.04.2017, totaling € 73,610.90 by virtue of the expiry of the IMT exemption once the FUND's immovable properties were sold and not subject to a contract for permanent residential rental.

e) The FUND paid the aforementioned assessment notices, totaling € 73,610.90.

f) On 6 April 2017, a deed of dissolution and liquidation of B... — Closed Real Estate Investment Fund for Residential Rental was executed, with its overall assets being transferred in favor of A...—, SA.

g) On 10 July 2017, in the name of the FUND, C... — SOCIEDADE GESTORA DE FUNDOS DE INVESTIMENTO, SA, filed an administrative complaint against the aforementioned IMT assessment acts.

h) The TA, on 20 October 2017, decided on the dismissal of the aforementioned complaints.

III.2. Unestablished Facts

There are no other facts with relevance for appraisal of the merits of the case that have not been proven.

III.3. Reasoning of Established and Unestablished Factual Matters

The Tribunal formed its conviction regarding the factuality referred to by considering the position taken by the parties, as well as the documents attached to the petition and those contained in the administrative file presented by the Tax Authority with its response.

III.4. On the Law

In the case being analyzed, there are two disputed questions of law: i) to determine whether, as the Claimant argues, the orders dismissing the administrative complaints sub judice and, as well, the IMT assessment acts underlying them are illegal – because it is understood that the "Sisa exemption provided for in article 1 of Decree-Law no. 1/87, of 3 January [...] necessarily remains in force"; and ii) to determine whether indemnificatory interest is owed to the Claimant.

Let us examine, then.

i) The present Claimant argues that "the tax assessment acts in question are [...] manifestly illegal, having resulted from evident erroneous interpretation and application of applicable law, and the same should be promptly annulled."

It bases its contention, in summary, on the understanding that "the exemptions applicable to the extinct Sisa tax continue to be in force in the context of IMT" – and that, therefore, the expiry of the IMT exemption granted under the Special Regime of the FIIAH "does not preclude the possibility of application [...] of other IMT exemptions, such as the exemption applicable to acquisitions of immovable property in general by manager companies with the objective of integrating them into the real estate investment funds managed by them."

It is verified, however, that the Claimant's argument is without merit. In fact, in the case of the present proceedings, the Special Regime of the FIIAH is that whose application must prevail, by virtue of the principle "lex specialis derogat legi generali". And, having occurred the expiry of the exemption through the application of the provisions in art. 14, no. 3, of the EBF, the question of the retroactivity or non-retroactivity of the rule provided for in article 236 of Law no. 83-C/2013, of 31/12 does not even arise here.

In this same sense, one may see, for example, the following Arbitral Decision (rendered in proceeding no. 717/2015-T, on 17/6/2016): «[...] we understand that what is in question is not the retroactivity or non-retroactivity of the rule provided for in article 236 of Law no. 83-C/2013, of 31 December, which would be the case, if, by way of example, the immovable property were for a period of 3 years in the FIIAH without yet having been assigned to permanent residential rental and, for that reason, there were assessment of IMT and stamp duty».

However, in the case of the proceedings, that is not what is at issue. The immovable property in question was sold without having fulfilled its purpose – assignment to permanent residential rental. It is not, therefore, a question of term, sold as it was, that purpose can no longer be fulfilled, so the requirement initially established in the special regime of the FIIAH was not met in order for the IMT exemption and stamp duty to be applicable to it.

We note that the right to tax benefits should be reported to the date of verification of the respective requirements, as is postulated in article 12 of the Tax Benefits Statute ("EBF").

The fact that the Claimant proceeded with the sale of the immovable property that, upon acquiring, it declared [that] it would assign in order to allow it [that] to be recognized – as it was – the exemption from IMT and stamp duty, would always determine [...] the expiry of such exemptions, by effect of the application of the provisions in article 12 and no. 3 of article 14 of the EBF (former 12, no. 3, as worded in the EBF that was in force prior to its republication by Decree-Law no. 108/2008, of 26/06), according to which: «When the tax benefit concerns the acquisition of assets intended for the direct realization of the purposes of the acquirers, it becomes void if they are sold or given another purpose without authorization of the Minister of Finance, without prejudice to the remaining sanctions or different regimes established by law.»" [End of quotation.]

Also in the same sense, one may see, for example, the Arbitral Decisions of the CAAD rendered in proceedings nos. 61/2016-T (on 13/7/2016), 93/2016-T (on 13/6/2016), 561/2016-T (on 27/3/2017) and 31/2017-T (on 21/7/2017).

In the case of these proceedings, it is demonstrated (and was not contradicted by the Claimant) that the immovable properties in question were not subject to a contract under the conditions required by art. 8, no. 14, of the Special Regime of the FIIAH – reason why the TA understood, and rightly so, the expiry of the IMT exemption previously granted, once there was assignment of the same to a purpose different from that for which the exemptions were granted (which was that of assigning the immovable properties to residential rental).

In fact, whenever there occurs an assignment to a different purpose, this determines the expiry of the granted exemption, by violation of the ratio legis of the tax exemption rule.

In this sense, see, for example, the Arbitral Decision of 31/7/2017, rendered in proc. no. 694/2016-T: "Paying special attention to al. a) of no. 7 [of art. 8 of the Regime of the FIIAH], which speaks of «acquisitions of urban buildings or autonomous portions of urban buildings intended exclusively for permanent residential rental», it is necessary to ask how the interpreter of law should understand the expression «intended exclusively for permanent residential rental».

Literally, the expression means that the acquirer of the immovable property acquires it for, i.e., with the purpose of assigning it to rent as permanent housing. The ratio legis of this rule, which establishes a tax benefit, is to promote the rental of permanent housing, of which there is also no doubt. Therefore, it seems obvious that only the Fund (FIIAH) that acquires an immovable property with the purpose of renting it for permanent housing could benefit from the exemptions (from IMT and IS). [...].

[...] the purpose means an intention, on the part of the acquirer, to carry out future conduct, which consists in renting for permanent housing. Therefore, there is no doubt that, upon requesting the exemption under art. 8 of the «special regime applicable to real estate investment funds for residential rental and real estate investment companies for residential rental», the acquirer (the FIIAH) declares that it will assign the immovable property to permanent residential rental.

And for the extrafiscal purpose of the rule to be fulfilled – promotion of permanent residential housing rental – it is necessary that this purpose be realized, if only through an action of the acquirer consisting in making the immovable property available for permanent residential rental.

[...]. If the acquirer does not make the immovable property available for permanent residential rental, the acquirer acts against the purpose that it declared at the moment it requested the exemption." [End of quotation.]

In conclusion, it is verified that, even if one were to consider art. 1 of Decree-Law no. 1/87, of 3/1 in force (in this respect, see abundant jurisprudence of the CAAD, such as, for example, the Arbitral Decisions rendered in proceedings nos. 544/2016-T and 440/2017-T), with special legislation applicable to the present case, it is this that applies, so the Claimant cannot, consequently, benefit from the exemption granted under that general law – not only because of the (already mentioned) principle "lex specialis derogat legi generali", but also because, if it were as the present Claimant argues, this would distort the ratio legis of the special rule (as has also been mentioned) and would lead to incongruous results from a systematic point of view, since, as the Defendant points out, to the extent that "art. 1 of Decree-Law 1/87, of 3 January [should be applied instead of the special legislation relating to the FIIAH, then] the real estate investment funds would be doubly benefited, in a clear position of advantage and inequality in relation to the remaining actors in the real estate market – both in the acquisition of immovable property and even in the sale of immovable property to third parties."

Furthermore, the Claimant's argument in seeking to transpose to the case at issue the jurisprudence followed in the Arbitral Decision, rendered in proceeding no. 544/2016-T, has no basis whatsoever.

In these terms, it is concluded that there is nothing to point out in the orders of dismissal impugned, and that the IMT assessments now in question should remain entirely in the legal order.

ii) In accordance with the provisions of no. 5 of article 24 of the RJAT, "payment of interest is owed, regardless of its nature, in the terms provided for in the general tax law and in the Code of Tax Procedure and Process" – which should be understood as permitting the recognition of the right to indemnificatory interest in the arbitral proceedings.

Thus being, it is necessary to ascertain, in the case being analyzed, whether there is a basis for payment of the requested indemnificatory interest. According to the provisions of article 43, no. 1, of the LGT, "indemnificatory interest is owed when it is determined, in an administrative complaint or judicial impugnation, that there has been error attributable to the services from which results payment of the tax debt in an amount greater than that legally due".

It is, therefore, a necessary condition for the award of the aforementioned interest the demonstration of the existence of error attributable to the services. In that sense, see, for example, the following court decisions: "The right to indemnificatory interest provided for in no. 1 of art. 43 of the LGT [...] depends on it being demonstrated in the proceedings that the act is affected by error in the factual or legal premises attributable to the TA." (Judgment of the STA of 30/5/2012, proc. 410/12); "The right to indemnificatory interest provided for in no. 1 of article 43 of the General Tax Law presupposes that in the proceedings it be determined that in the assessment «there was error attributable to the services», understood as the «error in the factual or legal premises attributable to the Tax Administration»" (Judgment of the STA of 10/4/2013, proc. 1215/12).

Having not occurred – as follows from what was said in III.4.i) – error attributable to the services, the request for payment of indemnificatory interest to the Claimant is without merit.

IV. DECISION

In view of the foregoing, it is decided:

  1. To dismiss the exception of expiry/untimeliness raised by the Defendant;

  2. To dismiss the request for arbitral pronouncement, with the tax assessment acts now impugned remaining entirely in the legal order, and thus absolving the Defendant Entity of the claim;

  3. To dismiss the claim also with respect to the recognition of the right to indemnificatory interest in favor of the Claimant.

V. VALUE OF THE PROCEEDINGS

The value of the proceedings is fixed at €73,610.90 (seventy-three thousand six hundred and ten euros and ninety cents), in accordance with the provisions of art. 32 of the CPTA and art. 97-A of the CPPT, applicable by virtue of the provisions of art. 29, no. 1, als. a) and b), of the RJAT, and art. 3, no. 2, of the RCPAT.

VI. COSTS

Costs to be borne by the Claimant, in the amount of €2,448.00 (two thousand four hundred and forty-eight euros), in accordance with Table I of the RCPAT, in compliance with the provisions of articles 12, no. 2, and 22, no. 4, both of the RJAT, and the provisions of art. 4, no. 5, of the cited Regulation.

Notify.

Lisbon, 26 September 2018.

The Presiding Arbitrator

(Fernanda Maçãs)

The Arbitrator Member

(Ricardo Marques Candeias)

The Arbitrator Member

(Miguel Patrício)

Frequently Asked Questions

Automatically Created

What is the IMT tax exemption regime for Real Estate Investment Funds for Residential Leasing (FIIAH) in Portugal?
The FIIAH IMT exemption regime in Portugal, established under Article 8(7) and (14) of the CIMT and Article 235 of Law 83-C/2013, exempts acquisitions of urban buildings or autonomous fractions intended exclusively for permanent residential rental by investment funds. However, the exemption is conditional: properties must be leased within three years of acquisition. If properties are sold or the fund is liquidated before this period, or if rental conditions aren't met, the Tax Authority may levy IMT retroactively with compensatory interest. For properties acquired before January 1, 2014, the three-year period began on that date per Article 236 of Law 83-C/2013.
Can a fund management company challenge IMT liquidation acts after the dissolution of a FIIAH fund?
Yes, a fund management company can challenge IMT liquidation acts after FIIAH dissolution if it has succeeded to the fund's legal relationships. When a FIIAH undergoes dissolution and liquidation, the entire patrimony transfers to the management company's legal sphere, including all active and passive legal relations. This succession grants the management company direct, personal, and legitimate interest (legitimidade processual) to contest tax assessments originally levied against the dissolved fund. The company steps into the fund's legal position and can pursue administrative complaints and arbitration proceedings at CAAD regarding assessments issued before or after dissolution.
What are the legal grounds for annulling IMT assessments related to FIIAH property acquisitions?
Legal grounds for annulling IMT assessments on FIIAH acquisitions include: (1) demonstrating compliance with specific FIIAH exemption conditions under Article 8(7) and (14) of CIMT; (2) invoking alternative exemptions not dependent on rental conditions, particularly Article 1 of Decree-Law 1/87, which exempts property acquisitions by fund managers intended for integration into real estate investment fund assets; (3) arguing that both exemptions serve distinct purposes and weren't repealed, citing Articles 28(2) and 31(6) of Decree-Law 287/2003 which maintain previous Sisa exemptions under IMT; (4) proving the acquisitions were made by the management entity specifically to integrate properties into the fund's patrimony, regardless of subsequent rental compliance.
How does the succession of legal relationships work when a FIIAH fund is dissolved and its assets transfer to the management company?
When a FIIAH fund is dissolved and liquidated, Article 6(4) of Decree-Law 1/87 governs the succession process. The fund's entire patrimony—including all assets, rights, and obligations—transfers automatically to the management company's legal sphere. This universal succession means the management company inherits all active legal relations (rights, including reimbursement claims) and passive legal relations (debts, tax obligations). The management company becomes the legal successor with full standing to continue any pending administrative or judicial proceedings initiated by the fund, file new challenges against tax assessments, and claim reimbursement of amounts paid by the dissolved fund, as if it were the original taxpayer.
Are taxpayers entitled to compensatory interest (juros indemnizatórios) when IMT liquidation acts are annulled by CAAD arbitration?
Yes, taxpayers are entitled to compensatory interest (juros indemnizatórios) when IMT liquidation acts are annulled by CAAD arbitration, provided legal requirements are met. Under Article 43 of the Tax Procedure and Process Code (CPPT) and Article 100 of the Tax Benefits Statute (EBF), when tax assessments are declared illegal and amounts were paid, the State must reimburse the principal plus compensatory interest at the legal rate from payment until full reimbursement. This compensates taxpayers for the State's unlawful retention of funds. The interest accrues automatically upon annulment without requiring separate proof of damages, calculated from the payment date of the illegal assessment until actual reimbursement, ensuring taxpayers are made whole for the time value of money improperly collected.