CAAD Case 246/2018-T: AIMI Subjective and Objective Incidence Under IMI Code Articles 135-A and 135-B

ARBITRAL DECISION

I - Report

1. A..., hereinafter referred to as the "Claimant," taxpayer no. ..., resident at Rua ..., no. ..., in Lisbon, requested the constitution of a singular arbitral tribunal, under the combined provisions of Article 2, no. 1, paragraph a) and Article 10, both of Decree-Law no. 10/2011, of 20 January (Legal Framework for Arbitration in Tax Matters, hereinafter referred to only as "LFATM") and Articles 1 and 2 of Ordinance no. 112-A/2011, of 22 March, in which the Tax and Customs Authority (TA) is the Respondent.

2. The request for arbitral pronouncement, presented on 15 May 2018, has as its object the declaration of illegality and consequent partial annulment of the assessment of the additional property tax (AIMI) no. 2017..., issued by the "TA" on 30 June 2017, with reference to the year 2017, in the total amount of 4,685.03 € (four thousand, six hundred and eighty-five euros and three cents).

3. It further requests that the Respondent be condemned to reimburse the amount paid relating to said assessment, in the amount of 1,983.05 €, plus the respective indemnitory interest, in accordance with the provisions of Article 43, no. 1 of the General Tax Code (GTC) and Article 61 of the Code of Tax Procedure and Process (CTPP), counted from the date of the undue payment of tax until the date of processing of the respective tax credit note.

4. The Claimant opted not to designate an arbitrator.

5. The request for constitution of the arbitral tribunal was accepted by the President of CAAD and notified to the TA on 15 May 2018.

6. The undersigned was designated by the President of the Ethics Council of CAAD as arbitrator of the singular arbitral tribunal, in accordance with the provisions of Article 6 of the LFATM, and acceptance of the assignment was communicated within the applicable timeframe.

7. On 5 July 2018, the Parties were notified of this designation, and neither opposed it, in accordance with the combined provisions of Article 11, no. 1, paragraphs a) and b) of the LFATM and Articles 6 and 7 of the CAAD Code of Ethics.

8. Thus, in accordance with the provisions of Article 11, no. 1, paragraph c) of the LFATM, the singular arbitral tribunal was constituted on 25 July 2018.

9. The Respondent was notified, by arbitral order of the same date, in accordance with Article 17, no. 1 of the LFATM, to, within a period of 30 days, submit a Response, if it so wished, and to request the production of additional evidence.

10. It was further notified to, within the same period, submit the administrative file (AF) referred to in Article 111 of the CTPP.

11. On 1 October 2018, the Respondent submitted its Response, defending itself by exception (untimeliness of the request for arbitral pronouncement), seeking dismissal of the claim.

12. On the same date it attached the respective AF to the case file.

13. On 1 October 2018, the Claimant was notified to, if it so wished, respond to the invoked exception, which it did on 4 October 2018.

14. Considering that the Parties did not request the production of any evidence beyond the documentary evidence attached to the case, the Arbitral Tribunal, given the principles of autonomy in case management, celerity, simplification and procedural informality, inherent in Articles 16 and 29, no. 2 of the LFATM, by order of 4 October 2018, waived the holding of the meeting provided for in Article 18 of the same statute, and further decided that the case would proceed with optional written submissions, within a period of 10 days, on a successive basis for the Respondent.

15. By the same order it was determined that the arbitral decision would be rendered by the end of the period referred to in Article 21, no. 1 of the LFATM.

16. On 24 October 2018 written submissions were presented by the Respondent.

Position of the Parties

From the Claimant -

It sustains its request for arbitral pronouncement, in summary, as follows:

On 7 August 2017 it was notified of the assessment of AIMI, relating to the year 2017, in the total amount of 4,685.03 €, which was levied on the taxable value of 1,188,502.98 € corresponding to the sum of the taxable patrimonial values of the urban properties which, on 1 January 2017, appeared in the respective real estate registries in its name, in the capacity of co-owner.

However, on that date, ownership of some of the properties no longer belonged to it, by virtue of, by deed of "Highlights and Division of Common Property," of 24 November 2016, the same having been allocated to other co-owners.

In fact, the urban properties registered in the real estate registry of the Union of Parishes of ..., ... and ..., municipality of ..., under the articles ..., ..., ..., ..., ..., ... and ..., were allocated to B... and the one registered in the same real estate registry under article ... was allocated to C....

Since the assessment was vitiated by error as to the factual premises, in that the removal of the said properties would entail a reduction in the taxable value of 202,506.66 € and the consequent reduction of AIMI, in the amount of 1,983.05 €, the Claimant, on 20 October 2017, filed a claim, in which, given the silence as to the respective pronouncement, the presumption of tacit rejection was formed.

It concludes by seeking the merits of the request for arbitral pronouncement and by virtue thereof the annulment of the assessment challenged with all the consequences provided for in law, in particular the reimbursement of the amount unduly paid, plus the corresponding indemnitory interest.

From the Respondent -

Defending itself by exception, it invokes the following arguments:

That the request for annulment or cancellation of the assessment challenged has as its immediate object a supposed presumption of tacit rejection of the discretionary claim presented on 20 October 2017.

However, on that date, a request was received by the Lisbon Finance Service ..., through which the Claimant, notified of the assessment challenged, petitioned the alteration of the registries of urban properties located in the Union of Parishes of ..., ... and ..., registered under articles ..., ..., ..., ..., ..., ..., ... and ..., since, according to public deed executed on 24 October 2016, they had been allocated to B... (articles..., ..., ..., ..., ..., ... and ...) and C... (article ...), having since that date left the legal sphere of the Claimant, and subsidiarily, and in accordance with the said alteration of the registry, requested the revision of the tax act performed in the context of AIMI.

However, at the date of processing of the assessment challenged (30-06-2017), the Claimant appeared in the respective registries as holder of ownership in a share of 1/3 of the properties in question, the notary not having communicated the execution of the said deed through submission in electronic form of the model 11 declaration, by 15-12-2016, in accordance with what was determined in no. 5 of Article 49 of CIMT (by mere mistake should refer to paragraph a), no. 4 of Article 49 of CIMT), which, given the automatic effects of such declaration, prevented the updating of the respective real estate registry.

The period for presentation of the request for arbitral pronouncement is untimely, since the starting point occurred on the day following the end of the deadline for voluntary payment of tax, that is, 30 September 2017, the request for constitution of the arbitral tribunal being presented beyond the legal period of 90 days.

Therefore, since the deadline for direct challenge of the assessment act has been exceeded, the timeliness of the request could only be founded on the existence of any discretionary means of challenge of said assessment act where a decision had been rendered denying or rejecting, in whole or in part, the claims formulated therein by the Claimant, which would constitute a second-instance act.

However, from the content of the request received on 20-10-2017, the Respondent TA did not determine, nor could determine the institution of the alleged "Discretionary Claim" which, given the invocation of the provisions of Article 106 of the CTPP in the request for arbitral pronouncement, is inferred to intend to designate the procedure of Discretionary Claim, given that the request formulated - alteration of ownership of the properties subject to division - does not constitute grounds for such procedure, with the request for revision of the tax act performed in the context of AIMI being merely subsidiary and consequent to the requested property alterations.

Therefore, with the powers of cognition being limited by the request and unable to exceed it, the Singular Arbitral Tribunal is prevented from assessing and declaring the illegality of the AIMI assessment, because the same is manifestly untimely.

It concludes, seeking the merits of the peremptory exception of untimeliness invoked and consequently "(…) the Respondent to be absolved of the instance."

Response of the Claimant to the Peremptory Exception of Untimeliness of the Request for Constitution of Arbitral Tribunal, Invoked by the Respondent

That it notes, with surprise, that the request seeking the revision of the tax act, in accordance with no. 1 of Article 78 of the General Tax Code, by it presented, does not form part of the administrative file (AF). However, it also considers strange the circumstance that on page 10 "(…) appears the corrective assessment of AIMI no. 2017... of 1/05/2018, entailing a reduction of the tax payable by the Claimant in the amount of € 1,856.10 (cf. compensation and reimbursement movements on page 9 of the AFT), of which the Claimant was unaware until now and which appears to constitute the allowance of the Claimant's claim and whose valid notification it now requires."

That the request in these proceedings consists of the declaration of nullity or partial annulment of AIMI assessment no. 2017..., as well as the restitution of part of the tax illegally levied by that assessment and already paid by the Claimant, plus the corresponding interest.

That the request was formulated in accordance with no. 1 of Article 10 of the LFATM, "within a period of 90 days, counted from the facts provided for in nos. 1 and 2 of Article 102 of the Code of Tax Procedure and Process," specifically, from the fact provided in paragraph d) of no. 1 of that article, that is, the "formation of the presumption of tacit rejection."

That, contrary to what was stated by the TA, the requests formulated by the Claimant in the request presented on 20-10-2017 are not subsidiary, but cumulative. Thus there is no relationship of subsidiarity between the requests identified in paragraphs a) and b) of "making the elements contained in this request and the attached documents reflected in the respective real estate registries" and "annulling the AIMI assessment no. 2017..., so that the urban properties registered in the registry under the articles nos. ..., ..., ..., ..., ..., ..., ... and ..., all of the union of parishes of ... and ... (...)."

That it is well settled in doctrine and case law that revision undertaken at the initiative of the taxpayer within the period of the claim constitutes a true claim.

And that the failure to decide after the end of the legal period constitutes presumption of tacit rejection for purposes of judicial challenge, thus constituting a legal fiction intended to facilitate private persons' recourse to contentious protection.

However, given that it is a faculty, the non-challenge of tacit rejection does not result in negative consequences for the interested party, since it will not be diminished in the right to challenge, in due time, the express rejection of the act.

Based on the foregoing, it seeks the dismissal of the invoked exception of untimeliness of the request for arbitral pronouncement.

II - Grounds

Facts Established

With relevance for the assessment and decision of the issues raised, the following facts are taken as established and proven:

On 1 January 2017, the following urban properties listed in doc. no. 1, which is here given as fully reproduced, were registered in the real estate registries in the name of the Claimant, in the capacity of co-owner:

On 30 June 2017, the TA proceeded to the assessment of AIMI no. 2017..., relating to the year 2017, in the amount of 4,685.03 €, which was levied on the taxable value of 1,188,502.98 €, corresponding to the sum of the taxable patrimonial values of the properties referred to above, with the deadline for voluntary payment occurring in the month of September 2017, cf. doc. no. 1.

The payment of the assessed tax was made on 29 September 2017, cf. pages 8 of the administrative file (AF) attached to the case, and which is here given as fully reproduced.

By deed of "Highlights and Division of Common Property" of 24 November 2016, executed at the Notarial Office of D..., located at Rua ..., no. ..., in Lisbon, the urban properties registered in the real estate registry of the Union of Parishes of..., ... and..., of the municipality of..., under the articles..., ..., ..., ..., ..., ... and..., were allocated to B... and the one registered in the same real estate registry under article ... was allocated to C..., cf. doc. no. 3, which is here given as fully reproduced.

Thus, on 1 January 2017, the Claimant was the holder of the right of property (co-ownership) of the following urban properties:

On 20 October 2017, the Claimant presented at the Lisbon Finance Service ... (...) a request addressed to that service and referenced with the subject "assessment of AIMI no. 2017...", in which, after setting out the error detected in the urban real estate registry of the Union of Parishes of..., ... and ... (...) by the fact that, as of 1 January 2017, the articles nos. ..., ..., ..., ..., ..., ..., ... and ... were registered in its name, in the capacity of co-owner, and informing that article ... was allocated, on 24 November 2016, to C..., and the rest, on the same date, to B..., in accordance with public deed of "Highlights and Division of Common Property," which it attached, requests the proper registry notation as well as the revision of the tax act performed in the context of AIMI, "annulling the assessment of AIMI no. 2017... and replacing it with another that reflects the assets effectively owned by the Claimant on 1 January 2017," cf. doc. no. 4, and which is here given as fully reproduced.

Facts Not Established

There are no facts relevant to the decision of the case that should be considered as not established.

Justification

Regarding matters of fact, the Tribunal has no duty to pronounce on all the matter alleged, having instead the duty to select what is relevant for the decision, taking into account the ground (or grounds) of claim that underlies the claim formulated by the plaintiff [(cf. Articles 596, no. 1 and 607, nos. 2 to 4 of the CPC, applicable ex vi of Article 29, no. 1, paragraphs a) and e) of the LFATM)] and to record whether it considers it proven or not proven (cf. Article 123, no. 2 of the CTPP).

According to the principle of free assessment of evidence, the Tribunal bases its decision, in relation to the evidence produced, on its intimate conviction, formed from the examination and assessment it makes of the evidence presented to the case and in accordance with its life experience and knowledge of persons (cf. Article 607, no. 5 of the CPC). Only when the probative force of certain means is pre-established in law (e.g. full probative force of authentic documents, cf. Article 371 of the Civil Code) does the principle of free assessment of evidence not apply.

Thus, the Tribunal's conviction was based on the documentary evidence attached to the case as well as on the positions assumed by the Parties.

III - Case Management

1. Because the peremptory exception invoked (untimeliness of the request for arbitral pronouncement) may result in total dismissal of the claim, cf. Article 576, no. 3 of the Code of Civil Procedure (CCP), the same should be officially and prioritarily decided (Article 579 of the CCP).

Thus:

For the TA, the request received on 20 October 2017 at the Lisbon Finance Service ... (...) did not determine, nor could determine, the discretionary claim procedure, given that the request formulated to alter the ownership of the properties subject to division does not constitute grounds for such procedure, with the request for revision of the tax act performed in the context of AIMI being merely subsidiary and consequent to the requested property alterations.

Therefore, with the powers of cognition being limited by the request and unable to exceed it, the Singular Arbitral Tribunal is prevented from assessing and declaring the illegality of the AIMI assessment, because the same is manifestly untimely.

For the Claimant, contrary to the TA's understanding, the requests formulated in the request presented on 20-10-2017 are not subsidiary, but cumulative. Thus there is no relationship of subsidiarity between the requests identified in paragraphs a) and b) of "making the elements contained in this request and the attached documents reflected in the respective real estate registries" and "annulling the assessment of AIMI no. 2017..., so that the urban properties registered in the registry under the articles nos. ..., ..., ..., ..., ..., ..., ... and ..., all of the union of parishes of ... and ... (...)."

Analyzing the request presented by the Claimant at the Lisbon Finance Service ... (...) on 20 October 2017, it becomes clear that two cumulative requests are formulated, with no relationship of subsidiarity between them.

In fact, in item 7, the correction of the real estate registry is requested due to error in the designation of persons. This claim has perfect legal basis being provided for in paragraph c) of no. 2 of Article 130 of CIMT.

In items 8 and 9, revision of the tax act performed in the context of AIMI and the consequent annulment of the sub judice assessment are requested.

From the respective prayer one can also extract, without difficulty, that the requests formulated by the Claimant ("making the elements contained in this request and the attached documents reflected in the respective real estate registries" and "in accordance therewith, annul the assessment of AIMI no. 2017..., so that the ... properties no longer appear in it") are cumulative and not subsidiary, especially because they are separated by the conjunction "and" and the adverb "further," which in this case means "also."

It should further be noted that the joinder of claims is permitted in the precise terms provided for in no. 1 of Article 555 of the Code of Civil Procedure.

On the other hand, the updating of registries by change of their respective holders does not constitute a burden on the taxpayer, especially since, in accordance with Articles 123 of the Code of Personal Income Tax, 49 of the Code of Municipal Property Transfer Tax and 63 of the Stamp Tax Code, it is incumbent on notaries or whoever intervenes in acts or contracts subject to property registration to submit in electronic form the model 11 declaration, relating to such acts or contracts containing, among other things, the name of the contracting parties.

However, in cases where the model 11 declaration is not delivered, as in the case under examination, cf. item 6 of the Response, it is incumbent on the head of the service to proceed officially with the respective registry update, cf. paragraph c) of no. 3 of Article 13 of CIMT.

Thus, the request to be assessed is reduced to the annulment of the AIMI assessment no. 2017..., which could consist of the discretionary claim or the request for official revision, provided for in Articles 68 et seq. of the CTPP and 78, no. 1 of the GTC, respectively, since these are the administrative means of challenge that the Claimant could make use of.

The judgment of the TCAN of 28-09-2066, rendered in Proceeding no. 00244/04, is thus summarized: "1. The purpose of the discretionary claim is the annulment, in whole or in part, of tax acts, triggered by the taxpayer, which can be filed on the same grounds provided for judicial challenge and which is characterized by simplification of its terms, by waiver of formalities, by speed of decision and by the obligation to send it to the competent body (regardless of whether the error made by the interested party is excusable or not). 2. Although the discretionary claim should be addressed, in principle, to the regional peripheral body and should be delivered to the local peripheral service in the area of the taxpayer's address or registered office, any error made in this regard is irrelevant to the characterization of the request, since, given the indisponible nature of the rules of competence, the law imposes on the TA the duty to officially know the matter of the body's competence to decide on the claim formulated, placing on it the duty to send the procedure to the competent body in accordance with terms regulated by Article 61 of the GTC. Therefore, neither the identification of the body to whom the request is addressed, nor the place or service where it is delivered, can by themselves constitute elements revealing the nature or classification of said document or, even, prevent or hinder its characterization as a "discretionary claim." 3. What matters in assessing the nature or qualification of a given request is its concrete content and purpose, revealed by the examination of the reasons adduced, by the manner in which they were presented and by the claim formulated, which implies and involves its interpretation according to the hermeneutic method that flows from the legal principles common to the interpretation of negotiated declarations and to the interpretation of laws, condensed in Articles 236 and 9 of the Civil Code. 4. Thus, for a request to be considered as a "discretionary claim" it is necessary that its author has made clear, in an unequivocal manner (even if implicit), a claim for annulment of a given tax act, so that the TA can adopt the appropriate procedural processing and submit it to the final decision of the competent body. 5. And whenever there are doubts about what remedy is demanded, because it has not been expressly indicated, it should be ascertained before the text of the request, the circumstances that justify it, the reasons of fact and law set forth as its basis and the logical-legal consequences they produce and that the requesting party clearly intended to achieve with the claim formulated (literal, historical, teleological and systematic elements, both of internal order of the request and of the legal system affected by the bases invoked)."

On the other hand, it has been the understanding of doctrine and case law that revision of the tax act at the initiative of the taxpayer within the period of the claim constitutes a true claim.

Thus, the request presented on 20 October 2017, constituting a true discretionary claim, in accordance with Articles 68 et seq. of the CTPP, should have been decided within a period of four months from that date, in accordance with the provisions of no. 1 of Article 57 of the GTC, the failure to comply with which after the end of said period presumes tacit rejection for purposes of judicial challenge, cf. Article 106 of the same code.

As explained by His Excellency Counselor Jorge Lopes de Sousa, "Tacit rejection is a legal fiction intended to enable the interested party access to courts, to obtain protection for its rights or legitimate interests, in cases of inactivity of the tax authority regarding claims presented to it."

Resulting from "the inactivity of the tax authority regarding claims presented to it," due to the failure to render a decision on such claims within the period that, by law, is conferred on it for such purpose.

That is, in short, the presumption of tacit rejection stems from the violation of the legal duty to decide that lies with the TA.

As written by Diogo Leite de Campos, Benjamim Silva Rodrigues and Jorge Lopes de Sousa, "The creation of a legal duty to decide has as its purpose to enable the formation of a tacit act of rejection, which depends on the existence of such duty, and the provision for the formation of such act has as its sole possible justification to enable its contentious challenge."

But even if it were considered that the request presented on 20 October 2017 should have been processed as a request for revision of a tax act, in accordance with no. 1 of Article 78 of the GTC, the silence as to non-pronouncement by the TA would also presume its tacit rejection for purposes of judicial or contentious challenge, cf. no. 5 of Article 57 of the GTC.

Given the foregoing and considering:

That, in accordance with no. 1 of Article 70 and paragraph a) of no. 1 of Article 102, both of the CTPP, the discretionary claim must be presented within a period of 120 days counted from the end of the period for voluntary payment of the AIMI whose assessment was challenged in the present proceedings; and

That, in accordance with Article 135-H of CIMT, the payment of AIMI is made in the month of September of the year to which it applies, the starting point or dies a quo for the presentation of the discretionary claim occurred on 1 October 2017 and the ending point or dies ad quem on 29 January 2018 (by application of paragraph e) of Article 279 of the Civil Code, since 28 February was a Sunday).

Thus, since the discretionary claim was presented on 20 October 2017, the same is timely, and should be decided by 21 February 2018, that is, within a period of four months after the date of entry of the petition, cf. no. 1 of Article 57 of the GTC and paragraphs b) and c) of Article 279 of the Civil Code.

Therefore, by force of the provisions of Article 106 of the CTPP, the discretionary claim is presumed tacitly rejected for purposes of judicial challenge on 22 February 2018, so that, in accordance with paragraph a) of no. 1 of Article 10 of the LFATM, combined with paragraph d) of no. 1 of Article 102 of the CTPP, the request for constitution of an arbitral tribunal could be presented until 22 May 2018, that is, within a period of 90 days from the date of formation of the presumption of tacit rejection of the discretionary claim.

Therefore, since the request for constitution of the arbitral tribunal was presented on 15 May 2018, the same is manifestly timely.

Thus, the invoked peremptory exception of untimeliness of the request for arbitral pronouncement invoked by the Respondent is judged to be without merit.

1. The Parties have legal personality and capacity, show themselves to be legitimate and are regularly represented (Articles 4 and 10, no. 2 of the LFATM and Article 1 of Ordinance no. 112-A/2011, of 22 March).

2. The case is not vitiated by nullities, the request was presented in a timely manner and no exceptions were invoked.

3. The Arbitral Tribunal is regularly constituted and is materially competent to know and decide the request, cf. Article 2, no. 1, paragraph a) of the LFATM.

4. There are no other circumstances that prevent the knowledge of the merits of the case.

IV - Matter of Law (Justification)

Subject Matter of the Dispute

In addition to the exception invoked by the Respondent of untimeliness of the request for arbitral pronouncement, the issue that constitutes the thema decidendum comes down to determining the taxable value for purposes of subjective and objective incidence of AIMI and respective assessment, in accordance with Articles 135-A, nos. 1 and 3; 135-B, nos. 1 and 2; 135-C, nos. 1 and 2 of CIMT; 135-F, nos. 1 and 2; and 135-G, no. 1.

Questions to be Decided:

• The (il)legality of the assessment challenged; and

• The claim for payment of indemnitory interest.

Regarding the (Il)legality of the Assessment Challenged -

With relevance to the question to be decided, we proceed to transcribe the provisions of CIMT that we consider most relevant:

Article 135-A

1 - The passive subjects of the additional property tax are natural or legal persons who are owners, usufructuaries or emphyteuticaries of urban properties located in Portuguese territory.

3 - The status of passive subject is determined in accordance with the criteria established in Article 8 of this Code, with the necessary adaptations, with reference to 1 January of the year to which the additional property tax relates.

Article 135-B

1 - The additional property tax is levied on the sum of the taxable patrimonial values of the urban properties located in Portuguese territory of which the passive subject is the owner.

2 - Excluded from the additional property tax are urban properties classified as "commercial, industrial or for services" and "others" in accordance with paragraphs b) and d) of no. 1 of Article 6 of this Code.

Article 135-C

1 - The taxable value corresponds to the sum of the taxable patrimonial values, as of 1 January of the year to which the additional property tax relates, of the properties that appear in the real estate registries in the ownership of the passive subject.

2 - From the taxable value determined under the preceding provision the following amounts are deducted:

a) Euro 600,000, when the passive subject is a natural person;

b) Euro 600,000, when the passive subject is an undivided estate.

Article 135-F

1 - To the taxable value determined in accordance with Article 135-C and after application of the deductions provided therein, where they exist, the rate of 0.4% is applied to legal persons and 0.7% to natural persons and undivided estates.

2 - To the taxable value, determined in accordance with no. 1 of Article 135-C, exceeding one million euros, or double this value when the option provided for in no. 1 of Article 135-D is exercised, the marginal rate of 1% is applied, when the passive subject is a natural person.

Article 135-G

1 - The additional property tax is assessed annually, by the Tax and Customs Authority, based on the taxable patrimonial values of the properties and in relation to the passive subjects that appear in the registries on 1 January of the year to which it relates.

Assessment:

The assessment challenged (AIMI for the year 2017), in the amount of 4,685.03 €, was levied on the taxable value, in the amount of 1,188,502.98 €, corresponding to the sum of the taxable patrimonial values of the urban properties not classified as commercial, industrial, for services and others, in accordance with paragraphs b) and d) of no. 1 of Article 6 of CIMT, registered in the real estate registries, on 1 January 2017, in the name of the Claimant, as holder of the right of property (co-ownership).

However, as appears from no. 4 of the proven facts, by public deed of "Highlights and Division of Common Property" of 24 November 2016, executed at the Notarial Office of D..., located at Rua ..., no. ..., in Lisbon, the urban properties registered in the real estate registry of the Union of Parishes of..., ... and..., of the municipality of ..., under the articles ..., ..., ..., ..., ..., ... and..., were allocated to B... and the one registered in the same real estate registry under article ... was allocated to C..., with the taxable patrimonial value of these properties being 202,006.66 €.

The presumption inherent in no. 4 of Article 8, applicable by force of the provisions of Articles 135-A, nos. 1 and 3 and 135-G, no. 1, all of CIMT, according to which the owner, usufructuary or emphyteuticary, for tax purposes, shall be whoever as such appears or should appear in the registry, is relative or juris tantum, always admitting proof to the contrary, cf. Article 73 of the GTC. Therefore, given the evidence produced (public deed of "Highlights and Division of Common Property" of 24 November 2016, referred to above), said presumption is rebutted.

Thus, the urban properties which, on 1 January 2017, should have been registered in the respective real estate registries in the name of the Claimant, as holder of said right of property (co-ownership), had a total taxable patrimonial value of 986,496.32 €, this being the value which, after deduction of the amount of 600,000.00 €, cf. paragraph a), no. 2 of Article 135-C, would serve as the basis for the incidence of AIMI for the year 2017, in accordance with Article 135-G/1 of CIMT.

Thus, the assessment should have been levied on the amount of 386,496.32 €, at the rate of 0.7%, contained in paragraph a), no. 1 of Article 135-F of CIMT.

Given the foregoing, the alleged defect of violation of law due to error as to the legal premises is deemed to be established, which determines the declaration of illegality and consequent partial annulment of the assessment challenged.

Regarding the Claim for Indemnitory Interest -

The Claimant further seeks to be paid indemnitory interest, due to error of the services, in accordance with Article 43, no. 1 of the GTC, having proven the payment of the assessed amount.

This provision, applicable subsidiarily to the tax arbitral process, by force of the provisions of Article 29, no. 1, paragraph a) of the LFATM, states "Indemnitory interest is due when it is determined, in a discretionary claim or judicial challenge, that there was error attributable to the services resulting in payment of the tax debt in an amount greater than legally due."

The existence of error attributable to the services is deemed to be established, according to uniform case law of the STA, whenever the merits of the discretionary claim or judicial challenge of the assessment act are found to be established (in the same sense, the decision in arbitral proceeding no. 218/2013-T).

Having been demonstrated the erroneous application of the standard of incidence that justifies the partial annulment of the assessment challenged, the Claimant's right to indemnitory interest is recognized at the legal default rate, in accordance with Articles 43, nos. 1 and 4, and 35, no. 10 of the GTC, Article 559, no. 1 of the Civil Code and Ordinance no. 291/2003, of 8 April, from the date of actual payment of the amount unduly assessed until the date of processing of the respective tax credit note, in accordance with the provisions of no. 5 of Article 61 of the CTPP.

**

V - Decision

Given the foregoing, the decision is:

a) To judge unfounded the peremptory exception of untimeliness of the request for arbitral pronouncement invoked by the Respondent;

b) To judge founded, due to defect of violation of law by error as to the factual and legal premises, the request for declaration of illegality and consequent partial annulment of the assessment of the additional property tax (AIMI) no. 2017..., with reference to the year 2017, with the taxable value of 386,496.32 € serving as the basis for incidence, corresponding to the sum of the taxable patrimonial values of the properties listed in no. 5 of the proven facts, in the amount of 986,496.32 €, minus the amount of 600,000.00 € referred to in paragraph a), no. 2 of Article 135-C of CIMT; and

c) To judge founded the claim for condemnation of the Tax and Customs Authority to reimburse part of the amount unduly paid by the Claimant, resulting from the amount over-assessed, plus interest, at the legal rate, from the date of payment until the date of processing of the respective tax credit note.

Case Value

In accordance with the provisions of Articles 306, no. 2 of the CCP, 97-A, no. 1, paragraph a) of the CTPP and 3, no. 2 of the Rules of Court Costs in Tax Arbitration Proceedings (RCCPAT), the case value is fixed at 1,983.05 €.

Costs

In accordance with Article 22, no. 4 of the LFATM, the amount of costs is fixed at 306.00 €, in accordance with Table I, attached to the RCCPAT, charged to the Tax and Customs Authority.

Notify.

Lisbon, 21 December 2018.

The Arbitrator,

(Rui Ferreira Rodrigues)

Text prepared by computer, in accordance with the provisions of Article 131, no. 5 of the CCP, applicable by remission of Article 29, no. 1, paragraph e) of the LFATM.