Stamp Tax on High-Value Property: Vertical Ownership and Verba 28.1 TGIS – CAAD 253/2015-T

ARBITRAL DECISION

CAAD: Tax Arbitration

Case No. 253/2015-T

Subject: Stamp Duty; full ownership; item 28.1 GSDT

REPORT

A…, legal entity no. …, administered by B… – …, S.A. holder of the single registration and identification number for legal entity …, both with registered office at Av. …, …, … floor, Lisbon, hereinafter simply referred to as the Applicant, filed a petition for the establishment of an arbitral tribunal in tax matters and petition for arbitral decision, pursuant to the provisions of articles 2, no. 1 a) and 10, no. 1 a), both of Decree-Law No. 10/2011, of 20 January (Legal Regime of Tax Arbitration, hereinafter referred to as LRTA), requesting the revocation of the decision dismissing the administrative complaint and declaration of illegality of the stamp duty tax assessments numbered 2013…, 2013…, 2013…, 2013… and 2013… and their respective collection notices (2014…, 2014…, 2014…, 2014… and 2014…), relating to the year 2013 and relating to the real property registered in the urban property register of the parish of ..., municipality and district of Lisbon, under item ….

In support of its petition, the Applicant alleges, in summary:

a) The Applicant was notified of the collection notices relating to stamp duty for the year 2013 and for the property registered in the urban property register of the parish of ..., municipality and district of Lisbon under item …;

b) The aforementioned stamp duty was assessed in accordance with item 28.1 of the General Stamp Duty Table (GSDT), taking into account the total value of each of the divisions with residential use of the building, resulting from the valuation performed in March 2013, which the Tax Authority retroactively applied to 31/12/2012, the date of receipt of the Model 1 declaration for IMI;

The collection notices sent do not identify the author of the act, and therefore are null, under the terms and for the purposes of article 39, no. 12 of the TCPT;

They do not identify the authority under which the act was performed, and therefore are illegal, due to the non-existence of the author of the acts;

And they are not reasoned, and therefore are invalid, ineffective and voidable, under the terms and for the purposes of article 77 of the LGT;

None of the divisions of the property that is the subject of the assessments in question has residential use, and therefore stamp duty cannot apply to them under item 28.1 of the GSDT;

The property has been leased to the Portuguese State since 23/12/2010, where it has installed the ...;

Each of the divisions of the property in question was subject to individual valuation for the purposes of the CIMI, and none of these divisions has a tax property value exceeding one million euros;

For the purposes of determining whether or not to be subject to Stamp Duty, the Tax Authority cannot consider as a reference value the total value of the property constituted in vertical ownership, by adding up the values of the divisions with independent use;

The legislator expressly established that Stamp Duty would apply only to properties whose tax property value was equal to or greater than one million euros, which is not the case for any of the divisions with independent use held by the Applicant in the property referred to in a) above;

The assessments challenged violate the principle of equality;

The Applicant is exempt from payment of the tax in question, by application of article 49 of the EBF, in force at the date of the facts;

The Applicant filed an administrative complaint against the assessments made, which was dismissed.

The Applicant submitted 25 documents and listed two witnesses.

In the petition for arbitral decision, the Applicant chose not to appoint an arbitrator, and therefore, in accordance with the provisions of article 6, no. 1 of the LRTA, the undersigned was appointed by the Ethics Council of the Administrative Arbitration Centre, with the appointment having been accepted in the manner legally provided.

The arbitral tribunal was constituted on 26 June 2015.

Notified in the manner and for the purposes of article 17 of the LRTA, the Respondent submitted a response, alleging, in summary, the following:

The subjection to stamp duty of the property in question in the present case results not only from its residential use but also from the fact that it has a tax property value exceeding one million euros;

Under the provisions of article 113, no. 1 of the CIMI, applicable by virtue of article 23 of the CIS, the tax is levied annually according to the tax property values of the properties contained in the registers on 31 December of the year to which it relates;

The tax in question in the present case relates to the year 2013, and therefore there is no retroactivity;

The property in question in the present case is in the regime of full ownership, not having any autonomous units;

The law distinguishes between the regime of full ownership and horizontal property, and this regime cannot be applied when autonomous units are not in question;

For the purposes of IMI and stamp duty, the Applicant is not the owner of 15 autonomous units but of a single property;

The tax property value relevant for the purposes of stamp duty is the total tax property value of the property and not the tax property value of each of the parts that compose it;

The exemption provided for in article 49 of the EBF does not apply to stamp duty;

There is no violation of the principle of equality.

The Respondent submitted no documents, did not list any witnesses, and did not submit the administrative file.

Given the position taken by the parties, the holding of the meeting referred to in article 18 of the LRTA was waived, as was the examination of the witnesses listed by the Applicant, and the submission of final pleadings was also waived.

SANITATION:

The Arbitral Tribunal is regularly constituted.

The parties have the required legal personality and capacity, are entitled to pursue the action, and are regularly represented.

The case is not affected by defects that would affect its validity.

QUESTIONS TO BE DECIDED:

In the present case, the questions to be decided are:

To determine whether the notification of the collection notices is null due to the lack of essential elements of notification;

To determine whether the assessments and collection notices are voidable due to lack of reasoning;

To determine the residential use of the property;

To determine the relevant tax property value for the purposes of stamp duty in the case of properties held in the regime of full ownership, composed of floors or divisions capable of independent use, with residential use;

To determine whether the alleged subjective exemption from stamp duty applies;

To determine whether there is retroactive application of stamp duty.

FINDINGS OF FACT:

Established Facts:

The following facts, relevant to the decision to be rendered in the present case, are established as proven:

1. A urban property is registered in favor of the Applicant, registered in the property register of the parish of ..., municipality and district of Lisbon under item …;

2. The property referred to in 1) above was the subject of a lease agreement, entered into between the Applicant and the Portuguese State, on 23 December 2010, intended for the installation of public services;

3. The Applicant was notified of the valuation of the urban property referred to in 1) above and of the residential use assigned to the divisions capable of independent use located on the 1st, 2nd, 3rd, 4th and 5th floors;

4. The Applicant did not request a second valuation in accordance with article 15-F of Decree-Law 287/2003, of 12 November;

5. The property referred to in 1) above is composed of 15 divisions capable of independent use;

6. Of the 15 divisions capable of independent use, 5 were classified as dedicated to residential use and 10 as dedicated to commercial use;

7. Each of the 15 divisions were subject to separate valuation, for purposes of IMI;

8. None of the stated divisions capable of independent use has a tax property value equal to or exceeding one million euros;

9. With reference to the year 2013 and to the divisions capable of independent use dedicated to residential use, the Respondent assessed Stamp Duty corresponding to Item 28.1 of the GSDT, in the total amount of € 15,086.00;

10. The Applicant was notified of the first installments of the SD assessed, relating to the year 2013, corresponding to collection documents nos. 2014…, 2014…, 2014…, 2014… and 2014…, in the respective amounts of € 1,111.54, € 1,069.74, € 1,069.74, € 990.94 and € 786.74, the payment deadline for which was April 2014;

11. The Applicant was notified of the second installment of the SD assessed, relating to the year 2013, corresponding to collection document no. 2014…, in the amount of € 768.73, the payment deadline for which was July 2014;

12. Notified of the collection notices referred to in 10) above, the Applicant filed, on 05/08/2014, an administrative complaint, to which the number …2014… was assigned;

13. By official letter dated 04/12/2014, the Applicant was notified of the draft dismissal of the administrative complaint filed and notified to exercise, if desired, within 15 days, the right to prior hearing;

14. By registered letter dated 22/12/2014, the Applicant exercised the right to prior hearing;

15. By official letter received by the Applicant on 15/01/2015, the Applicant was notified of the decision dismissing the administrative complaint filed;

16. On 15/04/2015 the Applicant filed a petition for the establishment of an arbitral tribunal.

Facts not proven:

There are no unproven facts of interest to the case.

Justification of the Findings of Fact:

The conviction regarding the facts established as proven was based on the documentary evidence submitted by the Applicant, indicated in relation to each point, whose authenticity and correspondence to reality was not contested by the Respondent, and on the uncontested allegations of the parties.

AS TO THE LAW:

On the lack of essential elements of notification:

The Applicant begins by arguing that the collection notices that were notified to it do not contain the identification of the author of the act nor the authority under which it acted, in violation of the provisions of article 39, no. 12 of the TCPT.

It further argues that it was not notified of the Stamp Duty assessments challenged here, of which it only became aware of the respective date.

It concludes by requesting the declaration of nullity of the aforementioned notifications, for violation of the aforementioned article 39, no. 12 of the TCPT.

Having examined the collection notices notified to the Applicant, it appears that no defect can be attributed to them.

In effect, article 46, no. 5 of the CIS provides, regarding collection notices, that, where there is an assessment of the tax referred to in item no. 28 of the General Table, the collection document is issued within the deadlines, terms and conditions set out in article 119 of the CIMI, with the necessary adaptations.

Article 119 of the CIMI provides that "the Services of the Directorate-General of Taxes send to each taxpayer, by the end of the month prior to the month of payment, the competent collection document, with identification of the properties, their parts capable of independent use, the respective tax property value and the amount of tax allocated to each municipality of the location of the properties."

When the collection notices notified to the Applicant are compared, it is verified that they contain, by reference to article 119 of the CIMI, the following elements:

identification of the property;

its parts capable of independent use;

the respective tax property value.

The collection notices notified to the Applicant therefore comply with all the requirements provided for in article 119 of the CIMI, except, naturally, for that relating to the amount of tax allocated to each municipality of the location of the properties, which is not applicable to Stamp Duty.

With all these requirements verified, it is concluded that no defect can be attributed to the collection notices in question in the present case.

The formal defect invoked by the Applicant regarding the nullity of the notification of the collection notices therefore does not apply.

On the lack of reasoning of the assessments and collection notices:

The Applicant further argues that the assessments and collection notices in question in the present case are affected by a defect of lack of reasoning, and are therefore invalid, ineffective and voidable.

As the assessments that gave rise to the collection notices were not submitted to the case, we can only address the alleged defects with regard to the collection notices.

Once again, it appears that the Applicant confuses the concept of collection notice with the concept of assessment.

In effect, article 77 of the LGT provides:

"1 – The decision of procedure is always reasoned by means of a brief statement of the facts and law that motivated it, and the reasoning may consist of a mere declaration of agreement with the grounds of earlier opinions, information or proposals, including those that form part of the tax inspection report.

2 – The reasoning of tax acts may be effected in summary form, and shall always contain the applicable legal provisions, the classification and quantification of tax facts and the operations for determining the taxable matter and the tax."

From a simple reading of the aforementioned provision, it is apparent that the duty of reasoning provided therein applies to the decision of procedure and to tax acts, and is therefore not applicable to simple collection notices.

As for these, as already stated, the law only imposes compliance with the requirements provided for in article 119 of the CIMI, which, as we have seen, are considered to be met.

Now, among these requirements is not included the reasoning of the collection notices, which, moreover, makes sense, since these are nothing more than the logical corollary of the assessment previously made.

It is, therefore, in relation to the assessments, as tax acts, that the law imposes the duty of reasoning, as a right enshrined and constitutionally guaranteed to citizens (article 268, no. 3, of the Constitution of the Portuguese Republic) and an act defining the position of the Tax Authority with respect to individuals, from which it is possible to infer the logical reasoning followed by the latter to decide as it did and not otherwise.

It is precisely for this reason that article 77, no. 2 of the General Tax Law requires that the decision of procedure contain "the applicable legal provisions, the classification and quantification of tax facts and the operations for determining the taxable matter and the tax", since only in this way can the taxpayer understand the reason for the tax act to which it is subject and defend itself against it.

Whether these premises and reasons correspond or not to reality is a matter related to the merits and no longer to the form and which, therefore, is placed in another dimension which it is not appropriate to examine at this point.

Without prejudice to the foregoing, the truth is that, the law not imposing any other requirement on the collection notices beyond those provided for in article 119 of the CIMI, in particular the duty of reasoning, it seems clear that no defect of lack of reasoning can be attributed to these collection notices.

The defect of lack of reasoning invoked by the Applicant therefore does not apply.

On the residential use of the property:

The Applicant argues that the property in question does not have actual residential use, due to the fact that it is leased to the Portuguese State, which has installed the .... there.

To the contrary, the Respondent argues that in the property record of the property in question, its use is residential, and as such it should be taxed.

As to objective incidence, article 1, no. 1 of the CIS provides that stamp duty applies to all acts, contracts, documents, titles, papers and other facts or legal situations provided for in the General Table.

Article 4 of Law No. 55-A/2012, of 29 October, added item No. 28 to the GSDT, annexed to the CIS, approved by Law No. 150/99, of 11 September, with the following wording:

"28 - Ownership, usufruct or right of surface of urban properties whose tax property value contained in the register, in accordance with the Municipal Property Tax Code (CIMI), is equal to or greater than € 1,000,000 - on the tax property value used for purposes of IMI:

28.1 - For property with residential use - 1%;

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

That said,

In item 28.1 of the GSDT added by Law No. 55-A/2012, of 29 October, an innovative concept was used, which is not used by any other tax legislation: the concept of property with residential use.

Nor in the CIMI, indicated by the aforementioned Law No. 55-A/2012 as a regulation of subsidiary application with respect to the tax introduced by the addition of item 28 to the GSDT, is any such defined concept used.

In effect, the CIMI defines the concept of property, defines the various types of properties and identifies the species of urban properties.

Thus,

Under article 2 of the CIMI, "property is any portion of territory, including water, plants, buildings and constructions of any kind incorporated therein or built thereon, with a character of permanence, provided that it forms part of the assets of a natural or legal person and, in normal circumstances, has economic value."

Properties are divided into rural (article 3), urban (article 4) or mixed (article 5), with urban properties subdivided into 4 species: residential, commercial, industrial or for services; land for construction and others (article 6).

Thus, property with "residential use" will be that which is intended for housing.

Indeed, the same conclusion is reached through a reconstruction of legislative intent, taking into account the unity of the legal system, the circumstances in which the law was drafted and the specific conditions of the time in which it is applied, as imposed by article 9 of the Civil Code.

First, it is important to consider that the introduction of this item 28 in the GSDT occurred at a time when, there being an absolute need to face the crisis that had been installed, it was necessary to collect as much revenue as possible, which was intended to be achieved, in particular, through the taxation of so-called "luxury" properties.

The intention, therefore, with the introduction of the taxation provided for in item 28 of the GSDT was to tax wealth, externalised in the ownership, usufruct or right of surface of urban properties "of luxury", with residential use.

That only properties with residential use are included in this new taxation results expressly from the Explanatory Memorandum of the Draft Law No. 96/XII, which states that, with a view to reinforcing the "principle of social equity in austerity, ensuring an effective sharing of the necessary sacrifices for compliance with the adjustment programme", the legal instrument to be approved "expands the taxation of income from capital and property, equitably encompassing a broad range of sectors of Portuguese society".

Thus, one can also read in the aforementioned Explanatory Memorandum that it "creates a tax under Stamp Duty applicable to urban properties with residential use whose tax property value is equal to or greater than one million euros" (emphasis in original).

Already in the course of the general discussion of the aforementioned Draft Law, one can read:

"First, the Government proposes the creation of a special tax to tax urban residential properties of higher value. This is the first time that in Portugal a special taxation has been created on high-value properties intended for housing. This tax 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" (emphasis in original).

There is no doubt, therefore, that the legislator's intention was to tax houses, urban residential properties, properties intended for housing, that is, properties already actually intended for residential use.

In the case at hand, as results from the facts established - point 2) -, the property in question was the subject of a lease agreement, intended for the installation of public services.

Thus, given the division of urban properties referred to in article 4 of the CIMI, it seems clear that this cannot be classified as a property with residential use, in the terms exposed.

The truth, however, is that this was the classification attributed by the Tax Authority, and it is certain that, notified of the valuation carried out and the classification attributed, the Applicant did not make use of the prerogative to request a second valuation – cfr. points 3) and 4) of the facts established.

Thus, in the face of the residential classification attributed to the divisions in question, not challenged by the Appellant, it cannot defend itself, as the Appellant intends, that, due to the fact that the property is leased and public services are installed there, the residential classification initially attributed can be altered.

The alleged non-residential use of the property therefore does not apply.

Relevant tax property value:

Here we have arrived at the conclusion that the fundamental question lies in the interpretation of the rule contained in Item 28 of the GSDT (in particular that in point 1), added by article 4 of Law No. 55-A/2012, of 29 October, which, at the date of the facts in question in the present case, established the following:

"28 – Ownership, usufruct or right of surface of urban properties whose tax property value contained in the register, in accordance with the Municipal Property Tax Code (CIMI), is equal to or greater than € 1,000,000.00 – on the tax property value used for purposes of IMI:

28.1 – For property with residential use – 1%

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

That said,

Given what has already been exposed in the examination of the residential use of the property, it is verified that the CIMI does not make any distinction between properties held in the regime of horizontal or full ownership. In effect, although number 4 of article 2 expressly states that the autonomous units of properties held in the regime of horizontal ownership constitute, each one of them, a property, the truth is that it does not exclude from such classification the divisions with independent use of properties held in the regime of full or vertical ownership.

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

It should be recalled that, in accordance with the provisions of no. 1 of article 11 of the General Tax Law, tax rules are interpreted in accordance with the principles of legal hermeneutics commonly accepted, especially those fixed, among us, in article 9 of the Civil Code.

Literal interpretation presents itself as the first stage of interpretative activity. As FERRARA states, "the text of the law forms the substrate from which and on which the interpreter must start and rest"[1]. Now, since the law is expressed in words, the verbal significance they contain must be extracted from them, according to their natural connection and the rules of grammar. However, when the words used by the legislator are ambiguous or indeterminate, it will be necessary to resort to logical interpretation, which attends to the spirit of the provision being interpreted.

Logical interpretation, as has been pacifically understood by doctrine[2], is based on the rational element, the systematic element and the historical element; weighing them and deducing from them the value of the legal rule in question.

By rational element is to be understood the raison d'être of the legal rule, i.e., the purpose for which the legislator instituted it. The discovery of the ratio legis thus presents itself as a factor of undoubted importance for the determination of the meaning of the rule.

It occurs, however, that a particular rule does not exist in isolation, but rather coexists with other rules and legal principles in a systematic and complex manner. Thus, it naturally becomes the case that the meaning of a particular rule becomes clear from the confrontation of this with others. As BAPTISTA MACHADO states, "this element comprises the consideration of the other provisions that form the complex normative body of the institute in which the rule being interpreted is integrated, that is, that regulate the same matter (context of the law), as well as the consideration of legal provisions that regulate parallel normative problems or related institutes (parallel places). It also comprises the systematic place that belongs to the rule being interpreted in the global order, as well as its consonance with the spirit or intrinsic unity of all legal order."[3].

The historical element, in turn, must be reported to and include materials connected with the history of the rule, such as "the evolutionary history of the institute, the figure or the legal regime in question (…); the so-called sources of law, that is, the legal or doctrinal texts that inspired the legislator in the preparation of the law (…); the preparatory work."[4].

Let us apply what has been stated to the case at hand, i.e., to the interpretation of no. 4 of article 2 of the CIMI, also invoking the provision of article 1414 of the Civil Code, which determines that "the units of which a building is composed, in conditions to constitute independent units, may be owned by different owners in the regime of horizontal ownership."

Now, knowing that, as a rule, a single right of ownership falls on each building incorporated in the land, belonging to one or more holders, it is easy to see that that rule [article 1414 of the CC] contains an important derogation from such a principle. In effect, and as indeed PIRES DE LIMA and ANTUNES VARELA teach[5], what characterizes this institute [horizontal ownership] "is the fact that the units of the same building that constitute independent units belong to different owners".

But then, what is to be said about no. 4 of article 2 of the CIMI? It should be said that it aims, in a manner congruent therewith, to adapt tax reality to the materiality permitted by article 1414 of the CC, i.e., it aims to allow taxation of different owners to the extent of their properties; but also, it aims to allow to obviate potential difficulties arising from the impossibility of assimilating each autonomous unit, in the horizontal ownership regime, to the concept of property as defined in no. 1 of article 2 of the CIMI. And only that. The legislator said exactly what it intended to say.

Thus, having examined the definition of property contained in number 1 of article 2 of the CIMI, we do not see any reason not to include therein the divisions with independent use of properties held in the regime of full ownership, since these constitute a portion of territory that forms an integral part of the assets of a natural or legal person and that has economic value.

Having established the classification of the divisions with independent use of properties held in the regime of full ownership as properties, in the terms and for the purposes of the CIMI, it seems evident to us that each one of these divisions will constitute a property with residential use from the moment it is intended to have such use or from the moment when, as occurs in the present case, it is thus classified for tax purposes.

On the other hand, in the case at hand, each of the divisions with independent use is individually classified, with 5 of those now under consideration being dedicated to residential use and the others to commercial use – cfr. point 6 of the facts established.

Indeed, were it not for the divisions in question in the present case being individually classified as a property, it would make no sense to prepare 5 assessment notices of Stamp Duty and 5 collection notices, one relating to each independent unit.

In effect, if these divisions were not classified, individually, as properties, then a single assessment notice and a single collection notice should have been prepared, relating to the property.

On the other hand, as regards the spirit of the law, it is important to note that, as has been argued by the most recent arbitral jurisprudence[6], the introduction of item 28 in the GSDT had the objective of taxation of urban properties of high value.

As already exposed, the introduction of item 28 of the GSDT aimed to tax wealth, externalised in the ownership, usufruct or right of surface of urban properties "of luxury", with residential use.

Indeed, as results from the arbitral jurisprudence cited above, which we follow closely, it will be said that, from the analysis of the discussion of Draft Law No. 96/XII in the Assembly of the Republic, it is inferred that the basis for the measure designated as a special tax on urban residential properties of highest value rests on the invocation of the principles of social equity and fiscal justice, calling on the holders of high-value properties intended for housing to contribute in a more intense manner, by placing the new special tax on houses with a value equal to or greater than one million euros.

Now, if the objective of the law was to adapt taxation under Stamp Duty to the contributory capacity of taxpayers, it seems to have no relevance the distinction between properties held in the regime of horizontal or vertical ownership.

In effect, it is not apparent how the ownership of certain divisions in a property in the regime of full ownership can signify greater wealth and greater contributory capacity than the ownership of the same number of units in a property in the regime of horizontal ownership.

Manifestly, it is not through this that the greater or lesser contributory capacity is revealed, especially since, as is known, horizontal ownership is a relatively recent legal institute, and it is certain that a large part of older properties are not held in this regime, although in practice they function as such.

Now, the principle of the prevalence of substance over form requires that the tax administration value material truth. And, in the case at hand, material truth consists in the non-existence of any substantive difference between the divisions with residential use owned by the Applicant and the units of a property held in horizontal ownership.

And the Respondent itself ends up accepting such substantive identity, when, in article 63 of the response submitted, it admits that the establishment of horizontal ownership entails a mere legal alteration of the property, with no need for a new valuation.

Now, if the alteration effected is merely legal and not factual, what reason exists for the difference in tax treatment between one and the other situation? It seems to us that none.

In the case at hand, having verified the identity between the divisions with residential use owned by the Applicant and the units of a property held in the regime of horizontal ownership, no ground can be invoked to justify the non-application of the same regime to both situations.

And, if in the case of units of a property held in the regime of horizontal ownership there is no doubt that the relevant tax property value for the purpose of determining whether or not Stamp Duty applies is the individual value of each unit, it is not apparent why this question should arise in the case of divisions that do not form part of a property held in the regime of horizontal ownership.

To distinguish, for the purpose of determination of whether or not to be subject to Stamp Duty, the autonomous units of properties held in the regime of horizontal ownership from the divisions with independent use of properties held in the regime of full ownership, represents a clear violation of the principles of justice, equality and fiscal proportionality, material truth and contributory capacity, and cannot therefore be accepted.

Thus, the thesis defended by the Respondent that the fact that the property is not held in the regime of horizontal ownership precludes the application of its regime cannot be upheld.

In the case at hand, as results from the facts established, none of the divisions capable of independent use, with residential use, or rather, none of the properties owned by the Applicant, has a tax property value equal to or exceeding one million euros – cfr. point 8) of the facts established -, and therefore these are not encompassed by the rule of incidence provided for in item 28 of the GSDT.

In light of all that has been exposed, there is no doubt that the tax property value relevant for the purposes of stamp duty in cases of properties held in the regime of full ownership, composed of several divisions with independent use, with residential use, is the tax property value of each of the divisions of the property and not, as defended by the Respondent, the total tax property value of the property, corresponding to the sum of all the tax property values of the divisions that compose it.

In light of all that has been exposed, there being no legal ground for the assessments carried out, its annulment is required, and the examination of the remaining questions raised by the Applicant is rendered moot.

OPERATIVE PART:

In light of the foregoing, it is decided:

1. To dismiss as unfounded the petition for declaration of nullity of notification of the collection notices;

2. To dismiss as unfounded the petition for annulment of the assessments and collection notices due to lack of reasoning;

3. To uphold the petition for revocation of the decision dismissing the administrative complaint and consequent declaration of illegality of the Stamp Duty assessment in the total amount of € 15,086.00, with the inherent annulment thereof and of the collection notices issued.

The value of the case is fixed at € 15,086.00, in accordance with point a) of no. 1 of article 97-A of the Code of Tax Procedure and Process, applicable by force of points a) and b) of no. 1 of article 29 of the LRTA and of no. 2 of article 3 of the Regulation of Costs in Tax Arbitration Proceedings.

The arbitration fee is fixed at € 918.00, in accordance with Table I of the Regulation of Costs of Tax Arbitration Proceedings, as well as the provision of no. 2 of article 12 and of no. 4 of article 22, both of the LRTA, and of no. 3 of article 4 of the aforementioned Regulation, to be paid by the Respondent as the losing party.

Register and notify.

Lisbon, 15 December 2015.

The Arbitrator,

Alberto Amorim Pereira

Text prepared by computer, in accordance with no. 5 of article 131 of the CPC, applicable by reference in point e) of no. 1 of Decree-Law No. 10/2011, of 20/01.

[1] FERRARA, FRANCESCO, Interpretation and Application of Laws, 1921, Rome; Translation by MANUEL DE ANDRADE, Arménio Amado, Publisher, Successor – Coimbra, 2nd Edition, 1963, p. 138 et seq.

[2] See, inter alia, BAPTISTA MACHADO, JOÃO, "Introduction to Law and to Legitimising Discourse", Almedina, Coimbra, 1994, 7th reprint, p. 181.

[3] BAPTISTA MACHADO, JOÃO, op. cit., p. 183.

[4] BAPTISTA MACHADO, JOÃO, op. cit., p. 184.

[5] PIRES DE LIMA and ANTUNES VARELA, Annotated Civil Code – Volume III (articles 1251 to 1575), 2nd Revised and Updated Edition (Reprint), Coimbra Editora, Limited, 1987, p. 391.

[6] See, among others, decisions rendered in the course of cases 48/2013-T, 50/2013-T and 132/2013-T, all available at www.caad.org.pt