Process: 265/2014-T

Date: June 5, 2015

Tax Type: IRC IMI

Source: Original CAAD Decision

Summary

This CAAD arbitration case (Process 265/2014-T) concerns a dispute over IMI (Municipal Property Tax) assessments totaling €5,551.11 for years 2010-2012 on an aparthotel unit with declared tourist utility status. The claimant owned fraction D of the Aparthotel B..., which received tourist utility status in 2009 for seven years and was granted IMI exemption under Article 47 of the Tax Benefits Statute (EBF). The Tax Authority challenged this exemption, issuing IMI assessments and arguing the property was not genuinely exploited for tourism purposes. The claimant's defense centered on maintaining tourist assignment through verbal agreements with the exploitation company C... S.A., despite economic crisis reducing demand. The claimant argued the Tax Authority lacked competence to revoke tourist utility status and that Article 21 of Decree-Law 423/83 was misapplied, as non-use resulted from market conditions rather than abandonment of tourist purpose. The Tax Authority countered that no formal legal exploitation contract existed, that the aparthotel developer requested housing assignment for the fraction, and that accounting records showed no tourist use. The Authority also noted the purchase deed did not specify tourist destination. Jurisdictional issues arose regarding the tribunal's competence to rule on associated fines and guarantee costs. This case illustrates critical requirements for maintaining IMI exemptions under Article 47 EBF: formal exploitation agreements, consistent property designation, and demonstrable tourist use beyond mere intention.

Full Decision

ARBITRATION DECISION

I. STATEMENT OF FACTS

  1. A…, S.A., with Tax Identification Number …, hereinafter identified as the Claimant, requested on 17 March 2014 the constitution of an arbitral tribunal, in accordance with the provisions of articles 2, no. 1, paragraph a), and 10, nos. 1 and 2, of Decree-Law no. 10/2011 of 20 January (hereinafter, Regulatory Framework for Tax Arbitration or RJAT) and articles 1 and 2 of Ordinance no. 112-A/2011 of 22 March, with a view to:

a) The declaration of illegality of the assessment of Municipal Property Tax ("IMI"), corresponding to the years 2010, 2011 and 2012, contained in three assessment notices numbered 2010 …, 2011 … and 2012 …, the first received on 19 December 2013 and the remaining two in the month of January 2014, with a total value of € 5.551,11

b) The consequent annulment of these assessments;

  1. The contested assessments concern the taxation, under IMI, of an autonomous fraction, identified by the letter "D", which constitutes the apartment numbered …, located on the Ground Floor of block …, intended for tourist use, of the urban property under the horizontal property regime, located at …, plot …, parish of …, and which integrates the tourist development called Aparthotel "B…".

  2. In the request, the Claimant opted not to appoint an arbitrator.

  3. In accordance with no. 2 of article 6 of the RJAT, the Deontological Council of the Center for Administrative Arbitration designated the undersigned Single Arbitrator, notifying the parties thereof.

  4. The tribunal has been properly constituted since 5 June 2014 to appreciate and decide on the subject matter of the case, as per the order issued by the President of the Deontological Council of CAAD.

  5. The facts and legal grounds supporting the Claimant's request for arbitral pronouncement are, in summary, as follows:

6.1 The Claimant is the owner and legitimate possessor of an autonomous fraction, identified by the letter "D", which constitutes the apartment numbered …, located on the Ground Floor of block …, with a storage room located in the basement numbered …, three parking spaces located in the basement numbered … to … of the urban property under the horizontal property regime, located at …, plot …, parish of …, the fraction being intended for tourist use.

6.2 The property identified here integrates the tourist development called Aparthotel B…, and which has a Tax Patrimonial Value (VPT) of € 466.480,00.

6.3 By order of the State Secretary for Tourism numbered …/2009, issued on 6 November of that year, this tourism enterprise was granted the status of tourist utility as a permanent right for a period of 7 (seven) years from 30 July 2008 (date of the tourist use license).

6.4 Following a request submitted by the Claimant, the Director of the Tax Services of … granted IMI exemption for a period of 7 (seven) years, under the provisions of article 47 of the Tax Benefits Statute (EBF).

6.5 The Claimant acquired the fraction identified above with the intention of exploiting it for tourism purposes, invoking that there are agreements between her and company C…, S.A. for the latter to exploit the property for tourism purposes.

6.6 Therefore, the Claimant does not understand the assessments now contested, considering there is no legal basis for them.

6.7 The Claimant was also notified to pay a fine for failing to update the property tax registry of the said fraction, an update that, in the view of the Tax Authority, was mandatory because the property was not intended for tourist exploitation.

6.8 Not agreeing with this understanding of the Tax Authority, the Claimant opted to pay the said fine in the amount of € 438,25.

6.9 The Claimant bases its request on the following grounds:

(i) The administrative act granting the fiscal benefit of IMI exemption would only be revocable, in accordance with article 14, no. 4 of the Tax Benefits Statute (EBF) if there is non-compliance attributable to the beneficiary of the imposed obligations, or if the benefit was improperly granted.

(ii) Therefore, the Tax Authority could not revoke the act granting the benefit granted;

(iii) Much less could the Tax Authority withdraw the qualification of tourist utility granted by the Government, as it has no competence to do so;

(iv) The fiscal benefit is also not extinguished under the provisions of article 21 of Decree-Law 423/83 because the Claimant always maintained, through verbal agreements made with company C…, S.A., the fraction assigned to tourist exploitation;

(v) Moreover, in the deed itself it was established that the fraction acquired was intended for tourist use;

(vi) Furthermore, there were moments when there were interested parties who expressed interest in reserving the apartment, which demonstrates that this assignment was maintained, regardless of whether there was actual use of the apartment;

(vii) The non-use of the property is solely due to insufficient demand resulting from the economic crisis the country has experienced in recent years;

(viii) This interpretation of article 21 referred to above violates, even the Constitution, as it violates programmatic rights related to the free disposal of assets and realization of economic rights.

(ix) Furthermore, in the Claimant's view, the fiscal benefit cannot cease automatically; the Tax Authority must expressly indicate the moment when this "revocation" occurred

(x) With the change in the owners of the company responsible for exploiting the enterprise, the Claimant states that conversations are currently ongoing between her and the new representatives of this company in order to maintain the tourist exploitation assignment contract.

6.10 In this manner the assessments should be annulled, the Claimant also including in its request the reimbursement of the fine paid and also the reimbursement of the costs incurred with the bank guarantee provided for suspension of the enforcement process.

  1. In its response, the Tax Authority, after enumerating and referring to which facts presented by the Claimant, as well as the grounds presented to request the annulment of the assessments, contested the requests made by the Claimant in its initial petition, in the terms and with the following grounds:

7.1 It begins by contesting that tax arbitration may pronounce on the fines applied by the Tax Authority and also on the reimbursement of costs incurred by the Claimant, in so far as, in accordance with article 2, no. 1 of the RJAT and article 2 of Ordinance 112-A/2011, only the legality of assessments (in this case, IMI) and the right to payment of indemnifying interest can be subject to tax arbitration.

7.2 Indeed, the Tax Authority considers that the appropriate means to determine the legality of the fine is judicial challenge in accordance with the provisions of articles 80 et seq. of the General Regime of Tax Violations (RGIT), while the matter of reimbursement of costs incurred by the Claimant with the bank guarantee provided should be addressed in execution of judgment.

7.3 The Tax Authority considers that the contested assessments were correctly issued, sustaining its position, basically, on the following arguments:

(i) The Claimant should have issued a legal title (with the terms in which that exploitation should be carried out) that would enable the exploiting entity to exploit the tourist property of its fraction (accommodation unit), which never actually occurred.

(ii) Moreover, B…, on 13 March 2009, requested from the Municipal Chamber of … the assignment of this fraction to housing, which demonstrates an evident incompatibility with its assignment to tourist exploitation.

(iii) This destination – tourist assignment – is not even contained in the deed of purchase and sale of the fraction, contrary to what the Claimant sustains.

(iv) In the accounting records of B… there is no evidence demonstrating that the autonomous fraction owned by the Claimant has ever been used for tourist purposes.

(v) The argument cannot hold that this lack of use is due to the financial crisis.

(vi) From the bylaws of the Claimant (article 3, no. 1) it follows that the company's object is not the exploitation of tourism, but rather the purchase and sale of real estate and the resale of those acquired for that purpose, real estate consulting and management, the carrying out of real estate investments, the management, exploitation, administration and rental of real estate and the commercialization of computer equipment.

(vii) The fact that the autonomous fraction was not subject to tourist exploitation results only from not having been opened to exploitation.

(viii) The fact that the Claimant intended to rent the autonomous fraction cannot, in the view of the Tax Authority, have any relevance for the success of its claim.

(ix) The representatives of the Tax Authority conclude that the assessments subject to contest do not violate, even indirectly, article 14, no. 4 of the EBF, in so far as the fiscal benefits resulting from the grant of tourist utility cease automatically (cf. article 21 of Decree-Law 423/83), independently of its revocation, it being sufficient, for this purpose, that the fraction be subtracted from tourist exploitation.

(x) The evidence of non-existence of the requirements for IMI exemption is overwhelming, but, the Tax Authority considers, that in case of doubt, it would always be the burden of the Claimant to demonstrate it, in accordance with articles 74, no. 1 of the LGT and 342, no. 1, of the Civil Code.

7.4 For all the above stated, the Tax Authority considers that the requests formulated by the Claimant should be judged as unfounded and, consequently, the assessments subject to contest should be maintained.

  1. Following requests submitted by the Parties, an order was issued by the Tribunal on 16 September 2014 in which the meeting provided for in article 18 of the RJAT was dispensed with and the Parties were notified to present, in writing, in successive form and beginning with the Claimant, their pleadings, which was done, within the fixed deadlines.

  2. In its pleadings, the Claimant contested, in the following manner, all arguments invoked by the Tax Authority in its response:

9.1 With regard to the request for reimbursement of costs incurred with the bank guarantee, the Claimant sustains that, in accordance with article 171 of the Code of Tax Procedure (CPPT), applicable subsidiarily in accordance with article 29 of the RJAT, the legality of the debt being discussed within the scope of the Arbitral Tribunal, compensation for costs incurred with the bank guarantee should be requested in the same forum.

9.2 The Claimant also contests the Tax Authority's understanding that the applicable regime is that of Decree-Law 167/97 of 4 July, in view of the provisions of article 76 of Decree-Law 288/2009 of 14 September, which amended and republished Decree-Law 39/2008 of 7 March.

9.3 In this sense, the Claimant considers that, in view of the provisions of no. 2 of the cited article 76 of Decree-Law 288/2009, it is incumbent upon the entities promoting tourist enterprises to choose between the application of the regime provided for in this new diploma or else the regime that was in force at the date of the beginning of the procedure (of licensing, it should be understood).

9.4 Now, there being no express manifestation by the Claimant in the sense of opting for the application of the regime prior to Decree-Law 288/2009, it should be considered that the applicable regime is that of this new diploma, from which it follows that it is incumbent upon the exploiting entity, and not the Claimant, to obtain the legal title that enables it to exploit all fractions of the tourist enterprise.

9.5 The Claimant further understands that the sole legal consequence for the failure to obtain these titles is of a contra-ordinal nature.

9.6 Moreover, the Claimant considers, in these pleadings, that the fact that the contract was concluded verbally cannot undermine its validity or legal existence, because, if there is a gap, the regime of article 219 of the Civil Code should prevail, which stipulates freedom of form.

9.5 The Claimant concludes its pleadings, arguing that (i) the Tax Authority has no competence to revoke the fiscal benefit and even less the grant of tourist utility to the enterprise, and that (ii) the provisions of article 21 of Decree-Law 423/83 of 5 December will not be applicable to the present case because, as per the evidence adduced in the case, the fraction of its property was not subtracted from the unitary exploitation of the enterprise.

  1. For its part, in its pleadings, the Tax Authority maintained the entire argumentation previously invoked, and already described above, it being, however, important to note, nonetheless, the following:

10.1 For the Respondent, it is irrelevant which diploma applies to the tourist enterprise where the fraction acquired by the Claimant is located, since article 76, no. 1 of Decree-Law 39/2008 reproduces article 45, no. 4 of Decree-Law 167/97.

10.2 Thus, for the Respondent, as a result of both diplomas, the fundamental element for the application or maintenance of the fiscal benefit is the existence of a legal title establishing the terms in which the tourist exploitation of the accommodation units should be carried out, the definition of the participation of the owners in the results of the exploitation of the accommodation unit and the definition of the conditions under which the owner may proceed to its use.

10.3 However, the Respondent understands that the Claimant never issued such legal title and that a mere verbal agreement, without any documentary form, cannot be understood as a legal title.

10.4 Two facts should also be relevant, in the understanding of the Tax Authority, namely:

(i) In March 2009, C… S.A. requested, from the Municipal Chamber of …, the assignment of the fraction to residential purposes instead of tourist purposes;

(ii) The Certified Public Accountant of C… S.A. declared that there are no accounting records in the company's accounting that prove that the fraction owned by the Claimant has ever been used for tourist purposes, from which it follows the conclusion that such use never occurred.

10.5 Thus, the fact that the autonomous fraction in question was not subject to tourist exploitation is due only to never having been assigned to tourist exploitation through the necessary obligation of issuing the said legal title.

10.6 In this manner, it is not a question of retroactive revocation of a fiscal benefit, but rather its cessation due to the fact that the property has been subtracted from tourist exploitation.

II. GROUNDS

II.1 FACTUAL MATTERS

  1. The Claimant is the owner and legitimate possessor of an autonomous fraction, identified by the letter "D", which constitutes the apartment numbered …, located on the Ground Floor of block …, with a storage room located in the basement numbered …, three parking spaces located in the basement numbered … to …, of the urban property under the horizontal property regime, located at …, plot …, parish of ….

  2. With respect to this fraction, the Tax Authority issued three assessment notices numbered 2010 …, 2011 … and 2012 …, the first received on 19 December 2013 and the remaining two in the month of January 2014, with a total value of € 5.551,11.

  3. The contested assessments concern the taxation of the fraction identified above, under IMI, because the Tax Authority considered that the requirements for granting the IMI exemption provided for in article 47 of the EBF were not met ("Properties integrated in enterprises to which tourist utility has been granted").

  4. By order of the State Secretary for Tourism numbered …/2009, issued on 6 November, this tourism enterprise was granted the status of tourist utility as a permanent right for a period of 7 (seven) years from 30 July 2008 (date of the tourist use license).

  5. The Claimant did not proceed to pay the assessed tax, having provided bank guarantee to suspend the corresponding tax enforcement proceedings.

  6. By request filed on 13.03.2009 with the Municipal Chamber of …, company C…, S.A. requested the issuance of housing licenses for a set of fractions integrated in the tourism enterprise of which it was, at the time, owner, including for fraction "D", which was later acquired by the Claimant.

  7. For failing to request the alteration of the matricial registration of the identified autonomous fraction, a contra-ordinal proceeding was instituted against the Claimant, with a fine set at € 438,25, which the Claimant paid.

  8. On 17 March 2014, the Claimant presented the request for constitution of the Arbitral Tribunal, in accordance with the provisions of articles 2, no. 1, paragraph a), and 10, nos. 1 and 2, of Decree-Law no. 10/2011 of 20 January (hereinafter, Regulatory Framework for Tax Arbitration or RJAT) and articles 1 and 2 of Ordinance no. 112-A/2011 of 22 March, with a view to the declaration of illegality of the IMI assessment acts, the annulment of that assessment, the condemnation of the Tax Authority to return the fine and the costs incurred with the bank guarantee.

  9. The Arbitral Tribunal was constituted on 5 June 2014.

The decision on the proven facts was based on the documents attached to the case and on the opposition of the Tax and Customs Authority regarding the facts invoked by the Claimant, as well as on the inspection report that supported the contested assessments.

There are facts not proven with relevance to the decision of the case, especially the failure to provide proof that there exists a legal title establishing the terms in which the tourist exploitation of the accommodation units should be carried out, the definition of the participation of the owners in the results of the exploitation of the accommodation unit and the definition of the conditions under which the owner may proceed to its use.

II.2 QUESTIONS TO BE APPRECIATED

The main and principal question to be appreciated by the Tribunal concerns the verification of the requirements which, in accordance with the law, are fixed for the granting and maintenance of the fiscal benefit provided for in article 47 of the Tax Benefits Statute (EBF).

The assessments contested by the Claimant were issued because the Tax Authority considered that the fraction acquired by her had been subtracted from tourist exploitation, and, as such, the fiscal benefit provided for in article 47 of the EBF had, in accordance with article 21 of Decree-Law 423/83, ceased automatically.

The principal question concerns, thus, in the understanding of the Tribunal, to ascertain whether the fraction acquired by the Claimant was subtracted from tourist exploitation or rather, whether it ever had such assignment.

The verification of this proof is essential to determine whether the provisions of article 21 of Decree-Law 423/83 are applicable and, consequently, whether the fiscal benefit provided for in article 47 of the EBF should cease automatically, independently of an express revocatory act by the Tax Authority to that effect.

From the evidence produced in the case by the Parties, it is the understanding of the Tribunal that the assignment of fraction "D" acquired by the Claimant to tourist exploitation never occurred.

This understanding of the Tribunal is based on the following:

a) In the request presented by the entity that owned the fraction (before its sale by the Claimant) to the Municipal Chamber of … and referred to in the inspection report that supported the assessments subject to contest, the assignment of fraction "D" to housing was requested.

b) The Certified Public Accountant of C…, S.A., in the statements she made in the course of the inspection action (and which are attached hereto), stated that there are no records in the company's accounting that demonstrate that this fraction was ever assigned to tourist exploitation;

c) In fraction "D", as in other fractions of the same tourist enterprise, there is continuous water consumption, which indicates normal and regular occupation of the fraction;

d) None of these facts was contradicted by the Claimant, either in its initial request in which it sought the constitution of the Arbitral Tribunal, or in its written pleadings;

e) The legal title was not presented, which both Decree-Law 167/97 and the diploma that came to replace it, Decree-Law 288/2009, impose, and which would enable the company exploiting the enterprise to exploit, for tourism purposes, the fraction whose property does not belong to it, that is, in the case in question, the fraction owned by the Claimant.

f) The argument invoked by the Claimant regarding freedom of form cannot hold, to understand that it is sufficient to have had a verbal agreement between her and the entity that proceeded to the tourist exploitation, to consider that this possibility – existence of a legal title and assignment to tourist exploitation – is met.

g) By using the expression "legal title" and by requiring certain minimum content – the definition of the terms in which the tourist exploitation of the accommodation units should be carried out, the definition of the participation of the owners in the results of the exploitation of the accommodation unit and the definition of the conditions under which the owner may proceed to its use – the legislator intended, in a clear and unequivocal manner, that the production of this title comply with certain requirements, in this case, that written form be adopted.

h) The exchange of correspondence, very limited and incipient, is not, in itself, sufficient proof that the fraction owned by the Claimant was assigned to tourist exploitation.

i) Likewise, the Tribunal considers that the economic crisis cannot be the ground for which, since the date of its acquisition, there has never been tourist use of this fraction.

Article 21, no. 1 of Decree-Law 423/83 of 5 December, which regulates the legal regime of tourist utility, provides that "The fiscal benefits resulting from the grant of tourist utility cease automatically, independently of its revocation, with respect to any and all component or integral element of the enterprise, including the properties and autonomous fractions referred to in no. 1 of article 20, which are subtracted from its unitary exploitation." (underlined in original).

Arising from the evidence provided by the Tax Authority (and, in essence, not contradicted and/or questioned by the Claimant), especially in the inspection report (and respective attachments) that supported the assessments now contested, that the fraction, more than subtracted from tourist exploitation, was never assigned to it, the Tribunal considers that the requirements are met that should cause the automatic cessation of the fiscal benefit provided for in article 47 of the EBF, this cessation therefore not requiring an express revocatory act from the entity that granted that benefit.

As a function of and as a consequence of the Tribunal's understanding regarding the principal question under appreciation, more specifically the legality of the assessment acts, the request for reimbursement of the costs incurred by the Claimant with the provision of the guarantee falls away, in accordance with article 53 of the General Tax Law (LGT).

Finally, with respect to the request for appreciation of the fine paid by the Claimant, the Tribunal also understands in this case that it is not in tax arbitration proceedings that this matter should be appreciated, since the competencies of tax arbitral justice are circumscribed to those expressly provided for in the RJAT, more specifically in its article 2, no. 1, and also in article 2 of Ordinance 112-A/2011, from which it follows that the scope of appreciation and judgment of arbitral justice is limited to the legality of assessments.

The Tribunal is therefore incompetent to appreciate this question.

III. DECISION

In view of the foregoing and for the reasons invoked, it is decided:

To judge unfounded the requests formulated by the Claimant of (i) annulment of the contested assessments, (ii) appreciation and reimbursement of the fine paid and (iii) the costs incurred with the bank guarantee provided to suspend the tax enforcement proceedings.

IV. VALUE OF THE CASE

In accordance with the provisions of article 315, no. 2, of the Code of Civil Procedure and article 97-A, no. 1, paragraph a), of the Code of Tax Procedure and article 3, no. 2, of the Regulation on Costs in Tax Arbitration Proceedings, the case is assigned the value of € 7.489,36 (seven thousand four hundred eighty-nine euros and thirty-six cents).

V. COSTS

In accordance with Table I attached to the Regulation on Costs in Tax Arbitration Proceedings, the amount of costs is fixed at € 612,00 (six hundred twelve euros).

Notify the parties.

Lisbon, 5 June 2015.

The Single Arbitrator

(João Marques Pinto)

Frequently Asked Questions

Automatically Created

Is a tourist property with utility status exempt from IMI under Article 47 of the EBF?
Yes, under Article 47 of the Tax Benefits Statute (EBF), tourist properties with definitive tourist utility status granted by the competent tourism authority are eligible for IMI exemption for up to seven years from the tourist use license date. However, maintaining this exemption requires the property to remain actively assigned to tourist exploitation. As demonstrated in Process 265/2014-T, mere ownership of a property within a tourist development is insufficient; the Tax Authority examines whether formal exploitation contracts exist, whether the property is actually being used for tourism purposes, and whether the designation remains consistent across official records and accounting documentation.
How does the CAAD handle disputes over IMI liquidation for aparthotel units?
The CAAD (Administrative Arbitration Center) handles IMI disputes for aparthotel units by examining both formal compliance with tax benefit requirements and substantive tourist exploitation evidence. In Process 265/2014-T, the tribunal evaluated whether the property owner maintained the tourist assignment necessary for Article 47 EBF exemption. The CAAD's jurisdiction is limited to assessing the legality of IMI tax assessments and indemnifying interest claims under Article 2(1) of the RJAT framework. Issues such as administrative fines or guarantee costs fall outside arbitration scope and must be challenged through separate judicial proceedings under the General Regime of Tax Violations (RGIT). The tribunal examines purchase deeds, exploitation agreements, municipal records, accounting documentation, and actual use patterns to determine exemption eligibility.
What is the process for obtaining an IMI exemption for tourist utility properties in Portugal?
To obtain IMI exemption for tourist utility properties under Article 47 EBF, property owners must: (1) secure definitive tourist utility status from the State Secretary for Tourism, typically granted for seven years from the tourist use license date; (2) submit a formal request to the Director of Tax Services in the relevant jurisdiction; (3) maintain the property's assignment to tourist exploitation through documented agreements with exploitation entities; (4) ensure consistency between property designation in purchase deeds, municipal records, and actual use; and (5) demonstrate ongoing tourist exploitation, not merely intention. As Process 265/2014-T illustrates, verbal agreements may be insufficient—formal legal contracts specifying exploitation terms are expected. The exemption period runs from the tourist use license date, and cessation of tourist exploitation may trigger retroactive IMI assessments.
Can a property owner challenge unlawful IMI assessments through tax arbitration at the CAAD?
Yes, property owners can challenge unlawful IMI assessments through tax arbitration at the CAAD under Articles 2(1)(a) and 10 of Decree-Law 10/2011 (RJAT) and Ordinance 112-A/2011. Process 265/2014-T demonstrates this procedure: the claimant requested arbitration within statutory deadlines, seeking declaration of illegality and annulment of three IMI assessment notices totaling €5,551.11. Property owners may opt not to appoint an arbitrator, in which case the CAAD Deontological Council designates a single arbitrator. However, CAAD jurisdiction is limited to tax assessment legality and indemnifying interest; related administrative fines must be challenged separately under RGIT judicial procedures. The arbitration provides an alternative to traditional judicial tax courts, offering specialized expertise in tax matters and potentially faster resolution.
What are the requirements for definitive tourist utility status to qualify for IMI tax benefits?
To qualify for IMI tax benefits under Article 47 EBF based on definitive tourist utility status, properties must meet several requirements: (1) formal tourist utility status granted by the State Secretary for Tourism as a permanent right for a specified period (typically seven years); (2) a valid tourist use license from municipal authorities; (3) continuous assignment to tourist exploitation through enforceable legal contracts with exploitation entities, not merely verbal agreements; (4) consistency across all official documentation—purchase deeds, municipal registrations, and property tax records must reflect tourist designation; (5) actual exploitation evidenced in accounting records and operational documentation; and (6) absence of incompatible uses, such as assignment to residential housing. As Process 265/2014-T reveals, the Tax Authority may revoke benefits under Article 14(4) EBF for non-compliance with imposed obligations or improper granting, and Article 21 of Decree-Law 423/83 may terminate benefits when tourist assignment ceases, regardless of economic justifications.