IMI Tax: Fuel Stations Classified as Commercial vs Other Urban Properties (CAAD 288/2017-T)

ARBITRAL DECISION

I – Report

1.1. A…, S.A., taxpayer with registration number…, with headquarters at Avenida…, n.º…, … Floor, …-… Lisbon (hereinafter referred to as the "Claimant"), having been notified of the tax acts fixing the property value for IMI purposes of several urban properties, submitted, on 24/4/2017, a request for constitution of an arbitral tribunal and for arbitral decision, pursuant to Article 10 of Decree-Law No. 10/2011, of 20/1 (Legal Framework for Arbitration in Tax Matters, hereinafter referred to solely as "RJAT"), in which the Tax and Customs Authority (AT) is requested, with a view to "the annulment of the acts fixing the property value" and "the repetition of the assessment procedure and the fixing of the respective property value [in the terms defended by the Claimant]" and, "furthermore, the reimbursement of the costs of second assessment incurred by the claimant."

1.2. On 30/6/2017 the present Arbitral Tribunal was constituted.

1.3. Pursuant to Article 17, No. 1 of the RJAT, the AT was served, as the respondent party, to present a response, in accordance with and for the purposes of the aforementioned article. The AT presented its response on 19/9/2017, having argued, in summary, the total lack of merit of the Claimant's request.

1.4. Under the provisions of Article 16, paragraph c) of the RJAT, the present Tribunal considered it unnecessary to hold the meeting provided for in Article 18 of the RJAT and that the case proceed to decision. Accordingly, the date of 18/10/2017 was set for the pronouncement of the arbitral decision.

1.5. The Arbitral Tribunal was duly constituted, is materially competent, the case is free from defects that would invalidate it, and the Parties have legal personality and capacity, and are duly legitimized.

II – Allegations of the Parties

2.1. The Claimant alleges, in its petition, that: a) "the property values were fixed, both in the first and second assessments, based on certain premises. Which we shall proceed to identify, after which we shall set forth the reasoning which, based on the IMI Code and the jurisprudence of the CAAD and the courts, refutes these same premises"; b) "1st The AT's 'Assessment Manual' was applied, which classifies a fuel service station as an urban property 'other' [...]. [...] the assessment commissions complied, uncritically and without reading Article 6 of the IMI Code, with the criterion contained in [the said Manual.] Both Article 6 of the IMI Code, which defines the typology of urban properties, and the numerous arbitral decisions decided in favor of the Claimant were disregarded. [...]. [...] the classification of the urban properties in question as 'other' reflects the criteria provided for in the 'Manual'. But the fact is that the 'Manual' contains not a single reason for – in accordance with Article 6 of the CIMI – to depart from the classification of these properties as 'commercial'"; c) "2nd Even if classified as an 'other' property, Article 38 was capable of application. [...] the 'Manual' appears to supersede both the IMI Code and judicial jurisprudence, considering that fuel service stations constitute 'other' properties and, for that reason, are subject to assessment under the terms of No. 2 of Article 46 of the IMI Code. And, following this understanding, the 'Manual' establishes the fixing of the property value in accordance with the 'cost method of construction added to the market value of the land'. Which denotes a manifest defect of improper classification of the provisions of the IMI Code (which prevails over any 'Manual'). Since No. 1 of Article 46, applicable to the assessment of 'other' properties, stipulates that, 'in the case of buildings, the taxable property value is determined in accordance with Article 38 with the necessary adaptations'. In other words, even if the property were capable of being classified as 'other', the preferred assessment method would continue to be the formula provided for in Article 38"; d) "3rd The cost of construction used is arbitrary and disorderly. The market values of the land were fixed [at] €100 per square meter. Why this value and not any other? It is not known. As for construction values, values ranging from €110.56 to €83.34 were determined. Why these values and not any others? It is not known"; e) "No. 4 of Article 37 of the CIMI provides that: 'The assessment relates to the date of the request for registration or updating of the property in the property register'. In the situation at issue, as the Form 1 models were submitted on 15 and 22 December 2014 and 18 March 2016, the rules that enable the assessment of the properties in question will be those in force on that date. [...] it is clear and unequivocal that the amendments introduced to Article 38 of the CIMI by Law No. 7-A/2016, of 30 March, which approved the State Budget for 2016 and which came into force on 31 March, do not apply to the case at issue. [...]. Given that the Claimant submitted on 15 and 22 December 2014 and 18 March 2016 the Form 1 models to correct the property registers of the properties in question, the determination of the respective taxable property values shall be carried out by the direct method provided for in Article 38 and following for properties classified as 'commercial'"; f) "A service station constitutes a 'commercial' or 'service' property. [...]. [...] the urban properties in question are composed of buildings and a plot of land, in which are installed equipment assets (metal covering, fuel tanks and pumps) and respective passageways (pavements, green areas and vehicle passage area for fuel acquisition)"; g) "it seems to us obvious that these service stations constitute places that have as their 'normal destination' the practice of commercial acts (sale of fuel, beverages and food). But, if there were any doubts, we attached copies of the licenses issued by the respective Municipal Councils when submitting the Form 1 models, cf. documentation attached to the Form 1 models"; h) "How can a place for the marketing of fuel, beverages and food be an 'other' property?"; i) "according to the assessment commission [...] the service station, in addition to being in the 'other' category, is included in the sub-category ... 'other'. [...]. We can discuss whether the use will be 'commerce' (sale of fuel, beverages and food) or 'services' (preparation of small meals). But 'other' will certainly not be"; j) "The 'Assessment Manual' does not supersede the IMI Code"; l) "'Commercial' or 'service' properties are assessed in accordance with Article 38 of the IMI Code"; m) "[several arbitral decisions of the] CAAD have [already decided] favorably to the Claimant in various cases identical to the one in question. [...]. The Central Administrative Court of the South also decided in the same sense".

2.2. In view of the above, the Claimant states "that the acts fixing the property value are vitiated by factual and legal defects" and requests "the annulment of the acts fixing the property value, on the following grounds: a) Service stations constitute 'commercial' properties, with the property value being determined based on the formulas provided for in No. 1 of Article 38 ["Vt = Vc × A × Ca × CI × Cq × Cv" / "A = (Aa + Ab) × Caj + Ac + Ad"]; b) Equipment assets do not fall within the concept of property and therefore are not relevant to the concept of gross private area or dependent gross area." Consequently, "it is requested that the assessment procedure be repeated and the respective property value be fixed at: - article no.… … €133,490.00; - article no. … … €71,220.00; - article no. … … €221,131.00; - article no. … … €112,520.00; in the terms previously described in this procedural document. Finally, reimbursement of the costs of second assessment incurred by the claimant is also requested."

2.3. For its part, the AT alleges, in its response, that: a) "All the properties [at issue] constitute fuel service stations and other ancillary facilities, and second assessment requests were submitted in respect thereof. The now requesting party comes to challenge these assessments, pleading for the classification of the properties as 'commercial', and the consequent application of the formula provided for in Article 38 of the CIMI and also on the ground that equipment assets do not fall within the concept of property"; b) "the defense of the respondent entity, in the present case, will be based on the same assumptions already presented in the scope of the CAAD cases, which it cites, since the requesting party is the same, the request is identical, and it uses in this case all the arguments it had already presented in those cases"; c) "the respondent entity continues to believe that it is correct, taking into account the CAAD decisions, but the position of the AT is not prejudiced by what was decided in the aforementioned judgment of 15 November 2011 of the Central Administrative Court of the South which, as we shall see, in no way conflicts with what was decided by the AT and in no way benefits the requesting party"; d) "[the] judgment 3917/10, of 15 November 2011, of the Central Administrative Court of the South [deals with] a very different matter of fact. [...]. In the case of the files, the properties obtained licensing that, depending on the cases, refers 'tout court' to the sale of fuel and others even refers to the marketing of other products. Therefore, the question for the classification and assessment of the properties in the files is not their licensing – a question that arose in the cited judgment – but rather the specific structures implanted on the land that make each property a fuel service station"; e) "account must be taken in this analysis of the composition of the properties, when we know that the primary purpose for which they are intended, by nature, is the retail sale of fuel. It should also be noted that the specific Use License Permit indicates, on the one hand, Liquid Fuel Service Station and on the other the sale of food products and miscellaneous items – a situation which is in accordance with the position of the respondent since it distinguishes the fuel service station, as being a constructive reality different from the sale of other products and provision of services such as vehicle washing"; f) "With regard to the properties of … it stands out from the assessment terms of the TPV calculation demonstrating, on the one hand the value of the land which is distinguished from the value of the service area, from the value of the shop and also from the value of the excavations and constructions of the fuel storage tanks and also the value of the pavements and landscaped areas. It should also be noted that the specific Use License Permit states, simply, fuel service station"; g) "The discussion around the classification of the property emerges now as a means to achieve the end, indeed, intended which is to obtain an even lower TPV. That is, what the now requesting party truly wants to discuss, in this forum, is the legal-tax nature of the property, since the method of assessment and its calculation are, inevitably, a consequence of that premise"; h) "we do not agree with the way the now requesting party presented this argument: either it does not identify the property, or when it does, it refers to 'service station', when the designation used in the terms of assessment, as well as in the use permits, which justify the assessment carried out is 'fuel service station' or simply 'service station'. [...]. These are indeed two distinct concepts and with consequences at the level of property classification and the respective assessment method, as we shall see. [...] a service area is considered to be a set of services designed to meet the needs of travelers. In these areas, services such as: fuel service, food service, convenience store, service station, rest areas, among others are available. [...] Service Station is synonymous with Service Area [...]. As for 'fuel service station', being a compound term/word, it is defined, empirically, as a location where vehicles are refueled, or by a legal definition found in Article 2, No. 3, paragraph q) of Order No. 131/2002, of 9 February (subsequently amended by Order No. 362/2005, of 4 April), which approves the Regulation for the Construction and Operation of Fuel Service Stations, fuel service station is defined as the facility intended for refueling, for own consumption, public or cooperative, of gasoline, diesel and LPG for motor vehicles, corresponding to the area of the location where the refueling units, their respective reservoirs and the security and protection zones are located, as well as the integrated buildings and the roads necessary for the circulation of the motor vehicles to be refueled. This definition includes, by extension, similar facilities intended for refueling vessels or aircraft. The same regulation in paragraph e) of No. 3 of Article 2 defines 'Service area', as the usual designation of fuel service stations on main routes complementary routes containing equipment and means intended to provide support to users and motor vehicles"; i) "In both terms its meaning is based on the same idea: location for refueling motor vehicles, and may incorporate other facilities related to vehicles and travelers, and the location where it is located, next to a highway or not"; j) "From this narrative we can conclude that the destination of the properties of the now requesting party is the retail sale of fuel to the public, and the properties where it carries out this activity is prima facie a fuel service station with various refueling units, with their respective storage reservoirs, with the property intended to carry out the company's activity"; l) "Of the other activities carried out there, in some cases, the convenience store stands out, and the vehicle wash center, claiming that it is not the main activity of A…, nor is it the main destination of the properties. It is an accessory activity, in support of customers who are refueling, and therefore, the main activity is the provision of fuel to its customers"; m) "From all of the above, as well as from the photographs contained in the assessment report and from the common sense that each of us has of this reality, we have no doubt in stating that we are dealing with a fuel service station, to which the requesting entity attached, in the space of the surplus grounds, a convenience store, among other ancillary facilities related to fuel service stations such as air/gas and vehicle washing, but which does not distort the legal definition of a fuel service station"; n) "the tax authority classified the properties in question, the subject of the company's activity, as an urban property of the type 'Other'"; o) "Properties fall within the category 'Other', according to No. 4 [of Article 6 of the CIMI], the lands situated within an urban settlement that are not building lands or, by virtue of a legally approved provision, cannot have use generating any income or can only have use generating agricultural income and are actually having this use; and also buildings and structures licensed or, in the absence of a license, that have as their normal destination other purposes than residential, commercial, industrial and service purposes"; p) "How is it concluded, in light of the law, that fuel service stations are urban properties 'other'?"; q) "without any interpretive effort beyond the literal, and taking into account the legal text highlighted, it can be said that a fuel service station comprises buildings and structures licensed for that purpose, which is the operation of fuel service stations, and which are not residential, commercial, industrial or service purposes, this from the perspective of the property's destination. Taking into account the legal-statutory nature of A…'s activity, and considering the constructive configuration of the property that was assessed, we exclude this property from being commercial or for services. Indeed, in the interpretation of the regulatory provision made by the requesting party, only the purpose or destination of the construction stands out, disregarding the constructive characteristics of the property. On the contrary, what the evaluators take into account, in the first place, are the constructive characteristics that clearly distinguish the properties, and subsequently integrate them in the classification given by law and from there proceed to apply the rules of assessment applicable"; r) "Given that the now requesting party has complied with all these rules to carry out its activity, licensing to build and operate fuel service stations, it cannot be claimed that the property has a commercial or service purpose, as the requesting party intends"; s) "the assessment terms state that the option was made to apply the cost method added to the value of the land, provided for in No. 2 of Article 36, to the detriment of the assessment method provided for in Article 38, because it is an 'other' property, whose intrinsic characteristics prevent the use of the formula contained in Article 38"; t) "The description of the properties of the now requesting party subsumes itself to a plot of land, where the refueling units, the access areas, the protection zones are located, as well as the convenience store and, in some cases, the car wash spaces and air/water refueling, with their respective accesses. It is difficult to admit that to this property a coefficient of quality and comfort, and a coefficient of age can be applied!"; u) "given that the evaluators needed to remove various coefficients, as they were naturally inapplicable, this led to the removal of the assessment method provided for in Article 38. And that is why the assessment commissions opted, and rightly so, to follow the cost method added to the value of the land, as allowed by Article 46, Nos. 2 and 3 of the CIMI"; v) "a property where commercial acts are practiced does not automatically, before the said fiscal law, become an urban property intended for commerce"; x) "We have [...] for certain, the assessment method applied, given the specificities of this type of property, which could never be classified as simply commercial, given the constructive complexity"; z) "according to the list of properties attached to the said order [No. 11/2017, published in Diário da República on 09/01/2017], it appears that fuel service stations are now assessed in accordance with the assessment method provided for in Article 46, No. 2 of the CIMI, that is, the 'cost method added to the value of the land'".

The AT concludes that "the respondent entity should be absolved of the request, since the assessment acts are not vitiated by the illegalities alleged."

III – Proven Facts, Unproven Facts and Respective Reasoning

3.1. The following facts are considered proven:

i) The Claimant submitted a Form 1 declaration for each of the urban properties identified below and at issue: i) no.…, located in the parish of …, municipality of Vila Nova de Gaia (Document 1); ii) no.…, located in the parish of…, municipality of Gondomar (Document 2); no.…, located in the parish of…, municipality of Gondomar (Document 3); iv) no.…, located in the parish of …, municipality of Maia (Document 4).

ii) As can be verified by reading Annexes 1 to 4 of the b.i.: in the use permit no. …/08 issued by the Municipal Council of Vila Nova de Gaia, the use of the property is referred to as "fuel service station and beverage service provision establishment"; in the use permit no. …/93 issued by the Municipal Council of Maia, the use of the property is referred to as "liquid fuel service station [with x m2]"; in the use permit no. …/96 issued by the Municipal Council of Gondomar, the use of the property is referred to as "fuel service stations"; in the use permit no. …/08 issued by the Municipal Council of Gondomar, the use of the property is referred to as "fuel service stations, composed of a support trade establishment, with gross area of 169 m2, and three covered refueling islands (206 m2), automatic washing areas (199 m2) and jet-wash (92 m2)".

iii) All the properties above identified constitute fuel service stations with other associated commercial ancillary facilities (reason why the cited properties should, strictly speaking, be considered as "service stations"), not ceasing such stations, for that reason, to possess the characteristics of a commercial building (i.e., of having commercial purpose). As is proven by the photographs contained in the b.i., the properties at issue, in addition to the (commercial) activity of selling fuel, also have, as mentioned, other associated commercial ancillary facilities.

iv) In light of the provisions of No. 2 of Article 6 of the CIMI, it is verified, by the use attributed by licensing to the said properties (and by the criterion of their normal use) that we are dealing with properties where commercial acts are practiced, and that have as their normal destination the pursuit of commercial purposes.

v) The assessments of the said properties resulted in the following property values: i) €386,470.00, relating to the property no.…, located in the parish of … (Document 5); ii) €521,440.00, relating to the property no.…, located in the parish of … (Document 6); iii) €619,220.00, relating to the property no.…, located in the parish of … (Document 7); iv) €420,560.00, relating to the property no.…, located in the parish of … (Document 8).

vi) The Claimant submitted a request for second assessment, disagreeing with the classification of the urban properties in question as 'other' and the consequent fixing of the property value based on the method provided for in No. 2 of Article 46 of the CIMI in respect of all assessments (see Documents 9 to 11).

vii) The second assessments maintained the classification of the properties as 'other', proceeding to the determination of the taxable property value based on the method stated in the aforementioned No. 2 of Article 46 of the CIMI (market value of the land added by the cost of construction).

viii) The said second assessments resulted in the following property values: i) €391,360.00, relating to the property no.…, located in the parish of … (Document 12); ii) €348,990.00, relating to the property no.…, located in the parish of … (Document 13); iii) €747,670.00, relating to the property no.…, located in the parish of … (Document 14); iv) €511,760.00, relating to the property no.…, located in the parish of … (Doc. 15).

ix) The representatives of the now Claimant in the assessment commissions presented a dissenting vote statement, as appears in the respective assessment reports.

x) Dissatisfied, the now Claimant submitted, on 24/4/2017, the present request for arbitral decision.

3.2. There are no unproven facts relevant to the decision of the case.

3.3. The facts considered pertinent and proven (see 3.1) are based on the analysis of the positions presented by the parties and the documentary evidence attached to the file.

IV – Law

In the case under analysis, the essential disputed issue of law is whether, for the purposes of the application of IMI, properties that are licensed for "fuel service stations" should be classified as urban properties 'other' or rather as urban properties 'commercial', and if, as a consequence, the method to be used in their assessment is that provided for in Article 38 of the CIMI, or if it is, rather, that provided for in Article 46, No. 2 of the CIMI (as the AT contends).

Let us see, then.

1. To address this issue, it is necessary, first and foremost, to pay attention to the text of the CIMI and, in particular, to what is provided for in its Article 2.

In No. 1 of that article it is stated that property is "any portion of territory, including water, plantations, buildings and structures of any nature incorporated in or situated on it, with a character of permanence, provided that it is part of the assets of a natural or legal person and, in normal circumstances, has economic value, as well as water, plantations, buildings or structures, in the circumstances above, endowed with economic autonomy in relation to the land where they are implanted, although located in a portion of territory that is an integral part of an asset diverse or does not have a patrimonial nature."

Also in the case here under analysis – which in no way differs, as regards the issue of law, from the one well analyzed in Arbitral Decision No. 244/2016-T, of 31/10/2016 (reason why the terms of that decision will be closely followed here) – the Claimant and the Respondent agree that the properties in question are urban properties (see Article 4 of the CIMI), but the Claimant disagrees with their classification as 'other' properties.

In light of such disagreement, it becomes necessary to observe the classifications of urban properties in light of the provisions of Article 6 of the CIMI. Thus, in this Article 6 one can read that:

"1 - Urban properties are divided into:

a) Residential;

b) Commercial, industrial or service;

c) Building land;

d) Other."

For its part, in No. 2 of the said article it is noted that:

"2 - Residential, commercial, industrial or service are buildings or structures licensed for such purposes or, in the absence of a license, which have as their normal destination each of these purposes."

As for urban properties classified as 'other', it is verified that they are defined by the residual criterion contained in No. 4 of this Article 6, and which refers to the 'buildings and structures licensed or, in the absence of a license, [those] which have as their normal destination purposes other than those referred to in No. 2 and also those of the exception in No. 3'.

In light of the above, and considering that the now Claimant understands that there are in question 'commercial' properties (see Article 6, No. 1, paragraph b) of the CIMI), i.e., 'buildings or structures licensed for such purposes or, in the absence of a license, which have as their normal destination each of these purposes' (see Article 6, No. 2 of the CIMI), it now falls to ascertain, just as the above-mentioned Arbitral Decision did (and which is being followed here), 'what are commercial purposes and whether those or others are pursued by the Claimant in the property whose assessment is contested.'

In this regard, it should be borne in mind that Article 11 of the LGT, notably in its No. 2, leaves no room for any doubt as to how tax norms should be interpreted when they employ terms specific to other branches of Law (as is the case here):

"2 - Whenever tax norms employ terms specific to other branches of law, they should be interpreted in the same sense that they have there unless something else follows directly from the law".

Now, there being nothing, in the case of these files, that justifies the application of the latter part of this No. 2, it should be concluded that the commercial purposes to which urban properties are intended cannot fail to be those that are regulated in commercial laws, that is, those that are materialized by the practice of commercial acts (Article 2 of the Commercial Code) and, in particular, by the practice of commercial purchases and sales (see Article 463 et seq. of the Commercial Code).

Indeed, it should be borne in mind that the sale of fuel – which was correctly considered the main activity of the Claimant in the assessed properties – is manifested in the practice of commercial acts, both objectively, since the sales of products purchased for that purpose are, necessarily, commercial sales, and subjectively, since commercial companies are merchants by nature (see Article 13, No. 2 of the Commercial Code).

Just as in the case underlying the aforementioned Arbitral Decision No. 244/2016-T, in this case too the Respondent argues that, for a property to be commercial, it is not enough that commercial acts are practiced in it (see §52 of the response). The question that now arises is the following: can the properties here in question ('fuel service stations') not be considered commercial, despite commercial acts being practiced in them (as the Respondent herself acknowledges)?

The answer to such a question must be negative. Indeed, in the case of the present files there are in question 'fuel service stations', which are, by legal definition – see Article 2, paragraph q) of the Regulation for the Construction and Operation of Fuel Service Stations, approved by Order No. 131/2002, of 9/2, subsequently amended by Order No. 362/2005, of 4/4 –, the 'facilit[ies] intended for refueling, for own consumption, public or cooperative, of gasoline, diesel and LPG for motor vehicles, corresponding to the area of the location where the refueling units, their respective reservoirs and the security and protection zones are located, as well as the integrated buildings and the roads necessary for the circulation of motor vehicles to be refueled'.

From this it follows, therefore, the conclusion that the term 'fuel service station' does not mean, only, a location of 'retail s[ale of] fuel', containing, in addition to the refueling units proper, other buildings (and activities) associated or complementary.

As well emphasized by the aforementioned Arbitral Decision No. 244/2016-T, ''fuel service station' is a complex reality in which, in addition to the refueling units, there are still the 'integrated buildings', even though they are intended for the pursuit of complementary activities (defined by the Regulation for the Construction and Operation of Fuel Service Stations as being 'the services to be provided to users within the limits of the fuel service station, in complement to the offer of fuel and lubricants, namely convenience store, vehicle support and vehicle washing (manual or automatic)'.

As the Claimant states (and is documented by photographs of each of the properties here in question, contained in the request for arbitral decision), these 'fuel service stations' are always composed of associated buildings (whether these are for the sale of beverages and food products, or for vehicle support), which are integral parts thereof, reason why it is concluded, in light of everything that has been set out, that there are no reasons not to apply the assessment method provided for in Article 38, No. 1 of the CIMI.

It is also verified that arbitral and judicial jurisprudence goes in the same sense as the understanding expressed here, i.e., in the sense that the said 'fuel service stations' should be considered, for the purposes of the application of IMI, as urban properties of a commercial nature.

Thus, as regards arbitral decisions, see, for example: Arbitral Decision No. 218/2015-T, of 22/1/2016; Arbitral Decision No. 271/2015-T, of 15/12/2015; Arbitral Decision No. 348/2015-T, of 4/1/2016; Arbitral Decision No. 604/2015-T, of 23/2/2016; Arbitral Decision No. 244/2016-T, of 31/10/2016 (cited several times here); and Arbitral Decision No. 2/2017-T, of 9/6/2017.

On the judicial level, see, e.g., the Judgment of the Central Administrative Court of the South of 4/6/2015, delivered in case no. 08035/14. There it was decided that, "as to the classification of the urban property as belonging to the type 'other', the legislator adopted a 'residual' purpose criterion by reference to the purposes stated in No. 2, as results from the provisions of No. 4 of Article 6 of the CIMI by excluding from this type all buildings and structures that have as their normal destination the purposes referred to in No. 2". And it was further added that "a urban property can only be classified in the type 'other' provided for in paragraph d) of No. 1 of Article 6 of the CIMI when the building or structure is not to be classified in the type commercial, industrial or service". More in detail, the cited Judgment further notes that "the property in question [in those files] is a construction made on a plot of land intended for industry, commerce and services, and is licensed for an automatic car wash and vacuum center, from which it is concluded that the legal provision of No. 2 of Article 6 of the CIMI is met ('residential, commercial, industrial or service are buildings or structures licensed for such purposes or, in the absence of a license, which have as their normal destination each of these purposes.'), being, therefore, to be classified in the category or type of urban properties commercial, industrial or service, provided for in paragraph b) of No. 1 of that legal provision. Indeed, the purpose of the construction is proven both by the nature of the land and by the licensing of the activity carried out on it, which lead to the conclusion that we are dealing with a commercial, industrial or service construction. [...]. Indeed, it should be noted that in the reasoning of the 2nd assessment, an act subjected to review in the appeal, the reason on which the classification of the construction in the type 'other' is based does not rest on the verification of the requirements of No. 4 of Article 6 of the CIMI (the legal provision that provides for the classification of urban properties in the type 'other'), but on the understanding that 'the construction does not enable the application of the general rule' [...]. As we have seen from the above, the requirements for the classification of the types of urban lands are clear, are contained in Article 6 of the CIMI, and at no point is there any reference to criteria of possibility or suitability of the method provided for in Article 38 for the determination of the TPV, nor to the cost method added to the value of the land provided for in Article 46, No. 2 of that code. One must start from the rules provided for in Article 6 and determine the classification of the urban property, and only then must one ascertain which method is applicable in light of the classification determined, and not the reverse. To ascertain the classification of a particular urban property, one must not, therefore, assess the suitability of the method to be applied and change the classification, for the simple reason that the law does not provide for it. In summary, the property in question in the present files is to be classified in the type of urban property Commercial, industrial or service, provided for in paragraph b) of No. 1 and No. 2 of Article 6 of the CIMI, and in that measure, the 2nd assessment could not have been determined in accordance with Article 46 of the CIMI [...], since we are not dealing with a property classified as 'other', being vitiated by the vice of violation of law."

In the case of the present files, having been demonstrated that the Claimant's properties are fuel service stations composed of annexed/complementary buildings, that they are licensed for commercial purposes and, also, that they have as their normal destination the practice of commercial activities, it is inevitable to conclude that all of them are commercial properties and should, for that reason, be assessed in accordance with the provisions of Article 38 of the CIMI.

Note finally that Order No. 11/2017, of 9/1/2017, does not apply to the properties here in question, given that, as the Claimant correctly notes, "Article 2 provides that the Order is applicable to Form 1 declarations delivered after its entry into force. Now, given that the claimant submitted on 15 and 22 December 2014 and 18 March 2016 the Form 1 models to correct the property registers of the properties in question, the determination of the respective taxable property values shall be carried out by the direct method provided for in Article 38 and following for properties classified as 'commercial'."

Concluding, for the reasons set out, that the present arbitral request is well-founded, the examination of any other issue raised by the parties is thereby rendered unnecessary.

V – DECISION

In light of the above, it is decided:

• To judge the request for arbitral decision well-founded, declaring the illegality of the assessment acts for the urban properties registered in the property register with the following numbers: i) no.…, located in the parish of…, municipality of Vila Nova de Gaia; ii) no.…, located in the parish of…, municipality of Gondomar; iii) no.…, located in the parish of…, municipality of Gondomar; iv) no.…, located in the parish of …, municipality of Maia;

• To determine the repetition of the assessment procedures in conformity with the qualification of the properties in the terms described above and with all legal consequences, especially in the application of assessment criteria, such as that provided for in Article 38 of the CIMI, in the version in force at the time of the facts.

The value of the case is set at €7,608.84 (seven thousand six hundred and eight euros and eighty-four cents), in accordance with Article 32 of the CPTA and Article 97-A of the CPPT, applicable by virtue of the provisions of Article 29, No. 1, paragraphs a) and b) of the RJAT, and Article 3, No. 2 of the Regulation on Costs in Tax Arbitration Proceedings (RCPAT).

Costs to be borne by the Respondent, in the amount of €612.00, in accordance with Table I of the RCPAT, and in compliance with the provisions of Articles 12, No. 2, and 22, No. 4, both of the RJAT, and the provisions of Article 4, No. 4 of the said Regulation.

Notify.

Lisbon, 18 October 2017.

The Arbitrator

(Miguel Patrício)

Document prepared by computer, in accordance with the provisions of Article 131, No. 5 of the CPC, applicable by referral of Article 29, No. 1, paragraph e) of the RJAT.

The editing of this decision is governed by the spelling prior to the Orthographic Agreement of 1990.