Summary
Full Decision
ARBITRAL DECISION
I. REPORT
1. A..., LDA., NIPC..., with registered office in ..., ..., ...-... ... (hereinafter, the "Claimant"), came, pursuant to and for the purposes of Articles 2, No. 1, subsection a) and 10 of Decree-Law No. 10/2011, of 20 January, which approved the Legal Regime for Arbitration in Tax Matters (hereinafter, "LRATM"), to request the constitution of an Arbitral Tribunal, with the intervention of a sole arbitrator, in which the Tax and Customs Authority is the Respondent (hereinafter, "TCA" or "Respondent"), with a view to the declaration of illegality and consequent annulment of the assessment of the Supplement to the Municipal Property Tax (hereinafter, "SMPT") No. 2017..., of 30 June 2017, relating to the fiscal year 2017, from which results the amount of € 10,359.16.
2. The request for constitution of the arbitral tribunal was accepted by the President of the Administrative Arbitration Centre (hereinafter, "AAC") and notified to the Tax and Customs Authority (hereinafter, the "Respondent" or "TCA").
3. Once the arbitrator was appointed, he communicated his acceptance of the assignment within the prescribed period.
4. The Tribunal was constituted on 6 September 2018.
5. The Claimant invokes, in summary, that:
5.1. She was notified of the assessment of SMPT No. 2017..., of 30 June 2017, relating to the fiscal year 2017, in the amount of € 10,359.16, and proceeded to pay it accordingly.
5.2. In disagreement with the assessment made, she filed a gracious complaint on 26 January 2018, which the TCA expressly rejected through Official Letter No.... of 4 June 2018.
5.3. The SMPT assessed falls upon four properties of which she is the owner:
a) Property matrix article No. ... of the parish of ..., Municipality of ..., District of ... – with Taxable Asset Value (hereinafter, "TAV") of € 5,990.00;
b) Property matrix article No. ... of the parish of ..., Municipality of ..., District of ... – with TAV of € 107,830.00;
c) Property matrix article No. ... of the parish of ..., Municipality of ..., District of ... – with TAV of € 113,350.00;
d) Property matrix article No. ... of the parish of ..., Municipality of ..., District of ... – with TAV of € 2,310,630.00.
5.4. All the properties are classified in their respective urban property books as "urban property".
5.5. The SMPT falls upon urban properties, with properties classified as "commercial, industrial or for services" and "others" being excluded and, consequently, exempt from taxation, pursuant to Article 6, No. 1, subsections b) and d) applicable by force of Article 135-B, No. 2 of the Municipal Property Tax Code (hereinafter, "MPI Code").
5.6. The property with matrix article No. ... falls within the scope of application of SMPT, since it consists of a property intended for housing and because that is its real and potential use.
5.7. Equally subject to SMPT are the properties with matrix articles ... and ..., whose urban property books (hereinafter, "UPB" or "UPB") describe them as land for construction and as "PLOT OF LAND FOR URBAN CONSTRUCTION".
5.8. The same cannot be said with respect to the property registered in the matrix with article ..., whose TAV was added to the others to arrive at the taxable matter, since this property consists of land for construction, whose UPB describes it as "PLOT OF LAND FOR URBAN CONSTRUCTION INTENDED FOR COMMERCIAL FACILITY".
5.9. The concept of "commercial facility" is not provided for in tax legislation, however, any interpretation leads to the conclusion that the property's allocation will be commercial.
5.10. If there is an exclusion from taxation in respect of SMPT for properties with commercial allocation, then land for construction of commercial facilities should also be considered excluded, since in these cases their future allocation will be commercial.
5.11. The TAV of the property with matrix article No. ... should not, therefore, have been added to that of the other properties for determination of the taxable matter and subsequent application of the rate, the assessment suffering from a defect of nullity.
5.12. The taxation of the property with matrix article No. ... violates the principles of equality and capacity to contribute since, notwithstanding the fact that it is land for construction, it may come to house a construction intended for housing or a construction intended for services, industry, commerce or others.
5.13. The SMPT aims to tax, essentially, persons whose housing assets are above average, hence the law has excluded from the objective scope of this tax properties intended for commerce.
5.14. The rationale of SMPT derives from the fact that it came to replace the previous Stamp Tax (hereinafter, "ST") which taxed, essentially, urban properties with high-value housing allocation.
5.15. The SMPT, also known as the "Mortágua Tax", arose as a result of the intervention of the Member of Parliament of the Left Bloc Mariana Mortágua, whose purpose was to tax properties with a value exceeding € 1,000,000.00, and to replace the ST which generated high litigation between the State and taxpayers.
5.16. It is important to ascertain the circumstances in which the law creating the ST was drafted, noting that for urban properties with high-value housing allocation, beginning with the discussion of Bill No. 96/XII (2nd) in the Assembly of the Republic (Series No. 9/XII/2, of 11 October 2012).
5.17. In this respect, the Secretary of State for Tax Affairs stated that "[f]or the tax system to be fairer it is crucial to promote the expansion of the taxable base, requiring increased effort from taxpayers with higher incomes and thereby protecting Portuguese families with lower incomes. For the tax system to promote more equality it is fundamental that the effort of budgetary consolidation be shared by all taxpayers and focus on all types of income, encompassing with special emphasis capital income and high-value properties. This matter, it should be recalled, was extensively addressed in the Constitutional Court ruling. Finally, for the tax system to be more equitable, it is crucial that everyone be called to contribute according to their real capacity to contribute, granting the tax administration enhanced powers to control and supervise tax fraud and evasion. In this sense, the Government presents today a set of measures that effectively strengthen a fair and equitable distribution of the adjustment effort across a broad and comprehensive set of sectors of Portuguese society. This proposal has three essential pillars: the creation of special taxation on urban properties worth more than 1 million euros; the increase in taxation on capital income and capital gains; and strengthening rules to combat tax fraud and evasion. First, the Government proposes the creation of a special rate to tax high-value residential urban properties. It is the first time in Portugal that special taxation on high-value properties intended for housing has been created. This rate will be 0.5% to 0.8% in 2012, and 1% in 2013, and will apply to houses valued at equal to or above 1 million euros. With the creation of this additional rate, the tax burden required of these owners will be significantly increased in 2012 and 2013." (bold and underlining added).
5.18. From the statement of the Secretary of State it appears that the legislator's intention was limited only to properties with housing allocation hence the use of the term "houses".
5.19. Thus, the SMPT does not diverge from the previous tax that maintained the exclusion of commercial properties, for services, industrial or other.
5.20. In a sensitive phase of the national economy, increasing the taxation of taxpayers in the context of their productive/wealth-generating activities would be counterproductive and contrary to the Government's intent, whose objective was to tax the real estate "fortune" of some few privileged ones.
5.21. It is unequivocal that the legislator did not intend to tax commercial real estate.
5.22. It is legitimate to conclude that if the commercial facility described in the registry had already been constructed, the property would be excluded from taxation under SMPT.
5.23. If the property is not subject to SMPT after its construction, it is not understood how it can be subject to taxation in a phase prior to its construction, but whose commercial purpose is known.
5.24. It is, therefore, a violation of the principles of equality and capacity to contribute by reason of the unjustified difference in treatment as provided in Articles 13 and 104, No. 3 of the Constitution of the Portuguese Republic (hereinafter, "CPR"), constituting a cause of nullity of the assessment.
5.25. Reinforcing this violation is an arbitral award of the Administrative Arbitration Centre ("AAC") handed down in case No. 668/2017-T, of 24/04/2018, in which it was decided that a "literal interpretation of this rule, with the sense that all land for construction is covered by the SMPT, it will be materially unconstitutional, being incompatible with the principle of equality (Article 13 of the CPR), by considering as taxable fact the ownership of land for construction of properties intended for services and not the ownership of the properties built on them because it constitutes discriminatory treatment of taxpayers who find themselves in the first situation, without material justification, since the capacity to contribute indicated by real estate assets in that situation is necessarily lower, which must be present, and increased, in the second."
5.26. The construction of a commercial facility and its operation constitute manifestations of capacity to contribute.
5.27. The taxation of a property in its embryonic stage, in which its potential for generating wealth has not yet been utilized, and the exclusion from taxation in the inverse situation, is a violation of the principle of capacity to contribute.
5.28. The rules inherent in Article 135-B, Nos. 1 and 2 of the MPI Code are unconstitutional also due to violation of the principles of equality and capacity to contribute, when they consider land for construction subject to taxation in this tax, or when they do not include them in the exemption rules of the same.
5.29. The ownership of land for construction cannot, in itself, be indicative of wealth that justifies its taxation under SMPT, its holding in itself is not indicative of a manifestation of wealth.
5.30. Land for construction may never come to meet the conditions to be a productive factor, namely because it does not have the means to make the necessary investments in it.
5.31. The choice to tax land for construction as if they were luxury properties violates the principle of capacity to contribute since it creates a fiction of a reality that is not linear.
5.32. Finally, Articles 135-C ("rules for determining taxable value") and 135-F ("Rate") of the MPI Code are equally unconstitutional due to violation of the principle of equality enshrined in the aforementioned Article 104, No. 3 of the CPR.
5.33. Indeed, the regime creates deductions applicable only to individuals and indivisible estates, exempting from tax all real estate assets held by these persons below € 600,000.00.
5.34. However, there is no similar provision for legal entities that could be applied to microenterprises or to enterprises that had turnover below a certain threshold.
5.35. As such mechanism does not exist, the regime significantly burdens legal entities to the detriment of individuals and indivisible estates, thereby violating the principle of tax equality.
5.36. Regarding the rate applicable for calculating the tax, there is equally a distortion: on one hand, individuals are subject to a progressive scaling of the tax in obedience to Articles 104, No. 2 and 13 of the CPR and 45 of the General Tax Law (hereinafter, "GTL"); on the other hand, legal entities are subject to a single and immutable rate that does not take into account the value of the properties held.
5.37. Besides it not being legitimate to consider that legal entities have greater capacity to contribute than individuals, much less so when all their real estate assets are taxed without any deductions.
5.38. Furthermore, the fact that all legal entities are treated equally, whether microenterprises or multinationals, regardless of business volume.
5.39. This unequal treatment offends the principle of tax equality since it taxes equally persons with different incomes.
5.40. She is entitled to payment of indemnifying interest pursuant to Article 43 of the GTL, by error attributable to the services.
6. Notified for this purpose, the Respondent presented her answer on 9 October 2018, in which it argues that:
6.1. The present request for arbitral determination (hereinafter, "RAD") is untimely, since the 90-day period for its presentation provided in Article 10, No. 1, subsection a) of the LRATM has been exceeded, counted from the end of the period for voluntary payment of the tax liability (Article 102, No. 1, subsection a) of the Tax Procedure and Process Code, hereinafter, "TPPC").
6.2. Therefore, the present action is untimely, since the deadline for payment of the tax was 30 September 2017 and the RAD was filed on 28 June 2018.
6.3. Not having been filed in time, timeliness could only be based on some means of gracious challenge of the assessment act where the Claimant's claims had been rejected, i.e., arbitral challenge of the second-level act.
6.4. Notwithstanding the Claimant having presented a gracious complaint of the assessment act and her claim having been rejected, when the RAD was filed, the Claimant did not formulate to the Tribunal any request for annulment of the gracious complaint decision.
6.5. Indeed, since the Tribunal's powers of cognition are limited by the request and it cannot exceed it, the Tribunal is prevented from appreciating and deciding the request made as provided in Articles 660, No. 2 and 661, No. 1 of the Civil Procedure Code (hereinafter, "CPC"), i.e., the Tribunal cannot condemn beyond what has been requested.
6.6. Thus, the TCA should be absolved from the instance given the RAD has been filed outside the legal period (see Article 278, No. 1, subsection e) of the CPC applicable ex vi Article 29, No. 1, subsection e) of the LRATM).
6.7. Without prejudice to the lack of merit of the request, the Respondent refers that the passive subjects of SMPT are individuals or legal entities that are owners, usufructuaries or superficiaries of urban properties located in Portuguese territory.
6.8. In this sense, on 1 January 2017, the Claimant was the owner of four properties:
a) Property matrix article No.... (urban) – housing allocation;
b) Property matrix article No. ... – land for construction;
c) Property matrix article No. ... – land for construction;
d) Property matrix article No.... – land for construction.
6.9. The determination of TAVs was made based on the TAV registered in the matrix pursuant to Article 135-C of the MPI Code.
6.10. The properties are not excluded from SMPT (see Articles 135-B, No. 2 and 135-C, No. 3 of the MPI Code).
6.11. On the other hand, the quality of passive subject is determined pursuant to Article 8 of the MPI Code, i.e., the tax is owed by the owner of the property on 31 December of the year to which it relates.
6.12. In turn, Article 135-B of the MPI Code establishes that:
"1 - The supplement to the municipal property tax falls on the sum of the taxable asset values of urban properties located in Portuguese territory of which the passive subject is the holder.
2 – Urban properties classified as «commercial, industrial or for services» and «others» are excluded from the supplement to the municipal property tax as provided in subsections b) and d) of No. 1 of Article 6 of this Code.".
6.13. Therefore, SMPT falls upon properties classified as residential and as land for construction, regardless of its potential allocation, and upon properties that are not exempt or not subject to taxation in MPI according to Article 135-C, No. 3, subsection a) of the MPI Code.
6.14. Furthermore, the regime allows the deduction of SMPT from the IRC (Corporate Income Tax) assessment, with this deduction limited to the fraction corresponding to income generated by properties and subject to IRC, within the scope of accommodation activities, or, alternatively, the expense of paying SMPT can be considered as a fiscally accepted expense for purposes of determining taxable profit (see Article 135-J of the MPI Code).
6.15. Thus, SMPT has the nature of a real tax, since the quantitative modeling of the amount to be paid abstracts from the economic dimension of entities, namely the qualification as small, medium or large enterprise and does not affect the totality of the net assets of entities.
6.16. The SMPT has the nature of real taxation, not representing, therefore, a mere accumulation of wealth.
6.17. The legislator excluded from taxation urban properties classified as "industrial, commercial or services" and "others", however, chose not to include in the exclusion residential properties and land for construction that also form part of the assets of enterprises.
6.18. The progressive character of SMPT manifests itself only in individuals and not in legal entities because, being a tax on "real estate wealth," it is necessary to reconduce the expression to its real economic dimension and because the concepts of "wealth" and "fortune" are only suited to individuals.
6.19. Regarding the comparison of SMPT with the revoked item 28.1 of the General Stamp Tax Table (hereinafter, "GSTT"), the exclusion from taxation of urban properties with "industrial, commercial and services" and "other" purposes translates the intention to mitigate the impact of SMPT on economic activities, but does not eliminate any and all impact of the tax and, therefore, there are entities that pursue economic activities that fall within the scope of application.
6.20. The only criterion relevant to delimit the objective scope of application is the typology of classification of urban properties inherent in Article 6, No. 1 by referral of Article 135-B, No. 2, both of the MPI Code.
6.21. Once the tax in question is of a real nature and falls upon real estate assets consisting of urban properties that meet the types aimed at by No. 2 of Article 135-B of the MPI Code, the Claimant is subject to MPI for the urban properties of which she is owner.
6.22. Notwithstanding understanding that SMPT is not coincident with or a substitution of item 28.1 of the GSTT, in the ruling handed down in case No. 378/2018 the Plenary of the Constitutional Court decided not to judge unconstitutional the rule in item 28.1 when it imposes annual taxation on the ownership of land for construction whose building, authorized or planned, is for housing, and whose TAV is equal to or greater than € 1,000,000.00.
6.23. Regarding the TCA's interpretation there is no error because it merely complied with the law.
6.24. Contrary to what the Claimant maintains, the legislator formulated the restriction of Article 135-B, No. 2 of the MPI Code taking into account the classification of properties, and in the wording of the law nothing points to the fact that the exclusion can be expanded.
6.25. Article 11, No. 1 of the GTL determines that the meaning of tax rules and the qualification of facts are based on the general rules and principles of interpretation and application of laws, adding in No. 2 that the interpreter cannot consider the legislative intent that does not have in the letter of the law a minimum verbal correspondence.
6.26. Interpretation must have a minimum correspondence with the letter of the law, as it is its starting point, however, it does not end with the literal apprehension of the text.
6.27. The TCA's interpretation merely complies with what is established in Article 135-B of the MPI Code, excluding only from taxation urban properties classified as "industrial, commercial, or for services" and "others".
6.28. The interpretation that the Claimant makes of the rule is derogative because its reach goes beyond the letter of the law, by including in the scope of exclusion all of the properties of which she is owner.
6.29. Recourse to analogy is prohibited according to Article 11, No. 4 of the GTL, thus, nothing in the letter of the law indicates that the exclusion from taxation is extendable to the remaining properties allocated to the operation of the passive subject's economic activity.
6.30. The ratio legis of SMPT consists of reaching a portion of the passive subjects' assets, falling upon real estate property constituting an asset recognizable in law as capital of a given individual or legal entity.
6.31. The legislator chose to delimit negatively in Article 135-B, No. 2 the scope of application, excluding from SMPT properties which, by their allocation, can be economically recognized as factors of production, as capital (i.e., intermediate goods which, combined with other factors of production, produce new utilities – economic goods that satisfy needs).
6.32. The legislator resorted to a criterion relating to the typologies of urban properties provided in Article 6, No. 1, subsections b) and d) of the MPI Code and which operates through the subtraction from SMPT of urban properties that by virtue of the licensing used and declared by municipalities or, in its absence, their normal purpose, are reconduted to the typologies.
6.33. Indeed, there are two typologies of urban properties subject to SMPT: residential urban properties and land for construction.
6.34. The criterion adopted is objective, seeking to lead to uniform and equal treatment of the properties subject to taxation.
6.35. The different valuation and taxation between properties with housing allocation as against properties intended for commerce, industry or services results from the different suitability of the properties in question, being, indeed, a rule of objective scope of a general and abstract character.
6.36. SMPT does not intend to tax generically wealth, but manifestations of capacity to contribute.
6.37. The Report of the State Budget Proposal for 2017 and the Explanatory Statement of the legislative proposal of the Socialist Party lost their relevance when referring to the intention being to ensure "absence of impact on economic activity".
6.38. Thus, it did not lead to the exclusion of the scope of the tax the commercial societies and other equivalent entities that by being destined to the pursuit of economic activities would be to a greater or lesser degree burdened by the tax.
6.39. Note that the legislator chose to maintain some properties that are part of the assets of enterprises, did not guarantee in all cases that "urban properties allocated to economic activities would be subject to taxation in SMPT".
6.40. It is understood, therefore, that the exclusion of the objective scope aimed, above all, to remove from the subjection properties that support the development of goods or services or for administrative purposes, not thus caring to, in a general manner, "not excessively tax the passive subjects who, by reason of their economic activities, hold properties for the pursuit of their corporate purpose.".
6.41. Even if the properties are allocated to the passive subject's economic activity, one cannot conclude that one is faced with goods lacking value, as they are goods with market value and intrinsic economic value, namely by reason of their location, constructive suitability and tendential scarcity.
6.42. Land for construction are not merely instrumental to the exercise of the activity, on the contrary, in some cases, they constitute the core of the activity.
6.43. Real estate assets excluded from SMPT subjection (see Article 135-B, No. 2 of the MPI Code) perform an instrumental function in relation to industrial, commercial or services economic activities, as they constitute buildings that serve to support the functioning of said activities, and are not by themselves generators of income.
6.44. Even if properties are instrumental in relation to their activities, they are suitable to indicate that those legal entities are holders of assets that, in themselves, evidence capacity to contribute in relation to other real estate owners and, therefore, suited to support an additional contribution to the desired budgetary consolidation.
6.45. SMPT translates into a specific levy on real estate and not on income, falling upon manifestations of capacity to contribute consisting of elements of real estate assets with the characteristics provided for in Article 135-B of the MPI Code.
6.46. Given the objective formulation of Article 135-B, No. 2 of the MPI Code, it is evident that the legislator wished to avoid the case-by-case application advocated by the Claimant.
6.47. Finally, the legislator by extending the scope of application to entities whose corporate purpose coincides with the pursuit of economic activities demonstrated that it was not his intention to leave outside the scope of SMPT property whose ownership belongs to such entities, under penalty of creating a tax incentive for the transfer of property by individuals.
6.48. The interpretation of the Claimant if accepted violates the constitutional principle of separation and interdependence of powers enshrined in Articles 2 and 111 and the principle of legality provided in Articles 103, No. 2 and 165, No. 1, subsection i), all of the CPR.
6.49. The Public Administration is obliged to be governed by the principle of legality in obedience to Articles 266, No. 2 of the CPR and 3, No. 1 of the Administrative Procedure Code, so that administrative bodies and agents do not have competence to disregard rules against which doubts of constitutionality are raised.
6.50. Courts are obliged to disregard unconstitutional rules, being attributed competence for diffuse and concrete review of constitutionality.
6.51. In this sense, the Opinions of the Attorney General's Office (Nos. 52/84, 8/85, 56/92, 190/81, 90/83, 16/92, 60/95 and 4/96) state that: "(…) what is at issue is not the constitutionality of the law, but the judgment that administrative bodies may make about that constitutionality. On one hand, the Administration is not an organ of review of constitutionality; on the other hand, the submission of the Administration to the law aims not only at the protection of the rights of individuals, but also at the defense and pursuit of public interests (…).".
6.52. The TCA cannot disregard a rule based on the interpretation it makes about its constitutionality.
6.53. The principle of equality does not prevent differentiation of treatment, but only arbitrary and unreasonable discriminations.
6.54. As for land for construction, these always have an intrinsic economic value and, normally, quotation in the real estate market, and thus are not reduced to mere rights of construction of future things.
6.55. Already the properties excluded from SMPT (see Article 135-B, No. 2 of the MPI Code) have an instrumental function in relation to industrial, commercial or services economic activity, as they constitute support to the functioning of the activity and are not, by themselves, generators of income.
6.56. The circumstance that properties are intended for commercialization and are not manifestations of capacity to contribute is a fallacy in that their utility and scarcity allows them to be assigned a market value.
6.57. In respect of SMPT it brings no utility to invoke case law relating to item 28.1 of the GSTT since SMPT ignores the potential allocation of land for construction and, because it applies regardless of the quality of the passive subject as long as they are holder of real rights on urban properties covered by Article 135-B of the MPI Code.
6.58. SMPT is dissociated from any realization of profit with the sale of properties, as well as the existence or not of a negative or positive net situation, being relevant for the economy of the tax only the asset value of land for construction and residential properties.
6.59. The fact that the assets are investment real estate, allocated to real estate operations habitually developed by the owners, not affecting the revealed capacity to contribute, will determine that taxation in SMPT is susceptible to some mitigation in the business sphere, being thus a cost of the activity.
6.60. Note that SMPT is a deductible expense, negatively influencing the taxable profit of the year or is deductible from the IRC (Corporate Income Tax) assessment when the properties in the taxable matter are included in income generated by properties, subject to it, within the scope of rental or accommodation activities (see Article 135-J, Nos. 1 and 2 of the MPI Code).
6.61. It is concluded, therefore, that the SMPT borne in each civil year mitigates the amount of IRC paid.
6.62. The legislator of SMPT, attending to the extrafiscal purposes sought, safeguarded from taxation urban properties that constitute the support for the performance of industrial, commercial or services economic activities in order to negatively influence the economic development and competitiveness of national enterprises. Thus, it did not extend the exclusion of the scope of SMPT to "land for construction" and "buildings or constructions for housing purposes", whether the properties are held for enjoyment by their owner or for commercialization or qualified accounting as "merchandise" or "non-current assets held for sale" or as "investment properties".
6.63. The legislator legitimately selected an element of the assets to tax, burdening individuals and legal entities holding that assets, as it concluded that the ownership demonstrates capacity to contribute.
6.64. Therefore, to affirm that a residential property or land for construction does not reveal greater capacity to contribute by its owner is fallacious.
6.65. The indemnifying interest petitioned is not due in that the assessment act does not suffer from illegality and that the TCA cannot be attributed any error of fact or law, as it complied with the law.
7. Having considered that the parties did not call any witnesses and it was not deemed necessary to hear the parties regarding the exception raised in oral hearing, on 29 October 2018, a period of 15 days was granted to the parties to present their written submissions.
8. In the submissions, the Claimant came to respond to the matter of the exception raised by the Respondent, invoking that:
8.1. She filed a gracious complaint against the SMPT assessment, a complaint that is voluntary and not mandatory contrary to what the Respondent suggests;
8.2. The case law on which the Respondent relies to invoke the exception of untimeliness is not applicable to the case sub judice, since this has as a point of contact the fact that decisions of the gracious means used have to be annulled so that the assessment can then be reviewed, something that does not happen in the concrete case, adding that there, it is not a question of any untimeliness issue, but rather of possible incompetence of the AAC to pronounce itself on certain assessments, because it is mandatory to resort to a prior gracious means.
8.3. The Law does not impose, neither in the LRATM nor in the TPPC, that to review the assessment one must request the annulment of the gracious complaint decision, it only refers to the fact that, when this gracious means has been presented, the period begins to count from the date of its decision, tacit or express.
8.4. In cases where the decision of the complaint occurs by formation of a tacit rejection, it would not make sense to impose on the taxpayer to attack a non-decision, requesting annulment of an omission, to be able to attack a tax act that he considers illegal or unconstitutional.
8.5. The action is timely, and the exception raised is without merit.
9. The Respondent, on the other hand, came essentially to reiterate the arguments presented in her answer.
10. On 6 March 2019, and subsequently on 6 May, the period for decision was extended by periods of 2 months.
III. DECISION
A. MATTERS OF FACT
A.1. Facts Established as Proven
11.1. The Claimant is the owner of the following properties:
(i) Property matrix article No. ... of the parish of ..., Municipality of ..., District of ... – with TAV of € 5,990.00;
(ii) Property matrix article No. ... of the parish of ..., Municipality of ..., District of ... – with TAV of € 107,830.00;
(iii) Property matrix article No. ... of the parish of ..., Municipality of ..., District of ... – with TAV of € 113,350.00;
(iv) Property matrix article No. ... of the parish of ..., Municipality of ..., District of ... – with TAV of € 2,310,630.00;
11.2. Regarding property matrix article No...., the UPB indicates a property in full ownership without floors or divisions susceptible to independent use, allocated to housing;
11.3. As for property matrix article No...., the UPB indicates land for construction with the description of a "PLOT OF LAND FOR URBAN CONSTRUCTION";
11.4. As for property matrix article No...., the UPB refers to land for construction with the description "PLOT OF LAND FOR URBAN CONSTRUCTION";
11.5. Finally, as for property matrix article No...., the UPB indicates land for construction with the description of "PLOT OF LAND FOR URBAN CONSTRUCTION INTENDED FOR COMMERCIAL FACILITY";
11.6. In all the UPBs the properties are classified as urban properties;
11.7. In disagreement with the SMPT assessment that fell upon the properties listed above, the Claimant filed a gracious complaint against the assessment act, having been notified of the draft of the decision order of rejection through official letter No...., of 2 May 2018, to, if she wishes, exercise the right of prior hearing within 15 days;
11.8. The gracious complaint with No. ...2018... was expressly rejected by the TCA through official letter No...., of 4 June 2018;
11.9. According to the UPB of the urban property with matrix article ... the land for construction is intended for a commercial facility;
11.10. No construction is built on said land.
A.2. Facts Established as Not Proven
12. There are no facts relevant to the decision that have not been considered proven.
A.3. Reasoning for Matters of Fact Proven and Not Proven
13.1. Regarding matters of fact the Tribunal does not have to pronounce on everything that was alleged by the parties, it being incumbent on it, rather, the duty to select the facts that matter for the decision and to distinguish proven from unproven matters (see Article 123, No. 2, of the TPPC and Article 607, No. 3 of the CPC, applicable ex vi Article 29, No. 1, subsections a) and e), of the LRATM).
13.2. Thus, the relevant facts for judgment of the case are selected and delineated in function of their legal relevance, which is established in attention to the various plausible solutions of the question(s) of Law (see art. 596 of the CPC, applicable ex vi Article 29, No. 1, subsection e), of the LRATM).
13.3. Thus, having regard to the positions assumed by the parties, in light of Article 110, No. 7 of the TPPC, the documentary evidence and the Administrative Process attached to the record, the following facts were considered proven as relevant to the decision.
13.4. The allegations made by the parties, and presented as facts, consisting of strictly conclusive statements, incapable of proof and whose truthfulness must be assessed in relation to the concrete matter of fact consolidated above, were not given as proven nor not proven.
B. LAW
B.1. Preliminary Issue: Exception of Untimeliness of the Request for Arbitral Determination
14.1. Pursuant to the provision of Article 10, No. 1, subsection a) of the LRATM: "1 – The request for constitution of an arbitral tribunal is filed: within 90 days, counted from the facts provided for in Nos. 1 and 2 of Article 102 of the Tax Procedure and Process Code, as to acts susceptible of autonomous challenge and, as well, as from notification of the decision or the end of the legal period for decision of the hierarchical appeal;".
14.2. Regarding the issue under consideration, JORGE LOPES DE SOUSA states that "with the formation of a tacit rejection or with the notification of an express rejection of the gracious complaint, the taxpayers always have a 90-day period for the purpose of filing the request for arbitral determination." (JORGE LOPES DE SOUSA, Guide to Tax Arbitration. Revised and updated, Almedina: Coimbra, 2017, p. 163).
14.3. In the concrete case, the filing of the arbitral action did not depend on necessary gracious complaint so that the Claimant could have reacted directly against the assessment acts.
14.4. However, the Claimant, as the TCA points out, opted to file a gracious complaint against the SMPT assessment act.
14.5. In this context, without prejudice to the RAD making clear that the Claimant requests the declaration of illegality and consequent annulment of the SMPT assessment relating to 2017, it likewise clearly appears that the immediate subject is the rejection of the gracious complaint filed.
14.6. Indeed, in Article 4 of the RAD the Claimant refers that "[t]he taxpayer filed a gracious complaint. Doc. No. 2 whose content is fully reproduced." and adds in Article 5 that "[t]he TCA expressly rejected the gracious complaint by letter dated 04.06.2018 (...)".
14.7. Among the documents attached to the RAD it appears that the gracious complaint was attached in which the rejection of the arguments presented by the Claimant is evident and the maintenance of the understanding that justified the assessment act.
14.8. Notwithstanding the fact that the Claimant may identify her claim in another manner, making reference to the annulment of the act of the gracious complaint decision, we understand that the manner in which the request is made does not affect the timeliness of the present action.
14.9. It will always be noted that the principles "pro actione" and "in dubio pro favoritate instanciae" should prevail in this context.
14.10. There is no doubt that the Claimant filed a gracious complaint and that it is against the act of rejection of that complaint that the Claimant comes to react (immediately) through the present arbitral action.
14.11. In this way, at most it could be said that there would be the possibility of the initial petition being null and not the untimeliness of the request for arbitral determination.
14.12. However, even in more extreme cases where the petition is manifestly deficient, the imperfections of the petition should not be confused with its nullity.
14.13. As Counselor JORGE LOPES DE SOUSA argues with respect to the nullity of the initial petition, "not all incorrectness, nor all imperfection of the initial request leads to nullity. The author expressed his thought in inadequate terms, using technically defective language, but sufficiently made known what legal effect he intended to obtain? The petition will be an awkward and unfortunate piece, but it cannot be qualified as null.". (JORGE LOPES DE SOUSA, Tax Procedure and Process Code. Annotated and Commented, Vol. II, Áreas Publisher: Lisbon, 2011, p. 81).
14.14. That is, the Claimant could have indicated in her request the immediate subject (express rejection of the gracious complaint) and the mediate subject (assessment act). In any case, the RAD makes clear, nonetheless, against which act the Claimant reacts.
14.15. Moreover, the Respondent recognizes that a Gracious Complaint was filed.
14.16. Further, the subject of arbitral challenge is the assessment act and not the second-level act.
14.17. As established in Article 2, No. 1, subsection a) of the LRATM it is within the competence of arbitral tribunals to appreciate the "declaration of illegality of acts assessing taxes, self-assessment, withholding at source and payment on account;" (emphasis added).
14.18. In this sense, CARLA CASTELO TRINDADE argues that "[t]he object of the request for arbitral determination will therefore be the (i)legality of the first-level tax act, regardless of whether the passive subject points to the object of her arbitral action as this one (the first-level act) or the second one, this always, provided that the second one appreciates the (i)legality of the first-level act. It is also believed that even if the taxpayer in the object of the arbitral action or in the request incorrectly indicates the second act instead of the first, it is up to the tribunal to correct ex officio this incorrectness namely by the imposition of the principle of good faith procedure and cooperation referred to in Article 16 subsection f)." (CARLA CASTELO TRINDADE, Legal Regime of Tax Arbitration. Annotated, Coimbra: Almedina, 2016, p. 71) (emphasis and underlining added).
14.19. Also the Supreme Administrative Court in case No. 0156/11, of 18/05/2011, defended that "the real subject of the challenge is the assessment act and not the act that decided the complaint, so it is the defects of that and not of that dispatch that are truly in question. As was said, among others, in the ruling of this SAC of 28/10/2009, handed down in appeal No. 595/09, «in cases where the gracious complaint is expressly rejected, the subject of the judicial challenge process is, formally and directly, the act of rejection, which maintained the assessment that was the subject of the complaint, but the real subject of the challenge, the act whose legality is in question to ascertain, is the assessment act that was maintained by the act of rejection of the complaint». The challenge is not, therefore, limited by the grounds invoked in the gracious complaint, and may have as its ground any illegality of the tax act." (available at www.dgsi.pt) (emphasis and underlining added).
14.20. Thus, the subject and the request of the arbitral action is, first and foremost, the illegality of the assessment act, even if the passive subject may (and it is even advisable that he does) include reference to the decision of the gracious complaint.
14.21. Considering the date of notification of the final decision of the gracious complaint on 7 June 2018 it is understood that the request for tribunal constitution filed on 28 June 2018 is timely under Article 10, No. 1, subsection a) of the LRATM.
14.22. This understanding is equally advocated in cases Nos. 282/2013-T, of 27/05/2014, 347/2015-T, of 05/02/2016 and 618/2015-T, of 22/04/2016.
14.23. Thus, in summary, taking into account the date of notification of the final decision of the gracious complaint, it is considered that the present RAD is not untimely, so we proceed to appreciate the legality of the assessment.
B.2. The Supplement to the Municipal Property Tax
15.1. Beyond what is stated above, at issue in the present ruling is the interpretation of Article 135-B, No. 2 of the MPI Code whose text is transcribed:
"2 – Urban properties classified as «commercial, industrial or for services» and «others» are excluded from the supplement to the municipal property tax as provided in subsections b) and d) of No. 1 of Article 6 of this Code.".
15.2. The issue under analysis has been dealt with in a fragmented manner in the case law of the AAC with, in essence, two divergent positions:
(a) On one hand, the position of those who argue that land for construction intended for "commercial, industrial, or services" purposes or "others" are excluded from taxation under SMPT. This position is grounded, namely, in the unity of the legal system, required by the principle of coherence valued or axiological of the legal order. For the defenders of this thesis, the unity of the legal system leads to an extensive interpretation of the exclusion provided in Article 135-B, No. 2 of the MPI Code regarding land for construction. Thus, this jurisprudential orientation seems to defend that there is material unconstitutionality when properties are not subject to SMPT for buildings intended for commerce, industry or services, but land is taxed that is intended for the construction of buildings with those same purposes. The burden on some taxpayers to the detriment of others constitutes, therefore, for the defenders of this thesis a violation of the principle of equality;
(b) On the other hand, there are still those who understand that the rule of subjection of SMPT is applicable to urban properties classified as "residential" and "land for construction", regardless of their potential allocation. The defenders of this thesis, in turn, emphasize that the extension of Article 135-B, No. 2 to land for construction is not correct since there is no identity between land for construction and constructed properties from the perspective of the teleology of the exclusion rule.
15.3. Faced with the different positions, we align ourselves, generically, with the second, because it is, in the opinion of this Tribunal and as is demonstrated below, the position most coherent with the letter and spirit of the law.
15.4. Now, with respect to the subjective scope, the passive subjects of SMPT are individuals or legal entities that are owners, usufructuaries or superficiaries of urban properties located in Portuguese territory (see Article 135-A, No. 1 of the MPI Code).
15.5. SMPT falls on the sum of the TAVs of the properties of which individuals or legal entities are holders (see Article 135-B, No. 1 of the MPI Code).
15.6. However, they are excluded from its scope of application rural properties, urban properties classified as "commercial, industrial or for services" and "others" as defined in Article 6 of the MPI Code and properties exempt or not subject to MPI in the previous year (see the provisions of Articles 135-B, No. 2 and 135-C, No. 3, subsection a), both of the MPI Code).
15.7. In this regard, it is important to reiterate that the classification as "commercial, industrial or for services", as well as the classification as "others" is what results from the MPI Code itself, in particular, from Article 6 of this Code.
15.8. This point is of particular relevance, since the classification of urban properties resulting from Article 6 of the MPI Code expressly provides for the existence of "land for construction" (Article 6, No. 1, subsection c)), being these, however, left out of the exclusion of scope provided in Article 135-B, No. 2 of the MPI Code,
15.9. And no reference is made to the future or potential allocation of a piece of land for construction as a relevant factor in the exclusion of these from taxation.
15.10. Indeed, the legislator classified urban properties into four species: (i) residential; (ii) commercial, industrial or for services; (iii) land for construction; and (iv) others (see Article 6, No. 1 of the MPI Code).
15.11. Pursuant to Article 6, No. 2 of the MPI Code urban commercial, industrial or services properties "are buildings or constructions licensed for such or, in the absence of a license, that have as normal purpose each of these purposes." (emphasized).
15.12. Already land for construction consists of "land located within or outside an urban settlement, for which a license or authorization has been granted, prior notice admitted or favorable prior information issued for a subdivision or construction operation, and also those that have been declared as such in the acquisition title, excepting lands where the competent entities forbid any of those operations, namely those located in green areas, protected areas or that, according to municipal land use plans, are allocated to spaces, infrastructures or public equipment." (see Article 6, No. 3 of the MPI Code).
15.13. For purposes of SMPT, urban properties that are classified as residential and land for construction are thus subject to taxation.
15.14. Now, the interpretation of the rule must have a minimum correspondence with the letter of the law.
15.15. Indeed, pursuant to Article 9, No. 2 of the Civil Code applicable by force of Article 11, No. 1 of the GTL: "[h]owever, the legislator's intent cannot be considered by the interpreter unless it has in the letter of the law a minimum verbal correspondence, even if imperfectly expressed.".
15.16. Thus, if the legislator had wished to exclude from SMPT properties potentially or potentially suited to develop an economic activity of a commercial, industrial, services or other nature, it would have adopted a formulation that would allow that scope to be attributed to the rule.
15.17. Thus, we conclude that the legislator did not wish to exclude those properties from the objective scope of application of SMPT.
15.18. That is, the criterion used to circumscribe the excluded properties relates to the typologies provided in Article 6 and not to the potential allocation of properties to the passive subject's economic activity.
15.19. Thus, despite the Claimant holding the properties within the scope of its economic activity, the literal element of Article 135-B, No. 2 of the MPI Code seems not to value that circumstance, by itself, in cases where the properties are not considered commercial, industrial, services or other and, in the absence of reconducting them to the referred qualifications, it does not remove the properties from the scope of SMPT.
15.20. In any case, the interpreter must resort to other elements of interpretation beyond the literal element, namely to historical and teleological elements, so we will continue our analysis.
15.21. Now, SMPT was created by Article 219 of Law No. 42/2016, of 28 December (State Budget Law for 2017, hereinafter, "SB 2017"), having come into force on 1 January 2017, and been added to the MPI Code in Articles 135-A to 135-L.
15.22. From the Report of SB 2017 can be extracted that "[t]he supplement to the municipal property tax introduces into the taxation of real estate assets a progressive element with a personal base, taxing more heavily the more substantial assets, with a marginal rate of 0.3% applied to assets exceeding €600,000 per passive subject. To prevent the impact of this tax on economic activity, rural, mixed, industrial and tourism-related properties are excluded from the scope, and enterprises are also permitted exemption of properties allocated to their productive activity up to €600,000. The possibility of deducting the amount of tax paid from the assessment relating to real estate income is additionally an incentive for leasing and productive use of the asset. This tax replaces the previous 1% stamp tax on the value of the property above 1 million euros. With a much lower rate (0.3%) it is also fairer because it takes into account the total value of real estate assets and not, separately the value of each property." (Report SB 2017 of the Ministry of Finance, pp. 57 and 60) (available at https://www.dgo.pt/politicaorcamental/OrcamentodeEstado/2017/Proposta%20do%20Or%C3%A7amento/Documentos%20do%20OE/Rel-2017.pdf) (emphasis and underlining added).
15.23. Now, the concern expressed in the Report of the SB for 2017 refers to a "productive use of the asset" and not to its productive potential.
15.24. Although in terms different from those described above, it also seems to result from Article 135-B, No. 2 of the MPI Code a concern extrafiscal that translates into an "incentive," to use the words of the referred report, to an effective and productive use of the properties in commercial, industrial or services activity.
15.25. Thus, although in terms of Article 9, No. 2 of the Civil Code the interpretation should not be confined solely and exclusively to the letter of the law "but rather reconstruct from the texts the legislative intent, taking especially 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," no permission is granted, as this Tribunal understands, to the interpreter to extract senses from the rule not intended by the legislator, but rather to dispel some imperfection of the letter of the law, adequately adjusting it, in particular, to legislative intent (see Article 9 of the Civil Code).
15.26. In the concrete case, it must be assumed, pursuant to Article 9, No. 3 of the Civil Code, that the legislator expressed correctly his intent.
15.27. From this it is concluded that the land for construction held by the Claimant, including land intended for commercial facility are subject to SMPT and are not excluded from their respective objective scope of application of the tax.
15.28. Note that, while the exclusion from taxation relating to built properties and classified as "commercial, industrial or for services" or as "others" translates into an incentive to construct and effectively exploit an economic activity, the same does not happen with the exclusion of land for construction which, by itself, does not have an associated incentive to building, and may even result in a disincentive to construction.
15.29. Indeed, land for construction can maintain this framework, i.e., not be allocated to activities materially commercial, industrial, services or other, for a long period or, even, an indefinite period.
15.30. Thus – if the criterion were not that of its reconducting to the category of urban property classified as commercial, industrial, services or other – the property would not be subject to taxation without being allocated to a productive use.
15.31. Moreover, from a legal point of view, the change of allocation of a piece of land for construction may be effected with relative simplicity, which could lead to situations of non-taxation by reason of a mere potential allocation, followed by a change in classification, without this necessarily becoming recondutable to the categories of "commercial, industrial or for services" or "other" properties.
15.32. The same will not occur with a built property allocated to commerce, industry or services, whose change of allocation will imply, in principle, more or less profound works and/or change of licensing.
15.33. As emerges from the arbitral award handed down in case No. 654/2017-T, of 03/09/2018, "[i]t is not disputed that from the point of view of fiscal policy the solution could have been different, and reserving great respect for other opinions, it is judged that the exclusion from taxation of all or part of the "land for construction" was not the solution adopted, since No. 2 of Article 135-B of the MICC only provides for the exclusion from taxation with respect to SMPT of urban properties classified as "commercial, industrial or for services" and "others," precisely in the terms of subsections b) and d), of No. 1 of Article 6, which necessarily leads to the taxation of the properties provided for in the two remaining subsections of that same Article 6 of the MICC, that is, urban properties, classified as "residential" (subsection a)) or as "land for construction" (subsection c)). Encompassed by the taxation in question, pursuant to the letter of the law, are all urban properties classified as "residential" and all urban properties classified as "land for construction," and not just some of them, and if the legislator, in its rule excluding from taxation, intended to exclude a part of the properties referred to in subsections a) and c), of No. 1 of Article 6 of the MICC, he would have had all the possibilities to do so. Similarly, the legislator could have altered the species of urban properties provided for in Article 6 of the MICC, for example, by subdividing land for construction according to the purposes to which they are intended, which did not happen. Regarding the possibility of extensive interpretation of the exclusion enshrined in the said No. 2 of Article 135-B of the MICC, in order to encompass land for construction not intended for housing – a solution adopted in the decisions that accepted claims similar to that of the Claimant, now in question – it is judged, always with respect due to other understandings, that it will not be accepted. Thus, and in the first place, it is believed that the identity of situations is not verified in light of the criteria juridically relevant, necessary to operate the said extensive interpretation of the clause excluding from objective subjection, that is, it does not appear that land for construction is in a situation identical to that of built properties, from the point of view of the teleology of that exclusion clause. From a teleological point of view, such a clause will have as its underlying background, in the first place, the purpose of burdening with SMPT the properties allocated, or susceptible of immediate allocation, to productive processes, land for construction not having such characteristics, given that while a built property will be, or be susceptible of being immediately, allocated to productive processes, land for construction is not in such a situation. (…) Indeed, already built properties have a material reality corresponding to the typology that is theirs. That is, to a built property and licensed for, or that has as normal purpose, commerce, industry or services, will correspond to a material reality suited to such purposes and, for what matters, objectively distinct from a built property and licensed, or with normal purpose, for housing. Land for construction, for its part, is distinguished from other lands at a purely legal level, that is, in function of an action of a public entity (granting of a license or authorization, admission of prior notice or issuance of favorable prior information for a subdivision or construction operation – see art. 6/3 and 37/3 of the MICC) or of the owners (declaration of purpose in the acquisition title; see art. 6/3 of the MICC), to which the Law attributes certain legal effects. Thus, in function of the pointed material differentiation, the change in the allocation of land for construction, from the point of view of the relevant notes for the problem in question, may be simple, merely requiring, for example, a mere declaration in the acquisition title, the presentation and admission of a prior notice, or the presentation and approval of a request for prior information. Already the change of purpose of a built property, from housing to commerce/industry/services, or vice versa, will imply, under a point of view of normality, the performance of more or less profound works (and necessary licensings). There is also the fact that a built property has incorporated a significant value corresponding to construction, which, even in cases where it is not concretely allocated to the intended use, will constitute a natural incentive to its economic exploitation since, always from a point of view of normality, a built property not only will not generate income, but will devalue (due to its degradation) from its non-use. Already land for construction, not only does not incorporate, by itself, any natural incentive for its building and subsequent allocation to a productive activity, but, also from a point of view of normality, may well be precisely the opposite, that is, in function of certain market conditions that create expectations of gains merely speculative, there may be incentives for their owners to maintain their condition of non-built land." (See Arbitral Award of the AAC handed down in case No. 654/2017-T, of 03/09/2018) (emphasis and underlining added).
15.34. In the same sense, see – by way of example - the arbitral awards of the AAC handed down in cases Nos. 664/2017-T, of 26/06/2018; 667/2017-T, of 05/09/2018; 676/2017-T, of 16/07/2018.
15.35. Without prejudice to considering that the taxation of only part of the assets (in the concrete case real estate assets) - contrary to taxation of global assets - place the principle of capacity to contribute in tension, it does not seem to this Tribunal that the taxation of land for construction be the determining element to consider the existence of an unconstitutionality.
15.36. We understand, indeed, that for purposes of application of the principle of equality, land for construction with potential allocation for commerce, industry and services do not resemble built properties already allocated to those purposes.
15.37. In summary, the principle of equality implies, on one hand, that those in an equal situation be treated equally and, on the other, that those in a dissimilar situation receive different treatment. However, in the case at hand, "commercial, industrial or services" properties do not seem to be in a situation comparable to "land for construction".
15.38. But further, there seems to be an extrafiscal objective of incentive to productive activity, so that a judgment of unconstitutionality should rest on the disproportionality of the measure, which does not seem to be verified in the terms already explained above.
15.39. Finally, the Claimant further argues that the Constitutional Court judged unconstitutional item 28.1 of the GSTT in ruling No. 250/2017, given that it imposes annual taxation on the ownership of land for construction whose building, authorized or planned, is for housing as provided in the MPI Code, whose TAV is equal to or exceeding € 1,000,000.00.
15.40. Now, in this regard it is incumbent on us to refer, in the first place, that the wording of Article 135-B of the MPI Code does not coincide with the wording of item 28.1 of the GSTT.
15.41. Note that item 28.1 of the GSTT established the following: "Ownership, usufruct or right of superficies of urban properties whose taxable asset value recorded in the matrix, pursuant to the Municipal Property Tax Code (MICC), is equal to or exceeding € 1,000,000 - on the taxable asset value used for MPI purposes:
28.1 - Per residential property or per land for construction whose building, authorized or planned, is for housing, as provided in the MPI Code - 1%" (emphasis and underlining added).
15.42. Since the rule at issue in the present arbitral ruling does not have the same content as the rule provided in the previous item 28.1 the case law on this cannot be fully transposed to the case at hand.
15.43. The interpretative differences between the two rules are, moreover, easily understood and, furthermore, justify the interpretation that we now defend.
15.44. Indeed, the legislator, in the context of Item 28. of the GSTT, explicitly refers to a foreseeable use ("building, authorized or planned"), whereas in the rule contained in Article 135-B, No. 2, of the Municipal Property Tax Code, no reference is made to a potential allocation, but rather to the classification effected pursuant to Article 6 of the same Code.
15.45. That is, when the legislator wished to confer differentiated treatment on land for construction according to its allocation, he did so clearly.
B.3. Indemnifying Interest
15.46. The Claimant makes a request for restitution of the sums collected by the Respondent, as well as for payment of indemnifying interest.
15.47. Not being it to be judged as having merit the RAD, it cannot be concluded that there are undue payments and, consequently, there is no justification for the annulment of the assessments nor for the payment of indemnifying interest pursuant to Article 43 of the GTL.
C. DECISION
In these terms, the members of this Arbitral Tribunal agree to:
a) Judge the exception raised regarding the untimeliness of the request for arbitral determination as without merit;
b) Judge the request for arbitral determination as without merit;
c) Condemn the Claimant in the costs of the proceeding, in the amount fixed below.
D. CASE VALUE
The case value is set at € 10,359.16, pursuant to Article 97-A, No. 1, a), of the Tax Procedure and Process Code, applicable by force of subsections a) and b) of No. 1 of Article 29 of the LRATM and No. 2 of Article 3 of the Regulation of Costs in Tax Arbitration Proceedings.
E. COSTS
The arbitration fee is set at € 918.00 pursuant to Table I of the Regulation of Costs of Tax Arbitration Proceedings, to be paid by the Claimant, since the request was without merit, pursuant to Articles 12, No. 2, and 22, No. 4, both of the LRATM, and Article 4, No. 4, of the aforementioned Regulation.
Notify the parties.
Lisbon, 3 June 2019
The Arbitrator,
(Leonardo Marques dos Santos)
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