AIMI Tax on Construction Land Owned by Real Estate Companies: CAAD Case 306/2018-T Ruling

ARBITRAL DECISION

I - REPORT

1. A..., S.A., legal entity no. ..., with registered office at ..., ...-... ..., (hereinafter referred to as Applicant or Taxpayer), filed on 2018-07-02, a request for constitution of a singular arbitral tribunal, pursuant to the provisions of paragraph a) of number 1 of article 2, number 5, paragraph 2, letter a), article 6, number 1 and article 10, numbers 1 and 2, all of Decree-Law no. 10/2011 of 20 January (hereinafter referred to as RJAT), in which the Tax and Customs Authority is requested (hereinafter referred to as Respondent or AT), with a view to declaring the illegality and consequent annulment of the act of dismissal of the administrative complaint to which number ... 2018... fell, and consequently the declaration of illegality and consequent annulment of the act of assessment of the Additional Tax on Real Estate (AIMI) number 2017..., issued by AT on 2017-06-30 in the global amount of €611.70, with reference to the year 2017.

2. The request for constitution of a Singular Arbitral Tribunal was accepted by His Excellency the President of CAAD, and notified to the Respondent on 2018-07-03.

3. Pursuant to and for the purposes of the provisions of paragraph a) of number 2 of article 6 of RJAT, by decision of His Excellency the President of the Deontological Council of CAAD, duly notified to the parties within the prescribed deadlines, the undersigned was designated as arbitrator, who communicated to that Council the acceptance of the appointment within the period provided for in article 4 of the Deontological Code of the Centre for Administrative Arbitration.

4. On 2018-08-22, the parties were notified of this designation and did not manifest any intention to refuse the arbitrator's designation, in accordance with the combined provisions of article 11, number 1, letters a) and b), as amended by Law no. 66-B/2012 of 31 December.

5. The Singular Arbitral Tribunal was constituted on 2018-09-11, in accordance with the requirement of letter c) of number 1 of article 11 of RJAT, as amended by article 228 of Law no. 66-B/2012 of 31 December.

6. Duly notified to do so, by order issued on 2018-09-11, the Respondent presented its reply on 2018-10-15, having on the same date proceeded to attach the administrative file ("PA").

7. By order issued on that same date, duly notified to the parties, which justified, among other things, the waiver of the meeting referred to in article 18 of RJAT, and the submission of final submissions, the date of thirty November two thousand and eighteen was indicated as the foreseeable deadline for the pronouncement and notification of the final decision.

8. Dated 2018-11-25, and for the reasons contained therein, an order was issued, duly notified to the parties, extending the deadline for pronouncement and notification of the decision to the parties to 03/01/2019.

9. In support of its request, the Applicant invokes, in summary and to the extent relevant hereto, the following (which is mentioned mainly by transcription):

9.1. It is a commercial company that carries out its activity in the real estate sector, having as its main activity the buying and selling of real estate (CAE 068100), (see article 1 of the request for arbitral ruling);

9.2. It acquired the land in question with the aim of promoting buildings there in accordance with its financial capacities and market circumstances, (see article 3 of the request for arbitral ruling);

9.3 Such real property is destined exclusively for exploitation [by the applicant] within the scope of its economic activity - either by sale or lease (see article 4 of the request for arbitral ruling);

9.4. (...) it appears that AIMI applies to real estate with residential allocation, as well as land for construction, regardless of its allocation - insofar as they do not appear in the norm establishing negative scope of incidence (see article 18 of the request for arbitral ruling);

9.5. Although AIMI was contemplated to continue taxation on luxury real estate and, moreover, to remedy many of the shortcomings that had been identified with item 28 of Stamp Duty, its contours present several divergences from the initial regime (see article 22 of the request for arbitral ruling);

9.6. (...) the tax act in question materializes (...) the violation of the most basic principles of equality, proportionality and tax-paying capacity (see article 51 of the request for arbitral ruling);

9.7. (...) the land that is being subjected to taxation under AIMI is essential for obtaining income within the scope of its economic activity (see article 69 of the request for arbitral ruling);

9.8.(...) a glaring inequality is created, without any factual basis, in material terms between companies that have decided to pursue an economic activity that presupposes the holding of real estate (including land for construction), in relation to other companies whose activity does not flow from the holding of real estate (see article 79 of the request for arbitral ruling);

9.9. (...) when the Proposed State Budget for 2017 was discussed in detail, it was established that excluded from the scope of AIMI incidence would be, in addition to real estate classified as industrial and urban buildings licensed for tourist activity, urban buildings classified as "commercial, industrial or for services" and "others" in accordance with letters b) and d) of number 1 of article 6 of CIMI - as came to be stated in law (see article 81 of the request for arbitral ruling);

9.10.(...) no material, legal, tax, economic or other basis can be found capable of justifying that taxation applies only to companies that have in their current assets real estate intended for the exercise of their economic activity, and excludes from taxation real estate allocated to other economic activities (see article 86 of the request for arbitral ruling);

9.11.(...) the taxation in question constitutes a violation of the principles of tax-paying capacity, equality and proportionality - insofar as the fact that the challenging party has in its inventory real estate for construction or sale, in no way evidences a relevant tax-paying capacity worthy of being (differently and independently) taxed (see article 111 of the request for arbitral ruling);

9.12. The Applicant also invokes arbitral decisions, namely those resulting from proceedings nos. 150/2017-T of 27/10/2017 and 507/2015-T of 17/03/2016, to conclude (article 123 of the request for arbitral ruling) that: "(...) by applying to the ownership of real estate completely devoid of any sufficient basis, article 135-B number 1 of CIMI should be disapplied for material unconstitutionality, insofar as it violates the principle of tax equality enshrined in articles 13 and 104, number 3 of CRP".

9.13. The Applicant likewise appeals to arbitral jurisprudence (proceedings nos. 218/2013-T and 51/2013-T), as well as to Constitutional Court decisions nos. 634/1993 of 4/11, 187/2001 and 387/2012 of 10/08, to anchor its position regarding the violation of the principles of tax-paying capacity and proportionality or prohibition of excess, with respect to the underlying regulation (see articles 126 et seq. of the request for arbitral ruling).

9.14. The Applicant concludes by requesting that "the AIMI assessment here challenged be annulled, with the legal consequences thereof".

1. As mentioned, on 2018-10-15, the Tax and Customs Authority proceeded to attach the PA and presented its reply where, fundamentally, in summary and to the extent relevant hereto, it argues the following (which is likewise mentioned mainly by transcription):

10.1. (...) as regards AIMI applying to urban buildings of which legal entities and equivalent structures are owners, usufructuaries or surface rights holders (number 2 of article 135-A of CIMI), the tax assumes the nature of a real tax, insofar as the calculation of the amount to be paid disregards the economic dimension of the entities, namely the qualification as a small, medium or large enterprise, and does not affect the entire net assets of the entities (see article 17 of the reply);

10.2. (...) the legislator excluded from incidence urban buildings classified as "industrial, commercial or for services" and "others" but expressly chose to maintain other buildings that also form part of companies' assets, such as those classified as residential or land for construction, by not including them in the negative scope definition provided for (see article 27 of the reply);

10.3. (...) nothing in the letter of the law authorizes the conclusion that the legislator's intention regarding AIMI was to exclude from taxation "urban buildings that are allocated to the exercise of an economic activity" (see article 60 of the reply);

10.4.(...) the Explanatory Note that appeared in the Report of the Proposed State Budget for 2017 lost currency as a result of amendments that were introduced in the Parliamentary proceedings to the legislative proposal presented by the Government to the Assembly of the Republic (see article 62 of the reply);

10.5. AIMI applying to legal entities and equivalent structures assumes the nature of a real tax on real property consisting of urban buildings that meet the types referred to in number 2 of article 135-B, regardless of the asset classes in which they are recorded - inventories, tangible fixed assets or non-current assets held for sale - (see article 64 of the reply);

10.6.(...) in the wording of article 135-B, number 2 of the IMI Code (...) it follows that the legislator specifically excluded from AIMI taxation only urban buildings classified as "commercial, industrial or for services" and "others" in accordance with letters b) and d) of number 1 of article 6 of the IMI Code (see article 76 of the reply);

10.7.(....) the legislator chose to formulate the restriction having regard to the classification of the buildings (see article 77 of the reply);

10.8. there being nothing in the letter of the law indicating that such exclusion may be expanded, namely extended to other buildings not included therein when allocated to a particular economic activity of the tax-paying subject (see article 78 of the reply);

10.9.(...) AT does not proceed to any unconstitutional interpretation of the rule, as it is not AT who decides to include in AIMI taxation urban buildings allocated to economic activities (see article 84 of the reply);

10.10. (...) the Applicant seeks an ab-rogating interpretation of the rule, introducing a meaning that was not established by the legislator in the letter of the law, thus expanding, the totality of buildings held by it (see article 87 of the reply);

10.11. Regarding the legislative purpose, AT affirms (articles 92 et seq. of its reply) that AIMI aims to reach a portion of the tax-paying subjects' assets, applying to real estate constituting an asset, legally recognizable as capital of a certain entity (singular or collective), regardless of whether it is allocated to any productive process or income-generating activity

10.12. The criterion chosen by the legislator - the classification of urban buildings as industrial, commercial, or for services and others - was adopted to the detriment of others that would call for case-by-case verifications of the actual destination given to the buildings (see article 103 of the reply);

10.13.(...) the negative scope definition was established in the objective incidence and not, in the subjective incidence (see article 106 of the reply);

10.14.(...) the assets in question, especially land for construction, are not merely instrumental to the exercise of the activity (...) they are the object of commerce or industry, as they are intended for resale or, in the case of land for construction, also for transformation in case buildings are erected thereon for subsequent resale (see articles 112 and 113 of the reply);

10.15. (...) the real estate excluded from subjection to AIMI, pursuant to number 2 of article 135-B of CIMI, are those that perform an instrumental function to industrial, commercial or service economic activities, insofar as they constitute buildings that serve to support the functioning of such activities, and are not themselves generators of income (see article 115 of the reply);

10.16. AT reiterates further, in way of concluding its argument, (see article 124 of the reply) that "given the objective formulation established in article 135-B number 2 of the IMI Code, the legislator unquestionably rejected the option for case-by-case approach advocated by the Applicant, in which one invokes elements of economic consciousness that are very variable and contingent and depend largely on the method of management, on the situational circumstances of framework, on the type of use made of the buildings, on the situation in each year of the patrimonia assets held"

10.17. With regard to the unconstitutionality issues raised, AT argues for their non-verification, particularly as regards the principles of equality, tax-paying capacity and proportionality, invoking abundant doctrine and jurisprudence in support of its thesis, arguing further that it cannot fail to apply the law on the ground of unconstitutionality, since it is subject to the principle of legality, in accordance with the provisions of articles 266, number 2 of CRP, article 3, number 1 of the Administrative Procedure Code and article 55 of the General Tax Law.

10.18. AT concludes its reply articulation to the effect that "the present request for arbitral ruling be dismissed as unproven, and, consequently, the Respondent absolved of all requests, in the manner above petitioned, all with the proper and legal consequences".

1. The Singular Arbitral Tribunal is materially competent and is regularly constituted in accordance with articles 2, number 1, letter a), 5 and 6 of RJAT.

2. The parties have legal capacity and standing, are legitimate, and are duly and legally represented (articles 3, 6 and 15 of the Tax Procedure Code and Process Code, pursuant to article 29, number 1, letter a) of RJAT).

3. No exceptions have been raised that need to be considered.

II - GROUNDS

A. FACTUAL MATTERS

A.1. Facts Established as Proven

With relevance to the assessment and decision of the issue raised, the following facts are established as proven:

1. The Applicant carries out its activity in the real estate sector, having as its main activity the buying and selling of real estate corresponding to CAE 068100),

2. On 01/01/2017 the Applicant owned land for construction, corresponding to the property record number ..., of the parish of ..., municipality of ..., in the district of Setúbal, with the Tax Patrimonial Value (VPT) of €152,925.10,

3. On the said property, AIMI assessment number 2017..., was made in accordance with the provisions of article 135-F, number 1 of CIMI, in the amount of €611.70, corresponding to the rate of 0.4%, on the VPT of €152,925.10.

4. From the said assessment, the Applicant presented on 2018-01-30 at the Finance Service of ... an administrative complaint to which number ... 2018... fell.

5. Such complaint was dismissed by order issued on 02/04/2018 issued by the Head of the Finance Service of ..., by delegation from the Finance Director of Setúbal.

6. The Applicant on 2017-09-29 proceeded to pay the tax that was assessed against it.

7. On 2018-07-02 the Applicant submitted to CAAD a request for arbitral ruling which gave rise to the present proceeding (see CAAD's process management information system).

A.2. Facts Established as Not Proven

With relevance to the decision, there are no facts that should be considered as not proven.

A.3. Grounds for the Factual Matters Established as Proven and Not Proven

With respect to the factual matters, the tribunal does not need to pronounce on everything that was alleged by the parties, it being incumbent upon it to select the facts that matter for the decision and distinguish the proven facts from those not proven (see article 123, number 2 of CPPT and article 670, number 3 of CPC, applicable pursuant to article 29, number 1, letters a) and e) of RJAT).

Thus, the facts relevant to the trial of the case are chosen and selected according to their legal relevance, which is established with regard to the various plausible solutions of the legal question(s) (see article 596 of Civil Procedure Code, applicable pursuant to article 29, number 1, letter e) of RJAT).

Thus, considering the positions taken by the parties in light of article 110, number 7 of CPPT, the documentary evidence and the attached PA, the facts listed above are considered proven, with relevance to the decision.

B. LEGAL MATTERS

Regulatory Framework:

AIMI was created by article 219 of Law no. 42/2016 of 28 December which approved the State Budget for 2017, through the addition to the IMI Code of articles 135-A to 135-K, now constituting chapter XV of the respective code.

Constituting revenue of the Financial Stability Fund of Social Security in accordance with the provisions of number 2 of article 1 of CIMI (as amended by article 257 of Law no. 114/2017 of 29 December (OGE 2018) with entry into force on 2018-01-01.

The objective or real incidence of the additional tax on real estate falls in accordance with the provisions of number 1 of article 135-B "on the sum of the tax patrimonial values of urban buildings located in Portuguese territory of which the taxpayer is owner".

Number 2 of the same provision providing for an exclusion of incidence regarding "urban buildings classified as "commercial, industrial or for services" and "others" in accordance with letters b) and d) of number 1 of article 6 of this Code.

Thus subject to AIMI are buildings allocated to "housing" and "land for construction" as defined in the said article 6 of CIMI.

Similar to the IMI regime, the taxpayers are owners, usufructuaries or surface rights holders of the respective buildings - article 135-A, number 1, regardless of whether they are singular or legal persons, equating to the latter "any structures or centers of collective interests without legal capacity that appear in the registers as taxpayers of the municipal tax on real estate, as well as undivided succession represented by the family head", in accordance with the provision of number 2 of article 135-A.

On the other hand, article 6 of CIMI classifies, under its number 1, the types of urban buildings as follows:

Article 6

Types of urban buildings

1. Urban buildings are divided into:

a) Residential;

b) Commercial, industrial or for services;

c) Land for construction;

d) Others

The requirements/conditions concerning the different types of buildings in question are detailed in the remaining numbers of the provision.

From the regulatory framework mentioned and without prejudice to what will be said below, one can already advance, as a preliminary conclusion, that it is the understanding of this tribunal that the literal wording of the AIMI rules leads to the incidence of the tax, and to the extent relevant hereto, on "land for construction", regardless of the allocation that may come to apply to it, since it does not appear in the negative scope definition.

The Applicant frames its request for arbitral ruling in the parallelism it establishes between the tax under examination and item 28 of TGIS, concluding that there is a violation of the constitutional principle of equality in the aspect of tax-paying capacity, insofar as, in its view there is a clear inequality, arguing further and fundamentally for the interpretation of the provision in question to the effect that the negative scope definition should be expanded to "land for construction", namely with allocation for "commerce".

Not adopting this interpretation, this tribunal subscribes to the position set forth in proceedings no. 6/2018-T which we endorse without reservation: the "literal wording of articles 135-A, number 1 and 135-B, numbers 1 and 2 is clear and does not lend itself to any interpretive doubts. Given that the letter is the law, or grammatical element, the first element to be invoked in legal hermeneutics and it being presumable that the legislator knew how to express its thought in adequate terms (number 3 of article 9 of Civil Code), it will not be necessary to invoke other elements from among those available in the panoply of hermeneutic tools"

Likewise adopting and in similar sense what is said regarding this segment in the decisions rendered in the context of proceedings nos. 664/2017-T and 676/2017-T which the above-cited decision invokes: "The exclusion of the tax thus encompasses buildings classified as commercial, industrial or for services, understood as those buildings or constructions licensed for these purposes or that have as their normal destination each of these purposes. It encompasses, furthermore, the residual type referred to in letter d) of number 1 of article 6, including land situated inside or outside an urban agglomeration that are neither land for construction nor rustic buildings, as well as buildings and constructions that do not fit within any of the above classifications

The scope of objective incidence, by effect of the referral to that article 6, was thus defined not only with reference to a type of urban building, but also with reference to the administrative procedure through which the classification was made or, failing a license, to the normal destination of such buildings for commercial, industrial, service or other purposes"

One cannot but diverge from the position sustained by the Applicant regarding the interpretation it carries out in relation to article 135-B of CIMI, to the effect that the legislator intended to exclude from the scope of AIMI incidence buildings that prove to be essential for the Applicant to obtain income in the course of its economic activity.

Returning to the cited arbitral decision from proceedings no. 6/2018-T, the interpretation that the Applicant sustains "(...) has no support in the letter of the law nor does it flow from the rational and systematic element. It is clear from the reading and interpretation of the rules in question that the legislator's option was not in the direction advocated by the Applicant. Such an option would presuppose that the legislator, instead of having delimited the scope of incidence through characterized types, would have opted for a case-by-case evaluation according to the allocation of the property, in practical terms, to an economic activity of a legal entity. Which is shown not to have occurred".

"(...) it was not on the basis of the activity to which the real estate are allocated that the exclusion of incidence came to be defined, as in the approved wording the non-incidence was defined only on the basis of the types of buildings indicated in article 6 of CIMI, without any reference to the allocation to the functioning of legal entities.

The allocation of a building, which presupposes a use and the purpose to which it is intended, is a distinct concept from the "normal destination" underlying the classifications of buildings referred to in number 2 of article 6 of CIMI.

Had the final wording of the Budget maintained the legislative intention of removing incidence on buildings directly allocated to the functioning of legal entities, the reference to this allocation would certainly have been maintained, which appeared in the proposal and expressed this legislative choice.

Thus, as the reference to the allocation of buildings has been removed, there is no legal basis to conclude that residential buildings and land for construction allocated to the activity of legal entities do not apply to AIMI incidence.

"In the absence of other elements that induce the choice of the less immediate sense of the text, the interpreter must opt, in principle, for that sense that best and most immediately corresponds to the natural meaning of the verbal expressions used, and in particular to their technical-legal meaning - on the assumption (not always accurate) that the legislator knew how to express its thought correctly.

Regarding the unconstitutionality questions raised by the Applicant, it argues that the taxation under discussion constitutes a violation of the principles of tax-paying capacity, equality and proportionality.

The judgment that this tribunal subscribes to regarding the unconstitutionality questions does not diverge from the negative judgment that has been made on them by, among others and only by way of example, the arbitral decisions issued by CAAD in proceedings nos. 664/2017-T, 676/2017-T, 678/2017-T, 690/2017-T and 6/2018-T, and reasons are not seen to diverge from them, which are centered, namely on what is stated in the context of proceedings nos. 664/2017-T (taken up in proceedings no. 676/2017-T);

"(...) the Constitutional Court has emphasized that one of the essential objectives constitutionally defined of the tax system, along with meeting the financial needs of the State and other public entities, is that of fair distribution of income and wealth as is apparent from article 103, number 1 of the Constitution.

It is this binding of the tax system to the idea of social justice and the reduction of social inequality of income and wealth that requires it to be progressive. This requirement is expressly established in the context of personal income taxation in accordance with number 1 of article 140, personal income tax aims at "reducing inequalities and shall be single and progressive taking into account the needs and income of the family unit"

Fiscal progressivity requires that the relationship between the tax paid and the level of income be more proportional, which can only be achieved by applying a higher tax rate to taxpayers with higher income. In other words, there is progressivity when the tax value increases in a ratio greater than the increase in the taxable base.

Consequently, the Constitution requires an intrinsic progressivity to contribute to a reduction in income inequality (on all these aspects, see the Constitutional Court decision no. 187/213, nos. 97, 98 and 99).

Progressivity of the tax system is also a requirement of the principle of material equality.

As stated by Casalta Nabais, the principle of tax equality has embedded in it above all "the idea of generality or universality, whereby all citizens are bound by the duty to pay taxes, and uniformity, requiring that such duty be measured by the same criterion - the criterion of tax-paying capacity. This thus implies equal tax for those with equal tax-paying capacity (horizontal equality) and different tax (in qualitative terms) for those with different tax-paying capacity in proportion to this difference (vertical equality)" (Tax Law, 5th edition, Coimbra, 2009, pages 151-152.

Configuring the principle of tax equality as material equality, the principle of tax-paying capacity - according to the same author - as the tertium comparationis of equality in the field of taxes, does not need a specific and direct constitutional provision. Its constitutional basis is the principle of equality articulated with the other principles and provisions of the respective "fiscal constitution" and, in particular, those that already flow from the structuring principles of the tax system contained in articles 103 and 104 of the Constitution (op. cit., page 152.

As a prerequisite and criterion for taxation, the principle of tax-paying capacity - within the same line of understanding - "removes fiscal legislators from arbitrariness, obliging them that in the selection and articulation of tax facts, they adhere to revelations of tax-paying capacity, that is, erect as the object and taxable matter of each tax a certain economic assumption that is a manifestation of such capacity and is present in the various legal instances of the respective tax" (op. cit., page 154).

Also the Constitutional Court, more recently, has analyzed the fiscal principle from the perspective of tax-paying capacity, as can be seen in particular in decision no. 142/2004, where it is stated that "[t]he principle of tax-paying capacity expresses and implements the principle of tax or fiscal equality in its uniformity aspect - the duty of all to pay taxes according to the same criterion - with tax-paying capacity fulfilling the unitary criterion of taxation".

The recognition of the principle of tax-paying capacity as a criterion intended to assess the constitutional inadmissibility of certain solution(s) adopted by the fiscal legislator has also led to the idea, expressed for example in Constitutional Court decision no. 348/97, that taxation in accordance with the principle of tax-paying capacity will imply "the existence and maintenance of an effective connection between the tax liability and the economic assumption selected as the object of the tax, requiring, for that reason, a minimum of logical coherence of the various considerations of legislative policy related to the rationalization of the system.

In sum, the principle of tax equality can be implemented through different aspects; a first is the generality of the tax law, its application to all without exception; a second, the uniformity of the tax law, in treating taxpayers in equal situations equally and those in different situations differently, in proportion to the difference, to be measured by tax-paying capacity; a last is the prohibition of arbitrariness, notwithstanding the introduction of discriminations between taxpayers that are devoid of rational basis (see Constitutional Court decisions nos. 306/2010 and 695/2014)"

As noted, the Applicant in its argument seeks to assimilate the regime of the tax now in question to that of the former item 28.1 of TGIS, arguing that AIMI repeals and replaces the item in question, invoking fundamentally arbitral jurisprudence as well as that of the Constitutional Court.

While indeed the OGE 2017 proceeds with the repeal of item 28.1, the fact is that the regimes in question, despite presenting some parallelism, reveal divergences between them whose detail will not fit to examine here.

It is worth noting, however, the recent constitutional jurisprudence produced with respect to item 28.1 of TGIS, with reference to its unconstitutionality, for alleged violation of the principles of equality, tax-paying capacity and proportionality.

In this regard, account should be taken of the decision rendered in decision no. 378/2018 of 4 July 2018 of the Plenary of the Constitutional Court, rendered in the context of proceedings no. 156/2016, which decided "not to judge unconstitutional the rule contained in Item 28.1 of the General Table of Stamp Duty, approved by Law no. 55-A/2012 of 29 October, and amended by Law no. 83-C/2013 of 31 December, insofar as it imposes annual taxation on the ownership of land for construction whose building, authorized or envisaged, is for housing, whose tax patrimonial value is equal to or greater than €1,000,000.00".

A decision that has moreover been followed, at least by two other decisions equally rendered by the Constitutional Court in the context of decisions nos. 443/2018 and 485/2018 of 2 and 4 October 2018 respectively.

III - DECISION

In view of what has been set forth, this Singular Arbitral Tribunal decides as follows:

a. to dismiss the arbitral claim filed by the Applicant, absolving the Respondent thereof,

b. to maintain within the legal order the tax acts subject to the present proceeding,

c. to condemn the Applicant to payment of procedural costs.

IV - VALUE OF THE PROCEEDING

In accordance with the provisions of articles 296, numbers 1 and 2 of the Civil Procedure Code, approved by Law no. 47/2013 of 26 June, 97-A, number 1, letter a) of the Tax Procedure and Process Code, and article 3, number 2 of the Regulation of Costs in Tax Arbitration Proceedings, the value of the proceeding is fixed at €611.70 (six hundred and eleven euros and seventy cents).

V - COSTS

Pursuant to the provisions of articles 12, number 2, 22, number 4 of RJAT and articles 2 and 4 of the Regulation of Costs in Tax Arbitration Proceedings, and Table I attached hereto, the amount of costs is fixed at €306.00 (three hundred and six euros).

NOTIFY

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NOTIFICATION TO THE PUBLIC PROSECUTOR'S OFFICE

The Respondent requested, by appeal to the provisions of article 280, number 3 of CRP and article 72, number 3 of the Constitutional Court Act, notification of this arbitral decision to the Public Prosecutor's Office.

Since the Public Prosecutor's Office is not represented before the arbitral tribunals operating with CAAD (article 4, number 1 of the Statute of the Public Prosecutor's Office), this decision be communicated to the Office of the Attorney General of the Republic, for the appropriate purposes.

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[The drafting of the present decision is governed by the spelling prior to the Orthographic Agreement of 1990, except as regards the transcriptions made]

Twenty-eighth of December of two thousand and eighteen

The Arbitrator

(José Coutinho Pires)