Summary
Full Decision
ARBITRAL DECISION
REPORT
A…, NIF…, widow, with residence at Largo de …, nº …, ..., in Lisbon, filed a request for arbitral pronouncement, under the provisions of the Legal Regime of Tax Arbitration approved by Decree-Law nº 10/2011, of 20 January (RJAT), as amended by Law 66-B/2012, for a declaration of illegality and consequent annulment of the assessments of Stamp Tax (relating to item 28.1 of the corresponding General Table), relating to urban real property articles with the numbers … of the parish of …, in Lisbon and …, of the parish of …, also in Lisbon, for the year 2015, with the total amount of € 23,419.70 (twenty-three thousand, four hundred and nineteen euros and seventy cents), by reference to the sum total of both properties.
The Tax and Customs Authority (AT) is the Respondent.
The Claimant did not proceed with the designation of an Arbitrator. For this purpose, the President of the Deontological Council of the Centre for Administrative Arbitration designated the undersigned, who expressly accepted this appointment. The parties were duly notified thereof and did not manifest any intention to refuse it.
The arbitral tribunal was thus constituted on 8 September 2016.
The AT presented its response in a timely manner and the administrative file, arguing for the stability of the tax act.
The Tribunal was properly constituted and is materially competent.
The parties have legal personality and judicial capacity and are legitimate.
The proceedings do not suffer from any nullities.
Given that the position of the parties is absolutely clear and there being no disputed questions of fact, bearing in mind the principles of the autonomy of the arbitral tribunal (art. 16, subparagraph c), of the RJAT), of free conduct of proceedings (art. 19 of the RJAT), of procedural celerity and the avoidance of useless acts, with the agreement of the parties, a hearing as referred to in art. 18 of the RJAT was considered unnecessary, as well as the production of pleadings, which were accordingly dispensed with, and a date was set for the pronouncement of the arbitral decision.
FACTUAL MATTERS
The following factuality is deemed proven:
a) In 2015, the Claimant was the owner of two urban properties, both located in Lisbon and both in vertical ownership, i.e. in full ownership, not constituted in horizontal property;
b) One of them, located in the parish of …, registered in the corresponding property matrix under article …, to which corresponded a total tax patrimonial value (TPV) of more than one million euros;
c) Another, located in the parish of …, registered in the corresponding property matrix under article …, to which corresponded a total tax patrimonial value (TPV), equally, of a value exceeding one million euros;
d) The property located in …, was composed of 15 units capable of independent use, 12 of which intended for residential purposes;
e) Having this property a TPV of € 1,296,110.00, to none of those units capable of independent use corresponded a TPV equal to or exceeding the value of one million euros (but rather a TPV always inferior to € 149,480.00);
f) The property located in … was composed of 11 units capable of independent use, 10 of which intended for residential purposes;
g) Having this property a TPV of € 1,960,430.00, to none of those units capable of independent use corresponded a TPV equal to or exceeding the value of one million euros (but rather a TPV always inferior to € 128,310.00);
h) The AT proceeded with the assessment of Stamp Tax of item 28.1 of the TGIS by reference to the year 2015 and with respect to all independent units intended for residential purposes of each of those properties;
i) The total amount of the tax assessment relating to those 12 independent units capable of use of the property located in … is € 10,830.20;
j) And the total amount of the tax assessment relating to those 12 independent units capable of use of the property located in … is € 12,589.50;
k) The assessment acts in question are dated 5 April 2016;
l) And they have the numbers 2015…, 2015…, 2015…, 2015…, 2015…, 2015…, 2015…, 2015…, 2015…, 2015…, 2015…, 2015…, with respect to the independent units intended for residential purposes of the first property;
m) And the numbers 2015…, 2015…, 2015…, 2015…, 2015…, 2015…, 2015…, 2015… and 2015…, with respect to the independent units intended for residential purposes of the second property;
n) Having given rise, at least, to the corresponding collection documents relating to the first instalments of tax, with payment deadline at the end of April 2016;
The present request for arbitral pronouncement was presented on 17 June 2016.
There are no other facts relevant to the appraisal of the merits of the case that have not been proven.
The proven facts are based on documents provided by the Claimant, whose correspondence to reality is not disputed.
MATTERS OF LAW
POSITION OF THE PARTIES
The question in the case corresponds to the application, in situations of so-called vertical ownership, of the new taxation in Stamp Tax on urban properties with residential purposes and TPV equal to or exceeding one million euros. This new taxation was introduced in 2012 to strengthen budget control measures on the revenue side, within a framework of financial (or economic-financial necessity, cfr. Sustainability and Solidarity in Times of Crisis, Suzana Tavares da Silva, in Fiscal Sustainability in Times of Crisis, Coord. José Casalta Nabais and Suzana Tavares da Silva, pp. 61 et seq).
As is well known, that new Stamp Tax taxation has raised strong doubts and considerable contestation. This not only for specific cases of its application (e.g., vertical ownership, co-ownership, building land or its application to the year 2012), but also in general terms, due to its possible unconstitutionality, whether of its general regime or of its transitional regime (see Luís Menezes Leitão, On the Taxation in Stamp Tax of Luxury Properties (item 28.1 TGIS), in Tax Arbitration nº1, pp. 44 et seq).
Claimant
The Claimant contests, precisely, the application of the new item 28.1 of the TGIS to urban properties not constituted in horizontal property, but which include units capable of independent use, where the minimum value of incidence fixed by law is reached by the sum of the TPV of the separate property matrix records (or autonomous) corresponding to those various units, but not by any one of them individually considered.
The Claimant argues that it is not the owner of a property with TPV equal to or exceeding the said minimum amount, but rather of a property in vertical ownership in which the TPV exceeding that value is achieved only by the sum of the TPV of the units capable of independent use allocated to residential purposes, without any of them, individually considered, reaching that minimum threshold of tax relevance.
For that reason, the assessments in question would suffer from a defect of violation of law and unconstitutionality, which would make them voidable.
Furthermore, in this case, there would be two TPVs to be attributed to the properties in question: one corresponding to the TPV resulting from the sum of the TPV of the independent units and another, for the Claimant without any support in law, which would result from the division or disregard of part of those units, to determine a TPV corresponding to the sum of the parts capable of independent residential use.
Respondent
Conversely, the Respondent contests that understanding, arguing instead for the maintenance of the assessments, in line with the decisions rejecting the said Complaints and Appeal.
For this purpose, it argues, in summary, that total ownership, or vertical ownership, corresponds to a property, this being the reality to be considered to determine whether the minimum value contained in the rule of incidence is met. The TPV relevant for purposes of tax incidence would, therefore, be the TPV of the urban property and not the TPV of each one of the parts that compose it, even though these may be capable of independent use, given that they are allocated to residential purposes. This is because the unity of the property is not affected, and its distinct parts cannot be legally equated to the autonomous fractions of a property constituted in horizontal property, not least because their ownership is necessarily attributed only to a single owner (or more than one, but in cases of co-ownership).
SUMMARY OF DISPUTED QUESTIONS
In summary, in the present case, the relevant question is only to determine what TPV is to be considered in cases of vertical ownership and, if it is concluded that the total TPV of the property or part of a set of divisions deemed relevant applies, whether from the consideration of that total TPV of the property, or of a set of divisions thereof, there arises or not a defect of unconstitutionality.
MATTERS OF LAW
Cumulation of Claims
Although the arbitral request concerns two distinct properties, the request concerns the annulment of both assessments, separately notified, given the identity of their essential elements; the same tax (item 28 of the TGIS), the same year (2015), identical taxpayer (the Claimant) and absolute identity of cause of action (illegality of item 28 in situations of vertical ownership) and of claim (annulment). It is thus clear that the decision of the case depends absolutely on the appraisal of the same circumstances of fact and the same principles and rules of law (art. 3, nº 2 of the RJAT).
Timeliness
First of all, it should be noted that, as the Claimant mentions, the disputed tax assessments are unique, although the tax is paid in more than one instalment. The Claimant contests the two assessments in question and not the corresponding collection notices, which expressly clarifies this preliminarily (on the indivisibility of the tax act relating to the item in question here, see the decision rendered in the case that proceeded before the arbitral tribunals functioning under the aegis of the CAAD, with the nº 397/2015-T).
It is also certain that the Claimant did not need to wait for the last collection notice to begin counting the period for arbitral challenge, so the timeliness of the request is clear (not least due to reasons of manifest procedural celerity and effective judicial protection).
It is thus necessary to analyse the merits of the claim.
VERTICAL OWNERSHIP
As mentioned, Law nº 55-A/2012, of 29 October, amended the Stamp Tax Code, adding a new item to the General Table of the STC.
On the issue of determining the (minimum) TPV relevant for the application of item 28.1 of the TGS in cases of vertical ownership, decisions have already been issued by the CAAD, among others and beyond those mentioned above, in cases numbered 50/2013-T, 132/2013, 181/2013-T, 183/2013-T, 272/2013-T, 280/2013-T, 26/2014-T, 30/2014-T, 88/2014-T, 177/2014-T and 206/2014-T, which were later confirmed by several other arbitral decisions, namely 349/2015-T, 397/2015-T, 440/2015-T, 490/2015-T, 518/2015-T and 597/2015-T.
In all of them, the question was, as in the present case, whether the TPV relevant for the rule of incidence (28.1 of the TGIS) is the TPV corresponding to each one of the units capable of independent use separately considered in the matrix or whether, on the contrary, the relevant TPV should correspond to the sum total of all those units capable of independent use, but forming part of the same property and which are allocated to residential purposes.
And the answer, in those decisions, was always for the first option and is considered to be correct. Let us now examine the reasons underlying such jurisprudence and the interpretation followed here.
THE STAMP TAX CODE
The new item was inserted in the Stamp Tax Code, an option that does not provide relevant contribution to systematically frame the new tax, as that tax "applies to a heterogeneous multiplicity of facts or acts ... without a common trait that gives them identity", which was moreover aggravated by the Reform of Patrimony Taxation of 2003/2004, making the "problem of the classification of this tax" even more complex (cfr. José Maria Fernandes Pires, Op. Cit., p. 422).
However, it is known that this new item was introduced as a means of strengthening budget control measures on the revenue side, within a framework of financial (or economic-financial) necessity, with the purpose of identifying new forms of externalization of contributory capacity that could be called upon to support the purpose of reducing the negative budget balance.
And it did so by choosing to apply the new taxation exclusively to certain assets, thus implying a strong negative discrimination of these, which requires a reinforced explanation of that option, so as not to put the principle of equality, or equity in the terminology of Glória Teixeira, into question, either in its sense of horizontal equity or in that of vertical equity (Glória Teixeira, Manual of Tax Law, p. 56, 2nd ed., Almedina).
Now, it seems possible to discern in the legislator's thinking the intention to identify in properties with TPV equal to or exceeding one million euros ("luxury") intended for residential purposes, a referential, not arbitrary, of an additional contributory capacity, capable of broadening the spectrum of contributions for the desired and necessary budgetary balance.
In this context, the question to be decided is whether a property constituted in total or vertical ownership, but with apartments or divisions with independent uses, is a "property with residential purposes" for purposes of the application of art. 1 of the STC and of item 28.1 of the TGIS, added by art. 4 of Law nº 55-A/2012, of 29 October (especially since, as in the present case, it may have areas allocated to non-residential purposes) or whether by "property" should be understood instead the divisions separately considered in the property matrix and, further, what is the relevant TPV (whether the TPV relating to the property, whether the TPV inherent to the sum of its parts with residential purposes, or whether instead the TPV relating, autonomously, to each one of these).
For this purpose, it is important to bear in mind that each apartment or part of a property capable of independent use is considered separately in the property registration of the total property, which also discriminates the tax patrimonial value of those (nº 2 of art. 12 of the IMI Code), and IMI is assessed individually in relation to each apartment or part of a property capable of independent use (art. 119, nº 1 of the IMI Code).
And, if this is so in IMI, it should also be so in Stamp Tax. Let us see why.
LITERAL INTERPRETATION
As stated in the decision taken in case 206/2014-T: "Given that the STC refers to the IMI Code, it must be concluded that the registration in the property matrix of properties in vertical ownership, constituted by different parts, apartments or divisions with independent use, follows the same registration rules as horizontal properties".
Since IMI and Stamp Tax "are assessed individually in relation to each one of the parts", also "the legal criterion for defining the incidence of the new tax must be the same". Consequently, there will be incidence of item 28.1 of the TGIS (only) if one of those parts, apartments or divisions with independent use presents a TPV, at least, equal to the amount provided for in the rule of incidence.
Thus, for this purpose, the property will be the independent area, considered separately and autonomously in the matrix, and is subject to Stamp Tax if two requirements are met: being intended for residential purposes and having a TPV equal to or exceeding one million euros, a criterion for assessing "luxury" residential properties. Otherwise, a reality not foreseen by the legislator would be created: that of, so to speak, a "residential property", possibly inserted within a larger property with various purposes, in which the TPV of that spurious to the property registrations would consist in the fiction of a TPV given by the addition of the autonomous TPV of each division (independent and with residential purpose) considered in the property registration. That is, where the legislator considered two realities, the interpreter would now, without support in the legislative text, as occurs in the assessments now in question, have to fictionalise a third reality, hybrid, midway between the urban property and its independent divisions. Divisions to which the legislator of the IMI, and of Stamp Tax by reference to the IMI Code, understood to give tax relevance.
Indeed, it is not clear how the sum of the TPV of a set of divisions could be considered on the basis of law, disregarding others. That is, to use as a criterion of subjection, neither the individual TPV of each division, nor the TPV of the property, but rather a TPV created by the interpreter, without support in law. This especially since if the legislator deliberately does not sum the TPV of the various properties held by the taxpayer, why would the interpreter now seek to sum the TPVs of the divisions, or, which amounts to the same, subtract from the TPV of the property, the TPV of certain divisions?
Also in the decision rendered in case 272/2013-T (CAAD) it is stated that "considering that the registration in the property matrix of properties in vertical ownership, constituted by different parts, apartments or divisions with independent use, under the IMI Code, follows the same registration rules as properties constituted in horizontal property, and that the respective IMI, as well as the new Stamp Tax, are assessed individually in relation to each one of the parts, it is beyond any doubt that the legal criterion for defining the incidence of the new tax must be the same". Moreover, it is further stated in that same decision that the position of the AT "finds no legal basis and is contrary to the criterion resulting from application in the seat of the IMI Code and, by reference, in the seat of Stamp Tax", which is why "the adoption of the criterion defended by the AT violates the principles of legality and tax equality, as well as that of the prevalence of material truth over legal-formal reality".
And in the same sense it is stated in the arbitral decision of case 30/2014-T (CAAD) to be found in the doctrine of the AT a "non-conformity with the literal element of the final part of the rule of incidence (item 28 of the TGIS) which states that the tax applies to "the tax patrimonial value used for purposes of IMI" and therefore, should not apply to the sum of tax patrimonial values of properties, parts of properties or apartments, having no legal support the operation of adding tax patrimonial values of apartments or parts of property capable of independent use, of residential purpose, severed from the TPV of the others with different purposes, so as to reach the threshold of eligible taxation of 1,000,000.00 euros or more".
As also stated in the arbitral decision taken in case 30/2014-T (CAAD), what happens with respect to urban properties with residential purposes, in vertical ownership, with apartments or divisions capable of independent use, is that the AT proceeds, in the operations of assessment of Stamp Tax, as it did in the present case, to the adaptation of the rules of the IMI Code (adding the tax patrimonial values of the same property, without considering those corresponding to parts of the property with non-residential purpose, thus giving rise to a new and hybrid TPV). Indeed, that "adaptation" corresponds to "summing the TPV of each apartment or independent division allocated to residential purposes (severed from the TPV of apartments or divisions intended for other purposes), creating a new legal reality, without legal support, which is a global TPV of urban properties in vertical ownership, with residential purposes", which goes "against the literal element of the rule of incidence" (incidence on "the tax patrimonial value used for purposes of IMI"). Thus, "in urban properties with residential purposes, in vertical ownership, with apartments or divisions capable of independent use", the tax patrimonial value should be considered "resulting exclusively from nº 3 of article 12 of the IMI Code. Both for purposes of IMI and for this Stamp Tax".
And the same understanding applies to properties in which all independent divisions are intended for residential purposes.
Concretely, as concluded in the decision rendered in case 26/2014-T of the CAAD, "for purposes of application of item 28 of the TGIS to properties in vertical ownership, the same rules of the IMI Code apply as to properties in horizontal property, and in the same sense the TPV for purposes of application of the item is the individual TPV of each independent residential fraction, and in the present case none of the fractions exceeds the criterion of incidence of 1,000,000.00€", the same occurring also in the case of the present proceedings.
It is thus concluded, in summary, as clearly follows from the cited decisions, that the literal interpretation of the new item of the TGIS cannot but be different from that upheld by the AT, in fact, the opposite, given the clear and indisputable reference made with respect to the new item of the TGIS to the rules of the IMI Code, and the interpreter cannot "create" a new concept of property in order to thus obtain a hybrid TPV, in the cases of properties with residential and non-residential use, not recognised in the matrix and without any support in the text of the law. What should also apply to properties in vertical ownership whose divisions are all intended for residential purposes.
ECONOMIC SUBSTANCE
Moreover, as is well stated in Judgment 117/2013 T of the CAAD, "an interpretation based exclusively on the literal content .... cannot be accepted, as in the interpretation of tax rules the general rules and principles of interpretation and application of laws are observed (article 11, nº 1, of the LGT) and article 9, nº 1, expressly forbids interpretations based exclusively on the literal content of the rules by providing that «the interpretation must not limit itself to the letter of the law», and should instead «reconstruct from the texts the legislative thought, taking especially into account the unity of the legal system, the circumstances under which the law was drafted and the specific conditions of the time in which it is applied». For there to be a correspondence between the interpretation and the letter of the law it will suffice «a minimum of verbal correspondence, even if imperfectly expressed» (article 9, nº 3, of the Civil Code), which will only prevent the adoption of interpretations that cannot in any way be reconciled with the letter of the law, even recognising in it imperfection in the expression of the legislative intention".
And if we now look at the economic substance of the tax facts, in compliance with art. 11, nº 3 of the LGT, without adhering to an economic interpretation of the norms of tax law, which is today condemned by Doctrine (cfr. Taxes, General Theory, Américo Fernando Brás Carlos, p. 196, 2014, 4th ed. Almedina), we will also have to recognise that the expression "each urban property" used in nº 7 of article 23, by identity of reasons, encompasses not only urban properties in horizontal ownership, but also apartments, divisions or parts of urban properties in vertical ownership, as long as they are allocated to residential purposes, always proceeding, in any of the cases, from a single taxable base for all legal purposes: the tax patrimonial value used for purposes of IMI (final part of item 28 of the TGIS), as concluded in the arbitral decision of case 177/2014-T (CAAD).
Or, as is emphasised in the decision rendered in case 272/2014-T of the CAAD, "in the view of the legislator, what matters is not the legal-formal rigour of the specific situation of the property but rather its normal use, the purpose for which the property is intended", so that "for the legislator the situation of the property in vertical or horizontal ownership was not relevant, as no reference or distinction is made between one and the other. What is relevant is the material truth underlying its existence as an urban property and its use", that is, the economic reality of the possession of independent parts, e.g. capable of independent use or leasing, just as autonomous fractions in the case of horizontal ownership, and therefore capable of allowing the use or obtaining income in a similar manner and thereby externalizing, equal contributory capacity (as it would be externalized by the sum of the TPV of several autonomous fractions of the same property in horizontal ownership or of several properties whose TPV, taken together, exceeded the value of one million euros, without such having been considered by the legislator as an externalization of contributory capacity relevant for purposes of Stamp Tax).
COHERENCE OF THE SYSTEM
And if we look at the entirety of the tax system we will not find indications that come to undermine the conclusion drawn so far.
As stated in the Judgment rendered in case 26/2014-T of the CAAD, no censure of the legislator with respect to vertical ownership is discernible. Indeed, "it will be said, not without reason, that the legislator, for purposes of taxation in the seat of IMI, chose to confer autonomy, independence, to each one of the parts or to each one of the apartments of a single property, as long as one and the other show independent use, to the point of providing for individual registration in the matrix of each one of those independent parts and imposing on taxation in the seat of IMI an also autonomous collection. Despite the legal existence of a single property, it is the legislator himself who not only recommends but imposes the autonomous consideration of each one of the independent parts, for purposes of taxation of patrimony". Indeed, as follows from an economic interpretation of the fact, with prevalence of its substance over its form, as was seen above. And if this is so in IMI, it would not be understood that it should not also be so in Stamp Tax, namely in the case of the new taxation on properties (houses, more precisely) "of luxury" (in the sense used in Parliament by the then State Secretary for Tax Affairs and referred to below).
Indeed, if the legislator is indifferent to one or another form of structuring the ownership of urban properties in the IMI Code, it would not be understood that he now intended to favour one to the detriment of the other, namely by considering one form of structuring more advanced than the other. In fact, as decided in cases 26/2014-T and 272/2014-T of the CAAD, "the current legal regime does not impose the obligation to constitute horizontal property", which is why "the discrimination operated by the AT translates into an arbitrary and illegal discrimination", as "the AT cannot distinguish where the legislator itself understood not to do so, under penalty of violating the coherence of the fiscal system, as well as the principle of fiscal legality provided for in article 103, nº 2 of the CRP, and also the principles of justice, equality and fiscal proportionality."
That is, the literal interpretation initially reached continues to apply.
INTENTION OF THE LEGISLATOR
And it is certain that nothing induces the interpreter to the conclusion that the concrete legislator of the new item of the TGIS, contrary to the legislator of the IMI, who moreover remains unchanged, intended to discriminate vertical ownership against horizontal ownership. As is well recalled in the Judgment rendered in the already mentioned case 26/2014-T of the CAAD, "when presenting and discussing, in Parliament, the bill nº 96/XII (2nd), the State Secretary for Tax Affairs expressly stated: "The Government proposes the creation of a special tax on high-value residential urban properties. This is the first time in Portugal that a special taxation is created on properties of high value intended for housing. This tax will be 0.5% to 0.8% in 2012 and 1% in 2013, and will apply to houses valued at one million euros or more" (cfr. DAR I Series nº 9/XII -2, of 11 October, p. 32). Now, as is emphasised in that Judgment, "the State Secretary for Tax Affairs presents this bill referring without reservation to the expression "houses"… of value equal to or exceeding 1 million euros", so that "it results with meridian clarity that item 28.1 of the TGIS cannot be interpreted in the sense that it encompasses each one of the apartments, divisions or parts capable of independent use when only from the respective sum results a TPV exceeding that provided for in the same item". This is because, in that case, "none of the "houses" … presents, per se, "value equal to or exceeding 1 million euros"".
It being, therefore, clear, as is stated in the aforesaid decision 272/2014-T, that for the legislator only that value of one million euros, as long as allocated "to one dwelling (house, autonomous fraction or apartment with independent use) translates into a contributory capacity above the average and, as such, capable of determining a special contribution to ensure the fair distribution of the tax burden".
And if this is so, we must then attend to the concept of "house" as a physical reality that enables a residential purpose, a unit capable of independent use, including its lease, as it is in that economic reality that we will find the externalization of the contributory capacity associated with "luxury dwellings" that the legislator considered relevant. Moreover, if this were not so, the legislator would proceed to a discrimination that could not be found to be justified, as has already been seen no censure of vertical ownership is found in the system when compared with horizontal ownership. Moreover, that distinction would clash with the necessary equity between identical externalizations of the same contributory capacity.
CONTRIBUTORY CAPACITY AND INTERPRETATION IN CONFORMITY WITH THE CONSTITUTION
It is certain that the tax legislator is subordinate to the principles of equality, which, as is well stated by Sérgio Vasques (Manual of Tax Law, pp. 249 et seq, 2011, Almedina), is more than a mere negative limit and imposes more than the mere prohibition of arbitrariness, rather requiring a distribution of taxes in accordance with the criterion of contributory capacity, so that the legislator will have to anchor taxation in reasonable and not arbitrary economic elements, capable of justifying the tax claim in a contributory capacity concretely externalized by the taxpayer.
Thus it is imperative to seek in the text of the new item a reading that gives effect to those principles. Or, which amounts to the same, not to extract from that text a meaning that violates such principles.
Now, the contributory capacities externalized by the ownership of a property composed of a set of autonomous fractions in horizontal ownership or by a set of divisions of independent use in a regime of vertical ownership, cannot fail to be considered identical, if not indeed, possibly, less in the case of the latter hypothesis. That is, a property does not, certainly, have a greater market value by being organized as vertical ownership. It is the same (allowing equal benefit from its use or equal income through its lease, as mentioned above), or it will even have a lesser value, as the alternatives for transmissibility will possibly be fewer. And we know that the TPV is intended to be an approximation, precisely, to the market value of properties and will therefore be the measure and limit of the contributory capacity relevant for the new item of the TGIS.
Thus, the interpretation advocated by the AT, finding no hermeneutical justification, as has been seen up to now, would still lead to a manifest inequality between owners of properties in horizontal and vertical ownership (and as has already been seen no penalising intention of these is discernible, even if one were to admit that this was constitutionally admissible). In the same sense, as is well stated in the decision of case 272/2014-T of the CAAD, the "existence of a property in vertical or horizontal ownership cannot, by itself, be an indicator of contributory capacity. On the contrary, from the law it follows that one and the other should receive the same tax treatment in obedience to the principles of justice, tax equality and material truth".
Concluding, "material truth is what imposes itself as the determining criterion of contributory capacity and not the mere legal-formal reality of the property, since the constitution of horizontal property implies a mere legal alteration of the property and does not even impose a new assessment" (as stated in the decision rendered in case 26/2014-T of the CAAD). And that fact "does not appear coherent with the decision of the AT to tax the residential parts of a property in vertical ownership, according to the global TPV of the property and not that which is effectively attributed to each part". Thus, "the AT cannot distinguish where the legislator itself understood not to do so, under penalty of violating the coherence of the fiscal system, as well as the principle of fiscal legality … and also the principles of justice, equality and proportional taxation", as was said by the creation ex novo of an innovative concept and a hybrid TPV, frequently corresponding to part of a property.
CONCLUSION
In these terms, the tax acts in question suffer from a defect of violation of law, due to error in the legal and factual presuppositions, as neither of the two properties has divisions capable of independent use having residential purposes with a TPV of a value equal to or exceeding the threshold resulting from the applied rule, which makes said tax acts voidable (which must therefore be declared).
It is thus necessary to annul the disputed Stamp Tax assessments.
OPERATIVE PART
As a result of the foregoing, this Single Tribunal decides to uphold, as proven, the request for arbitral pronouncement and to declare illegal the disputed Stamp Tax assessments on the basis of violation of law, resulting from error in the presuppositions, and likewise to annul the said assessments.
Value
As mentioned, the assessments subject to annulment amount to the total value of € 23,419.70, this being therefore the value of the action and of the claim, and the economic value thereof.
Thus and in accordance with the provisions of art. 306, nos 1 and 2, of the CPC and 97-A, nº 1, subparagraph a), of the CPPT and 3, nº 2, of the Regulation of Costs in Tax Arbitration Proceedings, the said value of € 23,419.70 (twenty-three thousand, four hundred and nineteen euros and seventy cents) is fixed for the proceedings.
COSTS
In accordance with art. 22, nº 4, of the RJAT, the amount of costs is fixed at € 1,224.00 (one thousand two hundred and twenty-four euros), in accordance with Table I attached to the Regulation of Costs in Tax Arbitration Proceedings, to be borne by the Tax and Customs Authority, here Respondent.
Lisbon, thirteenth of November 2016
Text prepared by computer, in accordance with the Code of Civil Procedure (CPC), applicable by reference from article 29, nº 1, subparagraph e) of the RJAT, with blank lines, reviewed and signed by the undersigned arbitrator.
The Arbitrator
(Jaime Carvalho Esteves)
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