Summary
Full Decision
ARBITRAL DECISION
I. Report
a) Parties and Request for Arbitral Pronouncement
1. A… S.A., a legal entity with identification number …, with registered office at …, n.º…, …-…, Lisbon, in its capacity as managing entity of the real estate investment fund B…–CLOSED REAL ESTATE INVESTMENT FUND FOR RESIDENTIAL RENTAL, with tax identification number … (hereinafter referred to as the Claimant), filed, on 06.01.2017, in compliance with articles 2.º, n.º 1, paragraph a) and 10.º of Decree-Law n.º 10/2011, of 20.1, as amended (hereinafter the Legal Regime of Tax Arbitration or LRTA), a request for arbitral pronouncement (hereinafter abbreviated as RP), in which the TAX AND CUSTOMS AUTHORITY (hereinafter, the Respondent or TA) is sued, in which it petitions (see the final prayer of the RP) the declaration of nullity or, subsidiarily, the annulment of the assessments for Municipal Tax on Onerous Transfers of Real Property (IMT) with n.º…, in the amount of €33,120.00, and for Stamp Duty (SD), with n.º…, in the amount of €4,416.00, for a total amount of €37,536.00, as well as the reimbursement of all amounts paid, together with, pursuant to article 43.º of the General Tax Code (GTC), the compensatory interest due until the date of such reimbursement.
b) Constitution of the Arbitral Tribunal
2. In compliance with articles 5.º, n.º 2, al. a), 6.º, n.º 1 and 11.º, n.º 1, al. a) of the LRTA, the Ethics Committee of this Administrative Arbitration Center (CAAD) appointed the undersigned as sole arbitrator, who accepted the appointment and to which appointment the parties did not object.
3. Pursuant to the provisions of al. c) of n.º 1 and n.º 8 of article 11.º of the LRTA, as communicated by the President of the Ethics Committee of CAAD, the Sole Arbitral Tribunal was constituted on 21.03.2017.
c) Procedural Chronology
4. In the request for arbitral pronouncement (hereinafter initial petition or IP), the Claimant alleges that the assessments for IMT with n.º…, in the amount of €33,120.00, and for SD, with n.º…, in the amount of €4,416.00, challenged herein, "based on article 8.º, number 16, of the Tax Regime of RERH, (applicable ex vi article 236.º (Transitional Provision within the scope of the Special Regime applicable to RERH and SIRH), number 2, of Law n.º 83-C/2013, of 31 December) and this latter provision being unconstitutional by violation of the principle of non-retroactivity of tax law, enshrined in article 103.º (Tax System), number 3, of the Constitution of the Portuguese Republic" "suffer from abstract illegality" (art. 64.º of the IP).
5. To support this position, the Claimant, which attached a legal opinion titled "On the constitutionality of article 236.º n.º 2, of Law n.º 83-C/2013, of 31 December (application to acquisitions prior to the amendments to the exemptions from IMT and Stamp Duty for Real Estate Investment Funds for Residential Rental)", alleges, essentially, the following in its IP:
i) The Claimant requested the assessment of IMT and SD with respect to the transfer by B…–CLOSED REAL ESTATE INVESTMENT FUND FOR RESIDENTIAL RENTAL of property unit U-…-AB located at…, n.º…, …, ..., registered in the urban property register of the parish of … and …, acquired on 13.12.2013, based on article 8.º, n.º 16, of the special regime applicable to RERH, applicable ex vi article 236.º, n.º 2, of Law n.º 83–C/2013, of 31.12 (arts. 6.º, 17.º and 18.º of the IP).
ii) These tax acts referred to an urban property that was part of the assets of Fund B… on the date of entry into force of Law n.º 83-C/2013, of 31.12, and thus covered by the aforementioned article 236.º of Law n.º 83–C/2013 (art. 31.º of the IP).
iii) The IMT and SD at issue are taxes of single obligation, whereby "at the moment when the properties (sic) – object of the Assessments – entered the assets of Fund B…, the exemptions from IMT and SD provided, respectively, in numbers 7, paragraph a), and 8 of article 8.º (Tax Regime) of the Tax Regime of RERH were definitively crystallized in the tax legal order" (arts. 33.º, 34.º and 36.º of the IP).
iv) "the taxable event is, both with respect to IMT and with respect to SD, the acquisition of ownership of the relevant properties by Fund B… . And the exemptions from IMT and SD were not, on the date on which they entered the assets of Fund B…, conditioned upon the subsequent occurrence of any facts or circumstances nor, moreover, subject to any regime of expiry" (arts. 37.º and 38.º of the IP).
v) "In the absence of (...) legally provided, at the moment of recognition of the exemption, any facts or circumstances upon which the expiry of the exemption crystallized in the tax legal order depended, it is manifest that the subsequent imposition of such facts or circumstances on exemptions crystallized in the tax legal order of the Claimant suffers from unconstitutionality, by violation of the principle of non-retroactivity of tax law, enshrined in article 103.º (Tax System), number 3, of the Constitution of the Portuguese Republic", whereby the "article 236.º of Law n.º 83-C/2013, of 31 December, by extending the application of the current Tax Regime of RERH «to properties that have been acquired by RERH before 1 January 2014, counting, in such cases, the three-year period provided in n.º 14 from 1 January 2014» - is directly and unequivocally violating the constitutionally enshrined principle of non-retroactivity of tax law. Indeed, the extension therein provided constitutes a new regime of expiry of the exemptions provided in numbers 7, paragraph a) and 8 of article 8.º (Tax Regime) and not a mere specification of a criterion previously provided." (arts. 41.º and 42.º of the IP).
vi) "Considering that the principle of fiscal non-retroactivity bears the character of a fundamental right, endowed with the legal protection regime of this right, its disregard results in the nullity of the act, in this case, the nullity of the assessments", or even "the vice of legal non-existence"; "Admitting subsidiarily, that the vice (abstract illegality) of the Assessments determines their voidability (and not nullity), the Assessments should be annulled accordingly" (arts. 56.º, 57.º, 58.º and 63.º of the IP).
6. The TA presented a reply (hereinafter abbreviated as R.) in which, defending itself by way of objection, it petitions that the request for arbitral pronouncement be judged unfounded and not proven and the assessment act be maintained, sustaining, essentially, the following:
i) "on the date of creation of the tax regime applicable to RERH, by Law n.º 64-A/2008, of 31 December, the exemptions in question, both with respect to IMT and with respect to Stamp Duty, required, respectively: (i) that the acquisition of real property had as its exclusive purpose "rental for permanent housing" and (ii) that the transfer had as its object "properties intended for permanent housing which occurs by force of the conversion of the right of ownership of such properties into a right of rental on the same, as well as with the exercise of the purchase option provided in n.º 3 of article 5" – "That is, the taxpayers who intended to benefit from the aforementioned exemptions, always had, since the beginning of the tax regime applicable to RERH, to meet the requirement that such properties be intended exclusively for rental for permanent housing", whereby "the Claimant lacks reason when it states that the exemptions at issue were not conditioned by any facts or circumstances, and, consequently, the argument it constructs departing from such erroneous premise is equally flawed with error" (arts. 49.º to 51.º of the R.).
ii) "the new wording introduced by Law n.º 83-C/2013, of 31 December, in favor of legal certainty and the principle of protection of legitimate expectations, and in line with the spirit of the legislator, at the time of creation of the regime, merely came to specify the criterion already required" – "the exemptions in question simply ceased to be in force: what happened, only, was that criteria were established to implement a legal requirement provided in an indeterminate form" (arts. 52.º and 59.º of the R.).
iii) "it is manifest that, since the beginning of the regime, the tax benefits at issue applicable to RERH always depended on the allocation of real property to rental for permanent housing, a legal requirement that the TA, within the scope of its supervisory powers, could always assess, in order to conclude as to the continuation of the benefit or, rather, the restoration of the standard tax system" (art. 65.º of the R.);
iv) "What the new law came to do (...) was only to specify criteria already provided in the old law, namely: (i) the concept of allocation to rental for permanent housing, stipulating a more than sufficient period for taxpayers to adapt, gathering an unequivocal means of proof (rental contract), (ii) as well as the clarification of the situations in which the transfer of the property intended for rental does not result in expiry of the exemption in the terms then previously provided in the FBR"; "In such terms, contrary to what the Claimant argues, there is no introduction ex novum of a regime of expiry of the benefit, and, still less is there any frustration of the expectations of the taxpayers or violation of the principle of non-retroactivity of tax law" (arts. 72.º and 73.º of the R.).
v) "in any event, given the transfer of the properties, it is unequivocal that the Claimant could not, in any way, benefit from the requested exemption"; "being in question the concrete transfer of the properties, note that, where the expiry of the exemption occurs, already under the terms of article 14.º, n.º 2, of the FBR, article 8.º, n.º 16 of the regime merely implements an anti-abuse measure, that is, clarifying that properties that do not remain in the portfolio with exclusive allocation to residential rental, were not acquired with such purpose" (arts. 56.º and 66.º of the R.).
7. By order of 11.05.2017, the Sole Arbitral Tribunal, pursuant to the provisions of al. c) of art. 16.º and art. 19.º of the LRTA, as well as the principles of procedural economy and the prohibition of performing useless acts set out in articles 6.º and 130.º of the Code of Civil Procedure (CCP), applicable ex vi al. e) of n.º 1 of art. 29.º of the LRTA, decided to dispense with the meeting referred to in art. 18.º of the LRTA, as the circumstances and purposes provided for in the various paragraphs of n.º 1 of this provision were not present. Furthermore, it decided, in compliance with n.º 2 of art. 18.º of the LRTA, that it was not necessary to hold oral argument, as the positions of the parties were perfectly exposed and defined in their respective pleadings.
The deadline for issuing the arbitral decision was set for 23.6.2017.
II. Preliminary Issues
8. The Tribunal was regularly constituted and is competent to consider the issues raised (art. 2.º, n.º 1, al. a) of the LRTA), the parties possess legal personality and capacity, have standing (arts. 4.º and 10.º, n.º 2 of the LRTA and art. 1.º of Ordinance n.º 112-A/2011, of 22 March) and are properly represented.
9. The cumulation of claims relating to the contested assessments concerning IMT and SD is admissible under art. 3.º, n.º 1 of the LRTA, given that the success of the claims depends on consideration of the same circumstances of fact and the interpretation and application of the same legal rules contained in article 8.º of the special regime applicable to real estate investment funds for residential rental (RERH) and to real estate investment societies for residential rental (SIRH), approved pursuant to articles 102.º to 105.º of Law n.º 64-A/2008, of 31.12.
10. The proceedings do not suffer from nullities and no issues have been raised that would hinder consideration of the merits of the case, whereby a decision on the substance of the dispute is warranted.
III. Question to be Decided
11. The thema decidendum consists of assessing the legality of the assessments for IMT and SD which are the object of the request for arbitral pronouncement, in light of article 8.º of the special regime applicable to real estate investment funds for residential rental (RERH), approved pursuant to articles 102.º to 104.º of Law n.º 64-A/2008, of 31.12 (hereinafter tax regime of RERH) and considering the possible application of n.º 2 of article 236.º of Law n.º 83-C/2013, of 31.12, which the Claimant deems to be unconstitutional by violation of article 103.º of the CRP.
IV. Findings of Fact and Motivation
12. Having examined the allegations contained in the procedural documents submitted and the documentary evidence produced (docs. n.ºs 1 and 2 attached to the IP), the Tribunal finds proven, with relevance to the decision of the case, the following facts:
a) Findings of Fact
I. The Claimant requested on 26.10.2016 the assessment of IMT and the assessment of SD in connection with the transfer by B… –CLOSED REAL ESTATE INVESTMENT FUND FOR RESIDENTIAL RENTAL of unit U-…-AB of the property located at Av. …, n.º…, …, …, registered in the urban property register of the parish of … and … under article …, which was acquired on 13.12.2013 (cfr. fact acknowledged in art. 6.º of the IP and copies of the assessments attached as doc. n.º 1 to the IP).
II. The requested assessments were implemented by the documents with references n.º…, in the amount of €33,120.00, and n.º…, in the amount of €4,416.00 (as per copies of the assessments attached as doc. n.º 1 to the IP).
III. In both the aforementioned assessments for IMT and SD, as per copies attached as doc. n.º 1 to the IP, in the description section, the following appears: "The taxpayer requests the assessment of IMT under n.º 16 of article 8.º of the special regime applicable to RERH and SIRH, approved by articles 102º to 104º of Law n.º 64-A/2008, of 31/12, as amended by article 235º of Law nº 83-C/2013, of 31/12, applicable by force of article 236º of Law nº 83-C, of 31/12, relating to unit AB of article … of the parish of Union of Parishes of … and …, IMT initial 2013/…, with benefit Code 92 RERH/SIRH (article 87º of OE/09) for the price of €552,000.00".
IV. The Claimant proceeded on 27.10.2016 to pay the amounts due under the aforementioned assessments for IMT and SD, as evidenced by receipts attached as doc. n.º 2 to the IP.
13. Further, with relevance to the decision of the case in light of the plausible solutions of the question of law, the following facts are considered not proven:
b) Facts Not Proven
A. Not proven that unit U-…-AB of the property located at Av. …, n.º…, …, …, acquired by B…–CLOSED REAL ESTATE INVESTMENT FUND FOR RESIDENTIAL RENTAL, was intended for rental for permanent housing, specifically that it was the subject of a rental contract for permanent housing.
14. The Tribunal's conviction regarding the proven facts resulted from examination of the documents submitted by the Claimant and acknowledgment of facts resulting from allegations in the IP, all as specified in the above-mentioned points of the factual findings.
The facts considered not proven resulted from the fact that no element in that regard was alleged and, consequently, demonstrated by the Claimant, in accordance, moreover, with the position sustained in the IP above indicated in 5, iv).
V. On the Law
V.1. Legal Framework
15. Law n.º 64-A/2008, of 31.12 (State Budget for 2009), approved, pursuant to its articles 102.º to 104.º, the special regime applicable to real estate investment funds for residential rental (RERH) and to real estate investment societies for residential rental (SIRH), hereinafter also referred to as "Special Regime of RERH", which established, in its article 8.º, titled "Tax Regime", hereinafter also referred to as "Tax Regime of RERH", insofar as relevant here, the following in n.ºs 7 and 8:
"7 — The following are exempt from IMT:
a) The acquisitions of urban properties or of autonomous units of urban properties intended exclusively for rental for permanent housing, by the investment funds referred to in n.º 1;
b) The acquisitions of urban properties or of autonomous units of urban properties intended for own and permanent housing, as a result of the exercise of the purchase option referred to in n.º 3 of article 5.º by tenants of properties that are part of the assets of the investment funds referred to in n.º 1.
8 – The following are exempt from stamp duty all acts performed, provided that they are connected with the transfer of urban properties intended for permanent housing which occurs by force of the conversion of the right of ownership of such properties into a right of rental on the same, as well as with the exercise of the purchase option provided in n.º 3 of article 5.º".
16. Law n.º 83-C/2013, of 31.12 (State Budget for 2014), by its article 235.º, added to the aforementioned article 8.º, concerning the Tax Regime of RERH, numbers 14 to 16, with the following content:
"14 - For the purposes of the provisions of n.ºs 6 to 8, it is considered that urban properties are intended for rental for permanent housing whenever they are the subject of a rental contract for permanent housing within the period of three years counted from the moment they became part of the assets of the fund, and the taxpayer must communicate and provide proof to the TA of the respective actual rental, within 30 days following the end of the said period.
15 - When the properties have not been the subject of a rental contract within the three-year period provided for in the previous number, the exemptions provided for in n.ºs 6 to 8 shall expire, and in that case the taxpayer must request from the TA, within 30 days following the end of the said period, the assessment of the respective tax.
16 - In the event that the properties are transferred, with the exception of the cases provided for in article 5.º, or in the event that the RERH is subject to liquidation, before the expiry of the period provided for in n.º 14, the taxpayer must also request from the TA, before the transfer of the property or the liquidation of the RERH, the assessment of the tax due under the previous number".
17. This same Law n.º 83-C/2013 also established in its article 236.º, titled "Transitional provision within the scope of the special regime applicable to RERH and SIRH", the following:
"1 - The provisions of n.ºs 14 to 16 of article 8.º of the special regime applicable to RERH and SIRH, approved by articles 102.º to 104.º of Law n.º 64-A/2008, of 31 December, shall apply to properties that have been acquired by RERH from 1 January 2014.
2 - Notwithstanding the provisions of the previous number, the provisions of n.ºs 14 to 16 of article 8.º of the special regime applicable to RERH and SIRH, approved by articles 102.º to 104.º of Law n.º 64-A/2008, of 31 December, shall equally apply to properties that have been acquired by RERH before 1 January 2014, counting, in such cases, the three-year period provided for in n.º 14 from 1 January 2014.".
18. For the assessment of this case, in addition to this specific framework, the following general normative propositions of the Tax Benefits Code (TBC) must also be taken into account:
- Art. 9.º: "Persons holding the right to tax benefits are obliged to declare, within the period of 30 days, that the situation of fact or law on which the benefit was based has ceased, except when such cessation is of official knowledge".
- N.ºs 1, 2 and 3 of art. 14.º, titled "Termination of tax benefits":
"1 - The termination of tax benefits results in the automatic restoration of standard taxation.
2 - Tax benefits, when temporary, expire by the expiry of the period for which they were granted and, when conditional, by the occurrence of the assumptions of their resolutive condition or by non-compliance with the obligations imposed, attributable to the beneficiary.
3 - When the tax benefit concerns the acquisition of property intended for the direct realization of the purposes of the acquirers, it ceases to have effect if those are transferred or given another use without authorization of the Minister of Finance, without prejudice to other penalties or different regimes established by law".
V.2. Legal Assessment
19. It must first be observed that the Claimant seeks consideration of the legality of the contested assessments, as expressly stated, exclusively in light of the rules on the basis of which it requested such assessments (see in the factual findings the proven fact n.º III), namely, n.º 16 of article 8.º of the Special Regime of RERH and the transitional law provision of n.º 2 of article 236.º of Law n.º 83-C/2013, of 31.12. Indeed, the Claimant indicates that the "request for arbitral pronouncement is limited to (...) the analysis of the legality of the Assessments which are based exclusively on the rules invoked by the Claimant and not in light of any other legal rules" (art. 20.º of the IP); that "it did not request the Assessments based on different rules or any other reasons or grounds, as can be verified in the Assessments" (art. 18.º of the IP), even going so far ab ovo in the IP to identify the issue it wishes to be considered in these proceedings in the following abstract terms: "To assess whether article 236.º (Transitional Provision within the scope of the Special Regime Applicable to RERH and SIRH) of Law n.º 83 – C/2013, of 31 December - insofar as it determines the application of the current Tax Regime of RERH «to properties that have been acquired by RERH before 1 January 2014, counting, in such cases, the three-year period provided in n.º 14 from 1 January 2014» - constitutes a new regime of expiry of the exemptions provided in n.º 7, paragraph a) and n.º 8 of article 8.º (Tax Regime) of the Tax Regime of RERH, revealing a flagrant and unequivocal violation of the principle of non-retroactivity of tax law, enshrined in article 103.º (Tax System), number 3, of the Constitution of the Portuguese Republic".
20. Such pretension of the Claimant to delimit and even to exclude the legal matter relevant for the consideration and solution of the dispute by this Tribunal has no basis, given the fundamental principle of iura novit curia (cfr. n.º 3 of art. 5.º of the Code of Civil Procedure (CCP) and n.º 2 of art. 2.º of the LRTA), which imposes on the courts the necessity to ensure the rule of law, for whose consummation there should be no limits or hindrances (without prejudice to the principle of adversarial proceedings, which includes hearing the parties if the legal subsumption would result in a surprise decision – cfr. art. 3.º, n.º 3 of the CCP and art. 16.º, al. a) of the LRTA).
The judge should, as a general rule, submit to the cause of action, be guided by the proven facts (da mihi facta, dabo tibi ius) and observe the objective and subjective scope of the claim filed, but is not bound by what the parties allege regarding the Law at the time of deciding the dispute, nor must limit the legal assessment to the reasoning and arguments of the parties, which may be erroneous, rather it is required that they embrace the legal norms that they deem relevant and apply the legal grounds that they consider sound. As such, the definition of the sense of the applicable regulation does not fall within the scope of the principle of disposition, since "the judge is not subject to the allegations of the parties regarding the inquiry, interpretation and application of rules of law" (n.º 3 of art. 5.º of the CCP).
Consequently, it is not the declarations that, by their hand, the Claimant recorded in its request for the assessments in question (cfr. arts 19.º and 20.º of the IMT Code and art. 23.º, n.º 4 of the SD Code), nor the delimiting judgments regarding the applicable precepts that it set forth in the IP that can put into question this fundamental principle of our Law iura novit curia or curia novit legem, which is intended to protect the integrity of the application of the law.
21. Precisely, it constitutes basic legal regulation to be applied in these proceedings the regulation providing for the tax benefits at issue contained in n.ºs 7, al. a) ("Are exempt from IMT: a) The acquisitions of urban properties or of autonomous units of urban properties intended exclusively for rental for permanent housing, by the investment funds referred to in n.º 1") and 8 ("Are exempt from stamp duty all acts performed, provided that they are connected with the transfer of urban properties intended for permanent housing which occurs by force of the conversion of the right of ownership of such properties into a right of rental on the same, as well as with the exercise of the purchase option provided in n.º 3 of article 5.º") of art. 8.º of the special regime of RERH, whose wording dates back to the aforementioned Law n.º 64-A/2008, of 31.12.
22. Well then, under this al. a) of n.º 7 of art. 8.º, the IMT exemption thus provided is conditioned upon the verification of the requirement that the acquired urban properties or autonomous units be intended "exclusively for rental for permanent housing". On the other hand, the SD exemption provided in the first part of n.º 8 of the same art. 8.º is limited to the circumstance that the transfer of the urban property intended for permanent housing occurs by force of the conversion of the right of ownership of the property into a right of rental on the same. It results from the literal wording of these determinations that such exemptions imply the actual allocation of the acquired properties or units to the exclusive purpose of rental for housing.
23. This requirement for the application of the IMT and SD exemptions of the actual allocation of the properties or units acquired by RERH to the purpose of permanent residential rental derives from the very ratio of the creation of a special regime for RERH, which the legislator intended to represent an instrument for promoting the rental market for housing. Indeed, as can be read in the Report of the Proposal for the State Budget for 2009 (pp. 16 and 17), on the "Creation of Real Estate Investment Funds for Residential Rental": "Equally deserving of mention is the initiative regarding the creation of funds and societies of real estate investment specifically devoted to investment in properties intended for residential rental. With this initiative it is intended to create an additional stimulus to the urban rental market in Portugal, providing for a particularly favorable tax regime applicable until 31 December 2020."; "Thus, it is intended to create the necessary conditions for placing properties on the rental market and to allow, further, families burdened with housing loan payments to sell the respective property to the fund or society, with reduction of the respective charges, replacing them with a rent of lower value than that payment and maintaining a purchase option on the property that they rent from the fund".
24. To stimulate the urban rental market in Portugal or to place properties on the rental market means to promote the actual conclusion of rental contracts, not to acquire properties and subsequently allocate them to transfer. As such, the allocation of the property to residential rental implies its actual rental.
25. Indeed, otherwise neither would it be understood the creation of RERH as a special category of real estate investment funds, particularized within the general scope of real estate investment funds (cfr. previously Decree-Law n.º 60/2002, of 20.3 and its amendments and currently the General Regime of Collective Investment Entities approved by Law n.º 16/2015, of 24.2; cfr. also n.º 2 of art. 104.º of Law n.º 64-A/2008, of 31.12), namely by the specificity of the composition of their respective assets, in which it is required that at least 75% of their total assets be constituted by properties, located in Portugal, intended for rental for permanent housing (cfr. n.º 1 of art. 4.º of the Special Regime of RERH), nor would there be understood the possibility for managing entities to carry out transactions between real estate investment funds under their management with the exclusive purpose of integrating properties intended for permanent housing into the portfolio of the RERH (art. 9.º, n.º 2 of the Special Regime of RERH).
26. It follows from this that it is unproductive to invoke, as is done in the opinion attached to the file to exclude the relevance, for purposes of the tax relief, of the necessity of rental of the acquired properties, the socio-economic argument of the possibility of periods of crisis in the rental market, which could entail difficulties and delays in the realization of residential rental by RERH, placing them at risk of loss of the benefit. The special regime of RERH was introduced precisely to additionally stimulate the rental market and to place properties in this market, not so that RERH would acquire properties in the expectation that, by intervention or factors beyond their control, the rental market would overcome its crises. The admission of such circumstantialism would entail a "poor debut" of the tax benefits at issue, which would not possess due justification in the assumed objectives, by not functioning as an incentive to residential rental (cfr. art. 2.º, n.º 1 and art. 6.º, n.º 1 of the TBC). In fact, as is written in the opinion attached to the file, the "RERH are (...) entities that should acquire the majority of assets for residential rental, the scope of the law being to protect funds for rental, not for urban speculation"; however, this scope implies, differently from what is understood in the same opinion, that the exemption has as its presupposition the actual realization of the rental. Now, the disappearance of the presupposition of tax benefit or the certainty that it cannot be verified is a circumstance always susceptible of affecting the taxpayers, determining the restoration of standard taxation (cfr. above in n.º 18 the content of arts. 9.º and 14.º, n.ºs 1, 2 and 3 of the TBC).
27. It is thus deemed that it does not merit hermeneutical acceptance before the legal requirement that the acquired property be intended exclusively for rental for permanent housing the position, alleged in the IP (see above 5, iii) and iv)) and sustained in the opinion attached to the file, that it would not be necessary, in view of the original provision contained in n.ºs 7 and 8 of the Tax Regime of RERH, the realization of residential rental and that it would not hinder the application of the exemptions in question, that the acquired property be, instead, the object of transfer.
28. On the contrary, in view of the normative enunciations contained in art. 8.º, n.º 7, al. a) and n.º 8, concerning the Tax Regime of RERH, and bearing in mind the relevant hermeneutical canons (art. 11.º, n.º 1 of the General Tax Code and art. 9.º of the Civil Code), it is to be understood that the IMT and SD exemptions at issue are specifically dependent upon the verification of the conditioning fact of the actual allocation of the acquired properties to permanent residential rental. The factuality determinative of the exemption from taxation in IMT and SD is the allocation of the acquired properties to permanent residential rental, not the mere onerous acquisition of the urban property or the autonomous unit by RERH, which constitutes solely the taxable event for standard taxation.
29. Thus, in accordance with the letter of the law and in harmony with the purposes and motivations that presided over the consummation of the Special Regime of RERH, there is agreement with the understanding, which has been accepted in various arbitral decisions rendered within the scope of this CAAD (cfr., designedly, the arbitral decisions rendered in cases n.ºs 398/2015-T, n.º 5, 710-2015-T, n.º 5 and 232/16-T, n.º 19), that it constitutes a presupposition of the IMT and SD exemption provided for in n.ºs 7, paragraph a) and 8 of art. 8.º concerning the Tax Regime of RERH that the urban properties or autonomous units of urban properties acquired be intended for rental for permanent housing, for which a mere declared intention at the time of acquisition of the property does not suffice, but the actual rental for permanent housing is necessary.
30. In this sequence, it is imperative to conclude that the necessity to actually allocate the acquired property to permanent residential rental does not constitute an additional requirement introduced by the amendments made by Law n.º 83-C/2013, of 31.12 transcribed above in n.º 16, but constitutes an original presupposition of the IMT and SD exemptions that derives from n.ºs 7, paragraph a) and 8 of art. 8.º concerning the Tax Regime of RERH.
31. Having set out the applicable regulatory framework and its respective sense and scope, it follows to proceed to the legal subsumption in light of the factuality given as proven and not proven.
32. Now, it is important to retain, in this context, that it is not demonstrated that unit U-…-AB of the property located at Av. …, n.º…, …, ..., parish of … and …, at issue in the proceedings, was intended for residential rental, designedly that it was the subject of any rental contract for residential housing following its acquisition (see paragraph A of the facts not proven), and it was instead the object of transfer by B…–CLOSED REAL ESTATE INVESTMENT FUND FOR RESIDENTIAL RENTAL, which determined, at the request of the Claimant, the contested assessments (see n.º I of the proven facts).
33. It results, thus, from the proven and not proven factuality that the presupposition upon which the realization of the IMT and SD exemptions depended was not observed, the purpose for rental for permanent housing, which results in the inapplicability of the tax relief and the consequent application of standard taxation. Indeed, as analyzed in the decisions of CAAD above invoked (n.º 29), given that the unit in question was transferred "without having fulfilled its purpose – allocation to permanent residential rental" and given that with such transfer "that purpose can no longer be fulfilled", the requirement established for the exemptions in question to be applicable is not verified, whereby it was incumbent to implement, by means of the competent assessments, taxation in IMT and SD.
34. In these terms, given that the transfer of the unit identified in n.º I of the factual findings occurred without it ever being intended for permanent residential rental, which involves the non-verification of the indispensable presupposition for the realization of the aforementioned IMT and SD exemptions, the request by the Claimant for the assessment of the taxes due shows itself to be in accordance with the provisions of arts. 9.º and 14.º, n.º 3 of the TBC, independently of the indication of the legal precepts it performed (cfr. proven fact n.º III), which, in any case, attests to the transfer of the property.
35. It is concluded, thus, that the IMT and SD assessments at issue, which resulted from a declaration by the Claimant (cfr. proven facts n.ºs I and III), possess the proper legal coverage by the circumstance that the provision contained in al. a) of n.º 7 of art. 8.º and in n.º 8 of art. 8.º of the Special Regime of RERH was not observed, since the unit in question was not intended for residential rental, as was required for the application of the exemption.
36. In consequence, given that the assessments sub judice are legal under the provisions of n.ºs 7, al. a) and n.º 8 of art. 8.º of the Special Regime of RERH, the consideration of n.º 2 of art. 236.º of Law n.º 83-C/2013, of 31.12 is rendered moot, by being inapplicable, and the assessment of the constitutional conformity of its provision.
37. The vice of violation of law imputed to the contested assessments does not therefore obtain, which remain in the legal order.
38. Having in mind that, under the terms set out above, the contested tax acts do not suffer from the illegality invoked in the request for arbitral pronouncement, the request for declaration of their nullity or their annulment not obtaining, necessarily the requests for restitution of the amounts of the taxes paid and of compensatory interest do not obtain, which are dependent upon the declaration of the invalidity invoked.
VI. Decision
Therefore, it is decided:
a) to judge unfounded the request which is the object of the arbitral pronouncement and, in consequence, to maintain the contested tax assessment acts, absolving the Tax and Customs Authority from the claim;
b) to judge unfounded the request for restitution of the taxes paid, as well as the request for compensatory interest, absolving the Tax and Customs Authority from the claim;
c) to condemn the Claimant to the costs of the proceedings.
VII. Value of the Case
In accordance with the provisions of art. 306.º, n.º 1 and 2 of the CCP, in article 97.º-A, n.º 1, al. a), and n.º 3 of the Code of Tax Procedure and Process, applicable by force of paragraphs a), c) and e) of n.º 1 of article 29.º of the LRTA and of n.º 2 of article 3.º of the Regulation of Costs in Tax Arbitration Proceedings, the value of the case is set at €37,536.00, which constitutes the total amount of the contested assessments whose annulment is the object of the request for arbitral pronouncement.
VIII. Costs
In accordance with the provisions of articles 12.º, n.º 2, and 22.º, n.º 4, both of the LRTA, and in article 4.º, n.º 4 of the Regulation of Costs of Tax Arbitration Proceedings, the value of the arbitration fee is set at €1,836.00, in accordance with Table I of the aforementioned Regulation, to be borne by the Claimant, given the unfoundedness of the request for arbitral pronouncement which is the object of these proceedings.
Let notification be made.
Lisbon, 23 June 2017.
The Arbitrator
(João Menezes Leitão)
Frequently Asked Questions
Automatically Created