Process: 361/2016-T

Date: November 4, 2016

Tax Type: Selo

Source: Original CAAD Decision

Summary

CAAD Process 361/2016-T addresses a critical issue in Portuguese Stamp Tax law: whether Verba 28.1 of the General Stamp Tax Table (TGIS) applies to buildings held under vertical property (propriedade vertical/total) based on the aggregate property tax value or individual unit values. Seven claimants challenged €32,970.49 in Stamp Tax assessments for 2015 on a residential building with 39 independent units. While each unit's Tax Value of Property (VPT) was below €1,000,000, the total building VPT exceeded €4.6 million. The Tax Authority (AT) argued that Stamp Tax under Verba 28.1 applies when the total building VPT exceeds €1 million for residential property. Claimants contended this interpretation violates constitutional equality principles (Article 13 CPR) by treating vertical property differently from horizontal property (condominium), despite the IMI Code applying identical valuation criteria under Article 7(2)(b). They argued the tax should only apply when individual autonomous units exceed the €1 million threshold, not the aggregate value. The AT also raised a jurisdictional objection, claiming claimants were challenging a payment notice rather than an assessment act. This decision is significant for property owners of multi-unit residential buildings held under vertical ownership regimes, as it determines whether the Stamp Tax burden applies to the entire building or only to high-value individual units, with substantial implications for tax planning and constitutional tax equality principles.

Full Decision

ARBITRAL DECISION

I. REPORT

A…, B…, C…, D…, E…, F…, G…, hereinafter Claimants, filed an application for the establishment of a single arbitral tribunal pursuant to the combined provisions of Articles 2 and 10 of Decree-Law No. 10/2011 of 20 January (Legal Framework for Arbitration in Tax Matters, hereinafter referred to as LFATM), against the Tax and Customs Authority (hereinafter AT), with the objective of obtaining a declaration of illegality of the Stamp Tax assessment act for the year 2015, in the total amount of €32,970.49.

The application for establishment of the arbitral tribunal was accepted by the Illustrious President of CAAD on 22.07.2016 and was automatically notified to the AT.

In accordance with the provisions of Article 11, Section 1, Subsection c) of the LFATM, the single arbitral tribunal was constituted on 21.09.2016.

The AT responded, defending the incompetence of the arbitral tribunal and challenging the merits of the claim.

The meeting referred to in Article 18 of the LFATM was waived and final oral arguments were dispensed with, given the nature of the matters contained in the case file.

The arbitral tribunal is duly constituted and is materially competent, in accordance with Article 2, Section 1, Subsection a) of the LFATM.

The parties possess legal capacity and standing, are legitimate parties, and are duly represented (Article 4 and Article 10, Section 2 of the LFATM and Article 1 of Ordinance No. 112/2011 of 22 March).

There are no irregularities, exceptions, or preliminary questions that would prevent the tribunal from proceeding directly to the merits of the case.

II. STATEMENT OF FACTS

Based on the elements contained in the case file, the following facts are considered proven:

A) The Claimants are owners and legitimate proprietors of urban real property registered in the property registration matrix of the parish of … under article …;

B) The said property is real property owned in full and is composed of 39 storeys and independent units, described as urban real property consisting of a basement with ground floor and 8 storeys with 3 openings on the ground floor and 4 openings on the storeys fronting the street, with concrete slab roof and polished granite base;

C) The Claimants were notified in the total amount of €32,970.49 (thirty-two thousand, nine hundred and seventy Euros and forty-nine cents) of the Stamp Tax assessment acts relating to the identified property for the year 2015, which appear in document No. 2 attached to the case file by the Claimants;

D) The storeys and independent units, subject to the Stamp Tax assessments identified above, are designated for residential use, and the total Tax Value of Property is greater than €1,000,000.00 (one million euros);

E) The Tax Value of Property (TVP) of the identified storeys and units was determined separately, in accordance with the provisions of Article 7, Section 2, Subsection b) of the Municipal Property Tax Code;

F) The Claimants filed an application for an arbitral decision regarding the Stamp Tax assessment for the year 2015, in the total amount of €32,970.49.

There are no facts of relevance to the decision of the case that should be considered unproven.

This Tribunal based its conviction on the documents attached to the case file by the parties.

III. LEGAL ANALYSIS

The principal question that arises in the present case is to determine what is the tax value of property relevant for the application of item 28 and 28.1 of the General Table of Stamp Tax (GTST) regarding urban residential real property constituted under a regime of vertical ownership, which comprises storeys or units susceptible of independent use.

To this effect, the Claimants allege in their application for an arbitral decision the following:

  • The interpretation made by the AT is not in accordance with the law, nor with the Constitution, as it violates the principle of equality established in Article 13 of the Constitution of the Portuguese Republic (CPR), as well as the provisions of Article 104, Section 3 of the CPR which states that "The taxation of property must contribute to equality among citizens.";

  • The AT's interpretation of item 28.1 of the GTST, in addition to having no legal basis, creates distinctions in treatment that are flagrantly violative of the principle of equality;

  • As noted in arbitral decision No. 132/2014-T, "how can it be justified, including in the light of principles of social equity and fiscal justice defended by the legislature – it should be noted in this respect that the statement from the Council of Ministers of 20/09/2012 referred to the measure, among others, as being fundamental to 'reinforce the principle of social equity in austerity' – that this taxation applies only to residential real property and not to non-residential real property?

  • It is well known that many properties existing under a regime of vertical ownership are old, with undeniable social utility, as in many cases they provide housing for tenants with modest and more accessible rents, factors that necessarily must be taken into account. And, certainly taking into account all this social and economic reality, the fiscal legislature itself, in the Municipal Property Tax Code, treated the two situations (horizontal and vertical ownership) in an equitable manner, applying the same criteria. The AT cannot disregard a distinction where the legislature itself chose not to make one, under penalty of violating the coherence of the tax system, as well as the principle of fiscal legality provided for in Article 103, Section 2 of the CPR and further, the principles of fiscal justice, equality, and proportionality.

  • The assessments in question – because they apply to storeys and units with independent use with a TVP of less than €1,000,000.00 – are affected by the defect of violation of law due to error in the application of item 28.1 of the GTST and defect of violation of constitutional law, specifically the principles of equality and taxpaying capacity, and should consequently be annulled in accordance with Article 135 of the Administrative Procedure Code, with the consequent reimbursement of amounts already paid plus compensatory interest, in accordance with Article 100 and 53 of the General Tax Law and Article 61 of the Tax Procedure Code.

In turn, the AT alleges, in summary, the following:

  • The Claimants are not challenging a tax assessment act, but rather are challenging the payment of a tax assessment act contained in a document which is merely a collection notice, and therefore the arbitral tribunal is incompetent to hear the claim formulated, which is regarding the legality of a mere collection notice;

  • The Claimants are challenging not the assessment acts but the payment – solely regarding the payment of a single unit value of tax;

  • The present collection documents are not challengeable per se, for which reason the exception raised should be upheld and the AT should be absolved of the claim;

  • If this is not accepted, and merely out of caution, the now-claimants are owners of an urban property registered in the respective property registration matrix of the parish of …, municipality of Lisbon, under article … property, which is constituted under a regime of full, also called vertical, ownership;

  • The tax value of property was determined separately, in accordance with Article 7, Section 2, Subsection b), of the Municipal Property Tax Code (MPTC), the tax value of property in its totality being in the amount of €4,602,254.17;

  • The subjection to Stamp Tax of item 28.1 of the General Table attached to the Stamp Tax Code results from the combination of two facts, namely the residential designation and the tax value of the urban property registered in the matrix being equal to or greater than €1,000,000.00;

  • Being the property of which they are owners in a regime of full ownership, it does not have autonomous units, to which tax law attributes the qualification of property.

  • The Municipal Property Tax Code provides that, under the regime of horizontal ownership, units constitute properties. Not being the property subject to this regime, legally the units are parts susceptible of independent use, without there being common parts.

  • The fact that the Municipal Property Tax was calculated based on the tax value of property of each part with independent economic use does not equally affect the application of item 28, No. 1, of the General Table;

  • This is what results from the fact that the determining factor for the application of this item of the General Table is the total tax value of the property and not separately that of each of its parcels.

  • The taxable fact of the Stamp Tax of item 28.1, consisting of ownership of urban properties whose tax value of property registered in the matrix, in accordance with the Municipal Property Tax Code, is equal to or greater than €1,000,000.00, the tax value of property relevant for purposes of the incidence of the tax is thus the total tax value of the urban property and not the tax value of property of each of the parts that compose it, even when susceptible of independent use;

  • And this interpretation of the provision regarding the incidence of Stamp Tax results from the combination with the other incidence provision of the Municipal Property Tax which is Article 1, according to which the Municipal Property Tax applies to the tax value of property of urban properties, taking into account the notion of property in Article 2 and urban property contained in Article 4 and also the types of urban properties described in Article 6 of the Municipal Property Tax Code.

Let us examine what should be understood.

A – Regarding the Exceptions Raised by the AT

In the response presented, the AT defends itself by exception, alleging on the one hand that this Tribunal is incompetent to hear the claim formulated, which is, in its view, a collection notice, and on the other hand, that the Stamp Tax collection documents sub judice are not challengeable.

On the competence of the arbitral tribunal, Article 2, Section 1, Subsection a) of the LFATM provides that arbitral tribunals are competent to hear claims for declarations of illegality of assessment acts of taxes, self-assessments, source withholdings, and advance payments.

On the other hand, regarding the binding of the tax administration to the jurisdiction of arbitral tribunals, Article 4, Section 1 of the cited legal framework provides that this is dependent on an ordinance of the members of the Government responsible for the areas of finance and justice.

The competence of the arbitral tribunal is thus delimited by the ordinance binding the Tax Administration to the jurisdiction of the Administrative Arbitration Centre (Ordinance No. 112-A/2011 of 22 March).

In accordance with the provisions of Article 2 of the indicated Ordinance, the General Directorate of Taxation and the General Directorate of Customs and Special Consumption Taxes bind themselves to the jurisdiction of arbitral tribunals functioning in the CAAD having as their object the hearing of claims concerning taxes whose administration is entrusted to them, referred to in Section 1 of Article 2 of Decree-Law No. 10/2011 of 20 January (LFATM), in which are expressly included claims for declarations of illegality of assessment acts of taxes, self-assessments, source withholdings, and advance payments.

It is concluded, therefore, that the tax arbitral proceeding has as its object, directly or indirectly, the tax assessment act, as an act determining the quantity of tax to be paid (tax collection), by application of a rate to the taxable base.

The examination of the exceptions raised depends therefore on the question of whether the Claimants are challenging the Stamp Tax assessment act (ST) or whether, instead, they are merely challenging each of the Stamp Tax payments individually.

Now, in cases where the tax must be paid in instalments, the assessment is notified to the taxpayer together with notification to pay each of the instalments, and can only be challenged in its entirety and not instalment by instalment.

In this regard, the esteemed Professor José Casalta Nabais clarifies, in Tax Law, 3rd Edition, Almedina, 2005 "Assessment in the broad sense, that is, as the set of all operations intended to determine the amount of tax, comprises: 1) Subjective assessment intended to determine or identify the taxpayer or tax obligor in the tax legal relationship, 2) Objective assessment through which the taxable base or taxable matter of the tax is determined and also the rate to be applied, in case of plurality of rates, 3) Assessment in the strict sense translated into the determination of tax collection through the application of the rate to the taxable base or taxable matter, and 4) any (potential) deductions from collection."

For each taxable event there will be, in principle, a single assessment, by means of which the tax collection to be paid will be determined.

In these terms, Article 23, Section 7 of the Stamp Tax Code provides that "when the tax is due for the situations provided for in item No. 28 of the General Table, the tax is assessed annually (…)" with the necessary adaptations, the rules contained in the MPTC apply".

In the same sense, Article 44, Section 5 of the Stamp Tax Code further provides that "when there is an assessment of the tax referred to in item No. 28 of the General Table, the tax is paid within the periods, terms, and conditions defined in Article 120 of the MPTC".

That is, in accordance with Article 113, Section 2 of the MPTC, "the assessment (…) is made in the months of February and March of the following year", the tax being paid in three instalments, in the months of April, July, and November, given its amount – see Subsection c), Section 1 of Article 120 of the MPTC.

From the combination of the legal provisions cited above, it follows that Stamp Tax is assessed annually, payment in instalments being nothing more than a technique for collection of the tax and not a partial payment thereof, as is stated in the arbitral decision rendered in the course of proceeding No. 408/2014-T, available at www.dgsi.pt, cited by the AT.

Accordingly, there is only one assessment and only it constitutes an injurious act susceptible of being challenged.

Having said this, from the analysis of the initial application it appears that the Claimants request the establishment of the single arbitral tribunal with the aim of "obtaining a declaration of illegality of the Stamp Tax assessment acts issued by the Tax and Customs Authority". That is, a declaration of illegality of the tax assessment act of Stamp Tax is requested, to which correspond the respective payment instalments.

It follows from the above that, contrary to what the AT states, the object of the application for an arbitral decision is the tax assessment act and not each of the Stamp Tax payments individually considered.

So much so that the Claimants themselves, in delimiting the object of the arbitral proceeding, confine the initiation of the respective proceeding to the annulment of the Stamp Tax assessment act for the year 2015, indicating as the value of the economic utility of the claim the total value of the Stamp Tax assessment.

Thus, although the Claimants associate the tax assessment act with the Stamp Tax payments, proceeding to their attachment and identification, the fact is that they do not confine the object of the application for an arbitral decision to any of the Stamp Tax payments in particular, but rather to the annual assessment of Stamp Tax.

The argument invoked by the AT regarding the incompetence of the arbitral tribunal is therefore untenable, as well as the argument regarding the non-challengeability of the acts, based on the alleged challenge by the Claimants of mere collection notices and not of the tax assessment act itself.

In view of the foregoing, and without need for further consideration, the exceptions of material incompetence of the arbitral tribunal and non-challengeability of the acts are dismissed as unfounded.

B – Regarding the Interpretation of Item 28.1 of the GTST

It follows from Article 11 of the General Tax Law (GTL) that the interpretation of tax law must be carried out in accordance with the general principles of interpretation.

The general principles of interpretation are established in Article 9 of the Civil Code (CC) as follows:

"1. Interpretation must not be confined to the letter of the law, but must reconstruct from the texts the legislative intent, taking especially into account the unity of the legal system, the circumstances in which the law was elaborated and the specific conditions of the time in which it is applied.

  1. However, the interpreter cannot consider the legislative intent that does not have in the letter of the law a minimum of verbal correspondence, even if imperfectly expressed.

  2. In determining the meaning and scope of the law, the interpreter shall presume that the legislature adopted the most correct solutions and knew how to express its intent in adequate terms."

Taking into account the rules of interpretation of the Law, it is important to know that Law No. 55-A/2012 of 29 October added items 28 and 28.1 to the GTST, creating the rate of Stamp Tax on urban properties of high tax value.

The creation of this new taxable event occurred in the context of an economic crisis and a grave crisis in public finances, with the purpose of increasing the fiscal revenues of the State through the taxation of those who reveal greater indicators of wealth.

The special rate of Stamp Tax on properties with a value exceeding €1,000,000.00, also known as the "luxury tax," aimed to ensure the distribution of sacrifices among all and not only among those who live from the income of their work.

In these circumstances, item 28 and 28.1 established the incidence of Stamp Tax as follows:

"Ownership, usufruct, or right of superficies of urban properties whose tax value of property registered in the matrix, in accordance with the Municipal Property Tax Code (MPTC), is equal to or greater than €1,000,000 – on the tax value of property used for purposes of Municipal Property Tax:

28.1 – For residential property or for land for construction whose development, authorized or contemplated, is for residential purposes, in accordance with the provisions of the Municipal Property Tax Code… 1%."

It results, therefore, from the letter of the law that the rate provided for in item 28.1 is applicable to the right of ownership of property with residential designation, whose TVP used for purposes of Municipal Property Tax is equal to or greater than €1,000,000.00.

In accordance with the provisions of Article 1, Section 6 of the Stamp Tax Code, "For purposes of this Code, the concept of property is that defined in the Municipal Property Tax Code (MPTC)."

In turn, the Municipal Property Tax Code determines in its Article 2 the following:

Concept of Property

"1 – For purposes of this Code, property is any fraction of territory, encompassing waters, plantations, buildings and constructions of any nature incorporated or situated thereon, with a character of permanence, provided that it forms part of the property of a natural or legal person and, under normal circumstances, has economic value, as well as waters, plantations, buildings or constructions, in the circumstances above mentioned, endowed with economic autonomy in relation to the land where they are located, although situated in a fraction of territory which constitutes an integral part of a property belonging to another or does not have a property nature.

2 – Buildings or constructions, even though moveable by nature, are deemed to have a character of permanence when dedicated to non-transitory purposes.

3 – The character of permanence is presumed when the buildings or constructions are situated on the same location for a period exceeding one year.

4 – For purposes of this tax, each autonomous unit under a regime of horizontal ownership is deemed to constitute a property."

Taking into account the concept of property established by Law, it is clear that properties constituted under a regime of vertical ownership constitute properties for purposes of item 28.1 of the GTST.

Insofar as the property in question (hereinafter Property) constitutes a Property in accordance with the provisions of Article 2 of the Municipal Property Tax Code, it is literally encompassed by items 28 and 28.1.

In truth, the law makes no distinction, at any moment, between property under horizontal ownership and property under vertical ownership, with Section 4 of Article 2 merely establishing that under a regime of horizontal ownership each autonomous unit is deemed to be property.

From what is stated in Section 4 of Article 2 it does not result, contrary to what the Respondent maintains in its response, that only the autonomous units of property under a regime of horizontal ownership are deemed to be properties.

Nevertheless, the special rate of Stamp Tax established in the item in question only applies if the Property constitutes residential property, whose tax value of property registered in the matrix, in accordance with the Municipal Property Tax Code, is equal to or greater than €1,000,000.

Since the Stamp Tax Code does not establish what is understood by "residential," by virtue of the provisions of Article 67, Section 2 of the said Code, the rules provided for in the Municipal Property Tax Code are also applicable here, in particular those established in Articles 6 and Article 41 of that Code.

From the analysis of the said rules, it also clearly results that the Property is encompassed by item 28.1, as urban property with residential designation.

It remains, therefore, to verify whether the TVP registered in the matrix of the Property, in accordance with the Municipal Property Tax Code, is equal to or greater than €1,000,000.

Now, as follows from the letter of the Law, the TVP of the Property will be that which is used for purposes of the Municipal Property Tax.

In this regard, it is determined in Article 7, Section 1 of the Municipal Property Tax Code, applicable ex vi of Article 23, Section 7 of the Stamp Tax Code, that "The tax value of property of properties is determined in accordance with the present Code."

In turn, in Sections 2 and 3 of Article 7 of the Municipal Property Tax Code, rules are established for the determination of the TVP of properties with two or more classifications.

Since the rate provided for in items 28 and 28.1 of the GTST applies only to properties with residential designation, the rules established in Sections 2 and 3 of Article 7 of the Municipal Property Tax Code are not applicable to the determination of the TVP relevant within the scope of the said item.

In truth, the TVP of residential designation properties, provided for in items 28 and 28.1, must be determined taking into account Section 3 of Article 12 of the Municipal Property Tax Code, according to which:

"Each storey or part of property susceptible of independent use is considered separately in the property registration, which also discriminates the respective tax value of property."

Thus, taking into account that the legislature assigns no relevance to the fact that the property is constituted under a regime of vertical ownership, the TVP must be allocated to each storey or part of property susceptible of independent use.

In fact, there is no provision in the Municipal Property Tax Code that permits the conclusion that the TVP of property under a regime of vertical ownership should be obtained by the sum of the TVP that were attributed separately to the parts that compose it (See, among others, the arbitral decisions rendered in Proceeding 50/2013-T, 131/2013-T, 177/2014-T, 396/2014-T).

Taking into account that the provisions regarding incidence are subject to the principle of fiscal legality (See Article 103 of the Constitution of the Portuguese Republic (CPR) and Article 8 of the GTL), it appears there is no legal basis for the assessment of Stamp Tax based on the sum of the TVP of each of the parts of the Property.

In fact, the AT cannot perform an assessment operation based on a provision regarding incidence, which does not expressly provide for the basis of incidence of the tax in the terms assessed, because the provisions regarding the incidence of taxes must be interpreted in their exact terms, without recourse to analogy, making prevail certainty and security in their application (See Decision of the Central Administrative Court of the South, rendered in the course of proceeding 7648/14, of 10.07.2014).

It is thus understood that there is no legal basis that permits the AT to add the tax values of property of the storeys or parts of property susceptible of independent use, in order to reach the taxation threshold of €1,000,000.00 provided for in item 28 of the GTST.

In view of the foregoing, none of the storeys susceptible of independent use having a tax value of property exceeding €1,000,000.00, the rate provided for in item 28 of the GTST does not apply.

Consequently, the annulment of the Stamp Tax assessment act sub judice is necessary, and recognition of the right of the Claimants to compensatory interest regarding the Stamp Tax payments already made, since the illegality of the assessment act is attributable to an error of the Respondent, in accordance with the provisions of Article 43 of the GTL.

IV. DECISION

Accordingly, this Arbitral Tribunal decides as follows:

A) The application for annulment of the Stamp Tax assessment act regarding the urban property registered in the property registration matrix of the parish of … under number …, for the year 2015, is fully granted;

B) The Tax and Customs Authority is condemned to reimburse to the Claimants the amount of tax paid, plus compensatory interest, in accordance with the law;

C) The Respondent is condemned to pay the costs of the present proceeding, as the unsuccessful party.

V. VALUE OF THE PROCEEDING

In accordance with the provisions of Article 306, Section 2 of the Civil Procedure Code, Article 97-A, Section 1 a) of the Tax Procedure Code and Article 3, Section 2 of the Regulations on Costs in Tax Arbitration Proceedings, the value of the claim is fixed at €32,970.49.

VI. COSTS

In accordance with the provisions of Articles 12, Section 2 and 22, Section 4, both of the LFATM, and Article 4, Section 4 of the Regulations on Costs in Tax Arbitration Proceedings, the value of the arbitration fee is fixed at €1,836.00, in accordance with Table I of the mentioned Regulations, to be borne by the Respondent.

Let notice be given.

Lisbon, 4 November 2016

The Arbitrator

Magda Feliciano

(The text of the present decision was prepared by computer, in accordance with Article 131, Section 5, of the Civil Procedure Code, applicable by reference to Article 29, Section 1, Subsection e) of Decree-Law No. 10/2011 of 20 January (LFATM), and its drafting is governed by orthography prior to the Orthographic Agreement of 1990).

Frequently Asked Questions

Automatically Created

Is Stamp Tax under Verba 28.1 TGIS applicable to buildings held in vertical property (propriedade total) when individual unit VPTs are below €1,000,000?
CAAD Process 361/2016-T examines whether Verba 28.1 TGIS Stamp Tax applies to buildings in vertical property when individual unit VPTs are below €1,000,000 but the aggregate building VPT exceeds this threshold. The Tax Authority assessed tax on the total building value of €4.6 million, while claimants argued that only individual units exceeding €1 million should be taxed. The decision hinges on interpreting whether the €1 million threshold applies per autonomous unit or to the building as a whole when divisions are valued separately under Article 7(2)(b) of the IMI Code.
How does the CAAD determine whether the global VPT or individual unit VPT applies for Stamp Tax on multi-unit residential buildings?
The CAAD analyzes whether to apply the global building VPT or individual unit VPT for Stamp Tax on multi-unit residential buildings by examining Article 7(2)(b) of the IMI Code, which provides for separate valuation of floors and independent units. The tribunal must determine if vertical property (propriedade total) should be treated differently from horizontal property (condominium) for Stamp Tax purposes, considering constitutional equality principles under Article 13 CPR and whether the legislature intended different tax treatment for these property ownership structures despite similar IMI valuation methodologies.
Can property owners challenge Imposto do Selo liquidations on vertical property through tax arbitration at CAAD?
Yes, property owners can challenge Imposto do Selo liquidations on vertical property through CAAD tax arbitration. However, the Tax Authority raised a jurisdictional objection in Process 361/2016-T, arguing that claimants were challenging a payment notice rather than an assessment act itself. The CAAD must first determine its competence under Article 2(1)(a) of the RJAT (Legal Framework for Tax Arbitration) before addressing the substantive Stamp Tax issue under Verba 28.1 TGIS.
What is the distinction between horizontal property and vertical property for purposes of Stamp Tax under Verba 28.1 of the TGIS?
Vertical property (propriedade vertical/total) refers to full ownership of a building with multiple floors or independent units without condominium regime, while horizontal property involves autonomous units with separate ownership and common areas. For Stamp Tax under Verba 28.1 TGIS purposes, the distinction is critical: the Tax Authority applies Stamp Tax to vertical property based on total building VPT when exceeding €1 million, whereas in horizontal property each autonomous unit would be assessed individually. Claimants in Process 361/2016-T argue this creates unconstitutional inequality since the IMI Code treats both regimes identically under Article 7(2)(b).
How is the taxable value calculated under Verba 28.1 TGIS when a building has independently assessed divisions under Article 7(2)(b) of the IMI Code?
Under Verba 28.1 TGIS, when a building has independently assessed divisions under Article 7(2)(b) of the IMI Code, the taxable value calculation becomes contested. The Tax Authority in Process 361/2016-T applied the aggregate building VPT of €4,602,254.17 to determine Stamp Tax liability. Claimants contend that Article 7(2)(b) requires separate valuation of each floor/unit, meaning the €1 million threshold should apply to each independently valued division, not the sum total. This interpretation dispute affects whether Stamp Tax of €32,970.49 was correctly assessed on units individually valued below €1 million.