Process: 368/2018-T

Date: April 11, 2019

Tax Type: IMI

Source: Original CAAD Decision

Summary

CAAD Decision 368/2018-T addresses a Spanish resident taxpayer's challenge to an AIMI (Additional Municipal Property Tax) assessment of €5,843.24 for 2017. The claimant, who owned Portuguese urban residential properties valued at €1,304,324.31, submitted a joint taxation option declaration with his spouse on September 28, 2017, after receiving the AIMI assessment in August 2017. Under joint taxation, the couple's combined property value would not exceed the €1,200,000 threshold, resulting in zero AIMI liability. The Tax Authority (AT) dismissed the gracious complaint, arguing the option was submitted outside the April 1-May 31 deadline established in Article 135-D(2) of the IMI Code. The claimant contested this, arguing that Article 135-D(1) governs his situation and does not specify a deadline for exercising the joint taxation option, as he is not married under a community property regime. He alleged the dismissal decision suffered from lack of reasoning and erroneous legal interpretation, violating constitutional and statutory requirements. The claimant supported his position by referencing similar IRS (income tax) case law regarding the timing of taxation options, arguing that Portuguese tax law does not establish preclusion of rights through untimely exercise unless expressly stated. This case highlights critical issues regarding non-resident property owners' rights to exercise AIMI joint taxation options and the applicable procedural deadlines under different marital property regimes.

Full Decision

ARBITRAL DECISION

1. Report

On 02-08-2018, A..., taxpayer no. ..., resident in ..., ..., Seville, Spain, hereinafter referred to as Claimant, submitted to the Administrative Arbitration Centre (CAAD) a request for constitution of an arbitral tribunal with a view, immediately, to declaring the illegality of the act of dismissal of the gracious complaint, and mediately, to declaring the illegality of the act of assessment of Additional Municipal Property Tax (AIMI) no. 2017..., of the year 2017, in the amount of 5,843.24 €.

The request for constitution of the Arbitral Tribunal was accepted by His Excellency the President of CAAD on 03-08-2018 and notified to the Respondent on the same date.

The Claimant did not proceed to appoint an arbitrator, whereupon, in accordance with article 6 no. 2 subsection a) of the RJAT, Dr. Suzana Fernandes da Costa was appointed as arbitrator by the President of the Deontological Council of CAAD on 21-09-2018, with the appointment being accepted within the legally prescribed timeframe and terms.

On the same date the parties were duly notified of this appointment and did not manifest a will to refuse the appointment of the arbitrator, in accordance with article 11 no. 1, subsections a) and b) of the RJAT, in conjunction with articles 6 and 7 of the Deontological Code.

Thus, in accordance with the provision in subsection c), no. 1, article 11 of the RJAT, the Arbitral Tribunal was constituted on 12-10-2018.

On 15-10-2018, an order was issued directing notification of the Respondent to, within 30 days, submit a response and, if it wished, request the production of additional evidence and remit to the arbitral tribunal a copy of the administrative file within the timeframe for submission of the response.

On 12-11-2018, the Respondent submitted its response and attached the administrative file to the case record.

On 15-11-2018, an order was issued to notify the Claimant to, within 10 days, pronounce whether it would or would not agree with the waiver of the hearing provided for in article 18 of the RJAT, and with the waiver of the submission of written arguments. The Claimant came before the tribunal on 26-11-2018 to inform that it agreed with the waiver of the hearing, but that there should be a submission of written arguments.

On 03-01-2019, an order was issued waiving the hearing, taking into account the position of the parties, in accordance with articles 16 subsection c) and 19 of the RJAT, and also having regard to the principles of procedural economy and the prohibition of carrying out useless acts. In the same order, the parties were directed to, if they wished, submit written arguments within 20 days. The date of 28-03-2019 was also set for the rendering of the decision, and the Claimant was warned to attach to the case record, by that date, proof of payment of the subsequent arbitration fee.

The Claimant submitted written arguments on 08-01-2019, also attaching on that date proof of payment of the subsequent arbitration fee to the case record. The Respondent submitted its arguments on 28-01-2019.

On 28-01-2019, the Claimant came before the tribunal to attach the arbitral decision in process no. 367/2018-T.

On 28-03-2019, an order was issued extending the deadline for the decision to 11-04-2019, taking into account the complexity of the matter and because the analysis of the substantive issue and existing case law had not yet been concluded.

On 08-04-2019, the Claimant came before the tribunal to attach the arbitral decision in process no. 344/2018-T.

The parties have legal personality and capacity and are legitimate (articles 4 and 10 no. 1 and 2 of the RJAT and article 1 of Ordinance no. 112-A/2011 of 22 March).

The arbitral request is timely, in accordance with article 10 no. 1 subsection a) of Decree-Law no. 10/2011 of 20 January and article 102 no. 1 subsection a) of the Code of Tax Procedure and Process.

The process is not affected by any nullities and no preliminary issues were raised.

2. Cause of Action

The Claimant begins by stating that he was notified, in August 2017, of the assessment of AIMI for the year 2017, with tax payable in the amount of 5,843.24 €, an assessment that was based on the global taxable property value of urban properties intended for residential purposes of which the Claimant is the owner, in the amount of 1,304,324.31 €.

The Claimant states that he timely submitted, on 28-09-2017, together with his spouse, a declaration of option for joint taxation for purposes of AIMI, and that he requested the cancellation of the AIMI assessment that had been notified and the corresponding issuance of a new AIMI assessment, in accordance with the joint taxation option effected.

The Claimant understands that with the option for joint taxation, the amount of tax due for AIMI purposes would be zero euros, as the taxable property value of the properties does not exceed the amount of 1,200,000 €.

Since he did not receive any notification of cancellation of the AIMI assessment in question, the Claimant states that he submitted a gracious complaint of the assessment, as he understood that it should be cancelled. This gracious complaint was expressly dismissed.

As for the decision dismissing the gracious complaint, the Claimant states that it is vitiated by a procedural defect due to lack of reasoning and incongruous reasoning.

In the Claimant's view, the TA dismissed the complaint without reasoning the decision taken, or doing so in a manifestly insufficient manner, in violation of article 268 no. 3 of the Constitution of the Portuguese Republic (CRP) and article 77 no. 1 of the General Tax Law (LGT).

In addition to the lack of reasoning, the Claimant alleges that the TA incorrectly invokes that the Claimant would be obliged to present a declaration within the timeframe allegedly established in the law – 1 April to 31 May – in order to be able to benefit from the option for joint taxation.

According to the Claimant, in article 135-D no. 1 of the IMI Code the legislator merely prescribed that joint taxation can be effected by option of married taxpayers or those in a de facto union, without, however, determining how or in what timeframe these taxpayers should proceed to make such option.

In the Claimant's understanding, the TA confuses the regime provided for in article 135-D no. 1 of the IMI Code, applicable to the case, with the regime provided for in article 135-D no. 2 of the IMI Code (timeframe of 1 April to 31 May), which could never apply to the case since the Claimant is not married under the regime of community of property.

The Claimant thus alleges that neither the manner nor the timeframe for exercising the option for joint taxation results from the law, and therefore cannot accept the TA's argument that the Claimant exercised his right to option for joint taxation in an untimely manner.

The Claimant mentions that even if article 135-D no. 3 of the IMI Code were to be considered applicable to the option for joint taxation, it must always be stated that it merely establishes that if the declaration is not made within the established timeframe, AIMI is assessed on each spouse based on the sum of the values of the properties that were already registered in the property matrix in their respective ownership.

According to the Claimant, it does not follow from the law that the taxpayer's right to exercise the option for joint taxation at a later date is barred. He states that the understanding set forth may even be confirmed by the case law of the higher courts regarding the option for joint or separate taxation for income tax purposes, which is worthy of note, by way of a parallel analogy, notwithstanding that it is a different tax, given the similarity of the legal issues involved.

The Claimant concludes by stating that since the law does not expressly establish the preclusion of a given right by untimely exercise or the irreversibility of a taxpayer's option, the TA cannot invoke such preclusion or irreversibility, as it is bound by the principle of legality.

The Claimant alleges that a norm creating an obligation of option, which will only not be exercised due to oversight or lack of knowledge by the taxpayer, is susceptible to violating the constitutionally protected principle of legitimate expectation.

3. Response of the Respondent

The Tax and Customs Authority submitted a response alleging the legal conformity of the tax act subject of the arbitral request.

The TA begins by stating that it does not agree with the Claimant's understanding of lack of reasoning in the decision dismissing the gracious complaint, as in the TA's view it is not possible to affirm that a particular act is unsupported when the contextual reasoning allowed its recipient to know the factual and legal reasons that led the TA to make the decision with that meaning and content.

As for the assessment in question, the TA states that it concerns the application of article 135-D of the IMI Code, and that the option for joint taxation was only exercised by the taxpayers at a later time than the notification of the challenged AIMI assessment.

The TA understands that the norm provided for in no. 4 of article 135-D is applicable to the situations established in no. 1 of the same article, notwithstanding that the word "declaration" only appears in numbers 2 and 3.

The TA alleges that in order to be able to timely proceed with the issuance of the assessment taking into account joint taxation, there would always have to be information to that effect, provided by the taxpayers and on the basis of which the assessment would be made. Thus, for the TA, the option for joint taxation necessarily had to be included in a declaration submitted by the spouses or de facto union partners within a given timeframe, as results from article 135-D of the IMI Code.

The Respondent alleges that the Claimant's interpretation cannot prevail in light of Ordinance no. 90-A/2017 of 01-03, which states in article 1 that the declarative forms apply to the option for joint taxation provided for in no. 1 of article 135-D of the IMI Code.

The TA also states that the timeframe provided for in no. 4 of article 135-D of the IMI Code applies to the situation in question, and being of a substantive nature, is subject to the regime of extinction provided for in articles 298 and 328 and following of the Civil Code.

In conclusion, the TA states that the AIMI assessment in question is legally valid, since the Claimant and his spouse did not express in a timely manner, that is, within the legally established timeframe for that purpose, their intention that the joint taxation regime be applied to them in that year.

4. Factual Matters

4.1. Proven Facts:

Having analyzed the documentary evidence produced and the position of the parties contained in the procedural documents, the following facts are considered proven and of interest for the decision of the case:

  • In August 2017, the Claimant was notified of the AIMI assessment no. 2017..., of the year 2017, in the amount of 5,843.24 €, as per document 3 attached to the arbitral request.

  • The assessment in question was based on the global taxable property value of urban properties intended for residential purposes of which the Claimant is the owner, in the amount of 1,304,324.31 €.

  • The Claimant is married to B..., taxpayer no. ... .

  • The Claimant and his spouse are not married under the regime of community of property.

  • On 29-09-2017, the Claimant and his spouse delivered to the Lisbon Tax Service ..., a declaration in which they indicated the option for joint taxation for purposes of AIMI, as per document 4 attached to the arbitral request.

  • As a result of the option made, the Claimant and his spouse also requested the cancellation of the AIMI assessment notified and the issuance of a new AIMI assessment reflecting the option for joint taxation.

  • The Claimant submitted, on 02-01-2018, a gracious complaint of the AIMI assessment identified above, as per document 2 attached to the arbitral request.

  • On 01-07-2018, the Claimant was notified of the decision dismissing the gracious complaint submitted, as per document 1 attached to the arbitral request.

  • It is stated in the draft decision of the gracious complaint, to which the decision on the complaint refers, that: "(…) the TA gives ex officio initiative to assessment procedures based on the data registered in the property matrices and with effect on the date of the taxable event – 1 January of the year to which the additional municipal property tax relates – resorting to the taxable property values and the taxpayers registered therein as holders of the real rights of use of the properties (subjective incidence).

However, AIMI admits that married persons or those in a de facto union can, in accordance with the provisions of article 135-D of the IMI Code, configure the assessment of the tax, by means of a declaration by both manifesting the intention of carrying out joint taxation.

Thus, the option for joint taxation was established, which must be exercised, by means of declaration, between 1 April and 31 May (no. 1 and 4 of article 135-D of the IMI Code).

The law requires the express and formal declaration of will by each of the spouses or de facto union partners for the option for joint taxation of AIMI (procedure to be identified in the tax authority portal).

It is not found that the complainant has exercised the aforementioned option, so the aforementioned right to option for joint taxation of AIMI is deemed expired".

  • The Claimant submitted the present arbitral request on 02-08-2018.

No other facts with relevance for the decision of the case were proven.

4.2. Unproven Facts

There were no facts that were not proven.

4.3. Reasoning of the Proven Factual Matters:

The arbitrator's conviction was based on the documents attached to the case record by the Claimant and on the position of the parties demonstrated in the procedural documents produced.

5. Legal Matters:

5.1. Object and Scope of the Present Process

The essential legal issues that arise in this process are as follows:

  • to determine whether the AIMI assessment in question is or is not vitiated by a violation of law, by virtue of the option for joint taxation exercised on 29-09-2017 by the Claimant and his spouse;

  • to determine whether the decision dismissing the gracious complaint is vitiated by a procedural defect due to lack of reasoning and incongruous reasoning.

In accordance with article 124 of the CPPT, subsidiarily applicable by virtue of article 29 no. 1 of the RJAT, if no defects are attributed to the challenged acts that would lead to a declaration of non-existence or nullity, nor a relation of subsidiarity is indicated, the order of examination of the defects should be that which, according to the prudent judgment of the judge, is shown to be most stable or effective for the protection of the offended interests.

In the case at hand, we shall examine, in the first place, the defects of a procedural nature invoked by the Claimant (lack of reasoning and incongruous reasoning), and then the substantive issue which is the illegality of the AIMI assessment.

5.2. Procedural Defect Due to Lack of Reasoning and Incongruous Reasoning

The Claimant alleges that the TA dismissed the gracious complaint submitted by him against the AIMI assessment without reasoning the decision taken, or doing so in a manifestly insufficient manner.

Indeed, reasoning is a requirement of tax acts in general, being a constitutional requirement (article 268 of the CRP) and a legal one (article 77 of the LGT).

It is now established in both national doctrine and case law that the required reasoning must have the following characteristics:

  • Officiosusness: it must always proceed from the initiative of the administration, and post hoc reasoning is not admissible;

  • Contemporaneity: it must be contemporaneous with the performance of the act, and cannot be deferred;

  • Clarity: it must be comprehensible to an average recipient, avoiding polysemic or deeply technical concepts;

  • Completeness: it must contain all the essential elements that were determinative of the decision taken. This characteristic breaks down into two requirements, namely: the duty of justification (legal norms and factuality – domain of legality) and motivation (domain of discretion or expediency, when an assessment is required).

Now, if reasoning is, as stated, necessary and mandatory, this cannot and should not be understood in an abstract and/or absolute manner, that is, the reasoning required of a concrete tax act must be that which is functionally necessary for it not to present itself to the taxpayer as a pure demonstration of arbitrariness.

This will be the touchstone for the fulfillment of the duty of reasoning: when, before an average recipient placed in the position of the actual recipient, the tax act presents itself, from a point of view of reasonableness, as a product of pure arbitrariness of the Administration, because the factual and/or legal reasons on which it is based are not discernible, the act will suffer from lack of reasoning.

Article 77 no. 1 of the LGT thus states that: "the decision in a procedure is always reasoned by means of a brief exposition of the factual and legal reasons that motivated it, and the reasoning can consist in a mere declaration of agreement with the grounds of previous opinions, information or proposals, including those that are part of the tax audit report".

The TA invokes, with respect to the reasoning of the decision dismissing the gracious complaint, that "an average person placed in the position of the recipient is able to understand the meaning of the information provided in the procedure".

The TA thus concludes that "the reasoning is sufficiently clear and unambiguous, all the more so because the Claimant, through the present arbitral request, admits and demonstrates, in light of the arguments explained throughout his pleading, to have fully understood the factual and legal framework on which the TA's decision was based, as he attempts to rebut its actions".

Indeed, for the TA, the decision dismissing the gracious complaint is duly reasoned.

The reasoning in question is contained in the draft decision of the gracious complaint. And it contains the following:

"(…) the TA gives ex officio initiative to assessment procedures based on the data registered in the property matrices and with effect on the date of the taxable event – 1 January of the year to which the additional municipal property tax relates – resorting to the taxable property values and the taxpayers registered therein as holders of the real rights of use of the properties (subjective incidence).

However, AIMI admits that married persons or those in a de facto union can, in accordance with the provisions of article 135-D of the IMI Code, configure the assessment of the tax, by means of a declaration by both manifesting the intention of carrying out joint taxation.

Thus, the option for joint taxation was established, which must be exercised, by means of declaration, between 1 April and 31 May (no. 1 and 4 of article 135-D of the IMI Code).

The law requires the express and formal declaration of will by each of the spouses or de facto union partners for the option for joint taxation of AIMI (procedure to be identified in the tax authority portal).

It is not found that the complainant has exercised the aforementioned option, so the aforementioned right to option for joint taxation of AIMI is deemed expired".

As stated in the Supreme Administrative Court judgment of 02-07-2014 in process no. 01074/13, "the Tax Authority has the duty to reason the acts of ex officio assessment of taxes, in accordance with the principle embodied in article 268 of the CRP, accepted in articles 125 of the CPA and 77 of the LGT. The act will be sufficiently reasoned when the administered party, placed in the position of a normal recipient – the bonus pater familiae mentioned in article 487 no. 2 of the Civil Code – can come to know the factual and legal reasons that are at its genesis, so as to allow him to choose, in an informed manner, whether or not to accept the act".

In accordance with the Supreme Administrative Court judgment of 30-01-2013 in process no. 0105/12, "there is no formal defect of lack of reasoning if the very party challenging it expressly reveals having perfectly understood the logical and legal process that led to the taxation decision, acknowledging having perceived the assumptions concretely taken into account by the author of the act and the reasons why the taxed values were reached, denouncing the cognitive and evaluative path traveled (…)".

In our view, the decision on the gracious complaint is sufficiently reasoned, being perceptible from the content of the arbitral request that the Claimant understood the logical and legal process of the decision dismissing the gracious complaint.

It shall thus be concluded, as concluded by the arbitral decision in process no. 344/2018-T, that the TA fully fulfilled its duty of reasoning, and the Claimant's position is therefore unfounded in this regard.

5.3. Defect of Violation of Law

In the Claimant's understanding, the AIMI assessment in question is vitiated by a violation of law, by virtue of the option for joint taxation exercised in a timely manner by him and his spouse.

The TA, in turn, states that the timeframe for exercising the aforementioned option for joint taxation for purposes of AIMI ran between 1 April and 31 May, and having sent the declaration of option on 29-09-2017, he did so in an untimely manner.

The Claimant alleges that the Respondent confuses the regime provided for in article 135-D no. 1 of the IMI Code, applicable to the case, with the regime provided for in article 135-D no. 2 of the IMI Code (timeframe of 1 April to 31 May), which could never apply to the case since the Claimant is not married under the regime of community of property.

The Claimant thus alleges that neither the manner nor the timeframe for exercising the option for joint taxation results from the law, and therefore cannot accept the TA's argument that the Claimant exercised his right to option for joint taxation in an untimely manner.

Let us examine the terms of the law in force at the date of the facts, applicable to the concrete case.

Law no. 42/2016 of 28-12 added chapter XV, with the heading "Additional Municipal Property Tax", which incorporated articles 135-A to 135-K.

Article 135-A no. 1 of the IMI Code states that:

"1. Taxpayers of the additional municipal property tax are natural or legal persons who are owners, usufructuaries or surface rights holders of urban properties situated in Portuguese territory".

And article 135-C of the IMI Code determines the following:

"1. The taxable value corresponds to the sum of the taxable property values, reported to January of the year to which the additional municipal property tax relates, of the properties that are registered in the property matrices under the ownership of the taxpayer.

  1. From the taxable value determined in accordance with the preceding number, the following amounts are deducted:

a) € 600,000, when the taxpayer is a natural person;

b) € 600,000, when the taxpayer is an undivided estate".

And article 135-D of the IMI Code provides that:

"1. Taxpayers who are married or in a de facto union for purposes of article 14 of the Income Tax Code can opt for joint taxation of this additional tax, adding up the taxable property values of the properties under their ownership and multiplying by two the value of the deduction provided for in subsection a) of no. 2 of the preceding article.

2 - Taxpayers who are married under the regimes of community of property who do not exercise the option provided for in the preceding number can identify, through a joint declaration, the ownership of the properties, indicating those that are own assets of each of them and those that are common assets of the couple.

3 - If the declaration is not made within the established timeframe, the additional municipal property tax applies, in relation to each spouse, to the sum of the values of the properties that were already registered in the property matrix under their respective ownership.

4 - The declaration, of a model to be approved by ordinance and to be submitted exclusively through the Tax Authority Portal, must be made from 1 April to 31 May.

5 - The declaration submitted in accordance with no. 2 updates the property matrix as to the ownership of the properties.

6 - The option referred to in no. 1 is valid until the exercise of the respective renunciation".

Taking these articles into account, we conclude that the law establishes the exercise of the option for joint taxation for taxpayers who are married or in a de facto union (no. 1 of article 135-D of the IMI Code), and the sending of the joint declaration of property ownership for taxpayers who are married under regimes of community of property (no. 2 of article 135-D of the IMI Code).

The law determines that, as to the joint declaration of property ownership, it must be submitted between 1 April and 31 May (no. 4 of article 135-D of the IMI Code).

Thus, we understand that the timeframe contained in no. 4 of article 135 of the IMI Code (from 1 April to 31 May) refers to the joint declaration of property ownership that can be submitted by taxpayers who are married under regimes of community of property, with the objective of identifying the properties that are own assets of each of them and those that are common assets, a declaration that is provided for in no. 2 of article 135-D of the IMI Code.

Indeed, the law did not determine the timeframe for purposes of exercising the option for joint taxation for taxpayers who are married or in a de facto union, an option that is provided for in no. 1 of article 135-D of the IMI Code.

Similarly, the law does not provide for the manner of exercise of this option for joint taxation by those taxpayers.

The Respondent alleges that the Claimant's interpretation cannot prevail by virtue of Ordinance no. 90-A/2017 of 01-03, which states in article 1 that the declarative forms apply to the option for joint taxation provided for in no. 1 of article 135-D of the IMI Code.

However, such reasoning violates the principle of legality, since if the Ordinance applied the timeframe to both situations (joint taxation and joint declaration), contrary to what is provided in the law, we would be faced with an ordinance with an innovative character, thus violating the principle of legality to which the TA is bound, as decided by the arbitral decisions in processes no. 367/2018-T and 344/2018-T.

We thus understand that the Claimant is correct in alleging that the law did not determine the manner or the timeframe for the exercise of the option for joint taxation, for purposes of AIMI taxation, and it cannot be considered that the Claimant and his spouse exercised the option in an untimely manner.

On the other hand, the Claimant alleges that it does not follow from the law that the taxpayer's right to exercise the option for joint taxation at a later date is barred.

If the right to joint taxation for purposes of AIMI were barred because the Claimant presented the option outside of a timeframe, this would imply an unjust increase in the tax owed and would constitute a tax penalty for the Claimant, and such a bar does not result from the law.

Indeed, the penalty for taxpayers who send tax declarations outside of a timeframe is the application of a fine in a violation of law proceeding, and not an increase in the tax.

Thus, even if it were considered that the Claimant exercised the option in an untimely manner, the Claimant's right to be taxed for purposes of AIMI on the basis of joint taxation would never be barred.

In conclusion, we conclude, as did the arbitral decisions in processes no. 367/2018-T and 344/2018-T, that the decision dismissing the gracious complaint is vitiated by illegality and must be annulled, and likewise the AIMI assessment in question in this case must be annulled, for a defect of violation of law.

6. Decision

In light of the foregoing, it is determined:

  • To judge the request formulated by the Claimant as wholly founded, regarding the illegality of the AIMI assessment no. 2017..., of the year 2017, in the amount of 5,843.24 €;

  • To order the Respondent to pay the costs of the present process.

7. Value of the Proceedings:

In accordance with article 306 no. 2 of the CPC and 97-A no. 1 subsection a) of the CPPT and 3 no. 2 of the Regulation of Costs in Tax Arbitration Proceedings, the value of the action is fixed at 5,843.24 €.

8. Costs:

In accordance with article 22 no. 4 of the RJAT, and Table I attached to the Regulation of Costs in Tax Arbitration Proceedings, the amount of costs is fixed at 612 €, to be borne by the Respondent, in accordance with article 22 no. 4 of the RJAT.

Notify.

Lisbon, 11 April 2019.

Text prepared by computer, in accordance with article 138 no. 5 of the Code of Civil Procedure (CPC), applicable by reference to article 29 no. 1 subsection e) of the Tax Arbitration Regime, reviewed by me.

The sole arbitrator

Suzana Fernandes da Costa

Frequently Asked Questions

Automatically Created

What is the AIMI (Adicional ao Imposto Municipal sobre Imóveis) and how does joint taxation apply?
AIMI (Adicional ao Imposto Municipal sobre Imóveis) is an additional tax on Portuguese real estate imposed on individuals whose aggregate taxable property value exceeds €600,000 (or €1,200,000 for joint taxation). Joint taxation allows married taxpayers or those in de facto unions to combine their property values and benefit from the higher €1,200,000 threshold, potentially reducing or eliminating AIMI liability. Article 135-D of the IMI Code establishes two regimes: one for married couples under community property regimes (with a specific April 1-May 31 declaration deadline) and another for other married taxpayers and de facto unions (where the deadline issue remains contested).
Can non-resident property owners in Portugal opt for joint AIMI taxation?
Yes, non-resident property owners in Portugal can opt for joint AIMI taxation if they are married or in a recognized de facto union. The option applies regardless of tax residency status, as AIMI is levied on property ownership in Portugal rather than residency. However, the procedural requirements and deadlines for exercising this option have been subject to dispute, particularly regarding whether Article 135-D(2)'s April 1-May 31 deadline applies universally or only to couples married under community property regimes. Non-residents must submit the joint taxation declaration through the Portuguese Tax Authority's procedures, typically using the official forms designated for AIMI purposes.
How can taxpayers challenge an AIMI assessment through CAAD arbitration?
Taxpayers can challenge an AIMI assessment through CAAD (Centro de Arbitragem Administrativa) by first filing a reclamação graciosa (gracious complaint) with the Tax Authority within 120 days of notification of the assessment. If the complaint is dismissed or remains unanswered beyond the legal deadline, taxpayers may then submit an arbitration request to CAAD within 90 days of the dismissal decision or statutory deadline expiration. The arbitration request must identify the contested act, present legal grounds for the challenge, and include supporting documentation. CAAD arbitration offers a faster, specialized alternative to judicial courts for resolving tax disputes, with decisions typically rendered within six months. The process involves appointing an arbitrator, exchanging written submissions, and potentially holding hearings, though parties may waive oral proceedings.
What was the outcome of the CAAD decision 368/2018-T regarding the AIMI joint taxation option?
The decision excerpt does not provide the final ruling, as the text ends mid-argument during the claimant's submissions. However, the case centered on whether the claimant could validly exercise the joint taxation option after receiving the AIMI assessment and outside the April 1-May 31 timeframe. The claimant argued that Article 135-D(1) of the IMI Code does not establish a specific deadline for joint taxation options when taxpayers are not married under community property regimes, and that the Tax Authority erroneously applied Article 135-D(2). The claimant also alleged procedural defects in the dismissal decision, including lack of reasoning and incongruous interpretation of the applicable legal provisions. The arbitrator would need to determine whether the joint taxation option could be exercised after the assessment and whether statutory deadlines preclude such late elections.
What is the procedure for filing a reclamação graciosa against an AIMI tax assessment in Portugal?
The reclamação graciosa procedure for challenging an AIMI assessment requires taxpayers to submit a written complaint to the Tax Authority within 120 days of notification of the contested assessment. The complaint must identify the specific act being challenged, present factual and legal grounds for contesting the assessment, and include supporting documentation. Article 77 of the General Tax Law (LGT) requires the Tax Authority to issue a reasoned decision addressing the taxpayer's arguments. The complaint should be submitted to the tax office that issued the assessment or through the Tax Authority's electronic platform (Portal das Finanças). If the Tax Authority does not respond within the statutory deadline or issues an unfavorable decision, taxpayers may then escalate the dispute to CAAD arbitration or judicial courts. The reclamação graciosa is a mandatory prerequisite for subsequent arbitration or judicial review of AIMI assessments.