Summary
Full Decision
ARBITRAL DECISION
Arbiter Raquel Franco, appointed by the Ethics Council of the Administrative Arbitration Centre ("CAAD") to form the Arbitral Tribunal constituted on 17.10.2018, decides in the following terms and on the following grounds:
I – REPORT
A..., S.A., a commercial company with a unique collective person identification number and registered in the Commercial Registry under no. ..., with tax domicile at ..., nos. ..., ..., ...-... ..., hereinafter referred to as the Claimant, filed a request for constitution of an Arbitral Tribunal and arbitral ruling on 08.08.2018, which was accepted and automatically notified to the Tax and Customs Authority ("TA"), in its capacity as Respondent.
The Claimant contests the legality of the following acts:
i. Decision refusing the Administrative Complaint no. ...2018... (order issued on 09.05.2018 by the Honourable Deputy Head of the Finance Service of ...;
ii. Assessment of the Additional Municipal Property Tax ("AIMI") no. 2017-..., relating to the year 2017 and to properties located in the "Historic Centre of Évora".
The Claimant bases its request on the following defects attributed to the contested acts:
1) Error regarding the conditions for application of articles 135.º-C, no. 2 and 135.º-C, no. 3, paragraph a) of the Municipal Property Tax Code ("CIMI") and article 44.º, no. 1, paragraph n) of the Tax Benefits Statute ("EBF");
2) Unconstitutionality by violation of the principles of equality and contributory capacity (article 13.º of the Constitution).
The Claimant did not appoint an arbiter, therefore, pursuant to the provisions of article 6.º, no. 2, paragraph a) and article 11.º, no. 1, paragraph a) of the RJAT, the President of the Ethics Council of the CAAD appointed the undersigned as arbiter of the Singular Arbitral Tribunal, who communicated acceptance of the office within the applicable time period.
On 26.09.2018, the parties were notified of this appointment and expressed no wish to refuse it.
In accordance with the provisions of article 11.º, no. 1, paragraph c) of the RJAT, the Singular Arbitral Tribunal was constituted on 17.10.2018.
On 20.11.2018, the Respondent, duly notified for this purpose, presented its response defending itself by exception and by impugning the claim.
Regarding the matter of the exception, it is related to the consolidation in the legal order of the question of non-exemption from Municipal Property Tax relating to 2016, as a prerequisite for non-subjection to AIMI in 2017.
By order of 21.11.2018, this Tribunal invited the Claimant to pronounce itself on the exception invoked by the Respondent in its Response.
The Claimant stated that such consolidation had not occurred because a request for official revision had been presented and, subsequently, a request for arbitral ruling – which gave rise to case 471/2018-T –, relating to the assessment of Municipal Property Tax for 2016 on the aforementioned real property.
Subsequently, the Respondent invoked the existence of a relationship of prejudiciality between the arbitral action pending in case 471/2018-T and the present action. The Claimant pronounced against the existence of such a relationship.
Faced with the question raised, the Tribunal decided that the requirements for the occurrence of a prejudicial issue were met, namely, the fact that another arbitral tribunal was examining a question that proved essential for the appreciation of the merits of the case proposed in this tribunal and that, by itself, could modify the legal situation that had to be determined in the decision to be rendered in this instance. Consequently, the Tribunal decided to suspend the proceedings, pursuant to the provisions of article 15.º, no. 1, of the Administrative Procedure and Process Code ("CPTA"), applicable by virtue of article 29.º, no. 1, paragraph b) of the RJAT, until the decision in case 471/2018-T was rendered and also decided to extend the period for rendering the arbitral decision by two months, that is, until 17.06.2019.
On 16.04.2019, the Claimant filed the decision rendered in case 471/2018-T, in which the tribunal considered that the properties in relation to which the Claimant sought to have the Municipal Property Tax exemption applied are classified as "national monuments", as a result of their location in the area of the Historic Centre of Évora and that, consequently, the assessments and the decision refusing the request for official revision are tainted with illegality and should be annulled, in accordance with the provisions of article 163.º of the Administrative Procedure Code.
The Tax and Customs Authority challenged that decision, having informed this tribunal accordingly and, for that reason, requested the suspension of the proceedings. Furthermore, the TA made it known to this tribunal that the Claimant had already filed, in 2018, an Administrative Action before the Administrative and Tax Court of Beja, to discuss the right to enjoy the exemption provided for in article 44.º/1-n) of the EBF, relating to the properties in question here, an action that was assigned and filed with that Court under the no. .../19...BEPRT.
Called upon to pronounce itself on the request to suspend the proceedings, this tribunal decided to refuse such request.
Summary of the Claimant's Position
The Claimant understands that the properties whose Taxable Patrimonial Value was considered in the assessment of AIMI are properties exempt from Municipal Property Tax and, as such, not subject to AIMI.
To support its position, it alleges that in all three cases, these are properties located in the Historic Centre of Évora and classified as UNESCO Cultural Heritage of Humanity, being, for that reason, exempt from Municipal Property Tax under paragraph n) of no. 1 of article 44.º of the Tax Benefits Statute ("EBF"), which establishes the application, automatically, of the Municipal Property Tax exemption to "properties classified as national monuments and properties individually classified as being of public interest or municipal interest, in accordance with applicable legislation".
It invokes the Cultural Heritage Protection Framework Law (Law no. 107/2001, of 8 September), in particular the provisions of nos. 2, 3 and 4 of article 15.º):
"2 – Real property may be classified as being of national interest, public interest or municipal interest (...).
3 – For real property classified as being of national interest, whether monuments, complexes or sites, the designation national monument shall be adopted (…).
4 – A property is considered to be of national interest when its protection and enhancement, wholly or in part, represents a cultural value of significance for the Nation".
On the other hand, from the content of the aforementioned Cultural Heritage Protection Framework Law (see no. 7 of article 15.º) it further results that "cultural property included in the World Heritage List constitutes, for all purposes and in its respective category, part of the list of property classified as being of national interest"
It further adds that, in accordance with no. 2 of article 2.º of Decree-Law no. 309/2009, of 23 October, "The classification of a real property may include, in particular, rural properties and urban properties, buildings or other constructions that are incorporated into the land with a character of permanence, as well as gardens, squares or pathways", with no. 1 referring to: "A real property is classified in the categories of monument, complex or site, as those categories are defined in international law".
Based on the legislation cited, the Claimant contends that the inclusion of the properties in the World Heritage List has as its immediate consequence, their classification as properties of national interest and, consequently, as "national monuments".
Consequently, according to the Claimant, "there is no doubt that the properties at issue are exempt from Municipal Property Tax, (…), in accordance with the provisions of paragraph n) of no. 1 of article 44.º of the EBF and, likewise, in no. 3 of article 15.º of the Cultural Heritage Protection Framework Law", therefore their respective Taxable Patrimonial Value could not have been included in the assessment of AIMI at issue in accordance with the provisions of paragraph a) of no. 3 of article 135.º-C of the CIMI.
Regarding the property that constitutes a plot of land for construction (with matrix article 1743), the Claimant further puts forward arguments related to the fact that, in its understanding, AIMI is a tax on wealth of a fractional nature that aims to burden only real property destined for housing (cf. articles 39.º et seq. of the request for arbitral ruling), reason why that property, a plot of land for construction destined for services, would always be excluded from its scope of application. On this point, the Claimant contends that the taxation of this property in terms of AIMI would constitute a violation of the constitutional principles of equality and contributory capacity because materially distinct realities are being treated in the same manner.
Summary of the TA's Position
The TA contested the Claimant's pretension, presenting a defense by exception and by impugning the claim. As for the matter of exception, already referred to above, we shall not dwell on it here. As for the matter of impugning the claim, it is worth highlighting a first part of the Response in which the TA responds to the matters raised in the request for arbitral ruling concerning the nature of AIMI and the circumstance that it does not target real property not destined for housing (an argument put forward regarding the property that constitutes a plot of land for construction and whose taxable patrimonial value was included in the tax base of the assessed tax), as well as the violation of the constitutional principles of equality and contributory capacity. The TA disagrees with the interpretation defended by the Claimant on this point, as well as with the equation drawn by it between AIMI and the tax created in accordance with item 28 of the General Table of Stamp Tax and later repealed, with this argument being put forward through article 292.º, inclusive, of the Response.
On the question of the classification of the properties in question, which it designates as "III.3 regarding the error regarding the conditions of articles 135.º-C/3 a) of the CIMI and article 44.º/1 -n) of the EBF", the Respondent begins by tracing a historical evolution of the concept of classification, from which the following conclusions emerge:
1) In the Constitutional Monarchy, there was a single classification level: National Monument.
2) In the 1st Republic, there were two classification levels: (i) National Monument and (ii) Property of Public Interest;
3) In the Estado Novo, there were three classification levels: (i) National Monument; (ii) Property of Public Interest and (iii) Municipal Value.
4) At the beginning of the 3rd Republic, the concept of Category was introduced and the classification levels were expanded, although neither one nor the other were ever applied because Law 13/85 was not subject to the necessary regulation.
5) During the 3rd Republic and until the emergence of the Cultural Heritage Law of 2001, the classification levels created by the Estado Novo continued to be applied
Following the historical note, it proceeds with the distinction of the various concepts contained in article 15.º of the Cultural Heritage Protection Framework Law, namely the following three: the category (monument, complex and site), the classification (national interest, public interest and municipal interest) and the designation (national monument, applicable only to monuments, complexes or sites classified as being of national interest).
According to the Respondent, since 2001, that is, since the entry into force of the Cultural Heritage Protection Framework Law, there is no classification denominated "national monument", but only classifications denominated "national interest", "public interest" or "municipal interest", being manifestly impossible to affirm that the Historic Centre of Évora is classified as a National Monument.
The Respondent proceeds by maintaining that there is no UNESCO classification denominated "Cultural Heritage of Humanity", "UNESCO Heritage", "World Heritage" or any other equivalent expression, claiming that, when inscribing a cultural property in the "World Heritage List", UNESCO's World Heritage Committee is not classifying a property, as it would not have the competence to carry out an administrative classification procedure over the Historic Centre of Évora.
Thus, the statement that a property is "classified as UNESCO World Heritage" is an incorrect statement. The classification of a cultural property always depends on a prior administrative classification procedure, which results from article 1.º of the Administrative Procedure Code, article 18.º of the Cultural Heritage Protection Framework Law and article 1.º of Decree-Law no. 309/2009, of 23 October – this never occurred with respect to the property included in the UNESCO World Heritage List at issue in this process.
According to the Respondent, "Insofar as a cultural property inscribed in the 'UNESCO World Heritage List', the so-called Historic Centre of Évora is, at most, classified as property of National Interest, as a result, no longer of a decision by the competent entity, but as a direct result of law (ope legis), since the latter commands that it be assigned, without more, such classification (article 15.º/2 and 3, by reference of article 15.º/7, both of the LBPC, articulated with article 72.º/1 of Decree-Law 309/2009).
However, being certain that the classification level of National Monument contained in article 24.º of Decree 20985 is not confused with nor equivalent to the concept of National Monument designation contained in article 15.º/3 of the LBPC.
Thus, in the Respondent's view, the Historic Centre of Évora belongs to the category of complex (since it is a complex of properties); is included in the list of property classified as being of National Interest (article 15.º/7 of the LBPC) and is designated as National Monument (article 15.º, no. 3 and 7, of the LBPC), it being certain that the National Monument designation is not confused with nor equivalent to the concept of classification denominated as National Monument contained in Decree 20 985 of 1932.
The Respondent concludes, maintaining that the EBF, in the 2nd and 3rd segments of article 44.º, no. 1, n), provides that "are exempt from municipal property tax (…) properties individually considered as being of public interest, of municipal value or cultural heritage, in accordance with applicable legislation."
In sum, it further maintains that, even if it were considered that the inscription of the Historic Centre of Évora in the UNESCO World Heritage List constitutes a classification and that this corresponds to the National Monument classification level, it would be an abusive interpretation to conclude that the properties at issue in the process, merely by being included in that complex, are equally classified as National Monument. As such, since the Claimant has not demonstrated that the properties are individually classified as National Monument, it is necessary to conclude that they do not meet the requirements to enjoy the fiscal benefit contained in article 44.º, no. 1, n) of the EBF.
The TA further strengthens its argument by saying that the fiscal benefit in question is necessarily associated with the concept of property and that the complex denominated "Historic Centre of Évora" does not constitute a property, but rather a universality. Because it understands that the exemption can only be directed at properties in the fiscal sense, it requires individual classification in order to be granted.
Finally, the TA pronounces itself on the documentary evidence filed in the process by the Claimant, stating, on the one hand, that the entity issuing the certificates filed with the record does not have the competence to establish the classification of properties, therefore the documents are merely "opinionative" and, on the other hand, that the relationship between the properties in question and the Historic Centre of Évora was not established.
For the reasons set out, the TA concludes in favour of the dismissal of the arbitral request.
II. PROCEDURAL REQUIREMENTS
The Arbitral Tribunal is materially competent and is regularly constituted, pursuant to the provisions of articles 2.º, no. 1, paragraph a), 5.º and 6.º, no. 1, of the RJAT.
The parties have legal personality and capacity, are legitimate and are legally represented, as provided for in articles 4.º and 10.º of the RJAT and article 1.º of Regulation no. 112-A/2011, of 22.03.
The action is timely and the process is not tainted with nullities.
III. GROUNDS
A. MATTER OF FACT
A.1. Proven Facts
(a) The Claimant is an anonymous commercial company, with registered office in Portugal, which carries out its activity in the hotel industry.
(b) The Claimant is the owner of urban properties registered in the urban property matrix of the Union of Civil Parishes of ... (..., ..., ... and ...) under articles ..., ... and ..., whose taxable patrimonial value was used in the calculation of the AIMI assessment at issue in this process (document 2 attached with the request for arbitral ruling).
(c) The urban property identified by matrix article ..., of the Union of Civil Parishes of ... (..., ..., ... and ...), municipality and district of Évora, corresponds to a plot of land for construction located at ..., nos. ... to ..., in Évora, with a taxable patrimonial value (TPV) of € 728,878.90, with the location coefficient 'services' (documents 2 and 3 attached with the request for arbitral ruling).
(d) The urban property identified by matrix article..., of the Union of Civil Parishes of ... (..., ..., ... and ...), municipality and district of Évora, constitutes an autonomous fraction with the intended use 'housing', of an urban property in the regime of horizontal ownership, located at ..., nos. ... to ..., in Évora, with a TPV of € 57,280.00 (documents 2 and 4 attached with the request for arbitral ruling).
(e) The urban property identified by matrix article ..., of the Union of Civil Parishes of ... (..., ..., ... and ....), municipality and district of Évora, is an autonomous fraction with the intended use 'housing' of an urban property in the regime of horizontal ownership, with a taxable patrimonial value (TPV) of € 77,840.00, (documents 2 and 5 attached with the request for arbitral ruling).
(f) The properties in question are integrated in the so-called 'Historic Centre of Évora', heritage included in the UNESCO World Heritage List, a fact made public by Notice dated 20 January 1988 from the Cultural Services Department, and published in the Official Journal, no. 39/1988, Series I, of 17 February 1988 [document no. 2, pp. 3-4, attached with the petition presented on 06.12.2018 by the Claimant, which corresponds to the TA's decision on the request for official revision presented by the Claimant referred to in (l)].
(g) On 30.06.2017, AIMI assessment no. 2017... was issued, document no. 2017..., which considered as the taxable patrimonial value subject to the assessment of the tax in question under article 135.º-C, no. 1 CIMI (Owner Matrix), the amount of € 863,998.90, resulting in the amount to be paid of € 3,456.00 (document 2 attached with the request for arbitral ruling).
(h) The properties whose taxable patrimonial value was included in the AIMI assessment at issue were the properties identified above, namely, ... (TPV of € 728,878.90), ... (TPV of € 57,280.00) and ... (TPV of € 77,840.00) (document 2 attached with the request for arbitral ruling).
(i) On 27.11.2017, the Évora City Council issued a certificate stating that "the property located at Rua ... no...., in Évora, is integrated in the complex classified as "Cultural Heritage of Humanity" by UNESCO (25 November 1986)" (document 7 attached with the request for arbitral ruling).
(j) On 27.11.2017, the Évora City Council issued a certificate stating that "the property located at ..., no. ... to ..., in Évora, is integrated in the complex classified as "Cultural Heritage of Humanity" by UNESCO (25 November 1986)" (document 8 attached with the request for arbitral ruling).
(k) On 26.10.2017, the Claimant made payment of the contested AIMI assessment (document 9 attached with the request for arbitral ruling).
(l) The Claimant filed an administrative complaint against the AIMI assessment act at issue, which was refused by order of 09.05.2018 of the Honourable Deputy Head of the Finance Service of ... .
(m) The Claimant also presented, on 07.02.2018, a request for official revision whose object is the act of assessment of Municipal Property Tax for 2016 (document no. 1 attached with the petition presented by the Claimant on 06.12.2018).
(n) The request for official revision identified in the preceding paragraph was refused by order of the Finance Director of ... of 20.06.2018 (document no. 2 attached with the petition presented by the Claimant on 06.12.2018).
(o) On 24.09.2018, the Claimant presented a request for arbitral ruling whose object is the act of refusal of the request for official revision mentioned in the preceding paragraph and which gave rise to arbitral case no. 471/2018-T (document no. 3 attached with the petition presented by the Claimant on 06.12.2018).
A.2. Unproven Facts
There are no facts alleged that should be considered unproven in relation to the decision.
A.3. Grounds for the Proven and Unproven Matter of Fact
The facts relevant to the judgment of the case were selected and delimited in function of their legal relevance, in view of the plausible solutions of the questions of law, in accordance with the joint application of articles 123.º, no. 2, of the Tax Procedure and Process Code ("CPPT"), and 596.º, no. 1 and 607.º, no. 3 of the Civil Procedure Code ("CPC"), by reference to article 29.º, no. 1, paragraphs a) and e) of the RJAT.
Allegations made by the parties and presented as facts, consisting of strictly conclusive statements incapable of proof whose veracity has to be verified in relation to the concrete consolidated matter of fact, were neither deemed proven nor unproven.
As regards the proven facts, the arbiter's conviction was based on the positions assumed by the parties and on the critical analysis of the documentary evidence filed with the record.
B. LAW
B.1. Regulatory Framework
In the present case, a request was presented to the tribunal for a declaration of illegality of a decision refusing an administrative complaint and of an act assessing Additional Municipal Property Tax (AIMI) for the year 2017.
The request is based primarily on the alleged existence of an exemption, in the year 2016, on the real property subject to the AIMI assessment, from which it would follow, in the Claimant's understanding, the non-inclusion of its respective taxable patrimonial value in the calculation of that tax in 2017.
Pursuant to the provisions of no. 3, paragraph a) of article 135.º-C of the Municipal Property Tax Code, "The following are not computed for the sum referred to in no. 1 of article 135.º-B: a) The value of properties that in the previous year were exempt or not subject to Municipal Property Tax taxation." (emphasis added)
The rule is ambiguous, capable of being interpreted, at least, in the sense (i) that only the property having met the conditions provided for in the exemption rule is required, regardless of whether it was applied; and in the sense (ii) that, in addition to having met the conditions provided for in the exemption rule, this exemption effectively occurred, that is, a valid act of tax assessment was not issued with respect to the property in question by virtue of the applicable exemption rule.
It seems to us, however, that, for reasons of internal logic and consistency of the legal system, the rule in question should be interpreted to mean that a given property that meets conditions, in accordance with the legal system, to be the object of an exemption, should not be included in the computation of the taxable patrimonial values subject to AIMI taxation. Otherwise, the operation of the rule provided for in no. 3 paragraph a) of article 135.º-C of the Municipal Property Tax Code would be made to depend on the action (legal) of the administration or on the declaration of illegality of an act by it performed.
Being so, it falls within the competence of this tribunal, insofar as it is a necessary condition for evaluating the legality of the acts contested in this process, to know whether the properties whose taxable patrimonial value was considered for the assessment performed met, or did not meet, the condition of not being exempt in the previous year because only thus will it be known whether there was a violation of the rule contained in no. 3 paragraph a) of article 135.º-C of the Municipal Property Tax Code, which forms an integral part of the legal regime of AIMI.
In fact, by virtue of the provisions of no. 3, paragraph a) of article 135.º-C of the Municipal Property Tax Code, the analysis of the legality of the application of the rules for assessing AIMI also implies determining whether they meet the negative condition established there, in that, if they do, the assessment of AIMI will be tainted, for that reason, even if not for another.
In these terms, it also falls here to analyze the content of the rule provided for in article 44.º, no. 1, paragraph n) of the EBF, whose wording establishes that the following are exempt from Municipal Property Tax "n) Properties classified as national monuments and properties individually classified as being of public interest or of municipal interest, in accordance with applicable legislation."
B.2. Application of the Law to the Concrete Case
In the concrete case, the discussion between Claimant and Respondent concerns the doubt as to whether the three properties whose taxable patrimonial value was included in the AIMI assessment should be considered as covered by the rule contained in paragraph n) of no. 1 of article 44.º of the EBF.
This tribunal considered proven, especially taking into account the content of the information preceding the refusal dated 20.06.2018 and issued by the Finance Department of ... regarding the request for official revision formulated by the Claimant (where one can read that, both the Finance Service of ... and the Department itself, accept that the properties in question are part of the complex denominated "Historic Centre of Évora"), that the properties whose taxable patrimonial value was included in the contested AIMI assessment do, in fact, belong to the "Historic Centre of Évora". On that aspect, and notwithstanding the fact that, in its Response, the Respondent came to say that the documents filed by the Claimant were insufficient to prove that fact, the truth is that, through the document cited, it is proven that there is no controversy as to that fact. We therefore consider that the controversy is reduced to knowing whether the documents filed by the Claimant to prove the fact were, or were not, suitable for that proof – a controversy that is overcome by the fact that the TA itself admits the integration of the properties in that complex.
Having overcome this first point, the doubt then becomes whether the inclusion of the aforementioned properties in the "Historic Centre of Évora" is sufficient to determine the application of the exemption rule provided for in paragraph n) of no. 1 of article 44.º of the EBF and, consequently, of no. 3, paragraph a) of article 135.º-C of the Municipal Property Tax Code, or not.
The TA contends that the Historic Centre of Évora does not have the classification of National Monument and, even if it did, that the properties included in it could benefit from the exemption in question without having been individually classified.
The Claimant, on the contrary, argues that properties that are part of that complex should be considered as national monuments and this independently of an individual classification act.
Indeed, the joint interpretation of the rules provided for in article 44.º, no. 1, paragraph n), of the Tax Benefits Statute, in article 15.º of Law no. 107/2001, of 8 September (Cultural Heritage Protection Framework Law), in Decree-Law no. 309/2009, of 23 October, and in article 2.º of the Municipal Property Tax Code has generated extensive controversy, with many decisions of tribunals, arbitral or otherwise, on this controversial matter.
However, in December 2018, the Supreme Administrative Court came to pronounce itself on the question in a clear manner, and this tribunal has no reason to depart from the jurisprudence stated there, which we follow in its entirety.
Thus, after a summary of the facts and the reasons that were at the origin of the question, that Court explains that "the legislator in elaborating the State Budget for 2007 wished to introduce a significant change in the regime of access to Municipal Property Tax exemptions that could benefit properties classified by reason of their cultural interest and importance and/or patrimonial value.
Whereas in the version of the rule prior to this 2007 State Budget the legislator did not require, for tax purposes, the individual classification of each of the properties, being content, therefore, with their classification in accordance with applicable legislation, with this change it proceeded to require an additional requirement, that of individual classification in accordance with applicable legislation.
However, it only proceeded to require this individual classification for properties that should be integrated into the categories of public interest, municipal value or cultural heritage, not making the same requirement for properties that should be integrated into the category of national monument (in the EBF the legislator makes reference to national monument when intending to refer to properties of national interest because that is how, in accordance with the provisions of article 15º, no. 3 of Law no. 107/2001, of 08 September they should be designated).
And this distinction clearly results from the express will of the legislator when editing the rule in question, that is, the legislator did not intend to require, for properties that should be included in the category of national monument (national interest) and for the purposes of this fiscal exemption, that they be subject to individual classification, therefore maintaining, as regards them, the regime that was previously established. Moreover the "new" wording of the provision maintains unchanged the first part of the article in question - Properties exempt from municipal property tax those classified as national monuments - which refers to national monuments.
This interpretation also results, expressly, from the parliamentary debate and voting that took place regarding this legal provision.
(…)
From this it is concluded, thus, that the properties that previously benefited from the fiscal exemption, because they were framed in the category designated by national monument, were not covered by the legislative amendments made by the 2007 State Budget, being able therefore to maintain the fiscal exemption of which they were benefiting, there being, therefore, as regards them, no need to apply the transitional regime contained in article 88º, als. c) and d) of the same State Budget."
Further on the Court expressly refers to the case of properties that are classified as national monuments by being integrated into a Historic Centre that is part of the World Heritage List:
"As can be readily discerned from reading the content of this letter, the TA understood that the recurrent's properties were subject to the innovative rules of the 2007 State Budget and, in that measure, the previously granted exemption had ceased ope legis since the aforementioned properties were not individually classified.
However, such understanding, as we have seen, would only be correct in the case that the recurrent's properties, despite benefiting from the tax exemption, were not covered by prior classification designated as national monument.
On 12.11.2003, the recurrent's request regarding the exemption from Municipal Contribution for both properties was granted, and exemption was granted for a period of 7996 years, to run between 2004 and 9999 inclusive, that is, exemption was granted for an unlimited period, provided that the prerequisites of the granted exemption remained current.
Since such exemption was granted by reason of the aforementioned properties being integrated into the Historic Centre of Porto which is part of the World Heritage List and, therefore, being integrated into the group of the so-called national monuments, see points 1 and 2 of the matter of fact and article 15º, nos. 3 and 7 of Law no. 107/2001, of 08.09, they did not require, faced with the "new" wording of article 40º, no. 1, al. n) of the EBF, or subsequently, any individual classification, therefore, in that measure, the tax act performed is unjustified."
Although in the case sub judice there are properties located in the Historic Centre of Évora, the grounds of the STA's decision are equally applicable in this case, since, both the Historic Centre of Porto and the Historic Centre of Évora are national monuments because they form part of UNESCO's World Heritage List.
Thus, we conclude in the same manner as the STA in the sense that the properties at issue in the present process did not require, faced with the "new" wording of article 40º, no. 1, al. n) of the EBF, or subsequently, any individual classification as a prerequisite of the exemption, which is applicable automatically in light of the provisions of no. 5 of article 44.º and no. 1 of article 5.º of the EBF.
Having demonstrated that the properties whose taxable patrimonial value was included in the contested AIMI assessment were exempt in the year 2016, the negative condition of taxable incidence drawn in no. 3, paragraph a) of article 135.º-C of the Municipal Property Tax Code is met.
Thus, the Assessment of the Additional Municipal Property Tax ("AIMI") no. 2017-..., relating to the year 2017, whose value fell entirely on properties located in the "Historic Centre of Évora", is illegal by violation of the provisions of no. 3, paragraph a) of article 135.º-C of the Municipal Property Tax Code and, indirectly, of paragraph n) of no. 1 of article 44.º of the EBF. Consequently, so is the decision refusing the administrative complaint no. ...2018... (embodied in the order issued on 09.05.2018 by the Honourable Deputy Head of the Finance Service of...).
The Claimant had also requested the application of compensatory interest by reason of the fact, considered proven above, that it had made payment of the contested assessment, combined with the fact that this is illegal.
First, following the declaration of illegality of the assessment act, the request for restitution of AIMI paid is considered well-founded, by virtue of the provisions of articles 24.º, no. 1, paragraph b) of the RJAT and 100.º of the General Tax Law ("LGT").
As regards compensatory interest, the request must be assessed in light of the provisions of article 43.º of the LGT, and, in accordance with no. 1 of this article, "[c]ompensatory interest is due when it is determined, in an administrative complaint or judicial impugnation, that there was error attributable to the services from which resulted payment of the tax debt in an amount exceeding the legally due amount".
In the concrete case, it is verified that the AIMI assessment included taxable patrimonial values of properties that were exempt in the previous year, such exemption being automatic and independent of recognition, in violation of the provisions of no. 3, paragraph a) of article 135.º-C of the Municipal Property Tax Code and, indirectly, of the provisions in paragraph n) of no. 1 of article 44.º of the EBF. Thus, the commission of the illegality is directly attributable to the TA which, as such, must be condemned to pay the compensatory interest due from the date of payment until full restitution.
IV – DECISION
In these terms, this Arbitral Tribunal decides:
(a) To judge well-founded the request for arbitral annulment of the tax act embodied in the Assessment of the Additional Municipal Property Tax ("AIMI") no. 2017..., relating to the year 2017, whose value fell entirely on properties located in the "Historic Centre of Évora", as well as the decision refusing the administrative complaint no. ...2018... (embodied in the order issued on 09.05.2018 by the Honourable Deputy Head of the Finance Service of ...).
(b) To determine full restitution of the amount of tax assessed;
(c) To judge well-founded the request for condemnation to payment of compensatory interest due from the date on which payment was made until full restitution of the tax indebtedly paid.
V – Value of the Process
The value of the process is fixed at € 3,456.00 (three thousand, four hundred and fifty-six euros), pursuant to article 97.º-A, no. 1, a), of the Tax Procedure and Process Code, applicable by virtue of paragraphs a) and b) of no. 1 of article 29.º of the RJAT and no. 2 of article 3.º of the Regulation of Costs in Tax Arbitration Processes.
VI – Costs
The arbitration fee is fixed at € 612.00 pursuant to Table I of the Regulation of Costs in Tax Arbitration Processes, to be borne by the Respondent.
Lisbon, 17 June 2019
The Arbiter
(Raquel Franco)
Frequently Asked Questions
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