IMT Tax Exemption for Tourist Utility: Revocation and Statute of Limitations on Assessment (CAAD 381/2015-T)

ARBITRAL DECISION

I. REPORT

1. On June 12, 2015, A..., NIF..., residing at Rua..., no..., 2nd floor, Lisbon (hereinafter, Claimant), filed a request for establishment of an arbitral tribunal, pursuant to the combined provisions of articles 2.º, no. 1, subparagraph a), and 10.º, nos. 1, subparagraph a), and 2, of Decree-Law no. 10/2011, of January 20, which approved the Legal Regime of Arbitration in Tax Matters, as amended by article 228.º of Law no. 66-B/2012, of December 31 (hereinafter, abbreviated as RJAT), seeking the declaration of illegality and annulment of the acts of additional assessment of Municipal Tax on Onerous Real Estate Transfers, in the amount of €8,287.50, and of Stamp Duty, in the amount of €816.00, with reference to the autonomous fraction designated by the letters "HM" of the urban property in horizontal property regime identified as "M...", located at..., ..., Portimão, registered under article ... in the urban property register of the parish and municipality of Portimão, whose right of superficies was acquired by the Claimant.

The Claimant submitted 3 (three) documents, having not listed witnesses, nor requested the production of any other evidence.

The Defendant is AT – Tax and Customs Authority (hereinafter, Defendant or AT).

1.1. In substance and brief summary, the Claimant alleged the following (which we mention mostly by transcription):

• The claimant acquired, by deed executed on January 5, 2010 and for the price of €127,500.00, the right of superficies of the autonomous fraction designated by the letters "HM", of the urban property in horizontal property regime identified as M..., located at..., ..., registered under property register article no. ...HM, of the urban property register of the parish and municipality of Portimão;

• The enterprise into which the autonomous fraction whose right of superficies was acquired by the present claimant is integrated was attributed tourist utility status provisionally, pursuant to Decree-Law no. 423/83, of December 5, as per Order of the Minister of Tourism published in the Official Journal, no..., III Series, of .../.../2004;

• The tax consequences resulting from the qualification attributed to the enterprise in question were recognized by the tax administration which, following the request for preliminary assessment submitted by the present challenger declared, on 23/12/2009, pursuant to article 20.º of DL 423/83, of December 5, the exemption from IMT and the reduction of Stamp Duty (item 1.1) to one-fifth;

• The Tax Authority changed its position and, by order without date of the Esteemed Head of the Financial Services Office of Portimão, communicated through official letter no..., of 2015-02-18, revoked the exemption and reduction that it had recognized in assessment no. .../2009 and notified the claimant to proceed with payment of the additional assessment of €8,287.50 of IMT and €816.00 of Stamp Duty;

• Following the notification, the claimant proceeded with payment of said amounts of €8,287.50 and €816.00 on 17/03/2015;

• The information on which the order was issued that gave rise to the challenged additional assessment, after acknowledging that the tax benefits annulled had been attributed in the initial assessment on 23/12/2009 because "it was an acquisition with the qualification of tourist utility", now understands "that such benefit was wrongfully granted", the reason for the change in understanding being due to the fact that it found that the "tax benefit aims to cover the construction/creation of establishments to promote tourist utility and not the acquisition of fractions even if integrated in enterprises with attribution of tourist utility";

• The order revoking the tax benefits recognized by the assessment of 23/12/2009 was issued on February 18, 2015, this being the date of information no. ... and official letter no. ... of the FS of Portimão, so between the date of the revocation order that gave rise to the challenged assessment and the date of the order recognizing the tax benefits of IMT exemption and reduction to one-fifth of Stamp Duty, referring to the transmission of the aforementioned autonomous fraction, more than five years elapsed;

• Tax acts may be revoked within the time limits for their revision (see article 79.º of the General Tax Law), however, since the LGT does not establish the regime for revocation of tax acts, it must be applied subsidiarily, as provided in article 2.º of the same Law, the provisions of articles 138.º and following of the Administrative Procedure Code (CPA) (version in force until publication of Decree-Law no. 4/2015, of January 7, which approved the new CPA);

• In light of said legal provisions, especially subparagraph b) of no. 1 in conjunction with subparagraph a) of no. 2 of article 140.º, valid administrative acts are not freely revocable when, as is the case, "they are constitutive of rights or legally protected interests" and acts are not at issue that have been "unfavorable to the interests of their recipients";

• Even if it were considered that the act of assessment of 23/12/2009 was an invalid act – a defect that the revocation order of February 18, 2015 did not even invoke – that act could only be revoked on the basis of its invalidity and "within the time limit for respective contentious challenge" (cfr. article 141.º of the CPA);

• A time limit that would long have been exceeded if considering the time limit for "contentious challenge" the one provided in article 58.º of the Code of Procedure in Administrative Courts (CPTA), or the one fixed in article 102.º of the Code of Tax Procedure and Process (CPPT);

• Even for those who defend that the time limit provided in article 141.º of the CPA for revocation of invalid acts should not be the one there provided but rather the broader time limit provided in article 78.º of the LGT, still the prerequisites for revision are not met on the basis of this legal provision;

• The change of understanding between 2009 and 2015 with which the information and order cited above sustained the issuance of the challenged assessment would not even allow invoking the four-year time limit – moreover already largely exceeded – provided in no. 1 of the cited article 78.º for, on the basis of "error attributable to the services", to sustain revision of the assessment of 23/12/2009;

• Even if it were considered that in the assessment of 23/12/2009 a factual or legal error was committed – a fact that is repeated was not invoked by the order that sustained the challenged assessment – from which harm resulted to the State, still, by mandate of the special rule provided in no. 3 of article 31.º of the IMT Code (also applicable to Stamp Duty), the additional assessment "can only be made until four years have elapsed from the assessment to be corrected (…)";

• Finally, it is necessary to reject the invocation contained at the end of information no..., on which the order was issued that founded the challenged assessment, that this assessment was made within the general 8-year time limit provided in article 35.º of the CIMT, since the IMT exemption (and Stamp Duty reduction) was not subject to any future condition nor was it limited to any time limit so that, after verification of that condition or after the lapse of that time limit, the said 8-year time limit could then commence for the assessment to be made.

The Claimant concludes its initial pleading by petitioning «the annulment of the additional assessment of IMT and Stamp Duty, respectively in the amounts of €8,287.50 and €816.00, paid on 17/03/2015, as well as the condemnation of the Tax Authority to payment of indemnificatory interest calculated from the date of payment until that on which the competent annulment order is processed».

1. The request for establishment of an arbitral tribunal was accepted and automatically notified to AT on June 25, 2015.

2. The Claimant did not appoint an arbitrator, so, pursuant to the provisions of no. 1 of article 6.º and subparagraph a) of no. 1 of article 11.º of the RJAT, the President of the Deontological Council of CAAD appointed the undersigned as arbitrator of the singular Arbitral Tribunal, who communicated acceptance of the appointment within the applicable time limit.

3. On August 14, 2015, the parties were duly notified of this appointment, and did not manifest the will to challenge the appointment of the arbitrator, pursuant to the combined provisions of article 11.º, no. 1, subparagraphs b) and c), of the RJAT and articles 6.º and 7.º of the Deontological Code of CAAD.

4. Thus, in accordance with the provision of subparagraph c) of no. 1 of article 11.º of the RJAT, the singular Arbitral Tribunal was constituted on August 31, 2015.

5. On September 29, 2015, the Defendant, duly notified for this purpose, filed its Response in which, beyond raising preliminary matters, it specifically contested the arguments put forward by the Claimant and concluded for the lack of merit of the present action, with its consequent absolution from the claim.

The Defendant filed no documents, nor requested the production of any other evidence.

At the same time, the Defendant submitted to the file the respective administrative file (hereinafter, abbreviated as PA).

6.1. In substance and also briefly, it is important to extract the most relevant arguments on which the Defendant based its Response (which we mention mostly by transcription):

The Defendant begins by raising an initial issue to state that the Stamp Duty assessment in question was in the meantime subject to annulment by AT, so there will only be need to discuss the legality of the IMT assessment, and the value of the case should be reduced accordingly.

Subsequently, the Defendant invokes the exception of error in form of process (impropriety of procedural means), aligning for this purpose the following argument:

• The entire cause of action on which the claimant's request for arbitral pronouncement is based centers on the alleged illegality of the act of revocation of the tax benefit;

• The Claimant does not raise an issue that is related to the legality of a tax act, especially the IMT assessment;

• The entire construction of articles 10.º to 25.º of the claim is concerned exclusively with issues related to the legality of an act in tax matters (especially, the order revoking the tax benefit);

• The Claimant seeks for the Singular Arbitral Tribunal to issue a decision recognizing the IMT exemption to which it claims entitlement;

• In light of this claim it is the Special Administrative Action that constitutes the appropriate procedural means to conduct the review of the matter (since it constitutes the means of challenge intended to review acts in tax matters – article 97.º, no. 2, of the CPPT) and not the request for arbitral pronouncement (since this constitutes one of the means of challenge intended to review tax acts – article 2.º, no. 1, of the RJAT);

• The Arbitral Tribunal must refrain from knowing of the claim, since the procedural means used by the Claimant does not permit review of that matter.

Subsequently, the Defendant invokes the exception of incompetence of the Arbitral Tribunal ratione materiae, employing the following argument:

• As a direct consequence of the exception previously raised, it is equally important to raise the incompetence of the Arbitral Tribunal inasmuch as the review of such matter exceeds the competencies reserved to it by law;

• In light of article 2.º, no. 1, of the RJAT, it clearly follows that outside the jurisdiction of tax arbitration is the review of any questions concerning the recognition of tax exemptions, under penalty of violation of law, and these questions constitute matter reserved to the jurisdiction of administrative and tax courts.

Subsequently, the Defendant enters into substantive defense, arguing the following which we highlight:

• The Claimant does not raise an issue that is related to the legality of the IMT assessment, instead raising exclusively issues related to the legality of the order revoking the tax benefit;

• The Claimant acquired on 05/01/2010 the right of superficies of an autonomous fraction integrated in an enterprise that at that time was already installed and whose tourist utility was recognized on 19/10/2004, that is, at the time of acquisition the enterprise was already installed from which it is easy to conclude that the Claimant acquired the respective fraction having in view not installation, but rather exploitation;

• It follows from article 47.º of the EBF that the recognition of the exemption there provided is conditioned on the submission of a request within a certain time period, a time period that cannot be dissociated, having in account the normal occurrence of events, from the installation of the enterprise since it must be requested within sixty days following the recognition of tourist utility;

• On the other hand, there is no provision for the existence beyond this time limit of other time limits for exemption to be requested, from which it follows the understanding that this exemption is associated with the installation of enterprises;

• No. 5 of article 47.º of the EBF expressly refers to the provisions of Decree-Law 423/83, of December 5, with the necessary adaptations to regulation of omitted cases and, pursuant to that statute, the emphasis of the tax exemptions has to do with the purpose for which the fractions were acquired, a question that is cross-cutting to both situations;

• In tourist enterprises constituted in shared ownership, as is the case under review, two distinct procedures stand out: that of "installation", relating to the practice of operations necessary to install the enterprise, and another, that of "exploitation", which comprises all operations necessary to place it into operation and its exploitation, and the sale of projected or constructed units necessarily forms part of the second;

• The IMT exemption has justification only relative to those who proceed with the installation of the enterprise and place it on the market and not in relation to all those who use and exploit it, even through the purchase of its units, an understanding which is expressly set forth in article 47.º of the EBF;

• The IMT assessment practiced by the Defendant is not affected by any illegality, and should, therefore, remain in the legal order;

• Since no obligation to pay tax in an amount superior to that owed resulted from the contested tax acts, no payment of any indemnificatory interest is owed.

1. Notified for this purpose, the Claimant pronounced itself on the preliminary matter alleged by the Defendant in its Response, arguing for the lack of merit of the exceptions that were raised.

2. On October 12, 2015, an order was issued dispensing with the holding of the meeting referred to in article 18.º of the RJAT.

3. Notified both parties to submit written arguments, only the Defendant did so.

II. DISMISSAL OF PRELIMINARY ISSUES

The Arbitral Tribunal was regularly constituted and is competent.

The process is not affected by nullities.

The parties possess legal personality and capacity, are duly represented and are legitimate.

II.1. Of the subject matter of the process

The Defendant, in its Response, alleged that said Stamp Duty assessment, in the amount of €816.00, was annulled by the Tax and Customs Authority, subsequently to the institution of this process. Subsequently, the Defendant advocates that «in the present file there will only be need to discuss the legality of the IMT assessment, and the value of the case should be reduced accordingly».

The Claimant, pronouncing itself on this question, confirmed such fact and agreed with the reduction of the value of the case.

It is necessary to review and decide.

Since the Stamp Duty assessment contested was subject to annulment by the Tax and Customs Authority, after the filing of this process, and since, as to that same assessment, what the Claimant petitioned was precisely its declaration of illegality and consequent annulment, showing that tax act annulled there is verified, as to the same, the supervening uselessness of the litigation and, therefore, the proceeding is declared terminated as to the review of the claim for declaration of illegality and consequent annulment of said Stamp Duty assessment (art. 277.º, subparagraph e), of the CPC, ex vi art. 29.º, no. 1, subparagraph e), of the RJAT).

Thus, the subject matter of the present process is confined to the review of the claim for declaration of illegality and consequent annulment of the IMT assessment, in the amount of €8,287.50, which was contested.

II.2. Of error in form of process

The Defendant alleges that the Claimant does not raise an issue that is related to the legality of a tax act – specifically, the contested IMT assessment –, because, according to the Defendant, the Claimant merely raises a series of questions related, exclusively, to the legality of an act in tax matters – specifically, the order revoking a tax benefit. For this reason, says the Defendant, what the Claimant fundamentally seeks is for the Arbitral Tribunal to issue a decision recognizing the IMT exemption to which it claims entitlement.

Being that the true claim of the Claimant, says then the Defendant that it is the special administrative action that constitutes the appropriate procedural means to review such matter – that action constitutes the means of challenge intended to review acts in tax matters (art. 97.º, no. 2, of the CPPT) – and not the request for arbitral pronouncement – this constitutes one of the means of challenge intended to review tax acts (art. 2.º, no. 1, of the RJAT). In this respect, the Defendant concludes that the Arbitral Tribunal must refrain from knowing of the claim, since the present procedural means does not permit review of that matter.

With this reasoning, the Defendant thus raises the dilatory exception provided in art. 577.º, subparagraph b), of the CPC ex vi art. 29.º, no. 1, subparagraph e), of the RJAT, whose merit obstructs the Tribunal from knowing the merits of the case and gives rise to absolution of the instance (art. 576.º, no. 2, of the CPC ex vi art. 29.º, no. 1, subparagraph e), of the RJAT).

The Claimant, pronouncing itself on this exception, affirms that the subject matter of this process is an additional IMT assessment, issued and notified by AT, to which it attributes illegalities arising from violation of duly identified legal provisions. Furthermore, says the Claimant that since the contested additional assessment was based on the illegal revocation of a tax benefit previously recognized, such a defect can be invoked here. The Claimant further states that it did not invoke solely the illegal revocation of an exemption, since the expiration of the right to assess was likewise invoked and constitutes by itself a defect that determines the annulment of the contested additional assessment. The Claimant further alludes to the principle of unitary challenge, contained in art. 54.º of the CPPT, to state that since any illegality previously committed can be invoked in the challenge of the final decision, that illegality may be referring to the illegal revocation of a certain tax benefit that determined the assessment.

It is necessary to review and decide.

The questions at issue in the present file are related to the application of tax benefits provided in no. 1 of art. 20.º of Decree-Law no. 423/83, of December 5, a legal rule that states the following:

"1. Are exempt from sisa and the tax on succession and gifts, with stamp duty reduced to one-fifth, acquisitions of real property or autonomous fractions intended for the installation of enterprises qualified as tourist utility, even if such qualification is attributed provisionally, provided that it remains valid and the time limit fixed for opening to the public of the enterprise is observed."

As results from the provision of art. 5.º, no. 1, of the EBF, tax benefits may be: (i) automatic, "when the right to the benefit results directly and immediately from the law, operating therefore ope legis, by the simple verification of the respective factual assumption, requiring no subsequent act of the tax administration" (José Casalta Nabais, Tax Law, 2nd revised and expanded edition, Coimbra, Almedina, 2004, p. 412); or (ii) dependent on recognition, "if they presuppose one or more subsequent acts of recognition by the tax administration, acts which may be administrative acts, in which case we have tax benefits dependent on unilateral recognition, or even contracts, in which case we have tax benefits dependent on bilateral or contractual recognition or contractual tax benefits" (José Casalta Nabais, ibidem).

With respect to the tax benefit at issue in this file – IMT exemption for acquisitions of real property or autonomous fractions intended for the installation of enterprises qualified as tourist utility –, since it results directly and immediately from the law, it is the same of automatic application, provided that the conditions provided in no. 1 of art. 20.º of Decree-Law no. 423/83, of December 5, are met, that is: that the acquisition of the property is intended for the installation of an enterprise qualified as tourist utility, even if such qualification is attributed provisionally, provided that it remains valid and the time limit fixed for opening to the public of the enterprise is observed. In this sense the Supreme Administrative Court has pronounced in multiple decisions, citing, by way of example, those issued on 02/12/2009, in case no. 0783/09, on 14/04/2010, in case no. 0120/10, on 16/12/2009, in case no. 0936/09 and on 20/01/2010, in case no. 0937/09 (all available at www.dgsi.pt). The same understanding has been expressed in diverse decisions of arbitral tribunals constituted under the aegis of CAAD, of which are examples the decisions issued in cases nos. 104/2014-T, 110/2014-T, 317/2014-T and 342/2014-T (all available at www.caad.org.pt/tributario/decisoes).

Said this and entering into the procedural analysis of the question under review, we have that it follows from the provision in subparagraph p) of no. 1 of art. 97.º of the CPPT, in the part that here is relevant to consider, that special administrative action is the appropriate procedural means when the act to be contested is that of total or partial denial or revocation of exemptions or other tax benefits, when dependent on recognition by the tax administration. It is thus unequivocal that the legislator only included within the scope of the referral to special administrative action the challenge of tax benefits dependent on recognition, leaving thus outside automatic tax benefits.

Investigating the ratio legis of that legal rule, Nuno Cerdeira Ribeiro (Judicial Review of Acts of the Tax Administration, Coimbra, Almedina, 2014, p. 213) advances that it may reside, first of all, in the fact that often automatic tax benefits are "considered in a broader assessment procedure, which results in the issuance of a tax act strictly speaking"; since then "the tax benefit is inserted in the assessment procedure, the act here contestable will be the latter, through the process of judicial challenge, and it is in that context that the taxpayer can attack the legality of the assessment on the basis of the disregard or the erroneous consideration of the benefit in question, which vitiates the final act".

Fully adhering to this doctrinal understanding and applying it to the concrete case, which fits perfectly within it, we consider that the present process is the appropriate procedural means to review the claim put forward by the Claimant, pursuant to the provision in art. 2.º, no. 1, subparagraph a), of the RJAT, inasmuch as it is embodied in the declaration of illegality and consequent annulment of the referenced IMT assessment (on the basis of the illegal revocation of an exemption and the expiration of the right to assess).

In these terms, without need of further considerations, the exception of error in form of process is judged to lack merit.

II.3. Of the incompetence of the Arbitral Tribunal ratione materiae

As a direct consequence of the prior exception, the Defendant raised the exception of material incompetence of the Arbitral Tribunal, because, says the Defendant, it is «outside the jurisdiction of tax arbitration the review of any questions concerning the recognition of tax exemptions, under penalty of violation of law», and «the question of recognition of tax exemptions is matter reserved to the jurisdiction of administrative and tax courts».

It is necessary to review and decide.

Considering the umbilical connection between this exception and the exception previously reviewed – the alleged material incompetence of the Arbitral Tribunal stems directly from the exception of error in form of process, sharing the same foundation –, we consider as fully reproduced and integrated here the stated in the prior point and, without need of greater considerations, the exception of material incompetence of the Arbitral Tribunal to review and decide the present process is judged to lack merit.

There are no other exceptions or preliminary questions that obstruct knowledge of the merits and that must be known.

III. REASONING

III.1. FACTUAL

§1. Proven facts

With respect to the factual matter, it is important, first of all, to emphasize that the Tribunal does not have to pronounce itself on everything alleged by the parties, but rather it falls to it the duty to select the facts that matter for the decision and distinguish the proven matter from the unproven (article 123.º, no. 2, of the CPPT and article 607.º, nos. 3 and 4, of the CPC, applicable ex vi article 29.º, no. 1, subparagraphs a) and e), of the RJAT). In this way, the relevant facts for judgment of the case are chosen and defined as a function of their legal relevance, which is established in attention to the various plausible solutions of the question(s) of Law.

In this framework, the following facts are considered proven:

a) On 05/01/2010, the Claimant acquired, by purchase and sale contract executed by public deed drawn up at the Notarial Office of Lisbon, in charge of the Notary..., the right of superficies of the autonomous fraction designated by the letters "HM" corresponding to sector... – Block...–..., ... – Tourist Accommodation, of the urban property in horizontal property regime identified as "M...", located at..., ..., parish and municipality of Portimão, registered in the respective register under article..., with the property value corresponding to the fraction of €111,417.13. (cf. Doc. 1 filed with the Claim)

b) By Order of the Minister of Tourism, of 19/10/2004, published in the Official Journal no..., III Series, of .../.../2004, the tourist utility was declared definitively of the enterprise "Hotel ... M...", pursuant to Decree-Law no. 423/83, of December 5, in which the aforementioned autonomous fraction whose right of superficies was sold is integrated. (cf. Doc. 1 filed with the Claim)

c) At the initiative of the Claimant, having in view the subsequent execution of the referenced public deed of purchase and sale, on 23/12/2009 the Tax and Customs Authority issued document no..., referring to IMT, in the amount of €0.00, which is here fully reproduced and integrated and from which the following mention appears: «Benefits: 33 – Tourist Utility (Art. 20.º of D. L. 423/83), 100% of the collective subject matter». (cf. PA filed with the file)

d) Through official letter no..., of 07/01/2015, of the Financial Services Office of Portimão, the Claimant was notified of the following (cf. Doc. 3 filed with the Claim and PA filed with the file):

[content]

e) The Claimant exercised the right of prior hearing, pursuant to the terms contained in pp. 9 to 11 of the administrative file filed with the proceedings and which are here fully reproduced.

f) Through official letter no..., of 18/02/2015, of the Financial Services Office of Portimão, the Claimant was notified of the content of information no..., of that same date – contained in pp. 13 to 15 of the administrative file filed with the proceedings and which is here fully reproduced – and of the order issued on this, handed down by the Deputy Head of the Financial Services Office in a substitution capacity, by delegation of the latter, with the following content (cf. Doc. 2 filed with the Claim and PA filed with the file):

«Taking into account that the IMT exemption and the reduction of Stamp to 1/5 was wrongfully granted, since article 20.º of Dec. Law no. 423/83, of 5/12 applies only to the entity installing the enterprise and not to purchasers of accommodation units, the exemption granted had no effect and the right to assessment has not expired as the same was notified within the 8-year period from the date on which the exemption had no effect, as provided in article 35.º of the CIMT, so I maintain the assessments of IMT and Stamp Duty made.»

g) Through the same official letter, the Claimant was further notified of the following (cf. Doc. 2 filed with the Claim and PA filed with the file):

[content]

h) On 17/03/2015, the Claimant made voluntary payment of the total IMT assessed, in the amount of €8,287.50. (cf. PA filed with the file)

i) On 12/06/2015, the Claimant filed the request for establishment of an arbitral tribunal that gave rise to the present process. (cf. information system of case management of CAAD)

§2. Unproven facts

With relevance for the review and decision of the case, there are no facts that have not been proven.

§3. Reasoning as to the factual matter

Regarding the proven factual matter, the conviction of the Tribunal was based on the facts alleged by the parties, whose adherence to reality was not called into question, on the documents filed with the proceedings and on the administrative file.

III.2. LEGAL

The Claimant begins by maintaining that the contested additional IMT assessment constitutes the revocation of an administrative act of granting/recognition of a tax benefit, in violation of the provision in arts. 140.º and 141.º of the CPA (version prior to publication of Decree-Law no. 4/2015, of January 7), specifically as to the time limit for revocation of the act.

Additionally, the Claimant further alleges that the contested additional IMT assessment was made beyond the time limit set forth in art. 31.º, no. 3, of the CIMT, so the expiration of the right to assess IMT is verified.

It is necessary to review and decide.

Since the expiration of the right to assess the tax is invoked, it is necessary to begin by knowing this defect as it is that whose merit determines more stable and effective protection of the interests of the Claimant (art. 124.º of the CPPT ex vi art. 29.º, no. 1, subparagraph a), of the RJAT).

§1. Of the expiration of the right to assess

The review of this defect also requires ascertainment of the nature of the IMT assessment contested: initial assessment or additional assessment? Effectively, the review of the question of expiration will depend on the answer we give to this question.

Article 45.º, no. 1, of the LGT provides the following: "The right to assess taxes expires if the assessment is not validly notified to the taxpayer within four years, when the law does not set another."

One of the cases in which the law sets another time limit is that of IMT, with article 35.º, no. 1, of its Code providing: "Tax may only be assessed in the eight years following the transmission or the date on which the exemption had no effect, without prejudice to the provision in the following number and, as to the remainder, in article 46.º of the General Tax Law."

Thus, as an exception to the general four-year expiration time limit, the law sets, for IMT, a special eight-year time limit, counting from the transmission or the date on which the exemption had no effect.

However, if it is considered that the contested IMT assessment constitutes an additional assessment, it is then necessary to take into account no. 3 of art. 31.º of the CIMT, which provides: "Assessment may only be made until four years have elapsed from the assessment to be corrected, except if it is by omission of property or values, in which case it may still be made subsequently, always being without prejudice, in all cases, to the provision in article 35.º."

However, nothing permits qualifying as an additional assessment the tax act contested in this process. Because the additional assessment presupposes that there has been a prior assessment – relative to the same tax fact, the same taxpayer and the same period of time – which it is intended to correct or rectify because, by factual or legal error or by an omission or inaccuracy committed in statements made for purposes of assessment, a lower tax was determined to be collected than was owed. In other words, the additional assessment is nothing more than the correction of a deficient assessment as a consequence of errors or omissions, which may be the responsibility of either the services or the taxpayers – in this sense, among others, the decisions of the Supreme Administrative Court of 17/01/2007, issued in case no. 0909/06, of 14/09/2011, issued in case no. 0294/11 and of 18/05/2011, issued in case no. 0153/11 (all available at www.dgsi.pt).

Now, the contested IMT assessment was not made in order to correct or rectify a prior assessment vitiated by factual or legal error or by omissions or inaccuracies committed in statements made for purposes of assessment. In truth, the transmission of the right of superficies of the aforementioned autonomous fraction which constitutes the tax fact did not give rise to assessment of the tax because it was considered exempt, pursuant to the provision in no. 1 of art. 20.º of Decree-Law no. 423/83, of December 5. It is true that the tax fact occurred but from this cannot be concluded, without more, that there was an IMT assessment from which no tax would have resulted in payment because it was considered exempt thereof; on the contrary, by force of that exemption, no IMT assessment was then made.

Established that it constitutes an initial assessment of tax and considering the factuality contained in subparagraphs a), f) and g) of the proven facts, we have that the contested IMT assessment was made and validly notified to the Claimant within the 8-year period that results from the provision in art. 45.º, no. 1, of the LGT, combined with no. 1 of art. 35.º of the CIMT.

Thus, the alleged defect of expiration of the right to assess IMT lacks merit.

§2. Of the illegal revocation of an administrative act of recognition of tax benefits

The Claimant alleges that the IMT assessment contested is illegal because the same presupposes the revocation of an administrative act of granting a tax benefit, which, according to its understanding, violates the provision in arts. 140.º and 141.º of the CPA (version prior to publication of Decree-Law no. 4/2015, of January 7), specifically as to the time limit for revocation of the act.

As was already made explicit above, the tax benefit at issue in this file – IMT exemption for acquisitions of real property or autonomous fractions intended for the installation of enterprises qualified as tourist utility –, since it results directly and immediately from the law, is of automatic application, provided that the conditions provided in no. 1 of art. 20.º of Decree-Law no. 423/83, of December 5, are met. For this reason, the effectiveness of that tax benefit is not dependent on any administrative act of recognition, susceptible of revocation pursuant to the terms and time limits provided in the legal rules cited by the Claimant.

In these terms, the alleged illegal revocation of an administrative act of recognition of tax benefits lacks merit.

§3. The scope of application of art. 20.º, no. 1, of Decree-Law no. 423/83, of December 5

Although the Claimant did not dwell on this question, it was referenced in the request for arbitral pronouncement and subject to careful development in the Response of the Defendant; for this reason, we understand that we should pronounce ourselves on this matter.

On the scope of application of the legal rule contained in no. 1 of art. 20.º of Decree-Law no. 423/83, of December 5, the Supreme Administrative Court pronounced itself in the decision issued on 23/01/2013, in case no. 0968/12, in enlarged judgment, which gave rise to the jurisprudence-standardizing decision no. 3/2013, published in the Official Journal, 1st Series, no. 44, of 04/03/2013, which standardized jurisprudence as follows: "The concept of «installation», for purposes of the benefits to which no. 1 of art. 20.º of Decree-Law no. 423/83, of December 5, refers, concerns the acquisition of real property (or autonomous fractions) for construction of tourist enterprises, after the respective urban operations are duly licensed, aiming to benefit companies that engage in the activity of promotion/creation of the same and not purchasers of autonomous fractions in constructed/installed enterprises in shared ownership regime, since this concerns «exploitation» and not «installation»".

Taking into account the importance of uniformity of jurisprudence, especially in face of the security and stability of legal relations that law should aim at and achieve, and which is enshrined in art. 8.º, no. 3, of the Civil Code – by imposing on the judge the duty to consider all cases that deserve analogous treatment, in order to obtain a uniform interpretation and application of law –, we must adhere to that jurisprudential orientation and to the foundations on which the said decision is based[1], set forth, in abbreviated but clarifying form, in the respective summary, of the following content:

"I – In the determination of the meaning and scope of tax rules and in the qualification of facts to which they apply, the general rules and principles of interpretation and application of laws are observed", and that "Whenever, in tax rules, terms proper to other branches of law are used, they should be interpreted in the same sense that they have there, unless otherwise directly results from the law" (art. 11.º, nos. 1 and 2, of the LGT).

II – Within the scope of the legal regime of installation, exploitation and operation of tourist enterprises, established in Decree-Law no. 39/2008, of March 7, the concept of installation of a tourist enterprise comprises the set of legal acts and the formalities necessary for licensing (in the broad sense, comprising prior notifications or authorizations, as the case may be) of urban operations necessary for construction of a tourist enterprise, as well as the obtaining of titles that make it capable of functioning and being exploited for tourist purpose (cfr. Chapter IV, arts. 23.º et seq.).

III – When the legislator uses the expression acquisition of real property or autonomous fractions intended for «installation», for purposes of the benefit to which no. 1 of art. 20.º of Decree-Law no. 423/83, of December 5, refers, cannot but be understood as referring precisely to the acquisition of real property (or autonomous fractions) for construction of tourist enterprises, after the respective urban operations are duly licensed, aiming to benefit companies that engage in the activity of promotion/creation of the same.

IV – This concept of «installation» is the one that is appropriate to all types of tourist enterprises and is not called into question by the fact that the enterprises may be constructed/installed in shared ownership regime, since this concerns «exploitation» and not «installation».

V – In tourist enterprises constituted in shared ownership (which comprise lots and or autonomous fractions of one or more buildings, pursuant to the provision in art. 52.º, no. 1, of Decree-Law no. 39/2008, of March 7), two distinct procedures stand out, although they may occur simultaneously: one relating to the practice of operations necessary to install the enterprise; another, relating to the operations necessary to put it into operation and exploit it, and the sale of projected or constructed units necessarily forms part of the second.

VI – The legislator intended to spur tourist activity by providing for exemption/reduction of payment of Sisa/Stamp, for promoters who intend to construct/create establishments (or readapt and remodel existing fractions) and not when it is merely the acquisition of fractions (or accommodation units) integrated in the enterprises and intended for exploitation, even if acquired at a date prior to the installation/licensing of the enterprise itself.

VII – Whoever acquires the fractions does not become a co-financier of the enterprise, with responsibility for its installation, since is acquiring a tourist product that was placed on the market by the promoter, whether the acquisition is made on plan or after the enterprise is installed, as any final consumer, especially since the fractions may be acquired for its exclusive use and without any time limitation (in the case of tourist enterprises constituted in shared ownership).

VIII – Not being at issue the acquisition of real property or autonomous fractions intended for the construction/installation of tourist enterprises, but rather the acquisition of accommodation units by final consumers, even if because integrated in the enterprise in question they are affected to tourist exploitation, the same cannot benefit from the exemptions enshrined in art. 20.º, no. 1, of Decree-Law no. 423/83.

IX – This interpretative result is what results from the historical element, rational/teleological and also literal of the legal rules in question.

X – "Tax benefits are measures of an exceptional character instituted for protection of relevant extra-fiscal public interests and that are superior to those of the taxation itself that they prevent (article 2.º/1 of the EBF) (…)" and although admitting extensive interpretation (article 10.º of the EBF), cannot be considered by the interpreter the legislative thought that does not have in the letter of the law a minimum of correspondence, even if imperfectly expressed (article 9.º/2 of the Civil Code), besides which because they represent a derogation from the rule of equality and the principle of contributive capacity that materially grounds taxes, tax benefits must be justified by a relevant public interest."

Thus, also considering that the applicable legislation to the case sub judice did not undergo alteration, it is reiterated, in the present proceedings, the reasoning speech of the cited decision, reason for which we consider that the acquisition of the right of superficies of the autonomous fraction in question, by part of the Claimant, does not benefit from the IMT exemption provided in no. 1 of the cited Decree-Law no. 423/83.

§4. Of indemnificatory interest

In accordance with the provision in article 43.º, no. 1, of the LGT, "indemnificatory interest is owed when it is determined, in administrative reclamation or judicial challenge, that there was error attributable to the services from which results payment of the tax debt in an amount superior to that legally owed".

Thus, not being judged to have merit the claim for declaration of illegality and consequent annulment of the contested IMT assessment, the claim for indemnificatory interest that depended on the existence of an error attributable to the services in that IMT assessment made by the Tax and Customs Authority also lacks merit.

IV. DECISION

Pursuant to the foregoing, this Arbitral Tribunal decides:

a) To judge the exception of error in form of process to lack merit;

b) To judge the exception of material incompetence of the Arbitral Tribunal to lack merit;

c) To judge the claim for declaration of illegality and consequent annulment of the contested IMT assessment, in the amount of €8,287.50, as well as the claim for indemnificatory interest to lack merit;

d) To absolve the Defendant from the claim; and

e) To condemn the Claimant to the costs of the process.

VALUE OF THE PROCESS

In accordance with the provision in arts. 306.º, no. 2, of the CPC, 97.º-A, no. 1, subparagraph a), of the CPPT and 3.º, no. 2, of the Rules of Costs in Tax Arbitration Processes, the value of the process is fixed at €8,287.50, considering the alteration verified in the subject matter of the present process and the provision in art. 97.º-A, no. 1, subparagraph a), of the CPPT, applicable ex vi article 29.º, no. 1, subparagraph a), of the RJAT.

COSTS

Pursuant to article 22.º, no. 4, of the RJAT, the amount of costs is fixed at €918.00 (nine hundred and eighteen euros), pursuant to Table I annexed to the Rules of Costs in Tax Arbitration Processes, charged to the Claimant.

Lisbon, January 21, 2016.

The Arbitrator,

(Ricardo Rodrigues Pereira)

[1] In line, moreover, with profuse jurisprudence of the Supreme Administrative Court of which we cite, by way of example, the decisions issued on 23/01/2013, in cases nos. 01001/12, 01005/12 and 01069/12, on 30/01/2013, in cases nos. 0970/12, 0971/12, 0972/12, 0999/12, 01003/12 and 01193/12, on 06/02/2013, in case no. 01000/12, on 08/02/2013, in case no. 01004/12, on 17/04/2013, in cases nos. 01023/12 and 01002/12, on 23/04/2013, in case no. 01195/12, on 11/09/2013, in case no. 01049/13, on 25/09/2013, in case no. 01038/13, on 09/10/2013, in cases nos. 01050/13, 1040/13 and 01015/13, on 18/10/2013, in case no. 01048/13, on 30/10/2013, in case no. 01052/13, on 13/11/2013, in case no. 01054/13, on 4.12.2013, in case no. 0824/13, on 29.1.2014, in case no. 01043/13, on 5.2.2014, in cases nos. 01041/13, 01047/13 and 01917/13, on 26/02/2014, in cases nos. 0860/13 and 08763, on 02/04/2014, in case no. 01914/13, on 09/04/2014, in case no. 0859/13, on 28/05/2014, in case no. 0291/14 and on 18/06/2014, in case no. 01527/13 (all available at www.dgsi.pt).