IMT and Stamp Tax on Lapsed Resale Exemption: Property Value Date for Assessment | CAAD 394/2015-T

ARBITRAL AWARD

The arbitral tribunal functioning with a single arbitrator constituted at CAAD – Administrative Arbitration Centre pursuant to the legal regime established by Decree-Law no. 10/2011 of 20 January[1], for which the single arbitrator from the Centre's list Nuno Maldonado Sousa was designated by the respective Deontological Council, hereby issues its arbitral award.

1.1. Report

1.2. Constitution of the arbitral tribunal

A..., Lda., with registered office at Rua..., no...., ..., ...-... Lisbon, registered in the Commercial Registry Office of Lisbon under the single registration number and collective person number..., with a share capital of €50,000.00, a single-member limited liability company and which was previously named B..., S.A.[2], filed a petition for constitution of the arbitral tribunal, pursuant to the combined provisions of articles 2 and 10 of the RJAT and articles 1 and 2 of Order no. 112-A/2011 of 22 March, with the Tax and Customs Authority as Respondent[3].

The petition for constitution of the arbitral tribunal was accepted by the President of CAAD on 25-06-2015 and was notified to the TA on the same date.

Pursuant to the provisions of article 6, no. 1 and article 11, no. 1, subsection b) of the RJAT, the Deontological Council designated as arbitrator of the single arbitral tribunal the undersigned, who communicated acceptance of the appointment within the applicable period, and notified the parties of that designation on 26-08-2015. In accordance with the rule set out in article 11, no. 1, subsection c) of the RJAT, the arbitral tribunal was constituted on 10-09-2015.

1.3. The Claimant's petition

In its Initial Petition the Claimant petitioned for a declaration of illegality and annulment of:

(i) Assessment of Transfer Tax and respective compensatory interest no..., with the total amount payable of €35,038.89;

(ii) Assessment of Stamp Tax[4] no..., with the total amount payable of €2,036.50.

To support its petition the Claimant argues that the assessments were made using as the taxable base the taxable patrimonial value of the urban property in question at a different moment from that which is relevant for the purpose, contending that the said taxes should be calculated with reference to the VPT[5] in force on the date of the transmission and not to that which later resulted from a subsequent valuation following alterations made to the property. It bases its claim on the provision of article 18-3 of the CIMT[6] which it considers applicable.

The Claimant also requested the condemnation of the TA to pay compensation for the costs incurred or to be incurred by the Claimant with the provision of security aimed at the suspension of the execution process.

1.4. The position of the TA

The Tax and Customs Authority presented its Response[7] upholding the legality of the assessments and defending the inadmissibility of the petition and its substantiation, considering that the relevant VPT is that which was in force at the moment when the said assessments were made, because the alterations that were made to the property did not alter its nature. It therefore considers that the provision of article 18-2 of the CIMT is applicable to the situation.

1.5. Proceedings and submissions

Considering that the issues in dispute in this process are primarily matters of law, the tribunal considered that the case was in a state to be decided after the TA's Response, as it was supplemented with documentary evidence presented by the Claimant and with the TA's Administrative File[8], which were not challenged, and no other procedural acts were requested. In that context and in order to avoid potentially unnecessary acts, the tribunal invited the Claimant and the TA to state whether it was necessary to hold the meeting referred to in article 18 of the RJAT and the necessity of producing submissions, oral or written, thus initiating the period for pronouncement of the award.

Following the passage of the period without the Parties having stated their position, it now falls to proceed to the decision phase.

1.6. Case management

The arbitral tribunal was regularly constituted and has jurisdiction ratione materiae according to the rules of article 2, no. 1, subsection a) of the RJAT.

The Parties possess legal personality and capacity (that of the TA being governed by the rules set out in article 4, no. 1 of the RJAT and 10, no. 2, of the same diploma and article 1, subsection a) of Order no. 112-A/2011 of 22 March), are legitimated and are regularly represented.

There are no irregularities that affect the proceedings, nor preliminary questions of a procedural nature.

Accordingly, there is no obstacle to the tribunal's examination of the merits of the case, so a decision must be issued.

1.7. Decision

1.8. Factual matters

1.8.1. Facts considered proven

The following facts are established in these proceedings:

A. On 26-12-2007 the Claimant was a joint-stock company whose corporate purpose was "real estate management and investment, as well as the acquisition, alienation and encumbrance of immovable property, namely its purchase for resale; the promotion, construction, commercialisation and operation of real estate and/or tourism enterprises" [1st RI: doc. 5; 3rd R-TA]

B. On 26-12-2007 the Claimant acquired by "deed of purchase and sale", for the price of €315,000.00, 95% of the urban property entered in the tax register under article... of the parish of..., described in the... Land Registry Office of Lisbon under number... and located at Rua..., number.... [2nd RI: doc. 6; 3rd R-TA]

C. The urban property entered in the tax register of the parish of..., municipality of Lisbon, under article... originated from article... of the parish of... (extinct), municipality of Lisbon. [2nd RI: doc. 7; 3rd R-TA]

D. On 26-12-2007 the urban property acquired by the Claimant was intended exclusively for residential purposes [public deed which constitutes doc. 5 attached to the RI, p. 1v].

E. In the title of acquisition the Claimant declared the part acquired of the property to be intended for resale [public deed which constitutes doc. 5 attached to the RI, p. 2]

F. When the deed of purchase and sale of the property was executed, the respective property register card expressed that it had a taxable patrimonial value of €22,998.66, determined in the year 2003. [3rd RI: doc. 8; 4th R-TA]

G. In the deed of purchase and sale there is a reference stating that "€3,200 and €25.00, items 1.1[9] and 15.1[10] of the Stamp Tax Table are paid". [3rd RI: doc. 6, p. 3; 4th R-TA]

H. In the urban property register card of article... of the parish of... (extinct), municipality of Lisbon, printed at the Finance Service of Lisbon -..., District, on 31-03-2005, in the description of the property, it is stated that it had 2 floors and an attic; it is also stated that the taxable patrimonial value was €22,998.66, determined in the year 2003; it is further stated that the use classification of the property is residential. [7th RI: doc. 8]

I. The notary who executed the deed of purchase and sale of the property filed a certificate issued by the Finance Service of Lisbon-..., proving that the Claimant was registered for the activity of purchase and sale of property and resale of those acquired for that purpose and that it carried out this activity normally and habitually in the previous year, and declared that he had verified through this document that the sale to the Claimant "was exempt from Transfer Tax in accordance with article 7 of the respective Code". [4th RI: doc. 6, p. 2v; 5th R-TA]

J. The property was in ruins at the date of its acquisition by the Claimant [6th RI and 7th R-TA].

K. The Lisbon Municipal Council issued in October 2007[11] the demolition works permit no.../... /2007, to which the municipal file refers that titles the execution of demolition works, which concern the property located at Rua..., ..., parish of.... [6th RI: doc. 11]

L. The Lisbon Municipal Council issued on 8 October 2007 the construction works permit no.../... /2007, to which the municipal file refers that titles the execution of works concerning the property located at Rua..., ..., parish of.... [6th RI: doc. 14]

M. As a result of the works carried out, IMI declaration model 1 was delivered on 16 December 2010, with the property having been valued on 2 March 2011, with a VPT of €599,540.00. [8th and 9th RI and 8th R-TA].

N. In the urban property register card of article... of the parish of..., municipality of Lisbon obtained via the internet on 21-11-2011, in the description of the property, it is stated that it has 5 floors and it is also stated that the taxable patrimonial value was €599,540.00, determined in the year 2010; it is further stated that the use classification of the property is residential. [7th, 8th and 9th RI: doc. 15]

O. On 16-12-2010 the Claimant proceeded with the filing of IMI declaration model 1 with the Finance Service of Lisbon – ... [10th RI and 9th R-TA: PA1, pp. 71-72].

P. The Claimant was still the owner of the property on 28-12-2007. [10th RI and 3rd R-TA]

Q. On 14-09-2011 and based on a declaration of the Claimant of the same date, an assessment of Transfer Tax was prepared by the TA "due to the lapse of the exemption provided for in no. 1 of article 7 of the CIMT" regarding the purchase of the part of the property referenced in these proceedings, with identification number..., in the amount of €35,038.89, corresponding to a tax amount of €34,173.78 calculated at the rate of 6% on the taxable amount of €569,563.00, and compensatory interest, with the payment deadline being 15-09-2011 [doc. 3 and PA1, pp. 10-12].

R. On 14-09-2011 and based on a declaration of the Claimant of the same date, an assessment of Stamp Tax – item 1.1, was prepared by the TA with identification number..., in the amount of €2,036.50, corresponding to a tax amount of the same value, calculated at the rate of 0.008% on the taxable amount of €254,563.00 (€569,563.00 - €315,000.00), with the payment deadline being 15-09-2011 [doc. 18].

S. On 05-12-2011 an administrative complaint dated 02-12-2011, submitted by the Claimant against the assessment of Transfer Tax and compensatory interest, concerning the property referred to herein, was received at the Finance Service of Lisbon-... [11th RI: doc. 17 and PA1, p. 1]

T. On 14-05-2012 the Claimant petitioned to broaden the request in the administrative complaint, so as to include therein also the annulment of the assessment of Stamp Tax no.... [11th RI: doc. 18].

U. The Claimant was notified of the rejection of the administrative complaint by a decision of 19-07-2012, in the substantive reasoning of which, among other matters therein contained and as regards the Stamp Tax in particular, may be read: [12th RI: doc. 19, p. 3]

1.2 On 14/5/2012, the taxpayer submitted a document requesting "the broadening of the administrative complaint petition so as to also include the annulment of the Stamp Tax assessment no..." (with payment deadline also on 15/9/2011), arguing that the factual and legal grounds of both assessments are the same (fls. 139 to 142 and 146).

It is, however, a different petition, hence a different administrative complaint, as follows, in particular, from article 71 of the CPPT.

Even if the other requirements for the joinder of petitions had been met (they are not, not least because they concern different taxes), the untimely filing of the petition concerning stamp tax alone does not permit satisfying the claimant's request.

V. In the substantive reasoning of the decision rejecting the administrative complaint of which the Claimant was notified, among other matters therein contained and as regards Transfer Tax in particular, the following may be read: [12th RI: doc. 19, p. 3]

3.1 Under the heading "temporal application of rates", article 18, no. 2 of the Transfer Tax Code, invoked by the claimant, provides that if "the exemption lapses, the rate and the value to be considered in the assessment shall be those in force on the date of the assessment".

However, no. 3 of the same article establishes that, in the event of the lapse referred to, "and after the acquisition of the property, facts have occurred that alter its nature, the tax shall be assessed on the basis of the rates and values in force on the date of the transmission".

3.2 The provision cited in no. 3 establishes, as a requirement for its application, the hypothesis that an alteration in the nature of the property which is the subject of the transmission has occurred, as would be the case, as mentioned by the claimant herself, of a rural property being acquired and subsequently being converted to an urban property. In the opinion held, it is not a requirement for the application of the provision merely an alteration in the value of the property as a consequence of the performance of works.

Now, the claimant alleges that it carried out works that altered the value of the property. It does not follow, however, from these proceedings that any fact has occurred that has altered its nature, so it does not appear that the provision cited in no. 3 of article 18 of the CIMT has application in this case.

W. On 19-07-2012 the Claimant filed a hierarchical appeal against the rejection of the administrative complaint regarding the assessments of Transfer Tax and Stamp Tax. [12th RI: doc. 20]

X. By a decision of 29-12-2014 that was notified to the Claimant, the hierarchical appeal was rejected and the decision taken in the administrative complaint was maintained. [12th RI: doc. 2]

1.8.2. Facts considered not proven

It is not considered proven that the Claimant provided bank guarantees in the amount of €44,648.18 as to the Transfer Tax assessment and €2,699.58 as to the Stamp Tax assessment for the suspension of the fiscal enforcement proceedings, as it asserts (14th RI), for having presented no evidence to support its allegation.

No other facts with interest for the decision of the case were invoked.

1.8.3. Substantiation of the proven factual matters

The tribunal's conviction was based on the documentary evidence in the proceedings and on the position taken with respect to each fact by the Parties in their pleadings, particularly in the TA's own statement (1st R-TA) to the effect that the facts underlying the assessment did not generate controversy.

1.9. Matters of law

In these proceedings the issues to be resolved concern two taxes: Transfer Tax and Stamp Tax.

With regard to Stamp Tax it is first necessary to determine ex officio whether the Claimant's right to challenge the assessment on the grounds on which it does so has lapsed. Should this exception fail, the substantive issue must be examined, which is to determine what is the taxable amount for this tax, bearing in mind that this is generally determined by the rules of the CIMT, with Transfer Tax in the case at hand having specific regulation for the situation of lapse of the exemption under the regime of purchase for resale, which does not apply to Stamp Tax. It may therefore be necessary to ascertain whether the subsequent assessment regime that applies to Transfer Tax in cases of lapse of the said exemption requires correction of the primitive Stamp Tax assessment, should a higher VPT eventuate.

The substantive issue to be resolved in respect of Transfer Tax consists in determining what the taxable amount is to be considered in cases of lapse of the exemption of the purchase for resale regime, in situations where the property has been re-valued because it has been subject to alterations and a new valuation.

Should the petitions for annulment of the assessments be granted, it will further be necessary to determine the Claimant's right to be compensated for the costs of providing security aimed at the suspension of the enforcement process.

1.9.1. Lapse (Stamp Tax)

The defects alleged by the Claimant concerning the act reside in its voidability (article 163-1 CPA[12], pursuant to 29-1-d RJAT) and may be challenged within the established period (article 163-3 CPA, pursuant to 29-1-d RJAT). Being a State tax, the right to that obligation is not at the disposal of the parties, so it falls to the tribunal to apply the legal regime ex officio (article 331 CC[13]), which it shall do.

As established in the factual matters, the Stamp Tax assessment had a payment deadline on 15-09-2011 and on 14-05-2012 the Claimant challenged it, petitioning the broadening of the request in the administrative complaint that it had filed.

On this matter the following rules apply:

· The provisions of the RJAT, notably the provision of its article 10-1-a) which requires that the petition for constitution of the arbitral tribunal be filed within 90 days as regards acts susceptible to independent challenge;

· The provisions of the CPPT[14] (pursuant to 10-1-a) RJAT) which in its article 102-1-a) determine that the commencement of the period shall coincide with the end of the period for voluntary payment of tax obligations legally notified to the taxpayer;

· The provision then in force of article 102-2 CPPT (pursuant to 10-1-a) RJAT) which allowed that in the event of rejection of an administrative complaint, the challenge could be presented within 15 days after notification.

Under the applicable law the period to challenge the assessment had its initial term on 16-09-2011 and its final term on the 90th day thereafter, which occurred on 14-12-2011, the date on which the Claimant's right to challenge the assessment on the grounds of its voidability lapsed. It is clear that the Claimant could have filed an administrative complaint by 03-01-2012 but it did not do so.

Accordingly, the lapse of the Claimant's right to challenge the Stamp Tax assessment on the grounds on which it did must be declared and the TA must be absolved of liability[15] in this respect.

1.9.2. Substantive issue (Transfer Tax): Determination of taxable amount in cases of lapse of the exemption of the purchase for resale regime

The provisions that govern this issue are contained in Chapter IV of the CIMT which stipulated (only the parts considered relevant are transcribed, which are the provisions that establish the rates and those that govern their temporal application):

CHAPTER IV - Rates

Article 17. Rates

1 - The rates of Transfer Tax are as follows:

a) Acquisition of urban property or autonomous fraction of urban property intended exclusively for own permanent residence:

b) Acquisition of urban property or autonomous fraction of urban property intended exclusively for residential purposes, not covered by the preceding subsection:

c) Acquisition of rural property - 5%;

d) Acquisition of other urban properties and other onerous acquisitions - 6.5%.

(…)

Article 18. Temporal application of rates

1 - The tax shall be assessed at the rates in force at the time the taxable event occurred.

2 - If the exemption lapses, the rate and the value to be considered in the assessment shall be those in force on the date of the assessment.

3 - When, in the case referred to in the preceding paragraph and after the acquisition of the property, facts have occurred that alter its nature, the tax shall be assessed on the basis of the rates and values in force on the date of the transmission.

The CIMT contains no definition of property nor treatment of this concept and therefore the legislator wisely chose from the outset to use the regime of the Immovable Property Tax Code for the regulation of this matter (article 1-2 CIMT). It is natural that it should be so since it is precisely in the Immovable Property Tax Code that the basic concepts that fiscal law uses for the taxation of assets are enshrined, as is evident from a similar provision made by article 1-6 of the Stamp Tax Code.

Fiscal law has not adopted entirely the dichotomous classification that civil law makes of properties, as objects of legal relations, adapting it to the needs of this branch of law. For the taxation of assets the conceptualisation of this subject is based on the Immovable Property Tax Code, as recognised by the statutes that regulate the other taxes with similar scope already cited. On the basis of these references it can be stated that the concepts regarding property are the same in asset taxation, with their regulation residing in the Immovable Property Tax Code.

According to the Immovable Property Tax Code, property is ultimately any fraction of territory, including water, plantations and constructions of any nature incorporated therein or placed thereon, with a character of permanence, provided it forms part of the assets of a person and has economic value (article 2 CIMI). For their part, properties may be rural or urban. The law does not name this division; it merely tells us that properties may assume one of two different designations – rural or urban – and it also does not set out the criterion for division, instead opting to specify in concrete terms which properties have one designation and which properties have the other.

Rural properties are lands situated outside urban settlements that are not building land, destined or fit for agricultural activities, including constructions directly assigned to that activity, their waters and plantations (article 3 CIMI).

Urban properties, which are all the others, are divided into various types, namely (i) residential properties; (ii) commercial, industrial or service properties; (iii) building land; and (iv) others (article 6-1 CIMI). The specification of urban properties is made according to their purpose, or because it is licensed for the purpose in question or because that is the purpose to which it is normally intended (article 6-3). For their part, building land comprises (i) those for which a license or authorization has been granted, permitted preliminary notice or issued favourable prior information of a subdivision or construction operation; (ii) those which have been declared as such in the title of acquisition (article 6-3 CIMI).

For their part, they are classified as other urban properties (i) lands within the boundaries of urban settlements in which the competent entities or the territorial planning instruments forbid subdivision or construction (ii) lands within an urban settlement that cannot have use capable of generating any income and are not assigned to use capable of generating agricultural income; (iii) buildings and constructions licensed or, in the absence of a license, which have as their normal purpose purposes other than residential, commercial, industrial or service purposes (article 6-4 CIMI).

Mixed property classification is also permitted, where the same property has a rural part and an urban part and neither can be classified as main relative to the other (articles 5-1 and 2 CIMI).

It is believed that the conceptual constructions of the Immovable Property Tax Code should be understood as structuring asset taxation, for several reasons. Firstly, because the provisions of the fiscal laws in this area of taxation express themselves in that sense. Secondly, because the Immovable Property Tax Code is a true code in its juridical sense, i.e., it contains the nuclear regime of the rules relating to a certain subject; it contains the fundamental discipline, treating it in a systematic and scientific manner[16]. Thirdly, the provisions of the Immovable Property Tax Code in question were elaborated within the context of the reform of asset taxation, considered in the complex normative framework in which they are integrated and have as their function "to establish the precise contours of the reality to be taxed" (preamble to the Immovable Property Tax Code).

The entire system of organization of immovable property embodied in the Immovable Property Tax Code thus has as its purpose the rigorous characterization of the immovable assets that are subject to taxation and uses for this a criterion of multiple dimensions – the economic perspective. It is the economic perspective that permits stating that only fractions of territory capable of constituting the assets of persons and having economic value are properties (article 2 CIMI); it is the characteristic of having economic autonomy that allows the concept of property to embrace waters, plantations, buildings and constructions (article 2 CIMI); it is use capable of generating agricultural income that allows properties to be qualified as rural (article 3-1-a CIMI); it is believed to be the same economic individuality perspective, much more than a juridical one, that requires treating each autonomous fraction of buildings in divided ownership as a property (article 2-4 CIMI), although for civil law it is only an independent unit of an urban property (article 1414 of the Civil Code); they also appear to be reasons of an economic nature that lead to each part of property capable of independent use being considered separately in the land registration, so as to allow the discrimination of the respective taxable patrimonial value (article 12-3 CIMI).

The concern for individualization following criteria of an economic character is well understood; it is intended to characterize each thing in accordance with its capacity and to tax it in conformity therewith. To that end there is a constant concern to have registered the value of each part that may be subject to different use (e.g. article 12-3 CIMI).

The conceptual organization is thus based at the highest level on two groups, filled in accordance with the exhaustive description of the characteristics that lead to their grouping into (i) rural properties and into (ii) urban properties. The law does not provide for any subdivision of rural properties but does do so with respect to urban properties. Urban properties are divided into types in accordance with their purpose or intended use.

In this conceptual organization of properties for taxation purposes there is never a reference to the division of properties according to their nature. It thus appears that the nature of properties is not considered a criterion for inclusion in any of the divisions in which properties are classified.

A search through the codes that regulate asset taxation allows one to locate the use of the term nature by reference to properties or related realities, as a synonym for essence or state pure (articles 2-2, 24-1, 25-b CIMI) but especially with the sense of a general characteristic of the group that it intends to reference (articles 2-1, 26-4 and 51-2-c CIMI and 14-2 and 3 CIMT). This latter sense is used specifically in the expression according to the nature of the property, analogous to that used in article 18-3 of the CIMT, in the provision of article 47-1 of the Stamp Tax Code, undoubtedly to make the distinction between immovable property and movable property.

It thus appears that the term "nature" does not form part of the "tax taxonomy", since it does not correspond to any classification or conceptual division of properties; it is rather merely a word that the legislator uses to reference a certain group of properties, which it has organized with a specific criterion for a specific purpose. Article 47-1 of the Stamp Tax Code is the perfect example of this idea. To treat credit privileges, the legislator divided them in the Civil Code into movable and immovable and when it wished to reference each of these two groups of property, the Stamp Tax Code considered that the criterion for grouping was the nature of the property. In other words, nature is ultimately the bond of belonging to a certain group, according to the criterion of division used in the specific case.

The regime in question – the temporal application of Transfer Tax rates – must be interpreted in compliance with the principle of unity of the legal system (article 9-1 CC). The understanding that is considered to exist on this matter in fiscal law in general has already been seen. Let us now examine it in the particular case of Transfer Tax rates.

For the application of Transfer Tax rates the legislator did not resort to the purity of the grouping of properties into types, as these appear organized in article 6-1 of the Immovable Property Tax Code, opting instead to create its own grouping, with an objective criterion[17], namely:

I. Group formed by the type of urban properties those which are intended exclusively for own permanent residence (article 17-1-a);

II. Group formed by the type of urban properties intended exclusively for residential purposes, not covered by the preceding subsection, which broadly comprises properties that do not constitute the residence of their holder or which, even if they do, are not so on a permanent basis (article 17-1-b);

III. Group formed by the other types of urban properties (article 17-1-d);

IV. Group formed by rural properties (article 17-1-c).

Organized thus the properties for the purposes of Transfer Tax taxation, each property must be classified in accordance with its own nature, i.e., in accordance with the criterion of belonging to one of the groups.

The property in these proceedings is an urban property for residential purposes (fact H) which falls into the group which has been designated as Group II, because that is its nature. As it was not resold within a three-year period the exemption of which the Claimant had benefited lapsed (article 11-5 CIMT) and the default regime set out in article 18-2 of the CIMT stipulates the application of the rate and the VPT in force on the date of the assessment. This is what the TA did.

It is true that the property was subject to modifications and that a new valuation was carried out which resulted in a new VPT but these alterations (of configuration and value) do not entail an alteration of its nature for the purposes of applying Transfer Tax. The Claimant's property continues to have the same nature after the works to which it was subject; it continues to have the nature of an urban property intended exclusively for residential purposes and it is this criterion that permits ruling out the application of article 18-3 CIMT.

It would only be otherwise if the property came to be used for the permanent residence of its owner or came to be a different type of urban property (commercial, industrial, service, building land or others), or came to be a rural property, since these are the different natures that the legal provision distinguishes.

Accordingly, the Claimant's petition must fail in this respect.

1.9.3. Other petitions

The obligation of reconstitution by the TA is subject to the scope of the success of the petitions (article 100 General Tax Code) and as the Claimant's petitions are unsuccessful, its petitions for compensation for costs of bank guarantees are prejudiced.

1.10. Decision

Having considered the factual and legal elements collected and presented, this arbitral tribunal decides:

a) To declare the lapse of the Claimant's right to challenge the Stamp Tax assessment on the grounds on which it did and to absolve the TA of liability in this respect;

b) To judge as unsuccessful the petitions for annulment of Transfer Tax and for compensation for costs of bank guarantees and to absolve the TA of these petitions.

c) To condemn the Claimant to the payment of costs, which shall be determined in the appropriate manner.

1.11. Value of the proceedings

In accordance with the provision of article 306-2 of the Code of Civil Procedure, pursuant to 29-1-e) of the RJAT and 97-A, no. 1-a) of the CPPT pursuant to article 3-2 of the Regulation of Costs in Tax Arbitration Proceedings, the value of the proceedings is fixed at €37,075.59.

1.12. Costs

The costs shall be borne by the party that gave rise to them, it being understood that the unsuccessful party gives rise to them (articles 527-1 and 2 Code of Civil Procedure). In these proceedings and considering the said rule, responsibility for costs falls on the Claimant, as the unsuccessful party.

Under article 22-4 of the RJAT and Table I attached to the Regulation of Costs in Tax Arbitration Proceedings, the amount of costs falling to the Claimant is fixed at €1,836.00.

Lisbon, 11 March 2016

The Arbitrator,

(Nuno Maldonado Sousa)

[1] In this award referred to by the common abbreviated form "RJAT" (Legal Regime of Tax Arbitration).

[2] Verified through the registration AP... /2008... contained in a permanent certificate, whose code is identified in document no. 1 of the Initial Petition.

[3] In this award referred to by the abbreviated form "TA" as is commonly used.

[4] In this document stamp tax is also referred to by the acronym "IS".

[5] In this document the taxable patrimonial value is also referred to by the acronym "VPT".

[6] In this document the acronym "CIMT" is used to refer to the Code of Transfer Tax (literally: Code of the Municipal Tax on Onerous Transmissions of Immovable Property).

[7] In this document this petition by the TA is also referred to as "R-TA".

[8] Administrative File.

[9] In the version then in force the Stamp Tax Table establishes the following rate: "1.1 - Onerous acquisition or by gift of the right of property or of fractional figures of that right over immovable property, as well as the resolution, invalidity or extinction, by mutual consent, of the respective contracts - on the value 0.8%"

[10] Item 15.1 of the Stamp Tax Table, subsequently revoked by article 99-2 of Law no. 3-B/2010, of 28 April, stipulated: "Notarial services and notarial acts: 15.1 - Deeds, excluding those which have as their object the acts referred to in no. 26, wills and other instruments prepared in the books of notes of notaries, including those exclusive to them - for each instrument €25"

[11] On a specific date (prior to the 10th) but whose reference is unclear in the document attached to the proceedings.

[12] In this document the Code of Administrative Procedure is also referred to as CPA.

[13] In this document the Civil Code is also referred to as CC.

[14] In this document the Tax Procedure and Process Code is also referred to as CPPT.

[15] In the sense that the lapse of the right to invoke the voidability of a tax act results only in the dismissal of the action see Jorge Lopes de Sousa - Tax Procedure and Process Code: annotated and commented. Vol. II. 6th ed., Lisbon: Áreas Editora, 2011, pp. 163-164.

[16] See José de Oliveira Ascensão – The Law – Introduction and General Theory. 3rd ed., Lisbon, Calouste Gulbenkian Foundation, 1983, pp.282-283.

[17] In nos. 4 and 7 it creates a second grouping with a subjective criterion.