Process: 396/2014-T

Date: March 2, 2015

Tax Type: Selo

Source: Original CAAD Decision

Summary

This arbitration case (396/2014-T) concerns the application of Stamp Duty under Verba 28 of the General Stamp Tax Table (TGIS) to a Lisbon urban property owned in total ownership with independent divisions. The taxpayer challenged the 2013 Stamp Duty assessment on a building comprising 8 floors with independent use, arguing the Tax and Customs Authority incorrectly applied Verba 28 by considering the total patrimonial value (TPV) of €1,812,650 rather than the individual TPV of each division. The central legal question is whether Stamp Duty applies when a building's aggregate TPV exceeds €1,000,000 but each independent unit falls below this threshold (each floor valued at €224,230). The taxpayer contended that properties with divisions capable of independent use should follow the same treatment as horizontal property, with each unit assessed separately for Stamp Duty purposes, consistent with Municipal Property Tax (IMI) rules. Key arguments included violations of tax equality principles, as properties genuinely valued over €1,000,000 receive the same treatment as buildings with multiple lower-value units, and breaches of legal certainty and non-retroactivity given the law's October 2012 creation with immediate effect. The taxpayer sought annulment of the assessments and compensatory interest on €5,132.48 paid. The case was admitted to the CAAD arbitration system, with the Tax Authority presenting no procedural exceptions. The excerpt provided does not include the final arbitral decision or reasoning.

Full Decision

ARBITRAL DECISION

Proceedings No. 396/2014 – T

A – REPORT

  1. A, taxpayer no. …, resident at Avenue …, Lisbon, came to request the establishment of an arbitral tribunal, pursuant to the provisions of art. 2, no. 1, a) and 10, no. 1 and 2 of the Legal Regime of Tax Arbitration, provided for in Decree-Law 10/2011, of 20 January, hereinafter referred to as "LRTA" and of articles 1 and 2 of Ordinance no. 112-A/2011, of 22 March, with a view to the declaration of illegality of the act of assessment of Stamp Duty, concerning the year 2013, and the recognition of the right to compensatory interest, with the Tax and Customs Authority (hereinafter referred to as "TCA") being requested to intervene.

  2. The request for establishment of a singular arbitral tribunal having been admitted, and the applicant not having opted for the appointment of an arbitrator, in accordance with the provisions of subsection a) of no. 2 of article 6 and subsection b) of no. 1 of article 11 of the LRTA, in the wording introduced by article 228 of Law no. 66-B/2012, of 31 December, the Deontological Council appointed the undersigned as arbitrator.

The parties were notified of this appointment, having manifested no wish to refuse the appointment of the arbitrator, in accordance with the combined provisions of article 11, no. 1, subsections a) and b) of the LRTA and of articles 6 and 7 of the Code of Ethics, having, in accordance with the provisions of subsection c) of no. 1 of article 11 of the LRTA, in the wording introduced by article 228 of Law no. 66-B/2012, of 31 December, the arbitral tribunal been constituted on 30-07-2014.

  1. Notified, the TCA came to present a response in which it raised no exception.

  2. Through two subsequent pleadings, the applicant came to broaden the request, to the effect that the two subsequent stamp duty instalments, relating to the same year 2013, which were meanwhile notified to him, should be considered in the present request for arbitral pronouncement.

  3. Notified, the TCA said nothing.

  4. It was waived, with the consent of the parties, the holding of the meeting provided for in art. 18 of the LRTA, as well as the presentation of submissions.

  5. The applicant requests that the illegality and consequent annulment of the act of assessment of Stamp Duty relating to the year 2013 be declared, with the consequent restitution of the tax paid, plus compensatory interest, alleging in summary:

a) He owns the urban property situated at Ave. …, in Lisbon, which is registered in the urban property matrix of the parish … under no. ….

b) The said property is a property in full ownership with floors or divisions capable of independent use.

c) Being described as a property with ground floor and 7 storeys, having the ground floor a basement, lined with ashlar, lined with marble up to the level of the 1st floor and the rest of the façade in marmorite. Roof with tiles. It has on the ground floor a wide bay with no. 95-A, and 2 more door bays. On the storeys per floor 4 bays in continuous balcony.

  • 95-A, Garage – one large division, 3 divisions, toilet and washrooms and basement
  • Ground floor porter's lodge – 1 division, kitchen and bathroom.
  • 1st – 8 divisions, kitchen, 3 bathrooms and pantry
  • 2nd – 8 divisions, kitchen, 3 bathrooms and pantry
  • 3rd – 8 divisions, kitchen, 3 bathrooms and pantry
  • 4th – 8 divisions, kitchen, 3 bathrooms and pantry
  • 5th – 8 divisions, kitchen, 3 bathrooms and pantry
  • 6th – 8 divisions, kitchen, 3 bathrooms and pantry
  • 7th – 8 divisions, kitchen, 3 bathrooms and pantry
  • Number of storeys of the article: 9
  • Number of floors or divisions with independent use: 8
  • Total patrimonial value: € 1,812,650.00

d) He was notified on 24-04-2014, of the contents of seven letters, relating to the first payment of stamp duty, of those floors, with the exclusion of the ground floor.

e) The TCA carried out such assessment based on entry 28.1 of the CIS applying this rule in non-conformity with the fiscal reality, making an extensive interpretation that is discriminatory and illegal, adapting it to its convenience.

f) Presently, the property comprises 8 floors and divisions with independent use, of old construction with about 50 years, whose TPV was determined separately, in accordance with the provisions of article 7, no. 2, subsection b) of the Code of Municipal Tax on Property.

g) Being that by chance, seven of these divisions are devoted to housing, making up the total TPV of € 1,539,730.00 (one million five hundred and thirty-nine thousand seven hundred and thirty euros).

h) Therefore, we are dealing with a property constituted by divisions capable of independent use and none of these has an individualized TPV equal to or greater than one million euros, quite the contrary, as described below:

  • TPV of 224,230.00 €, relating to the 1st floor
  • TPV of 224,230.00 €, relating to the 2nd floor
  • TPV of 224,230.00 €, relating to the 3rd floor
  • TPV of 224,230.00 €, relating to the 4th floor
  • TPV of 224,230.00 €, relating to the 5th floor
  • TPV of 224,230.00 €, relating to the 6th floor
  • TPV of 224,230.00 €, relating to the 7th floor

i) Given this, it is easy to verify that each of the divisions has a TPV below one million euros and a differentiated settlement note, this because the registration in the property matrix of property in full ownership, constituted by parts capable of independent use, follows the same rules of registration of properties constituted in horizontal ownership.

j) Denoting thus a manifest disproportionality in the subjection to the tax, as the property which by itself has a TPV exceeding one million, will have the same treatment as a property with a set of divisions capable of independent use.

k) Indeed, it follows from no. 2 of article 6 of Law no. 55-A/2012, that: "In 2013, the assessment of stamp duty provided for in entry no. 28 of the respective General Table must be levied on the same patrimonial value subject to tax used for the purposes of assessment of municipal tax on property to be carried out in that year".

l) Therefore, the TCA could only tax under Stamp Duty in accordance with the same rules that apply to IMI.

m) It can be concluded that the incidence of the new Stamp Duty occurs only in the case where divisions with independent use present a TPV exceeding € 1,000,000.00 (one million euros), which clearly is not the case.

n) That is, tax capacity is the essential element in which we can only consider that there is true equality of tax treatment of taxpayers if there is identical taxation for equal tax capacities, which clearly does not happen in this case.

o) In addition to the violation apparent here of tax equality, we also have the violation of legal certainty, given the moment of creation and application of this law, which was created in 2012, more specifically in October, with effect in that same year.

p) And we also have the violation of the Principle of Non-retroactivity, as the taxpayer who until October 2012 was not taxed and who perhaps made an acquisition in November 2012, was confronted with a tax to be applied in that same year.

q) Therefore, this Law should be considered unconstitutional as it undermines the protection of confidence, frustrating tax expectations.

r) In summary, in the present case, that none of the floors intended for housing has a patrimonial value equal to or exceeding € 1,000,000.00 (one million euros), the legal prerequisite for the incidence of Stamp Duty provided for in entry 28 of the General Table is not met and consequently the acts of assessment should be annulled.

s) In consequence, the Applicant has the right to compensatory interest, in accordance with article 43, no. 1, of the LGT and article 61 of the CTPT, calculated on € 5,132.48 (five thousand one hundred and thirty-two euros and forty-eight cents) from the date on which payment occurred until full reimbursement of the said amount.

  1. For its part, the respondent came in response to allege, in summary:

a) The property of which the applicant is the owner has housing allocation, and is composed of ground floor (garage) and 7 storeys corresponding to these 7 storeys the same number of parts or divisions capable of independent use with housing allocation, as inferred from the respective property record.

b) The patrimonial value subject to tax was determined separately, in accordance with article 7, no. 2, subsection b), of the Code of Municipal Tax on Property (CMTP), being the patrimonial value subject to tax in its entirety in the amount of € 1,812,650.00.

c) The patrimonial value of the floors/parts with housing allocation taken into account in the settlements was thus the corresponding to that value minus the TPV of the ground floor (garage), and for the year 2013.

d) The subjection to stamp duty of entry 28.1 of the General Table results from the conjunction of two facts, namely, the housing allocation and the patrimonial value of each property registered in the matrix being equal to or greater than € 1,000,000.00.

e) The applicant is the owner of a property in the regime of full or vertical ownership. From the notion of property in article 2 of the CMTP, only the autonomous fractions of property in the regime of horizontal ownership are regarded as properties - no. 4 of the cited article 2 of the CMTP.

f) Being that the property of which he is the owner is in the regime of full ownership, it does not have autonomous fractions, to which the tax law attributes the qualification of property.

g) Thus, the applicant, for the purposes of IMI and also of stamp duty, by force of the wording of the said entry, is not the owner of autonomous fractions, but rather of a single property.

h) Having taken this fact as given, what the applicant requests is that the TCA considers, for the purposes of assessment of the present tax, that there is analogy between the regime of full ownership and that of horizontal ownership, since there should be no discrimination in the legal-fiscal treatment of these two property regimes, as it would be illegal.

i) As is well known, horizontal ownership is a specific legal regime of ownership provided for in article 1414 and following of the Civil Code, the manner of constitution of which is provided there, as well as the other rules on the rights and obligations of co-owners, and it is necessary to recognize in this enactment, the existence of a more evolved ownership regime.

j) Now, to claim that the interpreter and applicant of tax law should apply, by analogy, to the regime of full ownership, the regime of horizontal ownership is what is abusive and illegal, as we will see in detail.

k) These two property regimes are regimes of civil law, which were imported into tax law, namely in terms referred to by article 2 of the CMTP.

l) And the interpreter of tax law cannot equate these regimes, in accordance with the rule that the concepts of other branches of law have in tax law the meaning given to them in those branches of law, or in the words of article 11, no. 2 of the LGT, on the interpretation of tax law: "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 flows directly from the law".

m) On the other hand, further taking into account, that in determining the sense of tax rules and in qualifying the facts to which they apply the general rules and principles of interpretation and application of laws are observed, as article 11, no. 1 of the LGT provides which thus refers to the Civil Code, its article 10 on the application of analogy, determines that this shall only be applicable in case of gaps in the law.

n) Now fiscal law has no gap whatsoever! The CMTP determines, to which the cited entry refers, that in the regime of horizontal ownership the fractions constitute properties. Not being the property submitted to this regime, legally the fractions are parts capable of independent use, without there being common parts.

o) We cannot therefore accept that it be considered that for the purposes of entry 28.1 of the General Table annexed to the CIS, that the parts capable of independent use have the same fiscal regime as the autonomous fractions of the horizontal ownership regime.

p) Being that the property is submitted to the regime of full ownership, but being physically constituted by parts capable of independent use, tax law attributes relevance to this materiality, evaluating these parts individually, in accordance with article 12 and consequently, in accordance with article 12, no. 3, of the CMTP, each floor or part of property capable of independent use is considered separately in the matricial registration, but in the same matrix, proceeding with the assessment of IMI and taking into account the patrimonial value subject to tax of each part.

q) The floors or independent divisions, evaluated in accordance with article 12, no. 3, of the CMTP, are considered separately in the matricial registration, which also discriminates the respective patrimonial value subject to tax on which IMI is assessed.

r) The unit of the urban property in vertical ownership composed of various floors or divisions is, however, affected by the fact that all or part of these floors or divisions are capable of independent economic use.

s) Such property does not cease, by the fact of being only one, not being thus its distinct parts legally equated to autonomous fractions in the regime of horizontal ownership.

t) Without prejudice to the regime of co-ownership, when applicable, its ownership cannot be attributed to more than one owner.

u) The fact that the IMI was calculated based on the patrimonial value subject to tax of each part of property with independent economic use does not equally affect the application of entry 28, no. 1 of the General Table.

v) It is what results from the fact that the determining factor for the application of that entry of the General Table is the total patrimonial value of the property and not separately that of each one of its parts.

w) It is thus unconstitutional, as offensive to the principle of tax legality, the interpretation of entry 28.1 of the General Table, in the sense that the patrimonial value on which its incidence depends be calculated globally and not floor by floor or division by division.

x) The legislator may, however, submit to a distinct legal tax framework, and therefore discriminatory, properties in regimes of horizontal and vertical ownership, in particular, favouring the legally more evolved institute of horizontal ownership, without such discrimination needing to be considered necessarily arbitrary.

y) Finally, it should be noted that the matricial registration of each part capable of independent use is not autonomous, per matrix, but consists of a description in the matrix of the property in its entirety – see the property record of this property which represents the document of the owners containing the matricial elements of the property.

z) What is intended to be concluded is that these procedural rules of evaluation, matricial registration and assessment of the parts capable of independent use do not permit affirming that there is an equating of the property in the regime of full ownership to the regime of vertical ownership, this because these legal-civil regimes are different and fiscal law respects them.

aa) The tax fact of stamp duty of entry 28.1 when consisting of ownership of urban properties whose patrimonial value subject to tax recorded in the matrix, in accordance with the CMTP, is equal to or greater than € 1,000,000.00, the patrimonial value relevant for the purposes of the incidence of the tax is thus the total patrimonial value of the urban property and not the patrimonial value of each one of the parts that compose it, even when capable of independent use.

bb) And this interpretation of the tax incidence rule to stamp duty results from the conjunction of the other tax incidence rule to IMI which is article 1, according to which the IMI incides on the patrimonial value subject to tax of urban properties, attending to the notion of property in article 2 and of urban property contained in article 4 and further of the species of urban properties described in article 6.

cc) For all the foregoing, the tax acts in question, in terms of substance, did not violate any legal or unconstitutional precept, and should thus be maintained.

  1. The Arbitral Tribunal was regularly constituted and is materially competent.

  • The parties enjoy legal personality and capacity and are legitimate (arts. 4 and 10, no. 2, of the same enactment and art. 1 of Ordinance no. 112-A/2011, of 22 March).

  • On the broadening of the request

After the presentation of a response, the applicant came to attach two requests through which he formulated a broadening of the request, to the effect that the two subsequent stamp duty instalments following the instalment which is the object of the assessment in question be covered in the request for arbitral pronouncement.

The broadenings of the request presented fall within the scope of no. 2 of art. 265 of the CPC, since they are nothing other than a development of the original request.

Since the broadening of the request can be formulated up to the closure of the discussion in first instance, the requests of the applicant are perfectly legitimate, which is why they should be heeded, and the request for arbitral pronouncement is broadened in the terms requested.

  • On the value of the action

To the entire case a certain value must be attributed, which, in the case of challenge to the assessment, shall be that of the amount whose annulment is intended [art. 97-A, no. 1, a) of the CTPT].

The applicant indicated as the value of the present request for arbitral pronouncement 5,132.48 €, which was not challenged.

It happens that, as a result of the subsequent pleadings which he presented, the applicant broadened the value of the assessment, whose annulment he intends to be declared, to 15,397.30 €.

In accordance with what is enacted by art. 306, no. 1 of the CPC, suppletively applicable to the case, "it is incumbent upon the judge to fix the value of the case, without prejudice to the duty of indication which rests upon the parties".

Faced with the request of the applicant, the value of the assessment whose annulment is requested is 15,397.30 €.

In this way, under the application combined with the legal precepts referred to, the value of the request for arbitral pronouncement is fixed at 15,397.30 €.

  • The proceedings do not suffer from nullities.

B. DECISION

  1. MATTER OF FACT

1.1. PROVEN FACTS

The following facts are considered proven:

a) The applicant is registered as the owner of the property situated at Ave. …, in Lisbon, registered in the urban property matrix of the parish of … under no. …, with the totality of the three instalments resulting from such assessment amounting to the global value of 15,397.30 €.

b) The property comprises a total of ground floor and seven floors with independent use with the following composition:

  • Ground floor a basement, lined with ashlar, lined with marble up to the level of the 1st floor and the rest of the façade in marmorite. Roof with tiles. It has on the ground floor a wide bay with no. 95-A, and 2 more door bays. On the storeys per floor 4 bays in continuous balcony

  • Garage – one large division, 3 divisions, toilet and washrooms and basement

  • Ground floor porter's lodge – 1 division, kitchen and bathroom.

  • 1st – 8 divisions, kitchen, 3 bathrooms and pantry

  • 2nd – 8 divisions, kitchen, 3 bathrooms and pantry

  • 3rd – 8 divisions, kitchen, 3 bathrooms and pantry

  • 4th – 8 divisions, kitchen, 3 bathrooms and pantry

  • 5th – 8 divisions, kitchen, 3 bathrooms and pantry

  • 6th – 8 divisions, kitchen, 3 bathrooms and pantry

  • 7th – 8 divisions, kitchen, 3 bathrooms and pantry

c) Having been attributed the TPV of 224,230.00 € to each of the 1st to 6th floors and of 194,350.00 €, to the 7th floor.

d) The sum of the global TPV of those floors makes up the amount of 1,539,730.00 € (one million five hundred and thirty-nine thousand seven hundred and thirty euros).

e) Seven of the floors are devoted to housing.

f) The TCA assessed stamp duty individually on the patrimonial values subject to tax of the floors or parts capable of independent use, at the rate of 1%, by application of the provisions of entry 28.1 of the TGIS, in the wording given by art. 4 of Law 55-A/2012, of 29 October.

g) The deadline for voluntary payment of the first instalment of the stamp duty assessed ended on 30-04-2014.

h) The respondent proceeded to payment of the three instalments of the tax.

i) On 27-05-2014 the respondent presented the request for arbitral pronouncement which gave rise to the present proceedings.

1.2 The facts were given as proven on the basis of the documents attached to the proceedings.

1.3 UNPROVEN FACTS

There are no facts given as unproven with relevance for the assessment of the request.

1.4 THE LAW

The substantive issue to be assessed in the present request for arbitral pronouncement resides in the interpretation to be given to entry 28.1 of the General Table of Stamp Duty, in the wording of Law no. 55-A/2012 of 29 October, in order to ascertain whether, with regard to properties not constituted in the regime of horizontal ownership that include floors or divisions capable of independent use, the patrimonial value subject to tax relevant for the purposes of application of the tax is that attributed individually to each one of them or, on the contrary, is the one corresponding to the sum of all of them.

Entry 28 of the General Table of Stamp Duty provides:

  • "Ownership, usufruct or right of superficies of urban properties whose patrimonial value subject to tax recorded in the matrix, in accordance with the Code of Municipal Tax on Property, is equal to or greater than € 1,000,000.00 – on the patrimonial value subject to tax for the purpose of IMI:

28.1 – For property with housing allocation – 1%

(…)".

Article 6 of the said Law no. 55-A/2012 provides that the patrimonial value subject to tax to be considered in the assessment of stamp duty corresponds to what results from the rules of the Code of Municipal Tax on Property (CMTP), adding no. 2 of article 67 of the Code of Stamp Duty (CSD) that "the matters not regulated in the present Code relating to entry no. 28 of the General Table, the provisions of the CMTP shall apply subsidiarily".

For its part, article 2 of the CMTP gives us the concept of property, establishing article 6 of the same code, in its no. 2, that "residential, commercial, industrial or for services are the buildings or constructions licensed for such purpose or, in the absence of a license, that have as their normal destination each one of these purposes".

It is with recourse to these dispositions that the answer to the question to be decided will have to be found.

Being certain that the only confrontation that the CMTP makes between properties in the regime of horizontal or full ownership can be found in no. 4 of article 2 when it prescribes that "each autonomous fraction, in the regime of horizontal ownership, is regarded as constituting a property".

In fulfillment of what, in the definition of the concept of property matrices, no. 3 of article 12 of the CMTP determines that "each floor or part of property capable of independent use is considered separately in the matricial registration, which also discriminates the respective patrimonial value subject to tax".

No relevance is therefore given by the tax legislator to the fact that a property is constituted in the regime of horizontal or vertical ownership, being relevant only the material truth underlying its existence as an urban property and its use.

That is to say, there is nothing in the law that permits concluding in the sense of obtaining the patrimonial value subject to tax of property in the regime of full ownership, by the sum of those which were attributed individually to the parts which constitute it, in accordance with an understanding which has been adopted by various arbitral decisions[1] to which we adhere entirely and for which reason we subscribe.

For which reason we understand that the position of the TCA cannot merit acceptance when it intends to fix as the reference value for the incidence of stamp duty, the global value of the property in question, as this is not admitted by the CMTP which is, as already stated, the legal remissive basis of support therefor.

Not having any of the floors, capable of independent use, a patrimonial value exceeding one million euros, there is no place for the incidence of entry 28.1 provided for in the TGIS.

Whence it is concluded that the assessment which is the object of the present arbitral request suffers from illegality, for which reason its annulment is required.

It results thus that the assessment of the unconstitutionality of the rule raised by the applicant is prejudiced.

Compensatory interest

In addition to the restitution of the tax unduly paid, the applicant requests that the right to payment of compensatory interest be declared.

Such right is enshrined in article 43 of the LGT which has as its prerequisite that it be determined, in gracious reclamation or judicial impugning that there was error attributable to the services from which results payment of the debt in an amount superior to that legally due.

The recognition of the right to compensatory interest in the arbitral process results from the provisions of article 24, no. 5 of the LRTA.

In the case in question, it is manifest that the illegality of the act of assessment in question is attributable to error by the TCA.

For which reason the applicant has the right to the requested payment of compensatory interest.

  1. DECISION

Faced with the foregoing, it is decided:

a) to judge as well-founded, for violation of law, the request for annulment of the tax act which is the object of the arbitral request corresponding to the assessment of Stamp Duty relating to the year 2013, as well as the request for payment of compensatory interest;

b) to condemn the Tax and Customs Administration to restore to the applicant the amount of tax paid, plus the respective compensatory interest;

c) to condemn the respondent to payment of the costs of the proceedings.

VALUE OF THE PROCEEDINGS: In accordance with the provisions of art. 306, no. 2 of the Code of Civil Procedure, art. 97-A, no. 1, a) of the Code of Tax Procedure and Process and art. 3, no. 2 of the Regulation of Costs in Tax Arbitration Proceedings, the value of the proceedings is fixed at 15,397.30 € (fifteen thousand three hundred and ninety-seven euros and thirty cents).

COSTS: In accordance with the provisions of art. 22, no. 4, of the Regulation of Costs in Tax Arbitration Proceedings, the amount of costs is fixed at 918.00 € (nine hundred and eighteen euros), in accordance with Table I annexed to the Regulation of Costs in Tax Arbitration Proceedings.

Notify.

Lisbon, 02-03-2015

The Arbitrator

António Alberto Franco

[1] Among others, those issued in Proc. 50/2013-T, 131/2013-T, 181/2013-T, 185-2013-T, 177/2014, 206/2014-T

Frequently Asked Questions

Automatically Created

How does Verba 28 of the Tabela Geral do Imposto do Selo apply to properties with independent units?
Verba 28 of the TGIS applies to urban properties with a patrimonial value equal to or exceeding €1,000,000. The key interpretive issue is whether buildings in total ownership with independent divisions should be taxed as a single unit based on aggregate value or per individual division. This case argues that properties with floors or divisions capable of independent use, registered separately in the property matrix with individual TPVs, should follow horizontal property rules where each unit is assessed independently. If each division has a TPV below €1,000,000, the taxpayer contends Verba 28 should not apply, even if the building's total value exceeds the threshold.
Can Stamp Tax (Imposto do Selo) be challenged through tax arbitration at CAAD for high-value real estate?
Yes, Stamp Tax assessments can be challenged through tax arbitration at CAAD (Centro de Arbitragem Administrativa). This case demonstrates that taxpayers may request arbitral tribunal establishment under the Legal Regime of Tax Arbitration (Decree-Law 10/2011) to contest Stamp Duty assessments, including those under Verba 28 TGIS for high-value real estate. The arbitration process provides an alternative dispute resolution mechanism to judicial courts, allowing taxpayers to seek declaration of illegality of tax assessments and claim compensatory interest for unlawful collections.
Is a building in total ownership with independent divisions taxed as a whole or per unit under Verba 28 TGIS?
The central dispute in this case concerns precisely this issue. The taxpayer argues that a building in total ownership with independent divisions should be taxed per unit, not as a whole, under Verba 28 TGIS. The argument relies on Article 6, no. 2 of Law 55-A/2012, which states Stamp Duty must use the same patrimonial value subject to Municipal Property Tax (IMI). Since properties with divisions capable of independent use follow horizontal property registration rules with separate TPV assessments per division, the taxpayer contends each unit should be evaluated independently for Stamp Duty purposes. This interpretation would mean only divisions individually exceeding €1,000,000 TPV would be subject to Verba 28.
What are the grounds for annulment of Stamp Tax assessments on urban properties valued over €1,000,000?
Grounds for annulment include: (1) incorrect application of Verba 28 TGIS when individual property divisions fall below the €1,000,000 threshold despite aggregate value exceeding it; (2) violation of tax equality principles by treating differently-structured properties with similar values inconsistently; (3) breach of legal certainty due to the law's creation in October 2012 with retroactive effect in the same year; (4) violation of non-retroactivity principles affecting taxpayers who acquired properties before the law's enactment; (5) unconstitutionality for undermining legitimate expectations and taxpayer confidence; and (6) misalignment with IMI assessment rules despite legal requirement for consistency in patrimonial value determination.
Are taxpayers entitled to compensatory interest (juros indemnizatórios) when Stamp Tax liquidation is declared illegal?
Yes, taxpayers are entitled to compensatory interest (juros indemnizatórios) when Stamp Tax liquidation is declared illegal. Article 43, no. 1 of the General Tax Law (LGT) and Article 61 of the Tax Procedure and Process Code (CPPT) establish the right to compensatory interest on amounts unduly paid. Interest is calculated from the payment date until full reimbursement of the illegally collected tax. In this case, the applicant claimed compensatory interest on €5,132.48 paid, demonstrating that successful challenges to unlawful Stamp Duty assessments trigger automatic entitlement to interest compensation for the period the Tax Authority retained funds without legal basis.