Process: 401/2016-T

Date: December 6, 2016

Tax Type: Selo

Source: Original CAAD Decision

Summary

In CAAD arbitration case 401/2016-T, a Portuguese company challenged Stamp Tax assessments under Verba 28.1 of the General Stamp Tax Table (TGIS) for 2015, totaling €58,538.10. The central dispute concerned calculating the €1,000,000 Tax Patrimonial Value (VPT) threshold for properties held in vertical ownership (propriedade vertical) with multiple independent units. The taxpayer argued that Verba 28.1 Stamp Tax should apply based on each independent unit's individual VPT, as determined under Article 7(2)(b) of the IMI Code. Since each unit had VPT below €1,000,000, no tax should be due. The taxpayer relied on Article 67(2) of the Stamp Tax Code, which cross-references IMI criteria, and cited favorable arbitral precedents. The Tax Authority defended that vertical ownership properties differ from horizontal property regimes. Under Article 2(4) of the IMI Code, only autonomous units in horizontal property constitute separate properties. For vertical ownership, the relevant VPT is the building's total patrimonial value, not individual unit values. While IMI may be assessed on independent divisions for collection purposes (Article 119 IMI Code), this doesn't create separate properties for Stamp Tax. This case exemplifies ongoing controversy over Stamp Tax on high-value properties, particularly vertical ownership structures. The taxpayer sought refunds of amounts paid, plus default and indemnification interest, demonstrating significant financial stakes. The tribunal's decision would influence how Portuguese tax authorities assess Stamp Tax on similar vertical property arrangements nationwide.

Full Decision

ARBITRAL DECISION

I. REPORT

On 14 July 2016, A…, SA, with the NIPC … and with registered office at …, no.…, …-…, in Lisbon (hereinafter referred to as the Claimant), came, pursuant to the combined provisions of articles 95.º of the General Tax Code, 99.º, paragraph a), of the Tax Procedure and Process Code, 2.º, no. 1, paragraph a) and 10.º, of Decree-Law no. 10/2011, of 20 January, which approved the Legal Regime for Tax Arbitration (LRTA), to request the constitution of an Arbitral Tribunal, in which the Tax and Customs Authority (hereinafter AT or Defendant) is the Respondent, with a view to the declaration of illegality and consequent annulment of the Stamp Tax assessments (Item 28.1 of the GTST) relating to the year 2015 and to the properties registered in the urban property matrices of the parish of …, municipality of Lisbon, under the article…, of the Union of Parishes of …, municipality of ..., under the article … and of the Union of Parishes of … and …, … and …, municipality of ..., under the article …, of which it is the owner, all in the total amount of € 58,538.10 (fifty-eight thousand, five hundred and thirty-eight euros and ten cents), value to which it attributes to the claim.

Furthermore, the Claimant requests the condemnation of the Defendant to the restitution of the amounts unduly paid, relating to the first instalment of each of the disputed assessments, plus default interest and indemnification interest.

Synthesis of the Parties' positions

a. Of the Claimant:

As grounds for the request for annulment of the Stamp Tax assessment acts (item 28.1 of the GTST) relating to the year 2015 and to the real properties identified in the request for arbitral pronouncement, the Claimant invokes that:

1. The urban properties of which it is the owner and to which the Stamp Tax assessments under dispute relate are properties in full or vertical ownership, composed of floors or divisions capable of independent use, whose tax patrimonial value was determined separately, pursuant to article 7.º, no. 2, paragraph b), of the Real Estate Tax Code;

2. On each of the floors or divisions capable of independent use, intended for dwelling and of Tax Patrimonial Value less than € 1,000,000.00, in each of the properties identified, the Tax Authority assessed the Stamp Tax of Item 28.1 of the General Stamp Tax Table (GTST), at the rate of 1%;

3. The AT understands that the criterion used by the incidence rule of Item 28.1 of the GTST is to consider the global TPV of the property, provided it is higher than € 1,000,000.00, regardless of whether it is composed of floors or divisions of independent use intended for dwelling;

4. To the contrary, it is the Claimant's understanding that the TPV to be taken into account for the purposes of the incidence of Stamp Tax of Item 28.1 of the GTST is the TPV individually attributed to each of the floors or divisions of independent use and not the sum of all TPVs of the floors or divisions that make up the properties in full ownership, as this is the criterion used for Real Estate Tax purposes, to which article 67.º, no. 2, of the Stamp Tax Code refers, as regards matters of Item 28.1 of the GTST;

5. The criterion used by the AT is illegal, as it cannot consider as a reference value for the incidence of Stamp Tax, of Item 28.1 of the GTST, a criterion different from that used for Real Estate Tax purposes, as the jurisprudence of the Arbitral Tribunals has mostly understood;

6. Notwithstanding that at the date of the request for constitution of the Arbitral Tribunal only the first instalments of each of the disputed assessments had fallen due, the Claimant disputes their entirety, since Stamp Tax is assessed annually and it is the assessment that embodies the act harmful to its legal sphere, the payment in instalments being nothing more than a technique for tax collection.

b. Of the Defendant:

Notified in accordance with the terms and for the purposes provided in article 17.º of the LRTA, the AT presented its response and attached the administrative process, in which it came to defend the legality and maintenance of the assessment acts subject to the present request for arbitral pronouncement, with the following grounds:

1. The Claimant is the owner of the urban properties identified in the initial petition, under the regime of full ownership, with floors or divisions capable of independent use, each of those properties having a TPV higher than € 1,000,000.00;

2. The Stamp Tax assessments for the year 2015 were issued without any subjective or discretionary assessment, in compliance with item no. 28.1 of the GTST, in the wording given by Law no. 83-C/2013 of 31/12, whose incidence rule refers to urban properties, evaluated in accordance with the Real Estate Tax Code, with TPV equal to or greater than € 1,000,000.00, of residential use;

3. The concept of property is defined in article 2.º, no. 1, of the Real Estate Tax Code, and its no. 4 provides that, under the horizontal property regime, each autonomous unit is deemed to constitute a property, from which it follows that a property in full ownership, with floors or divisions capable of independent use is, unequivocally, different from a property under the horizontal property regime, constituted by autonomous units, that is, by several properties;

4. Article 12.º, no. 3, of the Real Estate Tax Code respects exclusively the manner of registering matricial data and, as regards the assessment of Real Estate Tax, where properties are in full ownership, the value that serves as the basis for its calculation shall be that recorded in the property register as "total patrimonial value", although the collection document is sent to the taxpayer with a breakdown of the parts capable of independent use and their respective tax patrimonial value (article 119.º, no. 1, of the Real Estate Tax Code);

5. The thesis defended by the Claimant lacks legal support, as in the situations provided for in item no. 28.1 of the GTST, the legislator reserves aspects that require appropriate adjustments, as is the case of properties in full ownership, with floors or divisions capable of independent use in which, although Real Estate Tax is assessed in relation to each part capable of independent use, for the purposes of Stamp Tax what is relevant is the property in its entirety as the divisions capable of independent use are not deemed to be property;

6. Thus, it results from the fact that Stamp Tax Item 28.1 is levied on the ownership of urban properties whose TPV recorded in the matrix, in accordance with the Real Estate Tax Code, is equal to or greater than € 1,000,000.00, that the patrimonial value relevant for the purposes of the incidence of the tax is, clearly, the total patrimonial value of the urban property and not the patrimonial value of each of the parts that compose it, even when capable of independent use.

The AT concludes by requesting exemption from holding the meeting referred to in article 18.º of the LRTA, as well as from the filing of written submissions, as the facts on which a decision is requested have been established and only matters of law are at issue.

The process continuing with successive written submissions, the Parties reiterated the positions assumed in the initial procedural documents.

II. SANATION

1. The singular arbitral tribunal is competent and was regularly constituted on 4 October 2016, in accordance with articles 2.º, no. 1, paragraph a), 5.º and 6.º, all of the LRTA.

2. The parties have legal personality and capacity, are legitimate and are legally represented, in accordance with articles 4.º and 10.º of the LRTA and article 1.º of Administrative Order no. 112-A/2011, of 22 March.

3. The process does not suffer from defects that would invalidate it.

4. The cumulation of claims is admissible, pursuant to the provision of no. 1 of article 3.º of the LRTA, inasmuch as the request for arbitral pronouncement made, and its merits, depend on the appreciation of the same factual circumstances and the interpretation and application of the same principles or rules of law, in the present case, item 28.1 of the General Stamp Tax Table.

III. GROUNDS

III.1 MATTERS OF FACT

The factual matter relevant to the understanding and decision of the case, after critical examination of the documentary evidence and the administrative process (AP) attached to the file, is established as follows:

1. Both at the date of the occurrence of the tax event (31 December 2015) and at the date of issue of the disputed assessments (5 April 2016), the Claimant was the owner of the following urban properties:

a. Property in full ownership, composed of 18 floors or divisions of independent use, 3 intended for commerce and 15 for dwelling, registered in the matrix of the parish of …, municipality of Lisbon (Tax Office of Lisbon…), under the article … (PROPERTY A) and with a total patrimonial value of € 1,967,990.00 (according to a copy of the property register attached to the initial petition);

b. Property in full ownership, composed of 71 floors or divisions of independent use, 26 intended for storage and warehousing, 2 for commerce and 43 for dwelling, registered in the matrix of the Union of Parishes of … (…, … and …), municipality of Lisbon (Tax Office of ... …), under the article … (PROPERTY B) and with a total patrimonial value of € 2,128,890.00 (according to a copy of the property register attached to the initial petition); and,

c. Property in full ownership, composed of 27 floors or divisions of independent use, 1 intended for commerce and 26 for dwelling, registered in the matrix of the Union of Parishes of … and …, … and …, municipality of ... (Tax Office of ... …), under the article … (PROPERTY C) and with a total patrimonial value of € 2,026,920.00 (according to a copy of the property register attached to the initial petition);

2. None of the floors or divisions of independent use of any of the properties indicated has a tax patrimonial value equal to or greater than € 1,000,000.00;

3. Regarding each of the properties identified, the Claimant was notified by the AT of the issuance of Stamp Tax assessments of item 28.1 of the GTST, at the rate of 1%, on the tax patrimonial value of each of the floors or divisions of independent use, with each collection document showing the "Patrimonial Value of the property – total subject to tax":

a. For PROPERTY A (article … of the parish of … – Lisbon), with the "Patrimonial Value of the property – total subject to tax: € 1,869,860.00", 15 assessments were issued, each relating to each of the floors or divisions of independent use, intended for dwelling, in the total amount of € 18,698.60, with the sum of the respective first instalments, whose voluntary payment deadline fell in April 2016, of the amount of € 6,377.72;

b. For PROPERTY B (article … of the Union of Parishes of … –…), with the "Patrimonial Value of the property – total subject to tax: € 1,989,210.00", 43 assessments were issued, each relating to each of its floors or divisions of independent use, intended for dwelling, in the total amount of € 19,892.10, with the sum of the respective first instalments/single instalment, with a voluntary payment deadline in April 2016, of the amount of € 10,013.70;

c. For PROPERTY C (article … of the Union of Parishes of … and …, … and …, municipality of ...) 26 assessments were issued, each relating to each of the floors or divisions of independent use, intended for dwelling, in the total amount of € 19,947.40, with the sum of the respective first instalments, whose voluntary payment deadline fell in April 2016, of the amount of € 6,649.18;

4. The Claimant proceeded to pay the first instalment/single instalment of the assessments identified in the file, on 22 April 2016, according to the supporting documents attached to the initial petition (for property A – supporting documents 41 to 55; for property B – supporting documents 56 to 98 and for property C – supporting documents 227 to 252), in the total amount of € 23,040.60;

5. There are no facts relevant to the decision of the case that should be considered as unproven.

III.2 MATTERS OF LAW

1. The question to be decided

The main question brought to the file by the Claimant is whether the subjection to Stamp Tax, under item no. 28 of the General Stamp Tax Table (GTST), of an urban property not constituted under the horizontal property regime, is determined by the Tax Patrimonial Value (TPV) that corresponds to each of the parts of the property, economically independent and with residential use, as it argues, or whether it is determined by the global TPV of the property, which would correspond to the sum of all TPVs of the floors or divisions of independent use with residential use that compose it, according to the interpretation given by the AT to the aforementioned rule.

2. On the merits of the Stamp Tax assessments for the year 2015

Item 28.1 of the GTST, in the wording given to it by Law no. 83-C/2013 of 31 December (State Budget for 2014), applicable to the disputed assessments, establishes the subjection to Stamp Tax of the ownership, usufruct or right of superficies of residential urban properties or land for construction whose construction, authorized or planned, is for dwelling, whose tax patrimonial value recorded in the matrix, in accordance with the Real Estate Tax Code, is equal to or greater than € 1,000,000.00.

The concepts of urban property and residential urban property are defined in the Real Estate Tax Code, which applies subsidiarily to matters relating to item 28 of the GTST, by virtue of the reference made by no. 2 of article 67.º of the Stamp Tax Code.

Property is, in the definition of article 2.º of the Real Estate Tax Code, "any portion of land, including waters, plantations, buildings and constructions of any kind incorporated therein or built thereon, with a character of permanence, provided it forms part of the patrimony of a natural or legal person and, in normal circumstances, has economic value, as well as waters, plantations, buildings or constructions, in the circumstances above, endowed with economic autonomy in relation to the land on which they are located, although situated in a portion of land that forms an integral part of a different patrimony or does not have a patrimonial nature" (no. 1) and also the autonomous units of properties constituted under the horizontal property regime (no. 4).

Properties may be rural, urban or mixed, with urban properties defined, on a residual basis, by article 4.º of the Real Estate Tax Code, as being all those that should not be classified as rural, without prejudice to what is provided regarding mixed properties.

However, there are various types of urban properties, whose classification is established by article 6.º of the Real Estate Tax Code, which classifies them as a) residential, b) commercial, industrial or for services, c) land for construction and, d) other, with nos. 2, 3 and 4 of the same article delimiting what should be understood by each of those designations.

Residential properties are, therefore, buildings or constructions licensed for dwelling or which, in the absence of a license, have dwelling as their normal purpose (residential purposes).

Now, the properties of which the Claimant is the owner are urban properties not constituted under the horizontal property regime, which include floors or divisions of independent use, some intended for dwelling and others for "storage and warehousing", as is the case with the property designated as PROPERTY A and, in the cases of PROPERTY B and PROPERTY C, some intended for dwelling and others for commerce.

With regard to the determination of the tax patrimonial value of properties with parts classifiable in more than one of the classifications of no. 1 of article 6.º of the Real Estate Tax Code, as is the case with the properties identified in the request for arbitral pronouncement, article 7.º, no. 2, paragraph b) of the same Code applies, which provides that "If the different parts are economically independent, each part shall be valued by applying the corresponding rules, and the value of the property shall be the sum of the values of its parts."

And this is the only provision of the Real Estate Tax Code in which reference is made to the "[global] value of the property", without, however, this having any relevance at the level of tax assessment, as each floor or part capable of independent use "is considered separately in the matricial registration, which also discriminates its respective tax patrimonial value" (article 12.º, no. 3 of the Real Estate Tax Code), with the AT having issued individualized assessments for each floor or division of independent use and not a single assessment on the "global value" of each property.

On the other hand, the urban properties of which the Claimant is the owner and which are the subject of the present proceedings, including floors or divisions capable of independent use, some intended for dwelling and others for purposes other than dwelling, could not, globally, be considered residential urban properties, as the law is clear in subjecting to Stamp Tax of item 28.1 of the GTST only urban properties of (exclusively) residential use, whose TPV, for Real Estate Tax purposes, is equal to or greater than € 1,000,000.00.

Nor does it appear acceptable that the floors or divisions devoted to dwelling, which make up the aforementioned properties, could be segregated from the whole, in order to, together, integrate the notion of residential property provided for in the incidence rule of item 28.1 of the GTST, and therefore it cannot be accepted that, in doing so, the AT formulates an incidence rule ex novo, different from that created by the legislator, at the risk of violating the principle of tax legality, inherent in article 103.º, no. 2, of the Constitution of the Portuguese Republic.

What appears to result from the ratio legis underlying the rule of item 28 of the GTST, introduced by Law no. 55-A/2012 of 29 October, is that the legislator intended to tax the ownership, usufruct and right of superficies of residential units with TPV equal to or greater than € 1,000,000.00, as an index of high contributory capacity. Now, as appears from the proven facts, none of the floors or divisions capable of independent use and with residential use has a TPV equal to or greater than that defined in the incidence rule.

Furthermore, it is settled jurisprudence, both of the tax arbitral tribunals and of the Supreme Administrative Court, within the scope of the original wording of item 28.1 of the GTST (for which no reason for divergence is apparent in the situations covered by the current wording) and to which adhesion is given, that, "I - With respect to properties in vertical ownership, for the purposes of the incidence of Stamp Tax (Item 28.1 of the GTST, in the wording of Law no. 55-A/2012 of 29 October), the subjection is determined by the combination of two factors: residential use and TPV recorded in the matrix equal to or greater than € 1,000,000.

II - Where a property is constituted in vertical ownership, the incidence of Stamp Tax should be determined, not by the TPV resulting from the sum of the TPV of all divisions or floors capable of independent use (individualized in the matricial article), but by the TPV attributed to each of those floors or divisions intended for dwelling." – cfr. the summary of the recent Decision of the Supreme Administrative Court of 29/09/2016, Case no. 0560/16, available at http://www.dgsi.pt and other jurisprudence cited therein.

For the reasons set out, having found the defect of violation of law, by error in the application of the law, resulting from the erroneous interpretation of the incidence rule of item no. 28.1 of the GTST, it is necessary to conclude that the disputed assessments cannot be maintained in the legal order.

3. On the request for indemnification and default interest

In accordance with the provision of no. 1 of article 43.º of the General Tax Code (GTC), applicable subsidiarily to the tax arbitral process, pursuant to article 29.º, no. 1, paragraph a) of the LRTA, "Indemnification interest is due when it is determined, in a voluntary objection or judicial challenge, that there has been an error attributable to the services resulting in payment of the tax debt in an amount greater than that legally due."

The cumulative requirements for the right to indemnification interest are therefore: "– that there is an error in an act of assessment of a tax; – that it be attributable to the services; – that the existence of this error is determined in a process of voluntary objection or judicial challenge; – that this error resulted in the payment of a tax debt in an amount greater than that legally due."[1]

The tax arbitral process was conceived as an alternative to the judicial challenge process (cfr. the legislative authorization granted to the Government by article 124.º, no. 2 (first part) of Law no. 3-B/2010, of 28 April – State Budget Law for 2010), and it should be understood that the arbitral tribunals operating under the aegis of the CAAD have the same powers that, in judicial challenge proceedings, are attributed to the tax tribunals, such as that of assessing the error attributable to the services.

In the present case, it appears manifest that, with the illegality of the Stamp Tax assessment acts declared, as it has been demonstrated that there was an erroneous application of the objective incidence rule contained in item 28.1 of the GTST, which justifies its annulment, the Claimant's right to indemnification interest on the amounts unduly paid must be recognized, from the date of the respective payment, as provided in no. 5 of article 61.º of the Tax Procedure and Process Code, since such illegality is exclusively attributable to the Tax Administration, which carried out those tax acts without the necessary legal support.

As for the default interest requested by the Claimant, its payment is only provided for in the context of execution of judgment, where its performance implies the restitution of tax already paid, a situation in which default interest is due from the end of the deadline for its spontaneous execution (cfr. no. 2 of article 102.º of the GTC).

4. Questions not for decision

In the judgment, the judge must pronounce on all questions that he must assess, abstaining from pronouncing on questions that he should not know (final segment of no. 1 of article 125.º of the Tax Procedure and Process Code), and the questions that fall within the tribunal's powers of cognition are, in accordance with no. 2 of article 608.º of the Civil Procedure Code, applicable subsidiarily to the tax arbitral process, by reference to article 29.º, no. 1, paragraph e) of the LRTA, "the questions that the parties have submitted for its assessment, excepting those whose decision is prejudiced by the solution given to others (…)".

In light of the solution given to the questions relating to the determination of the TPV relevant for application of the incidence rule contained in item 28.1 of the GTST and the payment of indemnification interest in favor of the Claimant, the assessment of the remaining questions put by the Parties is prejudiced, in particular those of the unconstitutionality of the aforementioned rule, as it is not susceptible of the interpretation that, in this case, was given by the AT.

IV. DECISION

Based on the factual and legal grounds set out above and, in accordance with article 2.º of the LRTA, it is decided, finding the present request for arbitral pronouncement entirely well-founded:

a. To declare the illegality of the Stamp Tax assessments (item 28.1 of the GTST) under dispute, by error in the assumptions of law, determining their annulment;

b. To condemn the AT to the restitution of the amount unduly paid by the Claimant as Stamp Tax for 2015, plus indemnification interest, from the date of the undue payment until the date of issue of the respective credit notes.

VALUE OF THE CASE: In accordance with the provision of article 306.º, nos. 1 and 2, of the Civil Procedure Code, 97.º-A, no. 1, paragraph a) of the Tax Procedure and Process Code and 3.º, no. 2 of the Regulation of Costs in Tax Arbitration Proceedings, the case is valued at € 58,538.10 (fifty-eight thousand, five hundred and thirty-eight euros and ten cents).

COSTS: Calculated in accordance with article 4.º of the Regulation of Costs in Tax Arbitration Proceedings and Table I attached thereto, in the amount of € 2,142.00 (two thousand, one hundred and forty-two euros), to be borne by the Tax and Customs Authority.

Lisbon, 6 December 2016.

The Arbitrator,

/Mariana Vargas/

Text prepared by computer, in accordance with no. 5 of article 131.º of the Civil Procedure Code, applicable by reference to paragraph e) of no. 1 of article 29.º of Decree-Law 10/2011 of 20 January.

The drafting of this decision is governed by the Orthographic Agreement of 1990.

[1] Cfr. SOUSA, Jorge Lopes de, Tax Procedure and Process Code – annotated and commented, Volume I, Áreas Editora, 2006, p. 472.

Frequently Asked Questions

Automatically Created

How is Stamp Tax under Verba 28.1 of the TGIS applied to vertical property buildings with independent units?
Verba 28.1 of the TGIS imposes a 1% annual Stamp Tax on urban residential properties with Tax Patrimonial Value (VPT) equal to or exceeding €1,000,000. For vertical property (propriedade vertical), the key controversy concerns whether the threshold applies to the entire building or each independent unit. The Tax Authority's position is that vertical ownership buildings are single properties, with total VPT determining liability. However, taxpayers argue that independent units with separate VPT determinations under Article 7(2)(b) of the IMI Code should be taxed individually, meaning units below €1M would be exempt. This interpretation dispute significantly impacts tax obligations on buildings with multiple independent divisions.
Should the €1,000,000 VPT threshold for Verba 28.1 Stamp Tax be calculated per independent unit or for the entire building?
This is the central legal dispute in the case. The taxpayer's position is that each independent unit's VPT should be considered separately, consistent with IMI assessment practices under Article 7(2)(b) of the IMI Code. Since Article 67(2) of the Stamp Tax Code references IMI criteria for Verba 28.1 matters, the taxpayer argues the same individualized approach applies. The Tax Authority counters that vertical ownership properties are not subdivided into separate 'properties' like horizontal property regimes under Article 2(4) of the IMI Code, so the building's total VPT controls. Arbitral tribunal jurisprudence has predominantly favored the per-unit interpretation, though the Tax Authority maintains its aggregate value position.
Can a taxpayer challenge Stamp Tax assessments on vertical property through CAAD tax arbitration?
Yes, taxpayers can challenge Stamp Tax assessments on vertical property through CAAD (Centro de Arbitragem Administrativa) tax arbitration. This case was brought under Articles 2(1)(a) and 10 of Decree-Law 10/2011, which established the Legal Regime for Tax Arbitration (LRTA). The taxpayer requested annulment of the 2015 Stamp Tax assessments totaling €58,538.10, plus refunds with interest. Tax arbitration provides an alternative dispute resolution mechanism to administrative courts, offering faster resolution of tax disputes. The arbitral tribunal confirmed its jurisdiction and the parties' legal standing under the LRTA framework, demonstrating that Stamp Tax controversies on vertical property are arbitrable matters.
What is the role of Article 7(2)(b) of the IMI Code in determining VPT for independent units in vertical property?
Article 7(2)(b) of the IMI Code (Código do IMI) establishes that properties in full ownership composed of floors or divisions capable of independent use shall have their Tax Patrimonial Value determined separately for each independent unit. This provision is central to the taxpayer's argument that Stamp Tax should be assessed per unit rather than on aggregate building value. The taxpayer contends that since Article 67(2) of the Stamp Tax Code cross-references IMI Code provisions for Verba 28.1 matters, the separate VPT determinations under Article 7(2)(b) should control for Stamp Tax purposes. This creates individualized valuations for each division, which the taxpayer argues should be the basis for the €1M threshold test.
Is the property owner entitled to a refund with interest when Stamp Tax is unlawfully assessed on vertical property units?
Yes, when Stamp Tax is unlawfully assessed, property owners are entitled to restitution of amounts unduly paid, plus both default interest (juros de mora) and indemnification interest (juros indemnizatórios). In this case, the taxpayer specifically requested condemnation of the Tax Authority to refund first installment payments already made, with applicable interest. Portuguese tax law provides for interest compensation when taxpayers have been deprived of funds due to illegal tax assessments, recognizing the financial burden of erroneous taxation and the time value of money. The refund claim is cumulated with the annulment request under Article 3(1) of the LRTA, making both the legality determination and financial restitution part of the arbitral tribunal's jurisdiction.