Summary
Full Decision
ARBITRAL DECISION [1]
The Arbitrator, Dr. Sílvia Oliveira, designated by the Deontological Council of the Administrative Arbitration Center (CAAD) to form the Arbitral Tribunal, constituted on 11 September 2015, with respect to the above-identified proceeding, decided as follows:
1. REPORT
1.1
A..., NIF..., legally represented by B..., S.A., Legal Entity No..., registered at the Commercial Registry of Lisbon under the same number and with registered office at Rua..., in Lisbon (hereinafter referred to as "Claimant"), submitted a request for an arbitral pronouncement and constitution of a singular Arbitral Tribunal, on 29 June 2015, pursuant to the provisions of article 4 and No. 2 of article 10 of Decree-Law No. 10/2011, of 20 January [Legal Regime of Tax Arbitration (RJAT)], in which the Tax and Customs Authority (hereinafter referred to as "Respondent") is the respondent.
1.2
The Claimant requests that the Arbitral Tribunal "determine the annulment of the Stamp Tax assessment (...) identified, on the grounds of its illegality (...)", "that (...) determine the reimbursement of taxes paid and the payment of compensatory interest, calculated in accordance with legal provisions and (...) condemn the Tax Administration to pay the costs of the arbitral proceeding, all with the remaining legal consequences".
1.3
The request for constitution of the Arbitral Tribunal was accepted by the Esteemed President of the CAAD on 1 July 2015 and notified to the Respondent on the same date.
1.4
The Claimant did not proceed with the appointment of an arbitrator, wherefore, pursuant to the provisions of article 6, No. 2, paragraph a) of the RJAT, the signatory was designated as arbitrator by the President of the Deontological Council of the CAAD on 27 August 2015, having the appointment been accepted within the legally prescribed deadline and terms.
1.5
On the same date, the parties were duly notified of this designation and did not express any intention to refuse the appointment of the arbitrator, in accordance with the provisions of article 11, No. 1, paragraphs a) and b) of the RJAT, combined with articles 6 and 7 of the Deontological Code.
1.6
Thus, in conformity with the provisions of paragraph c), No. 1, of article 11 of the RJAT, the Arbitral Tribunal was constituted on 11 September 2015, having been issued an arbitral order on 14 September 2015, to the effect of notifying the Respondent to, in accordance with the provisions of article 17, No. 1 of the RJAT, submit a response, within a maximum period of 30 days and, if it so wished, request the production of additional evidence.
1.7
On 16 October 2015, the Respondent submitted its Response, having defended itself by way of opposition and concluded that "the request for a declaration of illegality and consequent annulment of the contested assessments should be judged unfounded, absolving the Tax Authority from the claim".
1.8
On the same date, the Respondent also submitted a motion requesting the dispensation with the holding of the first arbitral meeting (in accordance with the provisions of article 18 of the RJAT).
1.9
Accordingly, by order of this Arbitral Tribunal, dated 19 October 2015, taking into consideration the request for dispensation with the holding of the arbitral meeting referred to in article 18 of the RJAT, submitted by the Respondent (see preceding paragraph), and with the objective of guaranteeing the principle of contradiction and equality of the parties (in accordance with the provisions of article 16, paragraphs a) and b) of the RJAT), the Claimant was notified to submit, within a period of 5 days, its position on the Respondent's request identified above and, both parties were notified to submit, within the same period, their position on the possibility of dispensation with the submission of written arguments.
1.10
The Claimant submitted a motion on 20 October 2015, expressing its agreement with the dispensation with the holding of the meeting provided for in article 18 of the RJAT, but not waiving written arguments, requesting, for this purpose, the granting of a deadline.
1.11
The Respondent did not submit any position regarding the content of the arbitral order identified in paragraph 1.9, above.
1.12
Thus, by arbitral order, dated 27 October 2015, in accordance with the procedural principles laid down in article 16 RJAT, of contradiction [paragraph a)] of equality of the parties [paragraph b)], of the autonomy of the Arbitral Tribunal in the conduct of the proceeding and in determining the rules to be observed [paragraph c)], of cooperation and good faith in proceedings [paragraph f)] and of free conduct of the proceeding laid down in articles 19 and 29, No. 2 of the RJAT, as well as having regard to the principle of limitation of useless acts, provided for in article 130 of the Code of Civil Procedure (CPC), applicable by virtue of the provisions of article 29, No. 1, paragraph e) of the RJAT, this Arbitral Tribunal decided as follows:
1.12.1
To dispense with the holding of the meeting referred to in article 18 of the RJAT;
1.12.2
Not to dispense with the submission of arguments and, consequently, to notify the Claimant and the Respondent to, in this order and in succession, submit written arguments within a period of 15 days, with the deadline for the Respondent commencing to run upon notification of the submission of the Claimant's arguments.
1.12.3
To designate 14 December 2015 for the purpose of rendering the arbitral decision.
1.13
The Claimant was further cautioned that "until the date of rendering of the arbitral decision it should proceed to payment of the subsequent arbitral fee, in accordance with the provisions of No. 3 of article 4 of the Regulation of Costs in Tax Arbitration Proceedings and communicate such payment to the CAAD" (which it did on 3 December 2015).
1.14
On 6 November 2015, the Claimant submitted written arguments to the effect of reiterating that "it submitted a request for constitution of the learned tribunal to examine the legality of the decisions rendered in the context of the Hierarchical Appeal and consequently of the Stamp Tax Assessment that gave rise to it", having reinforced the arguments presented in the request for Arbitral Pronouncement, concluding that "(...) the Tax and Customs Authority cannot require (...) the assessment of stamp tax based on item 28.1. of the GTST", wherefore "(...) the tax act suffering (...) from the defect of violation of law (...) the Claimant has the right to the payment of compensatory interest (...)".
1.15
Consequently, the Claimant petitions "(...) the reimbursement of the amounts paid and not annulled, as well as the payment of compensatory interest (....) calculated from the date on which the payments were made until the date of the effective receipt of the indebtedly paid amounts".
1.16
The Respondent did not submit arguments, despite the content of the arbitral order referred to in paragraph 1.12.2., above (and its enforcement).
2. CAUSE OF ACTION
The Claimant supports its claim, in summary, as follows:
2.1
"(...) is the owner and lawful proprietor of the urban property intended as a plot of land for construction registered under article No. ... of the urban property matrix of the parish of ... (...)".
2.2
In this context, the Claimant was "(...) notified of the payment notices for Stamp Tax (...) in the amount of €4,361.90 each, with Nos. 2013..., 2013... and 2013..., relating, respectively, to the first, second and third installments (...) which correspond to the assessment (...) No. 2012... replaced by No. 2012..., relating to the tax year of 2012, in the total amount of €11,384.56 (...)".
2.3
Although having been paid in full, the Claimant, not agreeing with the said Stamp Tax assessment, on the grounds that "(...) the assessment lacks legal and constitutional basis since the provision that underlies it (...) is (...) clearly violative of the principles of equality, proportionality and legal certainty, primarily because it is a plot of land for construction that is outside the scope of application of the provision", submitted on 14 August 2013 and on 7 April 2014 an administrative complaint regarding the content of that assessment, having been notified "(...) on 23 December 2013 (...), on 14 May 2014 (...) and on 3 June 2014 (...) of the rejection of the administrative complaints".
2.4
"From the decisions of rejection the Claimant appealed hierarchically on 27 January 2014, 11 June 2014 and 01 July 2014, respectively (...)".
2.5
In this context, the Claimant was notified, "(...) on 15 April 2015 (...) of the rejection of the Hierarchical Appeal No. ...2014... (...) relating to the administrative complaint No. ...2013... (relating to the payment notice No. 2013... – 1st installment), with the grounds set out in the decision, having further been notified that the remaining Appeals were filed away for mootness (...)".
2.6
From the decision of rejection referred to in the preceding paragraph "it results (...) that the property subject to the contested assessment corresponds to a plot of land for construction of a building, with multiple use, residential and services (...)" wherefore "it is found (...) that in the stamp tax assessment now appealed (...) the total patrimonial tax value of the property (...) was improperly considered and not solely the patrimonial tax value of the part allocated to residential use (...)" and therefore should, consequently, "(...) the said assessment be officially revised (...)".
2.7
Thus, by order dated 23 April 2014 "(...) it was officially sanctioned that the official correction of the assessment that originated that complaint should be undertaken (...) given that it was found that part of the property (...) does not have allocation for residential purposes, but rather for services", wherefore "(...) as regards the year 2012, the assessment No. 2012... was partially annulled and was replaced by assessment No. 2012... (...)".
2.8
Now, the Claimant states that it "does not accept the decisions rendered in the Hierarchical Appeal proceedings (...) relating to (...) the Stamp Tax Assessment (...) that was replaced (...)" on the grounds that it "understands (...) that the assessment lacks legal and constitutional basis since the provision that underlies it (...) is (...) clearly violative of the principles of equality, proportionality and legal certainty, primarily because it is a plot of land for construction that is outside the scope of application of the provision".
2.9
Indeed, the Claimant further adds that "through Law No. 55-A/2012, of 29/10, item 28 was added to the General Table of Stamp Tax, subjecting to this tax urban properties whose patrimonial tax value contained in the matrix (...) is equal to or greater than €1,000,000.00 (...)", "with the taxable base consisting of the patrimonial tax value considered for purposes of the Property Tax and Stamp Tax being assessed annually by the Tax Authority regarding each urban property, at a rate of 1% (...), per urban property with residential allocation (...)".
2.10
The Claimant further states that "Law 55-A/2012, of 29/10, does not clarify what are properties with residential allocation, and, given that the said law has no preamble, it is not even possible to ascertain what would be the intention of the legislator", nor is it clarified in the explanatory memorandum underlying the Bill No. 96/XII.[2]
2.11
On the other hand, according to the Claimant, "No. 1 of article 9° of the Civil Code stipulates that interpretation should not be limited to the letter of the law, but reconstruct from the texts the legislative thought (...) the circumstances in which it was drafted and the specific conditions of the time in which it is applied".[3]
2.12
Thus, in this context, the Claimant concludes that "(...) what was proposed to the deputies and which they approved was the creation of a taxation of luxury real estate assets, which does not include plots of land for construction, or a special taxation on property of high value intended for residential purposes and, a special taxation that will apply to cases of value equal to or greater than €1,000,000.00, that is, a taxation on residential properties (...)".
2.13
Even if that is not the case, the Claimant argues that "a property that does not meet the requirements (...) referred to is classified as urban", adding further that, "(...) in defining the scope of the taxation of assets (...) the legislator considers, as a relevant element of tax capacity, properties of high value (...) that are held for residential purposes".[4]
2.14
Now, for the Claimant, "a property is classified as land for construction whenever a set of circumstances (...) that (...) suggest the intention to build on it, except if, by force of applicable legislation, such intention is not capable of effective realization".
2.15
On the other hand, the Claimant understands that "resulting from article 6°, of the PTC a clear distinction between residential urban properties and plots of land for construction, these cannot be considered, for purposes of incidence of stamp tax as properties with residential allocation", wherefore "the interpretation that the Tax Authority is giving to item 28.1. of the General Table of Stamp Tax is not in accordance with the law approved in the Assembly of the Republic, being therefore illegal the assessment carried out (...)". [5] [6]
2.16
Thus, the Claimant concludes that "given that the legislator has not defined the concept of properties (urban) with residential allocation, and resulting from article 6° of the Property Tax Code (...) a clear distinction between residential urban properties and plots of land for construction, these cannot be considered, for purposes of incidence of Stamp Tax (...), as urban properties with residential allocation".
2.17
The Claimant continues by stating that "with the State Budget (...) for 2014 (...) it is evident that taxation on plots of land for construction is excluded from the scope of application of Law 55-A/2012, of 29 October", since with the new Law, "(...) the tax of 1% will apply to property (...) of urban properties with residential allocation, whose patrimonial tax value is equal to or greater than €1,000,000.00, beginning to apply equally to plots of land for construction, whose authorized or planned construction is for residential purposes".
2.18
And "considering the literality of the new law as well as the constant and settled case law known, one cannot fail to conclude that this is not an interpretative law, but an innovative law, applicable only for the future", wherefore, the Claimant reiterates that "(...) there is no basis for tax incidence and therefore the assessments should be annulled".
2.19
Further, the Claimant understands that "(...) item 28.1. of the GTST is manifestly unconstitutional due to violation of the principles of equality, proportionality, and, as well, due to violation of the principle of legal certainty (...)", wherefore once again the Claimant argues for the annulment of the assessments that are the object of the request for arbitral pronouncement.[7]
2.20
Additionally, the Claimant states that having proceeded "(...) to the payment of the payment notices (...)", "(...) the sum of €1,701.14" was not refunded to it, wherefore "the tax act suffering (...) from the defect of violation of law (...) the Claimant has the right to the payment of compensatory interest (...)", requesting "the reimbursement of the amounts paid, as well as the payment of compensatory interest (...) calculated from the date on which the payments were made until the date of the effective receipt of the indebtedly paid amounts".
2.21
Thus, the Claimant concludes by requesting "(...) arbitral pronouncement on the illegality of the Stamp Tax assessment relating to the year of 2012 (...)", requesting that the Arbitral Tribunal "determine the annulment of the Stamp Tax Assessment (...) in question, on the grounds of its illegality (...), determine (...) the reimbursement of taxes paid and the payment of compensatory interest (...)" and "(...) condemn the Tax Administration to pay the costs of the arbitral proceeding (...)".
3. RESPONSE OF THE RESPONDENT
3.1
The Respondent responded sustaining the lack of merit of the request for arbitral pronouncement, having invoked the following arguments:
3.2
"It is the Tax Authority's understanding that the property subject to the contested assessment has the legal nature of a property with residential allocation, wherefore the act of assessment that is the object of the present request for arbitral pronouncement should be maintained, as it constitutes a correct interpretation of item 28 of the General Table, added by Law 55-A/2012, of 29/12".
3.3
"With this legislative amendment, Stamp Tax would begin to apply also to property, usufruct or right of superficies of urban properties whose PTV as shown in the matrix, in accordance with the Property Tax Code, is equal to or greater than EUR 1,000,000.00".
3.4
"In the absence of any definition of the concepts of urban property, plot of land for construction and residential allocation, in the context of Stamp Tax, one must resort to the Property Tax Code, in search of a definition that permits ascertaining the possible subjection to Stamp Tax (...)".
3.5
Thus, the Respondent continues, "pursuant to the said legal provision, matters not regulated in the Code, relating to item No. 28 of the GTST, the provisions of the Property Tax Code apply subsidiarily", pursuant to which:
3.5.1
"No. 1 of article 2 provides that a property is any portion of land, including waters, plantations, buildings and structures of any kind incorporated or installed thereon, with a character of permanence, provided that it forms part of the assets of a natural or legal person and, in normal circumstances has economic value (...)" and,
3.5.2
"Article 6, No. 1 provides (...) including in this concept" (of urban property) "plots of land for construction, that is, lands situated within or outside an urban agglomeration, for which a building permit or authorization has been granted, prior notification admitted or favorable prior information issued for a land division or construction operation (...)".
3.6
On the other hand, according to the Respondent, "the notion of allocation of the urban property is found in the section relating to the assessment of real estate, which is well understood since the assessment of the property (purpose) incorporates value to the property, constituting a determining fact of distinction (coefficient) for purposes of assessment".[8]
3.7
"Contrary to what is argued by the Claimant, the Tax Authority understands that the concept of properties with residential allocation, for purposes of the provisions of item 28 of the GTST, comprises both constructed properties and plots of land for construction, foremost in light of the literal element of the rule".
3.8
"It should be noted that the legislator does not refer to properties intended for residential purposes, having opted for the notion of residential allocation - a different and broader expression, whose meaning must be found in the need to integrate other realities beyond those identified in article 6, No.1 paragraph a) of the PTC".
3.9
On the other hand, while "as regards the legal regime of urbanization and building, (...) the same has as a prerequisite buildings already constructed", "one cannot ignore that the building permit for the undertaking of urban operations must contain, among other elements, the number of plots, (...), the purpose (...)", with the Respondent understanding that "also the Municipal Master Plans establish the strategy for municipal development, the municipal policy for land planning and urbanism and the remaining urban policies (...)" wherefore "well before the actual construction of the property, it is possible to ascertain and determine the allocation of the plot of land for construction".
3.10
As regards the "alleged violation of constitutional principles, the Tax Authority cannot fail to note that the Constitution requires that what is necessarily equal be treated equally and what is essentially different be treated as different, not preventing differential treatment (...)", wherefore "the Tax Authority understands that the provision of item 28 of the GTST does not constitute a violation of any constitutional command" given that "it applies to property, usufruct or right of superficies of urban properties with residential allocation, whose PTV as shown in the matrix, in accordance with the Property Tax Code, is equal to or greater than EUR 1,000,000.00, that is, it applies to the value of the property", being "a general and abstract rule, applicable in a uniform manner to all cases in which the facts and legal premises are met".
3.11
Indeed, "the different aptitude of properties (residential/services/commerce) supports the different treatment, having been the option of the legislator, for political and economic reasons, to exclude from the incidence of Stamp Tax properties intended for purposes other than residential purposes".
3.12
In fact, "(...) taxation in the context of Stamp Tax follows criteria of suitability, applying in a uniform manner to all holders of properties with residential allocation of value exceeding EUR 1,000,000.00, applying to the wealth embodied and manifested in the value of properties".
3.13
"Thus, the option for this mechanism of revenue generation is justified, which would only be subject to censure, in light of the principle of proportionality, if it resulted manifestly indefensible", "which is not the case since such a measure will apply in a uniform manner to all holders of properties with residential allocation of value exceeding EUR 1,000,000.00".
3.14
In these terms, "(...) the contested assessment constitutes a correct interpretation and application of law to the facts, not suffering from a defect of violation of law (...) and should, consequently, be judged unfounded the allegation made and the (...) Respondent absolved of the claim".
4. PRELIMINARY ISSUE
On the Timeliness of the Claim
4.1
In this context, taking into account that the request for arbitral pronouncement also implicitly includes a request to review the act of rejection of the Hierarchical Appeal as a means to be able to declare, in the final instance, the illegality of the Stamp Tax Assessment that is the object of the request, and being the deadline for submission of the claim a peremptory lapse of time (articles 298°, No. 2, 330°, No. 1, and 333°, No. 1, all of the Civil Code), the prior analysis of the timeliness of the claim is pertinent since, translating itself into a peremptory exception (of a type precluding the exercise of the respective right), the assessment of the merit of this exception (of knowledge ex officio, as per article 579 of the CPC) will depend the continuity of the arbitral proceeding.[9]
4.2
Pursuant to No. l of article 102° of the Code of Tax Procedure and Process (CTPP), as amended by Law No. 66-B/2012, of 31 December (in force since 1 January 2013), the deadline for submission of judicial challenge is three months counted, namely, "from the end of the period for voluntary payment of tax obligations legally notified to the taxpayer" or "from notification of the remaining acts that may be subject to autonomous challenge in accordance with this Code.
4.3
In general terms, the deadlines for bringing actions are:
a) Substantive deadlines, of lapse of time, and are part of the material legal relationship itself in dispute, aiming to determine the period for exercise of a right; and
b) Peremptory deadlines, since the passage of time extinguishes the right itself.
4.4
In any of the cases provided in the preceding paragraph, the deadline is counted in accordance with the provisions of article 279° of the Civil Code (by referral of article 20 of the CTPP), that is, continuously, not being suspended during the period of court holidays.[10]
4.5
As Jorge Lopes de Sousa refers, in his annotations to article 102 of the CTPP, "given that this article does not provide for any special deadline for judicial challenge of a decision rendered in a hierarchical appeal, the appropriate deadline will be the 90 days provided for in paragraph e) of No. 1 of that article".[11][12]
4.6
Indeed, before the repeal of the provisions of No. 2 of article 102 of the CTPP came into force (by Law No. 82-E/2014, of 31 December, in force as of 1 January 2015), that article provided that "in case of rejection of an administrative complaint, the deadline for challenge" was "15 days after notification" of the rejection.
4.7
Thus, given that the special deadline for challenge provided only for the decision of rejection of an administrative complaint (and not also for challenge of the subsequent decision of rejection of hierarchical appeal), it would be only to that decision and not to this that that shorter deadline was applicable.[13]
4.8
Consequently, the decision of the hierarchical appeal that involved the assessment of the legality of a tax assessment was covered by the provision of paragraph e) of No. 1 of article 102, wherefore to it would always be applicable the deadline of 90 days (three months, as of 1 January 2015) counting from the respective notification [in the case of an express decision, as provided in article 102°, No. 1, paragraph e), of the CTPP].[14][15][16]
4.9
On the other hand, in the context of the Legal Regime of Tax Arbitration, article 10, No. 1, paragraph a) of the RJAT provides that the request for constitution of an Arbitral Tribunal must be submitted "within a period of 90 days, counted from the facts provided in Nos. 1 and 2 of article 102 of the CTPP, as to acts susceptible to autonomous challenge and, as well, from notification of the decision or from the end of the legal period for decision of the hierarchical appeal" (emphasis added).
4.10
In this matter, it should be noted that the arbitral nature of this tribunal and the application of the Legal Regime of Tax Arbitration do not entail any modification relative to the nature, modalities and manner of counting deadlines, as is derived from the reading of the RJAT, and much less concerning substantive deadlines, which form an integral part of the material status of the tax credit right itself.
4.11
And, if there were any doubts, article 29 of the RJAT provides for the subsidiary application of the norms of a procedural or procedural tax nature, of the norms concerning organization and proceedings in administrative and tax courts, of the Code of Administrative Procedure (CAP) and of the CPC.
4.12
Thus, article 2 of the RJAT fixes the matters on which the Arbitral Tribunal may pronounce, among those finding among the competencies defined there being "the declaration of illegality of acts of tax assessment" [covered by paragraph a) of that article].
4.13
Indeed, the scope of applicability of the term "declaration of illegality of acts of tax assessment", referred to in the preceding paragraph and used in paragraph a) of No. 1 of article 2 of the RJAT, does not restrict the arbitral jurisdiction to cases in which a direct challenge is made to an act of that nature.
4.14
In fact, the illegality of acts of assessment can be declared judicially as a corollary of the illegality of a second-degree act, which confirms an act of assessment, incorporating its illegality.
4.15
In these terms, "the inclusion in the competencies of the arbitral tribunals functioning in the CAAD, of cases in which the declaration of illegality of acts, listed in article 2 of the RJAT, is effected through the declaration of illegality of second-degree acts (...) results with certainty from the reference made in that rule", namely, to acts of tax assessment, "which expressly refer to as included among the competencies of the arbitral tribunals" (emphasis added).[17]
4.16
In summary, we can thus conclude that, the provision in paragraph a) of No. 1 of article 2 of the RJAT does not exclude cases in which the declaration of illegality results from the illegality of a second-degree act.
4.17
The question that may be raised here is whether it is included, in the competencies of the arbitral tribunals functioning in the CAAD, to declare the illegality of acts of assessment if that illegality was not assessed by the act which is intended to be reviewed (i.e., in the case under examination, the acts that rejected the hierarchical appeals No. ...2014... and No. ...2014... filed by the Claimant and "(...) filed away for mootness").
4.18
Now, the fact that paragraph a) of No. 1 of article 10 of the RJAT makes reference to Nos. 1 and 2 of article 102 of the CTPP (in which the various types of acts that give rise to the deadline for judicial challenge are indicated, including the hierarchical appeal), makes it apparent that all types of acts susceptible to being challenged through the process of judicial challenge, covered by those Nos. 1 and 2, shall be included within the scope of the jurisdiction of the arbitral tribunals functioning in the CAAD, provided that they have as their object an act of one of the types indicated in the already cited article 2 of the RJAT.
4.19
As regards the act of rejection of a hierarchical appeal, it constitutes an administrative act, in light of the definition given by article 120 of the CAP [subsidiarily applicable in tax matters, by force of the provisions of article 2, paragraph d), of the General Tax Law (GTL), article 2, paragraph d), of the CTPP and article 29, No. 1, paragraph d), of the RJAT], since it constitutes a decision of a body of the Administration which, under rules of public law, aimed to produce legal effects in an individual and concrete situation.
4.20
On the other hand, it is also unquestionable that it is an act in tax matters since the application of rules of tax law is made in it.
4.21
In these terms, an act of rejection of a hierarchical appeal constitutes an "administrative act in tax matters".
4.22
From the analysis of the provisions in paragraphs d) and p) of No. 1 and No. 2 of article 97 of the CTPP, the rule is inferred that the challenge of administrative acts in tax matters can be made, in the tax judicial process, through judicial challenge or special administrative action (which succeeded the contentious appeal, as per article 191 of the ACPA), depending on whether or not those acts involve the assessment of the legality of administrative acts of assessment.
4.23
Thus, based on the criterion enunciated above, the acts rendered in procedures of rejection of hierarchical appeal of acts of assessment may only be challenged through the process of judicial challenge when they involve the assessment of the legality of the act of assessment.
4.24
If the act of rejection of hierarchical appeal of an act of assessment does not involve the assessment of the legality of the latter, the special administrative action will be applicable.
4.25
The legislative concern in excluding, from the competencies of the arbitral tribunals functioning in the CAAD, the assessment of the legality of administrative acts that do not involve the assessment of the legality of acts of assessment, apart from resulting, from the outset, from the generic directive to establish an alternative means to the process of judicial challenge and the action for recognition of a right or legitimate interest, also results (and clearly) from the provisions in the Law that approved the State Budget for 2010 (Law No. 3-B/2010, of 28 April), pursuant to which, in accordance with what is provided in paragraph a) of No. 4 of article 124, among the possible objects of the tax arbitral process are found "(...) the administrative acts that involve the assessment of the legality of acts of assessment (...)" (emphasis added).
4.26
This specification can only be justified by there having been a legislative intention to exclude, from the possible objects of arbitral proceedings, the assessment of the legality of acts that do not involve the assessment of the legality of acts of assessment.
4.27
Now, in accordance with the information contained in the documentation attached to the file by the parties, namely:
4.27.1
The content of the order of 17 March 2015, of the Director of Services (acting) of the Directorate of Services of the Municipal Property Transmission Tax, Stamp Tax, Single Circulation Tax and Special Contributions, duly notified to the Claimant, through Letter No..., of 8 April 2015, in which the hierarchical appeal No. ...2014... was wholly rejected (filed against the order of rejection, issued on 10 December 2012, of the administrative complaint No. ...2013..., relating to the payment notice for Stamp Tax No. 2013...) with the grounds "(...) that plots of land are included in the rule of incidence of item 28° of the GTST (...), wherefore the assessment of stamp tax levied on the now appellant is found to be correct, not suffering from any illegality";
4.27.2
The content of the order of 17 March 2015, of the Director of Services (acting) of the Directorate of Services of the Municipal Property Transmission Tax, Stamp Tax, Single Circulation Tax and Special Contributions, duly notified to the Claimant, through Letter No..., of 8 April 2015, in which it was ordered to file away the proceeding associated with hierarchical appeal No. ...2014... (filed against the order of rejection, issued on 30 April 2014, of the administrative complaint No. ...2014..., relating to the payment notice for Stamp Tax No. 2013...) for mootness in accordance with article 112 of the CAP;
4.27.3
The content of the order of 17 March 2015, of the Director of Services (acting) of the Directorate of Services of the Municipal Property Transmission Tax, Stamp Tax, Single Circulation Tax and Special Contributions, duly notified to the Claimant, through Letter No..., of 8 April 2015, in which it was ordered to file away the proceeding associated with hierarchical appeal No. ...2014... (filed against the order of rejection, issued on 16 May 2014, of the administrative complaint No. ...2014..., relating to the payment notice for Stamp Tax No. 2013...) for mootness in accordance with article 112 of the CAP;
It is verified that in order to ascertain the object of the claim and the consequent timeliness of the claim, it will be necessary to analyze, in detail, the content of the said claim, as well as the arguments produced.
4.28
Indeed, in consequence of the orders identified in the preceding paragraph (4.27., above), and as already mentioned, the Claimant came to submit, on 29 June 2015, a request for constitution of an Arbitral Tribunal with a view to the declaration of illegality and consequent annulment of Stamp Tax Assessment No. 2012... (corrected replacement assessment) relating to the year of 2012.
4.29
In this context, the Claimant begins by setting forth its Claim, in accordance with what was described in the preceding paragraph and, subsequently, presents the grounds for the "FRAMEWORK AND LEGITIMACY OF THIS REQUEST FOR CONSTITUTION OF AN ARBITRAL TRIBUNAL", referring in article 2 of the Claim that "by way of preliminary (...) it succinctly sets out the grounds for the timeliness of the submission of this request for constitution of an Arbitral Tribunal", and after a succinct description of the facts (article 3 to article 9 of the Claim), it goes on to invoke the timeliness of the request for constitution of the Arbitral Tribunal (article 12 of the Claim), on the grounds that, "given that the decisions of the Hierarchical Appeals were notified to the Claimant on 15 April 2015, the period of 90 days for requesting the constitution of the Arbitral Tribunal is still in progress" (article 11 of the Claim).
4.30
Based on the terms set out in the claim, this Arbitral Tribunal understands that, through that procedural document, the Claimant came to make "judicial challenge" following the rejection of the hierarchical appeals identified above (which it filed from the decisions that rejected the administrative complaints that it had submitted against the payment notices identified with respect to the Stamp Tax Assessment relating to the year of 2012).[18][19][20]
4.31
Thus, this Arbitral Tribunal understands that, in the acts of filing away of the hierarchical appeals identified in paragraphs 4.27.2. and 4.27.3., above, we are dealing with administrative acts that do not involve (because they do not include) the assessment of the legality of a tax assessment, wherefore, in theory, as to these two acts, the appropriate process would not be the process of judicial challenge.
4.32
As regards the act of rejection of the hierarchical appeal identified in paragraph 4.27.1., above, as Jorge Lopes de Sousa notes, in the commentary to the provisions of article 97 of the CTPP, "it results clearly that, in cases in which the act to be challenged is an act of assessment or an act that involves the assessment of an act of assessment [act of rejection (...) of hierarchical appeal filed from the decision that assesses the administrative complaint] the appropriate means is the process of challenge (...) if the act to be challenged contains effectively the assessment of the legality of an act of assessment (...)" (emphasis added).[21][22]
4.33
In these terms, this Arbitral Tribunal considers that the means used by the Claimant is appropriate to request the review of the act that summarily rejected the hierarchical appeal identified in the preceding paragraph, implicitly formulated in its request for arbitral pronouncement, since one is dealing with a matter included in the competencies of the arbitral tribunals functioning in the CAAD, and this tribunal is competent to know of that request.
4.34
Consequently, the counting of the 90-day period (provided in article 10 of the RJAT) and the three-month period provided in article 102 of the CTPP (in the version in force as of 1 January 2015, that is, in force at the time of the events) should commence from notification of that order of summary rejection (15 April 2015), since that order involved the analysis of the legality of the Stamp Tax Assessment relating to the year of 2012)
4.35
Thus, given that the request for constitution of the Arbitral Tribunal was submitted on 29 June 2015, the same occurred within the deadline referred to above, the request being therefore considered timely.
5. CASE MANAGEMENT
5.1
The request for arbitral pronouncement is timely since it was submitted within the deadline provided for in paragraph a) of No. 1 of article 10 of the RJAT.[23]
5.2
The parties have procedural capacity and capacity, are legitimate regarding the request for arbitral pronouncement and are duly represented, in accordance with the provisions of articles 4 and 10 of the RJAT and of article 1 of Regulatory Decree No. 112-A/2011, of 22 March.
5.3
The Tribunal is competent regarding the assessment of the request for arbitral pronouncement formulated by the Claimant.
5.4
No exceptions were raised that require to be decided.
5.5
No irregularities are found wherefore it is now necessary to decide on the merits of the claim.
6. FACTUAL MATTERS
6.1
Of Proven Facts
6.2
The following facts are considered as proven based on the documents joined to the file:
6.2.1
The Claimant is an open real estate investment fund resulting from the merger by incorporation of the open real estate investment fund ... into the open real estate investment fund A..., both managed by B..., S.A. (as per documents contained in documents No. 1, No. 2 and No. 3 attached with the claim).
6.2.2
The Claimant is the owner of an urban property (plot of land for construction), registered in the urban property matrix under No. U-... of the parish of ... (...), in the ..., whose PTV, determined in 2010, amounts to EUR 1,308,570.00 (as per documents contained in documents No. 1, No. 2 and No. 3 attached with the claim).
6.2.3
The Claimant was notified of Stamp Tax Assessment No. 2012..., dated 21 March 2013, in the total amount of EUR 13,085.70, relating to the property identified in the preceding paragraph, having subsequently been notified of the collection documents relating to payment of the first, second and third installments of that tax, as set out below:
| DOCUMENT | MATRIX ARTICLE | PTV | ASSESSMENT | INSTALLMENT | ATTACHED DOC. |
|---|---|---|---|---|---|
| 2013... | U-... | 1,308,570.00 | 13,085.70 | APRIL/2013 | 4,361.90 |
| 2013... | JULY/2013 | 4,361.90 | No. 1 | ||
| 2013... | NOVEMBER/2013 | 4,361.90 | No. 2 |
6.2.4
The Claimant made payment of the first and second installments relating to the Stamp Tax Assessment identified above on 20 December 2013 and paid, on 12 February 2014, the amount relating to the third installment of tax (as per documents contained in documents No. 1, No. 2 and No. 3 attached with the claim).
6.2.5
The Claimant submitted, on 14 August 2013, an administrative complaint (No. ...2013...) relating to the first installment of the Stamp Tax Assessment identified above (Stamp Tax payment notice No. 2013...) (document contained in document No. 1 attached with the claim).
6.2.6
The Claimant submitted, on 14 August 2013, an administrative complaint (No. ...2014...) relating to the second installment of the Stamp Tax Assessment identified above (Stamp Tax payment notice No. 2013...) (document contained in document No. 2 attached with the claim).
6.2.7
The Claimant was notified through Letter No..., of 12 November 2013, of the draft rejection of the administrative complaint No. ...2013..., relating to payment notice No. 2013..., to exercise, if it wished, within fifteen days, the right to a hearing, orally or in writing (document contained in document No. 1 attached with the claim).
6.2.8
The Claimant exercised the right to a prior hearing, in accordance with the reference in the preceding paragraph, on 28 November 2013 (document contained in document No. 1 attached with the claim).
6.2.9
The Claimant submitted on 07 April 2014, an administrative complaint (No. ...2014...) relating to the third installment of the Stamp Tax Assessment identified above (Stamp Tax payment notice No. 2013...) (document contained in document No. 3 attached with the claim).
6.2.10
The Claimant was notified of the decisions of rejection of the administrative complaints referred to in paragraphs 6.2.5, 6.2.6. and 6.2.9., above:
– On 23 December 2013, through Letter No..., of 19 December 2013, relating to the administrative complaint No. ... 2013... (document contained in document No. 1 attached with the claim);
– On 14 May 2014, through Letter No..., of 1 April 2014, relating to the second installment of tax (document contained in document No. 2 attached with the claim);
– On 03 June 2014, through Letter No..., of 22 April 2014, relating to the third installment of tax (document contained in document No. 3 attached with the claim).
6.2.11
The Claimant appealed hierarchically from the decisions of rejection of the administrative complaints identified in the preceding paragraph:
– On 17 January 2014, through hierarchical appeal No. ...2014..., filed relating to the decision of rejection of the administrative complaint process No. ...2013... (document No. 1 attached with the claim);
– On 11 June 2014, through hierarchical appeal No. ...2014..., filed relating to the decision of rejection of the administrative complaint process No. ...2014... (document No. 2 attached with the claim);
– On 1 July 2014, through hierarchical appeal No. ...2014..., filed relating to the decision of rejection of the administrative complaint process No. ...2014... (document No. 3 attached with the claim).
6.2.12
The Claimant was notified, on 15 April 2015, through Letter No..., of 8 April 2015, of the decision of rejection of hierarchical appeal No. ...2014..., relating to the administrative complaint No. ...2013... (document No. 4 attached with the claim), having on the same date also been notified that the two other hierarchical appeals filed (No. ...2014... and ...2014...) were filed away for "mootness (...) in accordance with the provisions of article 112 of the CAP" (Letters No. ... and..., of 8 April 2015), as per documents No. 5 and 6 attached with the claim.
6.2.13
Following a decision of hierarchical appeal filed in the matter of the process of official revision of Stamp Tax of item 28 of the GTST, the Respondent sanctioned the undertaking of official correction to the Stamp Tax Assessment applying to the plot of land for construction underlying the request for arbitral pronouncement, "given that it was found that part of the property does not have allocation for residential purposes but rather for services" (as per document No. 7 attached with the claim), reason for which Stamp Tax Assessment No. 2012..., dated 21 March 2013, was annulled, which was replaced by the Stamp Tax Assessment that is the object of the request for arbitral pronouncement (No. 2012..., of 28 April 2015, in the total amount of EUR 11,384.56) (document No. 8 attached with the claim).
6.3
No other facts were proven that could affect the decision on the merits of the claim.
6.4
Of Unproven Facts
6.5
No other facts were found to be unproven with relevance for the arbitral decision.
7. LEGAL GROUNDS
7.1
In this file, the essential issue to be decided is to determine what the scope of incidence of item 28.l. of the GTST is, as amended by Law No. 55-A/2012 of 29 October, namely, to know whether:
7.1.1
In that rule plots of land for construction should be included and, in particular;
7.1.2
Plots of land for construction with PTV equal to or greater than EUR 1,000,000 are subsumed, or not, in the category of urban properties "with residential allocation",
In order to determine whether the Stamp Tax Assessment that is the object of the Request for Arbitral Pronouncement suffers from a defect of violation of that item No. 28.1. (due to error regarding the legal premises), which would justify the declaration of its illegality and respective annulment.
7.2
The answer to the issues outlined in the preceding paragraph requires the analysis of the legal rules applicable to the case in question, in order to determine what the correct interpretation is in light of the Law and the Constitution, given that it is a matter of assessing a premise of tax incidence, carefully protected by the principle of fiscal legality, resulting from the provisions of article 103, No. 2 of the Constitution of the Portuguese Republic (CRP).
On the Scope of Incidence of item 28.l. of the GTST (as amended by Law No. 55-A/2012 of 29 October)
7.3
Law No. 55-A/2012 made several amendments to the Stamp Tax Code and added item 28 to the GTST, with the following wording:
"28. Property, usufruct or right of superficies of urban properties whose PTV as shown in the matrix, in accordance with the Property Tax Code, is equal to or greater than EUR 1,000,000.00 – on the PTV for purposes of Property Tax:
28.1 – Per property with residential allocation – 1%.
28.2 – (...)".
7.4
Notwithstanding the fact that the text of Law No. 55-A/2012 (in force since 30 October 2012) did not proceed to define the concepts contained in the said item No. 28, namely, the concept of "property with residential allocation", if we observe the provisions of article 67, No. 2, of the Stamp Tax Code (also added by the said Law), it is verified that "matters not regulated in the present Code, relating to item 28 of the General Table, the Property Tax Code applies subsidiarily" (emphasis added).
7.5
Now, from the reading of the Property Tax Code, we easily perceive that the concept of "property with residential allocation" refers, naturally, to the concept of "urban property", defined in accordance with articles 2 and 4 of that Code.
7.6
Indeed, in accordance with the provisions of article 2, No. 1 of the Property Tax Code, "(...) a property is any portion of land, including waters, plantations, buildings and structures of any kind incorporated or installed thereon, with a character of permanence, provided that it forms part of the assets of a natural or legal person and, in normal circumstances, has economic value, as well as waters, plantations, buildings or structures, in the circumstances previously mentioned, having economic autonomy in relation to the land where they are installed, even though situated in a portion of land that constitutes an integral part of an asset other than or not having a patrimonial nature" (emphasis added).
7.7
Additionally, in accordance with the provisions of Nos. 2 and 3 of the same article, "buildings or structures, even though movable by nature, are considered to have a character of permanence when allocated to non-transitory purposes", being presumed "the character of permanence when buildings or structures are installed in the same location for a period greater than one year".
7.8
On the other hand, in accordance with the provisions of article 4 of the Property Tax Code, "urban properties are all those that should not be classified as rural (...)".
7.9
In this context, among the various types of "urban properties" referred to in article 6 of the Property Tax Code, "plots of land for construction" are expressly mentioned [No.1, paragraph c)], with No. 3 of the same article adding that "plots of land for construction are considered lands situated within or outside an urban agglomeration, for which a building permit or authorization has been granted, prior notification admitted or favorable prior information issued for a land division or construction operation, and also those that have been declared as such in the acquisition title, excepting lands where the competent entities prohibit any of those operations, namely those located in green areas, protected areas or which, in accordance with municipal land planning plans, are allocated to spaces, infrastructure or public equipment" (emphasis added).
7.10
As is seen from the provisions of the Property Tax Code above transcribed, it is not possible to extract what the legislator intended to say when it refers in the text of the law to "properties with residential allocation", since that concept is not used in the classification of properties, nor is this concept, with this terminology, found in any other statute.
7.11
On the other hand, given that Law No. 55-A/2012, of 29/10, has no preamble, it follows from this that it is not possible to derive from it the intention of the legislator.
7.12
Thus, in the absence of exact terminological correspondence of the concept of "property with residential allocation" with any other concept used in other statutes, several interpretative hypotheses may be ventured, and the text of the law must be the starting point for the interpretation of that expression, since it is on the basis of it that the legislative thought will have to be reconstructed, as follows from the provisions of No. 1 of article 9 of the Civil Code, applicable by force of the provisions of article 11, No. 1, of the GTL.
On the Interpretation of the Concept of "Urban Property with Residential Allocation"
7.13
Indeed, in accordance with the provisions of article 9 of the Civil Code, "interpretation should not be limited to the letter of the law, but reconstruct, from the texts, the legislative thought, taking especially into account the unity of the legal system, the circumstances in which the law was drafted and the specific conditions of the time in which it is applied", being unable to "be considered by the interpreter the legislative thought that does not have in the letter of the law a minimum of verbal correspondence, even if imperfectly expressed" (emphasis added).
7.14
In these terms, it may be affirmed that fiscal laws are interpreted as any others, it being necessary to determine their true meaning in accordance with the techniques and interpretive elements generally accepted by legal doctrine (cf. article 9 of the Civil Code and article 11 of the GTL) [24].
7.15
Thus, the concept most closely aligned with the literal wording of the expression "property with residential allocation" is manifestly that of "residential properties", referred to in article 6, No. 1 of the Property Tax Code (and defined in No. 2 of the same article), comprising buildings or structures licensed for residential purposes or, in the absence of a license, that have as their normal purpose residential purposes (emphasis added).
7.16
"That is, for purposes of the Property Tax Code, both are residential properties which are licensed for residential purposes, even if they are not being put to that use and, in the case of absence of a license, which have as their normal purpose that purpose"[25].
7.17
Therefore, if one were to adopt the interpretation that "property with residential allocation" means "residential property", the assessment for which the declaration of illegality is sought will, in fact, be illegal, since there is, in any of the plots of land, any building or structure.
7.18
However, the non-coincidence of the terms of the expression used in item No. 28.1. of the GTST with what is extracted from the provisions of No. 2 of article 6 of the Property Tax Code, points in the direction that the legislator did not intend to use the same concept.
7.19
On the other hand, it is necessary to also take into account that the rules of incidence of taxes must be interpreted in their exact terms, without resort to analogy, making prevailing the certainty and security in their application.[26]
7.20
Finally, it is important to inquire what is the ratio legis underlying the rule of item 28.1. of the GTST and, in obedience to the provisions of article 9 of the Civil Code[27], what the circumstances were in which the rule was drafted and what the specific conditions are of the time in which it is applied.
7.21
Indeed, in this context, the legislator intended to introduce a principle of taxation on the wealth externalized in the property, usufruct or right of superficies of luxury urban properties with residential allocation, having considered, as a determining element of tax capacity, urban properties with residential allocation, of high value (luxury), that is, of value equal to or greater than EUR 1,000,000.00, on which would pass (and did pass) to apply a special rate of Stamp Tax (emphasis added).
7.22
In fact, in the preamble of the Bill that introduced amendments in matters of item 28 of the GTST the following were presented as reasons:
7.22.1
"The pursuit of the public interest, in light of the country's economic-financial situation, requires a strengthening of budget consolidation which will require, beyond permanent activism in reducing public spending, the introduction of fiscal measures inserted in a broader set of measures to combat the budget deficit".
7.22.2
"These measures are fundamental to reinforce the principle of social equity in austerity, ensuring an effective distribution of the sacrifices required to meet the adjustment program (...) and the Government is strongly committed to ensuring that the distribution of these sacrifices will be made by all and not just by those who live from the income of their work".
7.22.3
"In accordance with that aim, this statute widens the taxation of income from capital and property, equitably covering a broad set of sectors of Portuguese society".
7.22.4
"A rate is created in the context of Stamp Tax applying to urban properties of residential allocation whose PTV is equal to or greater than one million Euros" (emphasis added).
7.23
Thus, from this motivation of the legislator it results that the taxation in question aims at "an effective distribution of the sacrifices", applying that taxation to property (by contrast with income from work, already affected by other measures).
7.24
Because this enumeration of the motivations underlying the adoption of the measures is too broad, it has contributed little to the interpretation of the concept of "urban property with residential allocation".
7.25
And we understand that this is also what can be concluded from the analysis of the discussion of Bill No. 96/XII in the Assembly of the Republic[28], which was at the origin of the proposal for amendments, with no invocation being glimpsed of an interpretive ratio distinct from the one presented here.[29]
7.26
Indeed, the justification for the measure designated "special rate on urban residential properties of highest value" is based on the invocation of the principles of social equity and fiscal justice (calling on to contribute in a more aggravated manner the holders of properties of high value intended for residential purposes), by applying the new special rate to "homes of value equal to or greater than 1 million Euros" (emphasis added).
7.27
Now, if such logic seems to make sense when applied to a "home" (whether it is a house, an autonomous unit, a part of property with independent use or an autonomous unit) whenever the same represents, on the part of its holder, an above-average tax capacity (and, in that measure, susceptible of determining a special contribution to ensure the fair distribution of the tax effort), it will make no sense if applied to a "plot of land for construction".
7.28
In these terms, the Respondent cannot distinguish where the legislator itself understood not to do so, under penalty of violating the coherence of the tax system and the principles of fiscal legality (article 103, No. 2 of the CRP), of justice, equality and fiscal proportionality (included therein).
7.29
On the other hand, having regard to what has already been analyzed above, it should further be noted that the concept of "property (urban) with residential allocation" was not defined by the legislator, either in the text of Law No. 55-A/2012 (which introduced it), or in the Property Tax Code, to which No. 2 of article 67 of the Stamp Tax Code (also introduced by that Law) refers as a subsidiary matter.
7.30
In fact, it is a concept that, probably owing to its imprecision (a fact all the more serious since it is on the basis of it that the scope of objective incidence of the new taxation is determined) had a rather short life, since it was abandoned when the law on the State Budget for 2014 came into force[30] (on 1 January 2014), which gave new wording to that item No. 28.1. of the GTST and which now determines its scope of objective incidence through the use of concepts that are legally defined in article 6 of the Property Tax Code [31].
7.31
This amendment, "to which the legislator did not attribute an interpretive character, merely makes unambiguous, for the future, that plots of land for construction whose authorized or planned construction is for residential purposes are covered within the scope of item 28.1. of the GTST (provided that their respective PTV is of value equal to or greater than 1 million Euros), clarifying nothing, however, regarding prior situations" (namely, assessments relating to the year 2013), as is the case with the assessment that is at issue in the present proceedings (emphasis added) [32].
7.32
Now, as regards the assessment that is the object of the Request for Arbitral Pronouncement (relating to the year 2012), it does not result, either from the letter or from the spirit of the law, that the intention thereof was, ab initio, to cover within its scope of objective incidence plots of land for construction for which authorized or planned construction of residential buildings was authorized or planned, as now results from the text of item 28.1. of the GTST, (after the amendment introduced by the Law on the State Budget for 2014[33]) (emphasis added).
7.33
In this context, from the letter of the law nothing unambiguous results, since it itself, when using a concept that it did not define (and which was also not defined in the statute to which it referred as a subsidiary matter) lent itself, unnecessarily, to ambiguities, in a matter of tax incidence (a matter in which certainty and legal security should also be primary concerns of the legislator).
7.34
And from its "spirit", ascertainable in the explanatory memorandum[34] of the Bill that is at the origin of Law No. 55-A/2012, nothing more results than the concern to generate new tax revenues, on sources of wealth "more spared" in the past by the tax legislator than income from work, in particular income from capital, financial gains and property, reasons which bring no relevant contribution to the clarification of the concept of "properties (urban) with residential allocation", since they take it as given, without any concern to clarify it.
7.35
Thus, it can be ascertained that the reality that was intended to be taxed was, in fact, in common parlance (and notwithstanding the imprecision of the law's terminology with the expression "urban (residential) properties"), that of "homes", and not any other realities (as already referred to in paragraph 7.26.).
7.36
It should be added that "residential allocation" always appears in the Property Tax Code as relating to "buildings" or "structures", since only these can be inhabited, which does not happen in the case of plots of land for construction which do not have, in themselves, the conditions for such, not being susceptible of being used for residential purposes except if and when the construction authorized and planned for them is built thereon.
7.37
In this manner, considering that a plot of land for construction (regardless of the type and purpose of the building that will be, or may be, erected thereon) does not satisfy, by itself, any condition to be licensed as such or to be able to be defined as having residential purposes as its normal purpose, and the rule of incidence of Stamp Tax referring to urban properties with "residential allocation" (without any specific concept being established therefor), from it cannot be extracted that it contains a future potentiality, inherent to a distinct property that perhaps may be built on that land.
7.38
In these terms, it can be concluded that, resulting from article 6 of the Property Tax Code a clear distinction between urban properties "residential" and "plots of land for construction", these cannot be considered as "urban properties with residential allocation", for purposes of the provisions in item No. 28.1. of the GTST, in its original wording (which was given to it by Law No. 55-A/2012, of 29 October) (emphasis added) [35].
7.39
In summary, and in response to the questions raised above in paragraphs 7.1.1. and 7.1.2., it can be concluded that Stamp Tax referred to in item No. 28.1. of the GTST (in the wording provided by Law No. 55-A/2012) cannot apply to "plots of land for construction" since plots of land for construction (with PTV equal to or greater than EUR 1,000,000) do not fall within the category of urban properties "with residential allocation", being therefore illegal the act of assessment that is the object of the Request for Arbitral Pronouncement submitted by the Claimant.
On the Request for Reimbursement of Taxes Paid, plus Compensatory Interest
7.40
Thus, as a consequence of the illegality of the act of assessment already identified above, and in accordance with the provisions of paragraph b), of No. 1, of article 24 of the RJAT (in accordance with what is established therein), "the arbitral decision on the merits of the claim from which no appeal or challenge lies binds the tax administration as of the end of the period provided for the appeal or challenge, and the latter must restore the situation that would have existed if the tax act that is the object of the arbitral decision had not been performed, adopting the acts and operations necessary for this purpose" (emphasis added), wherefore there must be a reimbursement of the amounts, if any, already paid by the Claimant, in the capacity of the tax supported, as a way to achieve the restoration of the situation that would have existed if the illegality had not been committed.
7.41
Additionally, and in light of what is established in article 61 of the CTPP, given that the requirements for the right to compensatory interest are met (that is, verified the existence of error attributable to the services from which there results payment of the tax debt in an amount higher than legally due, as provided in No. 1, of article 43 of the GTL), the Claimant is entitled to compensatory interest[36] at the statutory rate, calculated on the amounts paid relating to the Stamp Tax Assessment that is the object of the request (and relating to the year 2012), which shall be counted in accordance with the provisions of No. 3 of article 61 of the CTPP, that is, from the date of payment of the undue tax until the date of issuance of the respective credit note.
On the Request to Condemn the Tax Administration to Pay the Costs of Arbitral Proceedings
7.42
In accordance with the provisions of article 22, No. 4, of the RJAT, "the arbitral decision rendered by the arbitral tribunal includes the determination of the amount and distribution among the parties of costs directly resulting from the arbitral proceeding".
7.43
Thus, in accordance with the provisions of article 527, No. 1 of the CPC (ex vi article 29, No. 1, paragraph e) of the RJAT), it must be established that the party that gave cause to them shall be condemned to costs, or, if there is no success in the action, who obtained benefit from the proceeding.
7.44
In this context, No. 2 of the said article makes concrete the expression "gave cause to", according to the principle of failure, understanding that the losing party gives cause to the costs of the proceeding, in proportion as it loses.
7.45
In these terms, in the case under examination, having regard to the above exposition, the principle of proportionality imposes that full responsibility for arbitral costs be attributed to the Respondent.
8. DECISION
8.1
In these terms, having regard to the analysis carried out, and the conclusions presented in the preceding Chapter, this Arbitral Tribunal decided:
8.1.1
To judge the request for arbitral pronouncement submitted by the Claimant as well-founded and to condemn the Respondent regarding the request for the declaration of illegality of the Stamp Tax Assessment that is the object thereof (relating to the year 2012) and identified in this proceeding, annulling, consequently, the respective tax act;
8.1.2
To condemn the Respondent to the reimbursement of the amounts indebtedly paid by the Claimant, plus compensatory interest at the statutory rate, counted in accordance with legal provisions;
8.1.3
To condemn the Respondent to payment of the costs of this proceeding.
Value of the Proceeding: Having regard to the provisions of articles 306, No. 2 of the CPC, article 97-A, No. 1 of the CTPP and article 3, No. 2 of the Regulation of Costs in Tax Arbitration Proceedings, the value of the proceeding is fixed at EUR 11,384.56.
Costs of the Proceeding: In accordance with the provisions of Table I of the Regulation of Costs of Tax Arbitration Proceedings, the value of the costs of the Arbitral Proceeding is fixed at EUR 918.00, to be borne by the Respondent, in accordance with article 22, No. 4 of the RJAT.
Notify.
Lisbon, 14 December 2015
The Arbitrator
Sílvia Oliveira
[1] The drafting of this decision is governed by the spelling prior to the Orthographic Agreement of 1990, except as regards transcriptions made.
[2] In this context, the Claimant cites the reasons that were at the origin of the Bill No. 96/XII, namely, that "(...) are measures to reinforce the principle of social equity in austerity, ensuring an effective distribution of the sacrifices required to meet the adjustment program (...)".
[3] In this matter, in compliance with the mentioned provision, for the apprehension of the concept of urban property with residential allocation, the Claimant argues that "we should avail ourselves of the discussion of the bill No. 96/XII (...) in the Assembly of the Republic, a discussion that can be consulted in the Parliamentary Record (...)". (in DAR I Series No. 9/XII/2 2012.10.11, of 11-10-2012).
[4] As per positive definition of rural property provided in article 3 of the Property Tax Code.
[5] In this context, the Claimant lists several arbitral decisions, "namely those relating to proceedings No. 48/2013-T, of 09.10.2013, No. 53/2013-T, of 02.10.2013, No. 180/2013-T, of 07.03.2014, No. 189/2013-T, of 20.03.2014".
[6] Additionally, it also cites the Judgment of the Administrative Supreme Court, rendered in the context of proceedings No. 0271/14, of 23 April 2014, pursuant to which "the fact that it may be considered that in determining the patrimonial tax value of urban properties classified as plots of land for construction the allocation to be taken into account in that the building authorized or planned for it would be had is for determination of the respective value of the area of implementation (...), does not determine that plots of land for construction may be classified as properties with residential allocation, since residential allocation always appears in the Property Tax Code as referring to buildings or structures, in existence, authorized or planned, since only these can be inhabited, which does not happen in the case of plots of land for construction, which do not have, in themselves, the conditions for such (...)".
[7] In this context, the Claimant cites the Judgment of the Constitutional Court No. 142/04 and Judgment No. 187/2013, as well as authors such as Casalta Nabais (in "Tax Law", 5th Edition, Coimbra, 2009, pages 151-152), Saldanha Sanches (in "Manual of Tax Law", 3rd Edition, Chapter 5 of Part I), Gomes Canotilho (in "Constitutional Law and Theory of the Constitution", Almedina, 7th Edition, 2003, Coimbra, page 270) and Jorge Miranda (the latter without bibliographic reference).
[8] In this matter, the Respondent states that "as results from the expression value of authorized buildings, contained in article 45, No.2 of the PTC the legislator opted to determine the application of the methodology for assessing properties in general, to the assessment of plots of land for construction, and consequently applicable to them the allocation coefficient provided in article 41 of the PTC" (in this sense, the Respondent cites the Judgment of the Administrative Court of the South No. 04950/11, of 14/02/2012.
[9] In general terms, being precluding of the exercise of the respective right [articles 576°, No. 3 and 579° of the CPC, here applicable ex vi paragraph e) of article 2° of the CTPP], untimeliness resulting from a peremptory exception has as a consequence the extinction of the right to perform the act (articles 298, No. 2 and 333, No. 1 of the CC and No. 3 of article 139 of the CPC), translated in the lapse of time of the right to request arbitral pronouncement, which implies the absolution of the respondent entity regarding the claim (article 576, No. 3 of the CPC).
[10] In this matter, see in particular, AC STA Proceeding 01038/12 of 28 November 2012, AC STA Proceeding 0677/10 of 7 September 2011 and AC STA Proceeding 01922/13 of 5 February 2014.
[11] This 90-day deadline was the one provided for prior to the entry into force of the amendment given to this article by Law No. 66-B/2012, of 31 December (in force as of 1 January 2013).
[12] See CTPP, Annotated and Commented, II Vol., 6th ed., 2011, annotation 7 c) to article 102, page 152.
[13] See CTPP, Annotated and Commented, II Vol., 6th ed., 2011, annotation 7 c) to article 102, page 153.
[14] And, as referred to in the Judgment of the Administrative Court of the South No. 00122/03, of 29 April, "except if a judicial challenge with the same purpose had been made, mediately or immediately (cf. provisions in article 76°, No. 2, of the CTPP)".
[15] See CTPP, Annotated and Commented, II Vol., 6th ed., 2011, annotation 7 c) to article 102, page 153.
[16] Regarding deadlines, see AC Administrative Court of the South Proceeding 02435/08 of 29 September 2009.
[17] In this sense, see Arbitral Decision of the CAAD P65/2012-T (adapted).
[18] In this context, see Judgment of the Administrative Court of the South No. 00122/03, of 29 April.
[19] In this matter, it should also be noted that the Claimant, in the context of written arguments submitted, came to reinforce this idea underlying the claim, by referring that "the present proceedings are based on the rejection of Hierarchical Appeal No. ...2014... (....) and filing away for mootness of Hierarchical Appeals No. ...2014... (...) and No. ...2014... (...) relating to the stamp tax assessment notice No. 2012... replaced by No. 2012..., relating to the tax year of 2012, in a global amount of €11,384.56 (...)".
[20] In this sense, also cite Jorge Lopes de Sousa, namely, AC STA Proceeding 0441/11 of 29 February 2012 and AC STA Proceeding 01461/02 of 19 February 2003, regarding this position.
[21] Jorge Lopes de Sousa continues, in the commentary produced on the same article, referring that "if in the act performed (...) the legality of the act of assessment was not arrived at being assessed, due to some impediment to such knowledge (...), the appropriate means of challenge will be the special administrative action, as follows from the provision in No. 2 of this article 97°, since it will be an act that does not assess the legality of an act of assessment".
[22] It continues by referring that "although it is not customary to determine the appropriate judicial means through the content of the act and not its nature or the administrative or tax proceeding in which it was performed, it is clear that paragraph d) of No. 1 and No. 2 of this article 97° make the choice between challenge or special administrative action (contentious appeal) dependent on the content of the act and not any other factor".
[23] See in this regard the analysis carried out in paragraph 4. of this arbitral decision.
[24] In this sense, see AC Administrative Court of the South Proceeding 07648/14, of 10 July.
[25] See CAAD Arbitral Decision No. 48/2013-T, of 9 October.
[26] Cf. AC Administrative Court of the South Proceeding 5320/12, of 2 October, AC Administrative Court of the South Proceeding 7073/13, of 12 December and AC Administrative Court of the South 2912/09, of 27 March 2014.
[27] In accordance with this article, the interpretation of the legal rule should not be limited to the letter of the law, but reconstruct the legislative thought, from the texts and the remaining interpretive elements, taking into account the unity of the legal system.
[28] Available for consultation in the Parliamentary Record, I series, No. 9/XII/2, of 11 October 2012.
[29] As already referred to in several Arbitral Decisions issued by the CAAD (namely, in Proceeding No. 48/2013-T, of 9 October).
[30] Introduced by Law No. 83-C/2013, of 31 December.
[31] See in this sense AC STA 048/14, of 9 April and AC STA 0272/14, of 23 April.
[32] See in this sense AC STA 048/14, of 9 April and AC STA 0272/14, of 23 April.
[33] In this context, it should be noted that having regard to the provisions of article 103, No. 3, of the CRP (prohibition of authentic retroactivity of fiscal law), it is not possible to admit the application of the new wording of item 28.1. of the GTST (in force as of 1 January 2014) to a Stamp Tax Assessment relating to the year 2013, since we would be dealing with the application of a new law to a prior tax fact (given that this fact occurred on 31 December 2013, being therefore prior to the entry into force of the new wording of the law).
Also in this matter, and in support of the interpretation of the constitutional rule, it becomes important to mention the provision in article 12, No.1 of the GTL, pursuant to which "tax rules apply to facts posterior to their entry into force, and no retroactive taxes can be created".
In judicial matters, the Constitutional Court (CC), in its case law in tax matters, particularly in Judgment (AC) No. 128/2009, of 12 March, considered that it follows from article 103, No. 3, CRP that "any fiscal rule (...) will be constitutionally censured when assuming a retroactive nature, with the expression retroactivity being used, here, in its proper or authentic sense", that is, "it prohibits the application of a new fiscal law, disadvantageous, to a tax fact that occurred within the force of the repealed fiscal law (the old law) and more favorable".
[34] In the presentation and discussion in the Assembly of the Republic of the Bill No. 96/XII – 2ª (which gave rise to Law No. 55-A/2012, of 29 October), the Secretary of State for Tax Affairs is said to have expressly referred that "the Government proposes the creation of a special rate on urban residential properties of highest value (...) being the first time in Portugal that a special taxation on properties of high value intended for residential purposes is created. This rate shall be of 0.5% to 0.8% in 2012 and of 1% in 2013 and will apply to homes of value equal to or greater than 1 million Euros" [See Parliamentary Record (DAR I Series No. 9/XII, of 11 October, page 32)].
[35] See AC STA 048/14, of 9 April, AC STA 0272/14, of 23 April, AC STA 0505/14, of 29 October and AC STA 0740/14, of 10 September.
[36] In fact, in accordance with the provisions of article 100 of the GTL, applicable to the case by force of the provisions in paragraph a), of No. 1, of article 29 of the RJAT, "the tax administration is obliged, in case of full or partial success of complaints or administrative appeals, or of judicial proceedings in favor of the taxpayer, to the immediate and full restoration of the situation that would have existed if the illegality had not been committed, comprising the payment of compensatory interest, under the terms and conditions provided for in law" (emphasis added).
Frequently Asked Questions
Automatically Created