Stamp Tax on Vertical Property: CAAD Ruling on Verba 28 TGIS and High-Value Real Estate

ARBITRAL DECISION

I. REPORT

1. A... (hereinafter "Claimant"), with tax identification number ("TIN") ..., resident at ..., No. ..., ...-... Lisbon, filed, on July 15, 2016, pursuant to the joint provisions of articles 2 and 10 of Decree-Law No. 10/2011 of January 20, i.e., the Legal Framework for Arbitration in Tax Matters ("RJAT"), a request for constitution of an arbitral tribunal, in order to have the Stamp Duty ("IS") assessments attached to the present proceedings declared illegal (see IS assessments filed by the Claimant), in the total amount of €29,375.90, for the years 2013, 2014, and 2015, with the Tax Authority and Customs Authority ("Respondent" or "AT") as defendant.

A) Constitution of the Arbitral Tribunal

1. Pursuant to article 6(2)(a) and article 11(1)(b) of RJAT, the Deontological Council of this Administrative Arbitration Center ("CAAD") appointed the undersigned as sole arbitrator, who communicated acceptance of the appointment within the applicable period, and notified the parties of this appointment on September 29, 2016.

2. Thus, in accordance with article 11(1)(c) of RJAT, and through communication from the President of CAAD's Deontological Council, the Sole Arbitral Tribunal was constituted on October 17, 2016.

B) Procedural History

1. In the request for arbitral pronouncement, the Claimant petitioned for a declaration of illegality of the Stamp Duty assessments previously mentioned, which are attached to the proceedings and were detailed by the Claimant in its initial petition (see pages 3, 4, and 5 of the initial petition), concerning the years 2013, 2014, and 2015, with reference to an urban property with a Tax Property Value ("VPT") of €1,146,480, held in full ownership, located at ..., registered in the property matrix of the parish of ... under article ...

2. Note that, in the context of the request for arbitral pronouncement referred to above, the Claimant, as a guarantee, deposited an amount equivalent to the assessments (i.e., €29,375.90).

3. The AT presented a response, requesting the dismissal of the request for arbitral pronouncement, arguing that there was no violation of law, requesting that the tax acts in question, as they do not violate any legal or constitutional provision, be maintained.

4. By order of January 9, 2017, the Sole Arbitral Tribunal, pursuant to article 16(c) of RJAT, and following the request by the AT, decided, without opposition from the parties, that it was not necessary to conduct the hearing referred to in article 18 of RJAT, given the simplicity of the matters at issue, and because it considered it had in its possession all the necessary elements to reach a clear and impartial decision.

5. It also decided, in accordance with article 18(2) of RJAT, that oral arguments were not necessary, as the positions of the parties were clearly set out in their respective pleadings, and set April 17, 2017 as the deadline for the arbitral decision.

6. The Tribunal was duly constituted and is competent to review the matters indicated (article 2(1)(a) of RJAT), the parties have legal personality and capacity and have full standing (articles 4 and 10(2) of RJAT and article 1 of Order No. 112-A/2011 of March 22). There are no nullities, and nothing prevents judgment on the merits.

7. Thus, the present proceedings are in a position for a final decision to be rendered.

II. ISSUE TO BE DECIDED

1. The central issue to be assessed and decided regarding the merits of the case, as emerges from the parties' procedural documents, is as follows: with reference to properties not constituted in horizontal property regime, comprised of various stories and divisions susceptible to independent use (with residential allocation), what is the VPT relevant for determining the Stamp Duty to be paid, pursuant to Item No. 28 of the General Table of Stamp Duty ("TGIS").

2. That is, this tribunal seeks to determine whether, as the Claimant alleges, the amount to be considered is the VPT attributed, individually, to each part susceptible to autonomous use, or, conversely, the total value resulting from the sum of the VPTs of those autonomous fractions, as the Respondent suggests.

III. DECISION ON THE FACTS AND ITS JUSTIFICATION

1. Having examined the documentary evidence produced, the tribunal finds proven, with relevance to the decision of the case, the following facts:

I. The Claimant is the owner of an urban property, held in full ownership, with VPT of €1,146,480, located at ..., registered in the property matrix of the parish of ... under article ..., comprised of 32 fractions, of which 30 are stories/divisions with residential allocation and 2 are commercial units;

II. The Claimant received, in 2016, with respect to the tax years 2013, 2014, and 2015, and as a result of Item No. 28 of TGIS, the assessment notices from the AT previously referred to, in the total amount of €29,375.90 (amount which was not paid, a deposit being constituted as guarantee);

1. The Tribunal's conviction regarding the facts found proven resulted from the documents attached to the proceedings and contained in the petition and the uncontested allegations of the parties, as specified in the points on the facts of the case set out above.

IV. ON THE LAW

A) Legal Framework

1. Taking into account the subject matter under discussion in the present proceedings, it is important, first of all, to set out the rules that comprise the applicable legal framework, as of the date of occurrence of the facts.

2. The subjection to Stamp Duty of properties with residential allocation resulted from the addition of Item No. 28 to TGIS, made by article 4 of Law 55-A/2012 of October 29, which stipulated the following taxable events:

"28 – Ownership, usufruct or right of superficies of urban properties whose tax property value recorded in the registry, pursuant to the Municipal Property Tax Code (Municipal Property Tax Code), is equal to or greater than €1,000,000.00 – on the tax property value for purposes of Municipal Property Tax:

28.1 – For property with residential allocation – 1%

28.2 – For property, when the taxpayers who are not individuals are residents in a country, territory or region subject to a clearly more favorable tax regime, included in the list approved by order of the Minister of Finance – 7.5%."

1. The aforementioned law also added to the Stamp Duty Code, article 23(7), regarding Stamp Duty assessment: "in the case of tax due for situations provided for in item no. 28 of the General Table, the tax is assessed annually, in relation to each urban property, by the central services of the Tax Authority and Customs Authority, applying, with necessary adaptations, the rules contained in the Municipal Property Tax Code", and article 67(2) which provides that "for matters not regulated in this code regarding item 28 of the General Table, the Municipal Property Tax Code shall apply subsidiarily".

2. In this context, and taking into account the indication above, let us now turn to the Municipal Property Tax Code.

3. First, note article 2(4) of the Municipal Property Tax Code which states that "for purposes of this tax, each autonomous fraction, in the horizontal property regime, is considered as constituting a property".

4. In turn, article 12(3) of the Municipal Property Tax Code establishes that "each story or part of property susceptible to independent use is considered separately in the property registry, which also specifies the respective tax property value".

5. Thus, it is within this legal framework that it is important to assess whether in cases where the horizontal ownership of an urban property with various autonomous fractions is not constituted, the VPT, for purposes of Item No. 28 of TGIS, is calculated, individually, per fraction susceptible to autonomous use, or, alternatively, determined by summing the VPTs of those fractions.

B) Arguments of the Parties

1. In this regard, the Claimant, in its petition, alleges, in summary, the following:

2. "The assessments made by the AT were based on the assumption that stamp duty would be due whenever the sum of the tax property values of all apartments and commercial units exceeds €1,000,000. Such interpretation constitutes a manifest illegality of the assessments due to a misunderstanding of the language of item 28 of the General Table of Stamp Duty".

3. However, in the Claimant's opinion, "the AT's interpretation of the language of Item 28 of TGIS violates the principles of equality between properties constituted in horizontal and vertical ownership / full ownership with stories or divisions susceptible to independent use".

4. Indeed, "in the modest opinion of the claimant, the tax property value to be considered in light of item 28.1 of TGIS should consider the tax property value of each story or division with residential allocation, and not the sum of the tax property values of all of them.

That is, stories or divisions of independent use, and autonomous fractions, are equal realities in practice, so if in horizontal ownership there is no assessment of Stamp Duty, in light of the principle of equal tax treatment, neither will there be in vertical ownership.

The only difference is in the form."

1. In conclusion, the Claimant then petitioned that "a declaration of illegality of the assessments in question in this case be issued due to violation of law or misinterpretation of the assumptions for Stamp Duty assessment, with consequent annulment thereof and return of the Stamp Duty deposit to the claimant in the total amount of €29,375.90".

2. For its part, the Respondent, after being duly notified for that purpose, presented its response in which it began by stating that "what is at issue here are assessments that result from the direct application of the legal rule, which translates into objective elements, without any subjective or discretionary assessment (…) it results from the analysis of the normative provision that a "property in full ownership with stories or divisions susceptible to independent use" is, unequivocally, different from a property in the horizontal property regime, constituted by autonomous fractions, that is, various properties.

(…)

As for Municipal Property Tax assessment, in the case of properties in full ownership, the value that serves as the basis for its calculation will unquestionably be the value that the now Claimant defines as the "total value of the property"."

1. As to the violation of the principle of tax equality, the Respondent considers that "what expressly results from the language of the law is that the legislator intended to tax with item 28.1 under discussion properties as a single legal-tax reality, as will be explained below.

(…)

As properties are in full ownership regime, not having autonomous fractions, to which tax law attributes the qualification of property, because from the notion of property in article 2 of the Municipal Property Tax Code, only autonomous fractions of property in the horizontal property regime are considered properties – article 2(4) of the cited Municipal Property Tax Code".

1. For the Respondent, Item No. 28.1 of TGIS "does not constitute any violation of the principle of equality, with no discrimination existing in the taxation of properties constituted in horizontal ownership and properties in full ownership with stories or divisions susceptible to independent use, or between properties with residential allocation and properties with other allocations".

2. In fact, the Respondent understands that horizontal and vertical property are differentiated legal institutions, and "tax law respects them!".

3. To reinforce its position, the Respondent brought to the discussion, among others, the Decision delivered on December 16, 2015 by the Constitutional Court, within the scope of case no. 51/2014, in which it was decided "not to judge unconstitutional the rule of incidence contained in item 28.1 of the General Table of Stamp Duty, when interpreted in the sense that it includes urban residential properties in full ownership comprised of parts susceptible to independent use and considered separately in the property registry".

4. The Respondent thus understands that the assessments made by it result from a correct interpretation and application of law to the facts, asking, therefore, that the claim raised by the Claimant be judged unfounded and it be absolved from the petition.

C) Assessment of the Tribunal

1. By way of introduction, it must be stated that, in the understanding of the present tribunal, and taking into account the legal framework previously presented, the essential normative proposition to be considered for the decision of the case is that which results from Item No. 28 of TGIS.

2. It should also be noted that, in the eyes of the arbitral tribunal, the issue to be decided concerns, exclusively, matters of law, namely to understand, for purposes of applying the aforementioned item, which VPT is relevant.

3. First, let it be clarified that it is clear, from the language of the law, that the VPT to be considered, for purposes of applying Item No. 28 of TGIS, can only be the one determined under the Municipal Property Tax Code.

4. This is indeed what the aforementioned item tells us, verbatim: "(…) whose tax property value recorded in the registry, pursuant to the Municipal Property Tax Code (Municipal Property Tax Code), is equal to or greater than €1,000,000.00".

5. Thus, let attention be paid once again to what results from article 2(4) of the Municipal Property Tax Code, which tells us that "for purposes of this tax, each autonomous fraction, in the horizontal property regime, is considered as constituting a property".

6. Reinforced, nevertheless, by article 12(3) of the same Code, which establishes that "each story or part of property susceptible to independent use is considered separately in the property registry, which determines also the respective tax property value".

7. It is concluded, thus, that, for purposes of calculating the Municipal Property Tax to be paid, the VPT is considered, individually, for each story or part susceptible to independent use.

8. And if this is the method of determination followed for Municipal Property Tax, it must necessarily be the same model applied under Item No. 28 of TGIS, in the terms explained above.

9. Nevertheless, and should doubts raised still exist, the present tribunal relies on some arbitral decisions previously delivered, which addressed the matter under analysis.

10. Thus, first, let us note decision no. 50/2013-T, of October 29, which provides the following.

11. "Law No. 55-A/2012 says nothing as to the qualification of the concepts in question, namely, as to the concept of "property with residential allocation". However, article 67(2) of the Stamp Duty Code, added by the aforementioned Law, provides that "for matters not regulated in this code regarding item 28 of the General Table, the Municipal Property Tax Code shall apply subsidiarily".

The rule of incidence thus refers to urban properties, the concept of which results from article 2 of the Municipal Property Tax Code, with the determination of the VPT obeying the terms set out in article 38 and following of the same code.

Consulting the Municipal Property Tax Code, it is verified that its article 6 only indicates the different types of urban properties, among which it mentions residential ones (…).

From this we can conclude that, in the view of the legislator, it does not matter the legal-formal rigor of the concrete situation of the property but rather its normal use, the purpose to which the property is intended. We further conclude that for the legislator the situation of the property in vertical or horizontal ownership did not matter, since no reference or distinction is made between one and the other. What matters is the material truth underlying its existence as an urban property and its use.

(…)

Using the criterion that the law itself introduced in article 67(2) of the Stamp Duty Code, "for matters not regulated in this code regarding item 28 of the General Table, the Municipal Property Tax Code shall apply subsidiarily"" (our emphasis).

1. That is, taking into account that the registration in the property registry of properties in vertical ownership, for purposes of the Municipal Property Tax Code, follows the same registration rules as properties constituted in horizontal ownership, with the respective Municipal Property Tax as well as the new Stamp Duty assessed individually in relation to each of the parts, it does not appear, to the present tribunal, that there is any doubt that the legal criterion for defining the incidence of the new tax must be the same.

2. In this context, if the law requires, with respect to Municipal Property Tax, the issuance of individualized assessment notices for the autonomous parts of properties in vertical ownership, in the same manner as it establishes for properties in horizontal ownership, it will require, in the same terms, with respect to the rule of incidence of Item No. 28 of TGIS.

3. Thus, the Stamp Duty, under Item No. 28 of TGIS, could only apply to a given fraction if it eventually had a VPT exceeding €1,000,000.00.

4. And, moreover, that was indeed the understanding adopted by the AT.

5. In fact, it also issued individualized assessment notices, referring to each of the fractions susceptible to autonomous use, demonstrating that, in its opinion, the aforementioned fractions, despite not being legally constituted in horizontal ownership, would be, for all purposes, independent from one another.

6. However, the AT overlooked that it could not, by virtue of the framework previously set out, proceed to sum the individual VPTs of the aforementioned fractions, seeking a value that would already fall within the basis of incidence of Item No. 28 of TGIS.

7. This when the legislator itself established a different rule under the Municipal Property Tax Code, which, as previously mentioned, is the Code applicable to matters not regulated in the Stamp Duty Code, with respect to Item No. 28 of TGIS.

8. In summary, the criterion established by the AT of considering the value of the sum of individual VPTs attributed to the parts, stories or divisions with independent use, taking advantage of the fact that the property is not constituted in the horizontal property regime, does not find, in the eyes of the present tribunal, legal support, being, in particular, contrary to the criterion applicable under Municipal Property Tax and, by reference (in the terms mentioned above), under Stamp Duty.

9. In this context, the present tribunal considers that the criterion defended by the AT violates the principles of legality and tax equality, and likewise, that of the prevalence of material truth over legal-formal reality.

10. In parallel, note that article 12(3) of the Municipal Property Tax Code makes no distinction as to the regime of properties that are in horizontal or vertical ownership.

11. As such, and since if the property were constituted in the horizontal property regime, none of its residential fractions would be subject to the incidence of the new tax, the AT cannot treat materially equal situations differently.

12. In this regard, see what was said regarding this issue in the arbitral decision delivered within Case No. 132/2013-T, of December 16, whose understanding the present tribunal adopts.

"Indeed, it makes no sense to distinguish in law what the law itself does not distinguish (ubi lex non distinguit nec nos distinguere debemus).

Moreover, to distinguish, in this context, between properties constituted in horizontal and full ownership would be an "innovation" without associated legal support, especially because, as has been stated here, nothing indicates, neither in item no. 28, nor in the provisions of the Municipal Property Tax Code, a justification for that particular differentiation.

Note, for example, what article 12(3) of the Municipal Property Tax Code says: each story or part of property susceptible to independent use is considered separately in the property registry, which also specifies the respective tax property value.

The uniform criterion that is required is thus the one which determines that the incidence of the rule in question takes place only when one of the parts, stories or divisions with independent use of property in horizontal or full ownership with residential allocation, has a VPT exceeding €1,000,000.00.

Setting the global VPT of the property in question as the reference value for the incidence of the new tax, as was intended by the respondent, finds no basis in the applicable legislation, which is the Municipal Property Tax Code, given the reference made by the cited article 67(2) of the Stamp Duty Code.

(…)

Moreover, admitting the differentiation of treatment could produce results incomprehensible from a legal point of view and contrary to the objectives that the legislator said it had for adding item no. 28. By way of example, suppose the following hypothesis, which seems plausible in light of the interpretation made by the respondent: a person who is the owner of a property constituted in full ownership intended for housing, with the total value of the autonomous units equal to or exceeding €1,000,000.00 and the VPT of each one below €1,000,000.00, is subject to an annual tax of 1% of that value (as happened in the situation under analysis); whereas another person who owns a property with the exact same characteristics as the previous one but which was constituted in horizontal ownership, with the global value of the autonomous fractions equally equal to or exceeding €1,000,000.00 and the VPT of each one below €1,000,000.00, will not be subject to taxation under the aforementioned item no. 28.

On the other hand, one could ask: if such fractions have the same owner, why does it not make sense to aggregate, for tax purposes, their respective VPTs? The answer can be illustrated through another hypothesis: a person who is the owner of a property in horizontal ownership, in which each of its 20 fractions has a VPT below €1,000,000.00, would be subject to taxation if – if such aggregation were allowed – the global VPT exceeded that amount; whereas another person with identical 20 fractions distributed across 5, 10 or 20 properties would not be subject to any taxation under the aforementioned item no. 28.

If this line of reasoning makes sense – thus justifying the non-aggregation of the VPTs of fractions of properties in horizontal ownership –, there is no plausible reason why the same should not be applied to the autonomous units of properties in full ownership.

Observing, now, the case under analysis, it is found that the VPTs of the stories (autonomous units) of the property with residential allocation vary between (…), so any of them is below €1,000,000.00.

From this it is concluded, as a result of what has been stated, that the Stamp Duty referred to in item no. 28 of TGIS cannot apply to them, being therefore illegal the assessment acts contested by the applicant" (our emphasis).

1. It is also worth highlighting (although the previous framework is sufficient to recognize the illegality of the assessment acts carried out by the AT), the understanding advocated, both by the legislator and by the government itself, at the time of the addition of Item No. 28 to TGIS.

2. In this regard, let us focus now on the arbitral decision delivered within case no. 48/2013-T, of October 9, which extensively analyzes the objectives underlying the addition of the aforementioned item.

3. "Law No. 55-A/2012, of October 29, has no preamble, so from it is not possible to extract the legislator's intention.

This law from the National Assembly had its origin in the bill no. 96/XII (2nd), which, in its statement of reasons, speaks of the introduction of fiscal measures included in a broader set of measures to combat budget deficit.

In the statement of reasons of the aforementioned bill, it is said that, "these measures are essential to strengthen the principle of social equity in austerity, ensuring an effective distribution of the sacrifices necessary to fulfill the adjustment program. 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 on their work income. In accordance with this goal, this law expands the taxation of capital and property, equitably encompassing a broad range of sectors of Portuguese society".

In that statement of reasons it is also said that, in addition to the increase in taxation of capital income and stock market gains, a tax rate is created under Stamp Duty applying to urban properties of residential allocation whose tax property value is equal to or exceeding one million euros.

That is, in such a statement of reasons, it is also not clarified what is meant by urban properties with residential allocation.

In his intervention in the National Assembly, in the presentation and discussion of the aforementioned bill, the Secretary of State for Tax Affairs stated the following:

"The Government has elected as a priority principle of its fiscal policy social equity. This is even more important in times of fiscal rigor as a way to ensure the fair distribution of the fiscal effort.

In the demanding period that the country is going through, during which it is bound to comply with the program of economic and financial assistance, it becomes even more pressing to assert the principle of equity. It cannot always be the same ones – employees and pensioners – bearing the tax burden.

For the tax system to be fairer, it is decisive to promote the expansion of the tax base by requiring increased effort from taxpayers with higher incomes and thus protecting Portuguese families with lower incomes.

For the tax system to promote more equality, it is fundamental that the effort of budget consolidation be shared by all types of income, encompassing with special emphasis capital income and high-value properties. This matter, it should be recalled, was extensively addressed in the Constitutional Court decision.

Finally, for the tax system to be more equitable, it is crucial that everyone be called upon to contribute according to their ability to pay, granting the tax administration enhanced powers to control and supervise situations of tax fraud and evasion.

In this sense, the Government presents today a set of measures that effectively strengthen a fair and equitable distribution of the adjustment effort across a broad and comprehensive range of sectors of Portuguese society.

This proposal has three essential pillars: the creation of special taxation on urban properties valued at more than 1 million euros; the increase in taxation on capital income and stock market gains and the strengthening of rules against tax fraud and evasion.

First, the Government proposes the creation of a special tax on urban residential properties of higher value. This is the first time in Portugal that special taxation is created on high-value properties intended for housing. This tax will be 0.5% to 0.8% in 2012, and 1% in 2013, and will apply to properties valued at equal to or greater than 1 million euros. With the creation of this additional tax, the fiscal effort required of these owners will be significantly increased in 2012 and 2013"".

1. Next, it is necessary to gather the conclusions that will make it possible, without doubt, to decide on the matter under discussion (that is, whether, for purposes of applying Item No. 28 of TGIS, in cases where a property with various autonomous fractions, susceptible to independent use, is not constituted in horizontal ownership, the VPT relevant is determined by the sum of individual VPTs, or, alternatively, is individually considered).

2. In this sense, it should be said, first of all, that the present issue is, by virtue of article 67(2) of the Stamp Duty Code, subject to the rules of the Municipal Property Tax Code, "for matters not regulated in this code regarding item 28 of the General Table, the Municipal Property Tax Code shall apply subsidiarily".

3. As such, and as has been mentioned so many times, in the understanding of the present tribunal, the mechanism for determining the VPT relevant for purposes of the aforementioned item is the one found established in the Municipal Property Tax Code.

4. Now, article 12(3) of the Municipal Property Tax Code establishes that "each story or part of property susceptible to independent use is considered separately in the property registry, which also specifies the respective tax property value".

5. The legislator thus downplaying, in the terms previously mentioned, any prior constitution of horizontal or vertical ownership.

6. Indeed, for the legislator, what matters is the material truth underlying its existence as an urban property and its use.

7. It should be noted that the AT itself seems to agree with the criterion set out, which is why the assessments it itself issues are very clear in their essential elements, from which it results that the value of incidence is the corresponding to the VPT of each of the stories and the assessments are individualized.

8. Thus, if the legal criterion requires the issuance of individualized assessments for the autonomous parts of properties in vertical ownership, in the same manner as it establishes for properties in horizontal ownership, it clearly established the criterion, which must be single and unambiguous, for defining the rule of incidence of the new tax.

9. Thus, there would only be grounds for the incidence of Stamp Duty (under Item No. 28 of TGIS) if one of the parts, stories or divisions with independent use presented a VPT exceeding €1,000,000.00.

10. The AT cannot consider as the reference value for the incidence of the new tax the total value of the property, when the legislator itself established a different rule under Municipal Property Tax (and, as previously mentioned, this is the code applicable to matters not regulated regarding Item No. 28 of TGIS).

11. In conclusion, the current legal regime does not impose an obligation to constitute horizontal ownership, so the AT's actions translate into arbitrary and illegal discrimination.

12. In fact, the AT cannot distinguish where the legislator itself understood not to do so, under penalty of violating the coherence of the tax system, as well as the principle of tax legality provided for in article 103 of the Constitution of the Portuguese Republic, and also the principles of tax justice, equality and proportionality.

13. In the case at hand, the property in question was, at the relevant date of the facts, constituted in full ownership and had 32 fractions with independent use, as results from the documents attached by the Claimant, 30 of which with residential allocation.

14. Given that none of those fractions, individually considered, has a tax property value equal to or exceeding €1,000,000.00, as results from the documents joined to the proceedings, it is concluded that the legal assumption of incidence was not met.

15. In its allegations, the AT appended to the present proceedings a Constitutional Court Decision (see above), in which the alleged unconstitutionality of the rule contained in Item No. 28 of TGIS, raised by a taxpayer, was rejected.

16. Now, in this sense, the AT considers that that jurisprudence has special relevance to the case at hand, relying on it to reinforce the understanding that its practice described above is entirely legal and in accordance with the Constitution.

17. Indeed, this tribunal also neither intends (nor can) assess the constitutionality of the aforementioned rule.

18. However, what is currently under discussion is not the possible unconstitutionality of Item No. 28 of TGIS but, alternatively, the illegality of the discriminatory conduct of the AT which, in a totally discretionary manner, gives differentiated treatment to properties constituted in horizontal and full ownership.

19. And, in that sense, the aforementioned Decision, in the understanding of the present tribunal, loses its relevance in the specific case (since it concerns the unconstitutionality of the rule in abstract and not its application by the AT).

V. DECISION

1. In these terms, this Arbitral Tribunal decides:

A) To judge the request for arbitral pronouncement well-founded and, in consequence, declare illegal and annul the Stamp Duty assessments mentioned above, with reference to the tax years 2013, 2014, and 2015, from which resulted tax due in the amount of €29,375.90, regarding the taxation of urban properties with VPT equal to or exceeding €1,000,000, in accordance with Item No. 28 of TGIS;

B) To lift the deposit constituted by the Claimant, as guarantee, and that amount shall be returned by the Respondent to the first; and

C) To condemn the Respondent in the costs of the proceedings.

VI. VALUE OF THE CASE

1. The value of the case is fixed at €29,375.90, pursuant to article 97-A(1)(a) of the Code of Civil Procedure in Tax Matters, applicable by virtue of article 29(1)(a) and (b) of RJAT and article 3(2) of the Regulation of Costs in Tax Arbitration Proceedings ("RCPAT").

VII. COSTS

1. In accordance with article 22(4) of RJAT, the value of the arbitration fee is fixed at €1,530, pursuant to Table I of the aforementioned Regulation, at the expense of the Respondent, given the full success of the request.

Let it be notified.

Lisbon, CAAD, March 20, 2017

The Arbitrator

(Sérgio Santos Pereira)