Stamp Tax on Vertical Property: CAAD Ruling on High-Value Urban Building (442/2016-T)

ARBITRAL DECISION

I. REPORT

1. A…, Lda., (hereinafter "Claimant"), with tax identification number ("NIF")…, with registered office at …, …, …, … … Lisbon, and with share capital of €50,000.00, filed, on 28 July 2016, pursuant to the combined provisions of Articles 2 and 10 of Decree-Law No. 10/2011, of 20 January, i.e., the Legal Framework for Arbitration in Tax Matters ("RJAT"), a request for the constitution of an arbitral tribunal, in order to declare illegal the assessments of Stamp Tax ("IS") set out below, in the total amount of €10,527.80 (see tables below);

The Tax and Customs Authority ("Respondent" or "TA") is the defendant.

A) Constitution of the Arbitral Tribunal

1. Pursuant to the provisions of Article 6(2)(a) and Article 11(1)(b) of the RJAT, the Deontological Council of this Administrative Arbitration Centre ("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 3 October 2016.

2. Thus, in accordance with Article 11(1)(c) of the RJAT, and by means of communication from the President of the Deontological Council of the CAAD, the Sole Arbitral Tribunal was constituted on 19 October 2016.

B) Procedural History

1. In the request for arbitral pronouncement, the Claimant petitioned for the declaration of illegality of the IS assessments mentioned above, relating to the tax year 2015, with reference to an urban property with a Taxable Patrimonial Value ("VPT") of €1,052,780, in full ownership, located at …, nos … and …, in Lisbon, currently registered under article … in the urban property register of the parish of …, municipality of Lisbon.

2. By order of 9 January 2017, the Sole Arbitral Tribunal, pursuant to Article 16(c) of the RJAT, and following the request by the TA, decided, without opposition from the parties, that it was not necessary to hold the meeting referred to in Article 18 of the RJAT, as a result of the simplicity of the issues at hand, as well as considering that it had in its possession all the necessary elements to make a clear and impartial decision.

3. It likewise decided, in accordance with Article 18(2) of the RJAT, that oral arguments were not necessary, as the positions of the parties were clearly defined in their respective pleadings, and set 19 April 2017 as the deadline for the arbitral decision.

4. The Tribunal was regularly constituted and is competent to assess the issues indicated (Article 2(1)(a) of the RJAT), the parties have legal personality and capacity and have full standing (Articles 4 and 10(2) of the RJAT and Article 1 of Ordinance No. 112-A/2011, of 22 March). There are no procedural defects and nothing bars judgment on the merits.

5. The present proceedings are thus in a position for final judgment to be rendered.

II. QUESTION TO BE DECIDED

1. The central question to be assessed and decided regarding the merits of the case, as emerges from the parties' procedural documents, is the following: with reference to properties not constituted under a horizontal property regime, comprising various floors and divisions capable of independent use (with residential designation), what is the Taxable Patrimonial Value ("VPT") relevant for the purposes of determining the IS payable, pursuant to Item No. 28 of the General Table of IS ("GTIS")?

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 of the parts capable of autonomous use, or, conversely, the total value resulting from the sum of the VPTs of those autonomous fractions, as suggested by the Respondent.

III. DECISION ON THE FACTS AND ITS REASONING

1. Having examined the documentary evidence produced, the tribunal finds proved, as relevant to the decision of the case, the following facts:

I. The Claimant is the owner of a property located at …, nos … and …, in Lisbon, currently registered under article … in the urban property register of the parish of …, municipality of Lisbon, with a Taxable Patrimonial Value ("VPT") of €1,052,780;

II. The Claimant received, with respect to the tax year 2015, and as a result of Item No. 28 of the GTIS, assessment notices from the TA, mentioned above, relating to three instalments of IS, in the total amount of €10,527.80 (amount already paid in full);

1. The Tribunal's conviction regarding the facts found as proved resulted from the documents attached to the record and contained in the petition and the unchallenged allegations of the parties, as specified in the points of the factual findings set out above.

IV. ON THE LAW

A) Legal Framework

1. Taking into account the subject matter at issue in the present proceedings, it is important, first of all, to list the norms that make up the relevant legal framework, as of the date of the occurrence of the facts.

2. The subjection to IS of properties with residential designation resulted from the addition of Item No. 28 to the GTIS, effected by Article 4 of Law 55-A/2012, of 29 October, which defined the following taxable events:

"28 – Ownership, usufruct or right to build on urban properties whose taxable patrimonial value contained in the register, pursuant to the Municipal Property Tax Code (Municipal Property Tax Code), is equal to or exceeding €1,000,000.00 – on the taxable patrimonial value for the purposes of Municipal Property Tax:

28.1 – For a property with residential designation – 1%

28.2 – For a property, when the taxpayers that are not natural persons are resident in a country, territory or region subject to a clearly more favourable tax regime, listed in an ordinance approved by the Minister of Finance – 7.5%."

1. The aforementioned law also added, to the IS Code, Article 23(7), relating to the assessment of IS: "where the tax is due for the 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 and Customs Authority, applying, with the necessary adaptations, the rules contained in the Municipal Property Tax Code", and Article 67(2) which provides that "to matters not regulated in this code relating to item 28 of the General Table, the Municipal Property Tax Code applies 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 the purposes of this tax, each autonomous fraction, in a horizontal property regime, is considered as constituting a property".

4. In turn, Article 12(3) of the Municipal Property Tax Code establishes that "each floor or part of a property capable of independent use is registered separately in the property register, which also specifies its respective taxable patrimonial value".

5. In parallel, the article that governs the item in question, in the IS Code, is Article 23(7), relating to the assessment of IS, which provides the following: "where the tax is due for the 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 and Customs Authority, applying, with the necessary adaptations, the rules contained in the Municipal Property Tax Code".

6. In parallel, and if not otherwise understood, consideration shall also be given to whether in cases where the horizontal property ownership of an urban property with various autonomous fractions is not constituted, the VPT, for the purposes of Item No. 28 of the GTIS, is calculated individually per fraction capable of being used autonomously, or, alternatively, determined by summing the VPTs of those fractions.

B) Arguments of the Parties

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

2. The Claimant is the owner of the property located at …, nos … and …, in Lisbon, currently registered under article … in the urban property register of the parish of …, municipality of Lisbon.

3. The property is divided into seven floors or divisions with independent use, all as better described in the respective property register entries, of which the five floors that were subject to the contested assessments are listed with residential designation.

4. According to the property register, the five aforementioned floors correspond, respectively, to the following taxable patrimonial values: €208,470, €208,470, €210,560, €212,640 and €212,640.

5. The Claimant made full payment of all amounts assessed as IS, within the legally established deadlines.

6. The Claimant contested the assessments relating to the years 2012 and 2013 before the arbitral tribunal, and these were declared illegal and annulled by a final decision (cf. decision rendered in proceedings No. 295/2014-T and 42/2016-T, respectively), with the Respondent returning the amount unduly collected and declaring that the floors in question are not subject to the tax.

7. The acts in question are based on the same error regarding the factual and legal prerequisites for the application of Item 28 of the GTIS that led to the annulment of the previous ones, being tainted by the same defect of violation of law.

8. Subjection to IS contained in Item No. 28.1 of the GTIS is determined by the combination of two criteria: residential designation and the VPT recorded in the register equal to or exceeding €1,000,000.00.

9. In that sense, in the case of an urban property with characteristics identical to those described in the present proceedings, subjection to IS is determined not by the VPT of the property, but by the VPT attributed to each of the floors or divisions.

10. This is because, in the Claimant's opinion, the legislator made no distinction between properties constituted under full ownership and horizontal property. Therefore, in the case at hand, only the material truth underlying the property and its respective use can be relevant.

11. The Claimant takes the view that since "any of the aforementioned units capable of independent use – the floors subject to the assessments herein – has a taxable patrimonial value clearly below €1,000,000.00 according to the only admissible criterion, which is the legal criterion, in accordance with the rules of the Municipal Property Tax Code, by express reference of the law that created item no. 28 of the GTIS (cf. the cited Article 3 of Law No. 55-A/2012, of 29 October)".

12. From the Claimant's perspective, "the TA cannot consider as the reference value for the tax the total value of the property, since the legislator itself established a different rule in the Municipal Property Tax Code, and this is the Code applicable to matters not regulated with respect to item no. 28 of the GTIS".

13. In conclusion, the Claimant then petitioned that the aforementioned assessments be annulled, "as being manifestly illegal, with all the consequent effects".

14. For its part, the Respondent, after being duly notified for that purpose, submitted its response in which it began by stating that, in its understanding, a property under full ownership with floors or divisions capable of independent use is unequivocally different from a property under a horizontal property regime, constituted by autonomous fractions, that is, multiple properties, so that, as regards the assessment of Municipal Property Tax, and subsidiarily of IS, "the VPT that serves as the basis for its calculation, will unquestionably be the VPT that the now Claimant defines as the global value".

15. Concluding, on that point, that the legislator intended to subject, with Item No. 28.1 of the GTIS, properties as a single legal-tax reality. "Whence it is necessarily concluded that the tax acts in question did not violate any legal or constitutional principle, and therefore should be maintained".

16. The Respondent accordingly takes the view that the assessments made by it result from a correct interpretation and application of the law to the facts, and accordingly requests that the claim made by the Claimant be ruled unfounded and the Respondent absolved of the claim.

17. In the course of its closing arguments, the Respondent referred in full to the arguments set out in its response to the initial petition submitted by the Claimant.

18. The Tribunal's conviction as to the decision on the factual matters was based on the documents contained in the record, as well as on the pleadings presented and the positions of the parties expressed therein, it being noteworthy that there is agreement between the parties regarding the facts, with the disagreement being confined to the matter of law.

C) Tribunal's Assessment

1. By way of introduction, it should be noted that, in the understanding of this tribunal, and taking into account the legal framework previously presented, the essential normative proposition to be taken into account for the decision of the case is that which results from Item No. 28 of the GTIS.

2. It should also be noted that, in the view of the arbitral tribunal, the question under analysis concerns exclusively a matter of law, namely to understand, for the purposes of applying the aforementioned item, what VPT is relevant.

3. First, it should be clarified that it is clear, from the letter of the law, that the VPT to be considered, for the purposes of applying Item No. 28 of the GTIS, can only be that which is determined in accordance with the Municipal Property Tax Code.

4. This is, moreover, what the aforementioned item states, verbatim: "(…) whose taxable patrimonial value recorded in the register, in accordance with the Municipal Property Tax Code (Municipal Property Tax Code), is equal to or exceeding €1,000,000.00".

5. Therefore, let us note once again what follows from Article 2(4) of the Municipal Property Tax Code, which states that "for the purposes of this tax, each autonomous fraction, in a horizontal property regime, is considered as constituting a property".

6. Reinforced, nevertheless, by Article 12(3) of the same Code, which establishes that "each floor or part of a property capable of independent use is registered separately in the property register, which also specifies its respective taxable patrimonial value".

7. It is concluded, therefore, that, for the purposes of calculating the Municipal Property Tax payable, the VPT is considered individually for each floor or part capable of independent use.

8. And if this is the method of calculation followed for Municipal Property Tax, it must necessarily be the model equally applied in the context of Item No. 28 of the GTIS, in the terms set out above.

9. Nevertheless, and should the doubts raised still persist, this tribunal relies on some arbitral decisions previously rendered, which addressed the subject matter under analysis.

10. Thus, first, let us note decision No. 50/2013-T, of 29 October, mentioned equally by the Claimant, which states the following:

11. "Law No. 55-A/2012 says nothing about the qualification of the concepts at issue, in particular, about the concept of 'property with residential designation'. However, Article 67(2) of the IS Code, added by the aforementioned Law, provides that 'to matters not regulated in this code relating to item 28 of the General Table, the Municipal Property Tax Code applies subsidiarily'.

The rule of incidence thus refers to urban properties, the concept of which is that which results from the provisions of Article 2 of the Municipal Property Tax Code, with the determination of the VPT following the terms of the provisions of Article 38 et seq. of the same code.

Consulting the Municipal Property Tax Code, it is found that its Article 6 merely indicates the different species of urban properties, among which it mentions residential properties (…).

From this we can conclude that, in the view of the legislator, what matters is not the legal-formal rigour of the concrete situation of the property but its normal use, the purpose to which the property is destined. We further conclude that for the legislator the situation of the property in vertical or horizontal property ownership did not matter, as no reference or distinction is made between them. 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 IS Code, 'to matters not regulated in this code relating to item 28 of the General Table, the Municipal Property Tax Code applies subsidiarily'" (emphasis in original).

1. That is, taking into account that the registration in the property register of properties in vertical ownership, for the purposes of the Municipal Property Tax Code, follows the same registration rules as properties constituted in horizontal property ownership, with the respective Municipal Property Tax, as well as IS, being assessed individually in relation to each of the parts, it does not appear to this 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 property ownership, it will require, in the same terms, with respect to the rule of incidence of Item No. 28 of the GTIS.

3. Therefore, IS, in the context of Item No. 28 of the GTIS, could only be incurred on a particular fraction if this, possibly, had a VPT exceeding €1,000,000.00.

4. And, it should be added, that this was equally the understanding adopted by the TA.

5. Indeed, the TA also issued individualized assessment notices, relating to each of the fractions capable of autonomous use, demonstrating that, in its opinion, the aforementioned fractions, despite not being legally constituted in horizontal property ownership, would, for all purposes, be independent of one another.

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

7. This when the legislator itself established a different rule in the context of the Municipal Property Tax Code which, as previously stated, is the Code applicable to matters not regulated in the IS Code, with respect to Item No. 28 of the GTIS.

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

9. In this context, this tribunal considers that the criterion defended by the TA violates the principles of legality and fiscal equality and, likewise, 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 in a horizontal property regime, none of its residential fractions would be subject to the incidence of the new tax, the TA cannot treat materially equal situations differently.

12. In this regard, see what was said on this matter in the arbitral decision rendered in the context of Proceedings No. 132/2013-T, of 16 December, whose understanding this tribunal adopts:

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

Furthermore, distinguishing, in this context, between properties constituted in horizontal property ownership and in full ownership would be an 'innovation' without associated legal support, especially since, as has been stated here, nothing indicates, either in item no. 28 or in the provisions of the Municipal Property Tax Code, a justification for that particular differentiation.

Note, by way of example, what Article 12(3) of the Municipal Property Tax Code states: each floor or part of a property capable of independent use is registered separately in the property register, which also specifies its respective taxable patrimonial value.

The uniform criterion that is necessary is, therefore, the one that provides that the incidence of the norm in question only takes place when any of the parts, floors or divisions capable of independent use of a property in horizontal or full ownership with residential designation has a VPT exceeding €1,000,000.00.

Setting as the reference value for the incidence of the new tax the global VPT of the property in question, as the now respondent intended, does not find a basis in the applicable legislation, which is the Municipal Property Tax Code, given the reference made by the cited Article 67(2) of the IS Code.

(…)

Furthermore, admitting such differentiation in treatment could produce incomprehensible results 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 now respondent: a citizen who is the owner of a property constituted in full ownership intended for residential use, with the global 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 annual taxation of 1% of that value (as occurred in the situation under analysis); whereas another citizen who holds a property with the exact same characteristics as the previous one but which has been constituted in horizontal property 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 taxation purposes, the respective VPTs? The answer can be illustrated through another hypothesis: a citizen who is the owner of a property in horizontal property ownership, in which each of its 20 fractions has a VPT below €1,000,000.00, would be subject to taxation if – should such aggregation be allowed – the global VPT exceeded that value; whereas another citizen with identical 20 fractions distributed among 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 – justifying, therefore, the non-aggregation of the VPTs of fractions of properties in horizontal property 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 floors (autonomous units) of the property with residential designation vary between (…), so that any one of them is below €1,000,000.00.

From this it is concluded, as a result of what has been stated, that IS as referred to in item no. 28 of the GTIS cannot be incurred on them, and therefore the tax assessment acts contested by the claimant are illegal" (emphasis in original).

1. In this regard, let us now focus on the arbitral decision rendered in the context of proceedings No. 48/2013-T, of 9 October, which analyzes, in an extensive manner, the objectives underlying the addition of the aforementioned item.

2. "Law No. 55-A/2012, of 29/10, has no preamble, therefore it is not possible to extract the intention of the legislator from it.

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

In the statement of reasons for the aforementioned bill, it is stated that, 'these measures are fundamental to strengthen the principle of social equity in austerity, guaranteeing an effective distribution of the sacrifices necessary to comply with the adjustment programme. The Government is strongly committed to ensuring that the distribution of these sacrifices will be made by everyone and not just by those who live on their work income. In accordance with this objective, this law expands the taxation of capital and property, covering equitably a broad set of sectors of Portuguese society'.

In that statement of reasons it is further stated that, in addition to the increase in taxation of returns on capital and capital gains, a rate is created in the IS context affecting urban properties of residential designation whose taxable patrimonial 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 designation.

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 elected social equity as the priority principle of its fiscal policy. This is even more important in times of rigour as a way of guaranteeing the fair distribution of the fiscal effort.

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

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

For the tax system to promote greater equality, it is fundamental that the budgetary consolidation effort be shared by all types of income, covering with particular emphasis returns on capital and properties of high value. 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, giving the tax administration enhanced powers to monitor and inspect situations of fraud and tax evasion.

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

This proposal has three essential pillars: the creation of special taxation on urban properties of value exceeding 1 million euros; the increase in taxation on returns on capital and capital gains and the strengthening of rules to combat fraud and tax evasion.

First, the Government proposes the creation of a special rate on residential urban properties of higher value. It is the first time that in Portugal special taxation on properties of high value intended for residential use is created. This rate will be 0.5% to 0.8% in 2012, and 1% in 2013, and will affect houses of value equal to or exceeding 1 million euros. With the creation of this additional rate, the tax effort required of these owners will be significantly increased in 2012 and 2013'".

1. Next, it is necessary to bring together the conclusions that will allow, without room for doubt, deciding on the matter under discussion (that is, whether, for the purposes of applying Item No. 28 of the GTIS, in cases where a property with various autonomous fractions, capable of independent use, is not constituted in horizontal property ownership, the relevant VPT is determined by summing the individual VPTs, or, alternatively, is individually considered).

2. In this sense, it should be noted, first, that the present subject matter is, by virtue of Article 67(2) of the IS Code, subject to the norms of the Municipal Property Tax Code, "to matters not regulated in this code relating to item 28 of the General Table, the Municipal Property Tax Code applies subsidiarily".

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

4. Now, Article 12(3) of the Municipal Property Tax Code establishes that "each floor or part of a property capable of independent use is registered separately in the property register, which also specifies its respective taxable patrimonial value".

5. The legislator devaluing, in the terms previously mentioned, any prior constitution of horizontal or vertical property 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 TA itself seems to agree with the criterion set out, which is why the assessments that it itself issues are very clear in their essential elements, from which it results that the value of incidence corresponds to the VPT of each one of the floors and the assessments are individualized.

8. Therefore, if the legal criterion imposes 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 property ownership, it clearly established the criterion, which must be unique and unequivocal, for defining the rule of incidence of the new tax.

9. Thus, there would only be a place for IS incidence (in the context of Item No. 28 of the GTIS) if any of the parts, floors or divisions with independent use presented a VPT exceeding €1,000,000.00.

10. The TA 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 in the context of Municipal Property Tax (and, as previously mentioned, this is the code applicable to matters not regulated with respect to Item No. 28 of the GTIS).

11. In conclusion, the current legal regime does not impose the obligation to constitute horizontal property ownership, so the action of the TA translates into arbitrary and illegal discrimination.

12. Indeed, the TA cannot distinguish where the legislator itself understood not to do so, under penalty of violating the coherence of the fiscal 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, as of the relevant date of the facts, constituted in full ownership and had 5 of the fractions, which were subject to assessment (contested) with independent use, as results from the documents attached by the Claimant, all with residential designation.

14. Given that none of those fractions, individually considered, has a taxable patrimonial value equal to or exceeding €1,000,000.00, as results from the documents attached to the record, it is concluded that the legal prerequisite for incidence is not met.

V. DECISION

1. Therefore, this Arbitral Tribunal decides:

A) To rule the request for arbitral pronouncement admissible and, as a consequence, to declare illegal and annul the IS assessments mentioned above, with reference to the tax year 2015, from which resulted tax paid in the amount of €10,527.80, which amount should now be reimbursed to the Claimant;

B) To condemn the Respondent, pursuant to Article 43(1) of the General Tax Law ("LGT") and Articles 61(2) and (5) of the Code of Tax Procedure and Process ("CPPT"), to pay interest damages at the rate resulting from Article 43(4) of the LGT, with in the case "sub judice", undoubtedly attributable error by the services in the practice of the tax acts in question, calculated on the amount paid, from the day the aforementioned assessments were paid and until the full reimbursement of the amount referred to; and

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

VI. VALUE OF THE PROCEEDINGS

1. The value of the proceedings is set at €10,527.80, pursuant to Article 97-A(1)(a) of the CPPT, applicable by force of Articles 29(1)(a) and (b) of the RJAT and Article 3(2) of the Regulation of Costs in Tax Arbitration Proceedings ("RCPAT").

VII. COSTS

1. In accordance with the provisions of Article 22(4) of the RJAT, the arbitration fee is set at €918, pursuant to Table I of the aforementioned Regulation, to be borne by the Respondent, given the complete success of the claim.

Let it be notified.

Lisbon, CAAD, 17 March 2017

The Arbitrator

(Sérgio Santos Pereira)