Process: 446/2016-T

Date: February 6, 2017

Tax Type: Selo

Source: Original CAAD Decision

Summary

This CAAD arbitration decision (Process 446/2016-T) addresses whether stamp duty under Item 28.1 of the General Stamp Duty Table (TGIS) applies to undeveloped building land valued over €1,000,000. The taxpayer, A... SA, challenged €17,209.84 in stamp duty assessments for 2015 on land for construction with a taxable property value of €1,720,984.25. The company argued that mere registration as building land, without an approved construction project or owner's intention to build, does not constitute 'residential use' under Verba 28.1 TGIS. The taxpayer contended that simply because the Municipal Master Plan permits future residential development, taxation cannot be triggered by mere expectation of construction. The Tax Authority countered that the legal concept of 'properties with residential use' encompasses both built properties and building land, as their taxable values are calculated identically. The AT cited Law 83-C/2013, which explicitly included building land in Item 28 TGIS, clarifying legislative intent. The measure was adopted during Portugal's fiscal crisis to tax high-value patrimonial wealth. The taxpayer alternatively claimed unconstitutionality, arguing Verba 28 violates equality principles (Article 13 CRP) and contributory capacity principles (Article 104(3) CRP) when applied to undeveloped land. The AT raised a preliminary exception of material incompetence, asserting arbitral tribunals cannot rule on constitutional matters. This excerpt covers the procedural background, parties' positions, and preliminary matters, with the substantive legal reasoning and final decision to follow in subsequent sections.

Full Decision

ARBITRAL DECISION

I – REPORT

1. A… SA, with NIPC[1]…, with registered office at Rua … nº…, …-…Lisbon, filed a request for arbitral pronouncement, pursuant to the provisions of subparagraph a) of article 2(1), article 3(1) and subparagraph a) of article 10(1), all of the RJAT[2], with the AT[3] being the respondent, with a view to assessing the legality of the stamp duty tax assessment acts, referring to the year 2015, relating to the ownership of land for construction registered in the urban property register of the parish of … under article … area of the … Revenue Service of the municipality of ..., in accordance with collection documents 2016…, in the amount of € 5,736.62, 2016…, in the amount of € 5,736.61 and 2016… in the amount of € 5,736.61, respectively, all in the total amount of € 17,209.84.

2. That the request was made without exercising the option to designate an arbitrator, and was accepted by His Excellency the President of the CAAD[4] and automatically notified to the AT on 29/07/2016.

3. Pursuant to the provisions of article 6(2) of the RJAT, by decision of His Excellency the President of the Deontological Board, duly communicated to the parties within the legally applicable deadlines, on 03/10/2016, Arlindo José Francisco was designated as arbitrator of the tribunal, who communicated acceptance of the assignment within the legally prescribed deadline.

4. The tribunal was constituted on 19/10/2016 in accordance with the provisions contained in subparagraph c) of article 11(1) of the RJAT, as amended by article 228 of Law No. 66-B/2012 of 31 December.

5. With its request, the petitioner aims at the annulment of stamp duty, referring to the year 2015, in accordance with the collection notes already mentioned, relating to the property already identified whose TaxablePropertyValue[5] is greater than € 1,000,000.00, provided for in item 28.1 of the TGIS[6].

6. It supports its position, in summary, on the understanding that the fact of registering the property as land for construction does not justify by itself the taxation, without first analyzing whether for the said land there is or is not an authorized or planned building.

7. It considers that the fact that the land is located in an area where the Municipal Master Plan[7] admits the possibility of future buildings being intended for housing does not permit taxation provided for in item 28.1 of the TGIS, without the owner having undertaken or manifested any intention to carry out such constructions.

8. Thus mere expectation of construction for residential purposes, by itself, will not be sufficient to fulfill the provision of the norm and as such there cannot be taxation.

9. The petitioner, as owner of the property, does not intend to carry out any building thereon and the same only came into its possession due to non-compliance with a credit contract by one of its clients, and the taxation is manifestly unlawful due to error in the factual and legal premises.

10. Alternatively, it invokes the unconstitutionality of item 28 of the TGIS when applied to land for construction, as it considers it to violate the foundational principle of equality, enshrined in article 13 of the CRP[8], while at the same time it conflicts with the principle of tax equality in determining double taxation and the principle of contributory capacity, provided for in article 104(3) thereof.

11. It further considers inapplicable to the case the jurisprudence of the CC[9] which considered item 28 of the TGIS constitutional when applied to residential properties, and not when applied to land for construction, concluding with the request for reimbursement of the SD[10] wrongfully paid accompanied by the payment of compensatory interest by the AT, pursuant to articles 43 and 100 of the LGT[11].

12. In its response the AT, also in summary, makes its defense by raising an exception of absolute incompetence of the tribunal ratione materiae, given that it is forbidden to appreciate the request for declaration of unconstitutionality of norms.

13. By way of objection, it states that, contrary to what is argued by the petitioner, the concept of properties with residential use, for purposes of item 28 of the TGIS, encompasses not only built properties but also land for construction, given that the TaxablePropertyValue of these is determined in the same manner as the TaxablePropertyValue of built buildings, citing in this sense the Decision No. 04950/11 of 14/02/2012 of the CAC[12] of the South.

14. In its perspective the legislator, in using the expression "residential use", intended to encompass not only built properties but also land for construction, this having always been the understanding of the AT, but now with the amendment introduced by Law 83-C/2013 which includes, in the wording of item 28 of the TGIS, land for construction, no doubt whatsoever remains as to its taxation in SD.

15. The appearance of the norm occurred in a situation of great difficulties for the Country, in particular public finances, which led the legislator to take extraordinary measures, calling to the collective effort segments of society that revealed patrimonial wealth with TaxablePropertyValue equal to or greater than € 1,000,000.00.

16. As to the unconstitutionality of item 28 of the TGIS with the wording of Law 83-C/2013 of 31/12/2013, it refers that the CC, in its most recent jurisprudence, proclaims its constitutionality, as there are no violations of the principles of equality and contributory capacity.

17. Concluding that, in the event of the petition being upheld, compensatory interest shall not be due, since the AT, at the date of the facts, applied the law in force, and there can be no reference to error attributable to the services.

II - PRELIMINARY MATTERS

The tribunal was regularly constituted, the parties have legal personality and capacity, show themselves to be legitimate and are regularly represented in accordance with articles 4 and 10(2) of the RJAT and article 1 of Ordinance No. 112-A/2011 of 22 March.

In its response the AT raised the material incompetence of the tribunal, which set, by order of 23/11/2016 the meeting referred to in article 18 of the RJAT for 14/12/2016 which, due to unavailability of the CAAD, was rescheduled for 05/01/2017, at 11.30 hours.

In the said meeting the petitioner pronounced itself on the lack of merit of the exception raised by the AT, with the latter maintaining its point of view as to the same.

The parties declared to dispense with the production of oral or written submissions, the tribunal having considered the conditions met to render a decision.

Thus, as the proceedings do not suffer from defects of nullity, it is necessary to decide.

III - REASONING

1 – The questions to be resolved, with interest for the record, are as follows:

a) To assess the exception of material incompetence of the tribunal raised by the AT.

b) In case the exception is dismissed, to declare whether or not the stamp duty tax assessment acts in question are unlawful due to violation of law, due to error in the factual and legal premises.

c) To assess whether item 28.1 of the TGIS, as worded at the date of the facts, is or is not in conformity with the constitutional principles of equality and contributory capacity.

d) If, in the event of the petition being upheld with the consequent annulment of the tax assessment acts at issue herein and reimbursement of the SD paid in due course, this should or should not be accompanied by the payment of compensatory interest by the AT.

2 - Matter of Fact

a) The petitioner, on 31/12/2015 was the owner of the urban property "land for construction", registered in the urban property register under article … of the parish of … area of the ... revenue service of the municipality of ....

b) The TaxablePropertyValue of the property in question was determined in 2012 and is € 1,720,984.25, on which SD in the total amount of € 17,209.84 was incurred, divided into three installments, in accordance with collection notes 2016… of € 5,736.62, 2016… of € 5,736.61 and 2016… of € 5,736.61.

c) Up to the date of the petition, the first two installments had been paid and the 3rd had a payment deadline of 30 November 2016.

d) The said property was evaluated as land for construction with a planned building implantation area of 1,450m2 and intended for residential use in 2003.

e) The facts described are proven by documents attached to the record and we consider them to be the relevant ones for assessing the merits of the case.

3 – Matter of Law

3.1 – Regarding the material incompetence of the tribunal, exception raised by the AT

The violation of the rules of competence, ratione materiae, determines the absolute incompetence of the tribunal, which is of public order and its consideration precedes that of any other matter.

The AT sustains that the petitioner intends to have declared the unconstitutionality of item 28 of the TGIS and consequently to have declared the illegality of the stamp duty tax assessment acts which contravenes what is stated in article 2(1) of the RJAT, being manifest that the competence of the arbitral jurisdiction does not comprehend the consideration of constitutional conformity of legislative acts or their norms.

At the meeting referred to in article 18 of the RJAT, the petitioner, invited to pronounce itself on the exception raised, declared that the same does not obtain and that the petition should be declared without merit.

Having analyzed the positions of the parties on this matter, the tribunal, taking into account the provisions contained in subparagraph a) of article 2(1) of the RJAT and article 2 of Ordinance 112-A/2011 of 22 March, understands that the competence of arbitral tribunals comprehends the consideration relating to the declaration of illegality of tax assessment acts, in the present case SD, whose administration pertains to the respondent.

In the case at hand the petitioner requests, in the first place, that the tax assessment acts of SD be annulled due to violation of law, due to error in the factual and legal premises and, only subsidiarily, requests the declaration of illegality of the tax assessment acts at issue, as they were undertaken based on norms which, in its understanding, would be unconstitutional.

It is therefore evident that the petitioner intends to have the illegality of the assessment acts appreciated, the defects pointed out being an integral part thereof, considering, from this perspective, the tribunal materially competent, pursuant to the legal provisions already referred to, whereupon the exception raised lacks merit.

3.2 – Regarding the illegality of the tax assessment acts in question, due to error in the factual and legal premises

From the petitioner's perspective, item 28 of the TGIS shall only apply to land for construction when the building to be implanted thereon is authorized or planned and is intended for housing, and it is not sufficient, in its understanding, that the respective Municipal Master Plan provides for residential construction, there shall always be a need for its owner to undertake a process with a view to such objective, which did not happen in the case of the petitioner, nor will it happen, once its activity is not geared towards construction, but rather towards others, namely credit operations, the non-compliance with credit contracts being the reason for being the owner of various properties, including land for construction, whose ownership results from payments in kind. It refers to decisions already handed down by arbitral tribunals of the CAAD where it was decided that item 28 of the TGIS may only be materialized by the verification of the effective potential for building.

Let us see what item 28 of the TGIS tells us in the wording given to it by Law 83-C/2013: "28 – Property, usufruct or right of superficies of urban properties whose patrimonial value contained in the register, pursuant to the provisions of the Municipal Property Tax Code (CIMI), is equal to or greater than € 1,000,000.00 – on the taxable patrimonial value used for purposes of the Municipal Property Tax:

28.1 – For residential property or for land for construction whose authorized or planned building, is for housing, pursuant to the provisions of the Municipal Property Tax Code…1% …"

For the tribunal it is clear that the law requires that there be property, usufruct or right of superficies, that the TaxablePropertyValue is equal to or greater than € 1,000,000.00 and, in the case of land for construction, that there be an authorized or planned building.

The legislator said nothing more about expectations of construction, activities of the owners, intentions to build or others, and it is well understood, in fact the registration of properties in the register is done by means of a declaration presented by the TaxPayer[13], in accordance with article 13(1) of the CIMI[14] wording of Law 83-C/2013 of 31 December, the Finance Chief taking the initiative of the first assessment based on the said declaration - article 37(1) of the CIMI - and in the case of land for construction the said declaration shall be accompanied by a photocopy of the subdivision permit and if it does not exist by photocopy of the building permit, approved plan, favorable preliminary information or a document proving construction viability – (3) of the cited article 37 of the CIMI (this article 37 is worded as per Law 64-B/2011 of 30 December).

Having the property in question been registered in the register in 2003, at which time the Property Tax Code[15] was in force, the registration was done by declaration of the taxpayer owner, (1) of article 14 of the said Code, the concept of land for construction being set out in (3) of article 6 of the Property Tax Code which stated: "Land for construction is land, located within or outside an urban agglomeration, for which a subdivision permit has been granted, an approved plan or a building permit has been granted and also those which have been so declared in the acquisition title"

It is thus found that the property in question has been considered land for construction, at least since 2003, by declaration of its then owner, the respective Municipal Master Plan providing for residential construction, with its owner well knowing of the existence of its constructive potential which may or may not be used, a fact which is not within the control of the respondent, but which, by itself, is not capable of preventing its taxation in SD, in the year 2015. Nor should it be said that mere expectation or legal possibility is not sufficient to characterize the property as land for construction and its taxation in SD, in fact the situation falls within the provision of the norm of article 1(1) of the STC[16] which states "Stamp duty shall apply to all acts, contracts, documents, titles, papers and other facts or legal situations provided for in the General Table, including gratuitous transfers of property". Hence the tribunal understands that the factual and legal premises are met for its taxation in SD, that is, there is a right of ownership of land for construction, its TaxablePropertyValue is equal to or greater than € 1,000,000.00 and the legal situation is provided for in the TGIS.

3.3 – Regarding the unconstitutionality of item 28.1 of the TGIS

By way of subsidiarity, the petitioner invoked the unconstitutionality of the norm contained in item 28.1 of the TGIS, as worded in Law 83-C/2013, when applied to land for construction, considering that the same violates the constitutional principles of equality, tax equality and contributory capacity, enshrined in article 13 and (3) of article 104, both of the CRP.

We transcribe the constitutional norms invoked:

"Article 13 - 1- All citizens have the same social dignity and are equal before the law.

2 – No one can be privileged, benefited, harmed, deprived of any right or exempted from any duty on account of ancestry, sex, race, language, territory of origin, religion, political or ideological beliefs, education, economic situation or social condition."

"Article 104…

3 – The taxation of patrimony must contribute to equality among citizens"

It is in light of these norms that we shall assess whether item 28, 28.1 of the TGIS, as worded in Law 83-C/2013, is or is not in conformity with the CRP, being transcribed: "28 - Property, usufruct or right of superficies of urban properties whose taxable patrimonial value contained in the register, pursuant to the provisions of the Municipal Property Tax Code (CIMI), is equal to or greater than € 1,000,000.00 – on the taxable patrimonial value used for purposes of the Municipal Property Tax:

28.1 – For residential property or for land for construction whose building, authorized or planned, is for housing, pursuant to the provisions of the Municipal Property Tax Code…1%".

The petitioner supports its point of view on the following:

The fact that the legislator, in an arbitrary manner, excluded a significant portion of high-value real estate patrimony intended for purposes other than housing;

Taxing in SD the owner of a single property intended for housing with TaxablePropertyValue equal to or greater than € 1,000,000.00 and excluding another owner, with various properties which in their totality exceed that TaxablePropertyValue;

Not taking into account that there is land for construction of housing whose TaxablePropertyValue is equal to or greater than € 1,000,000.00, but as to which building of residential units of value less than € 1,000,000.00 is planned.

Making double taxation of the same taxable fact which generates negative discrimination in relation to other owners who, only saw fall upon the same taxable fact, a single tax.

The non-application of constitutional jurisprudence which considered item 28 of the TGIS to be in conformity with the constitution, given that it refers only to residential properties and not to land for construction.

The tribunal understands that the ratio of the emergence of item 28 of the TGIS and, in accordance with the explanatory statement of the respective bill, was the pursuit of the public interest, in face of the economic and financial situation of the Country, which had been requiring reduction of expenditure and the introduction of fiscal measures with a view to combating the deficit, which led the legislator to intervene, seeking fiscal measures that would encompass the various types of income, in order to ensure a fair distribution of sacrifices. One of these measures was the creation of item 28 of the TGIS, whose constitutional conformity, in its original wording was affirmed by the CC in Decision No. 590/2015 of 11 November, where it was concluded that the legislator intended to tax the ownership of luxury homes as being revelatory of adequate contributory capacity. The new wording not only maintained residential properties, but included land for construction intended for housing whose TaxablePropertyValue is equal to or greater than € 1,000,000.00, calculated according to the rules of the Municipal Property Tax Code.

The legislator, as has already been said, sought a just distribution of sacrifices with a view to fulfilling the adjustment program, extending taxation to income and sectors of society that had greater contributory capacity, such as the increased taxation of capital income and securities gains as well as income obtained or transferred to tax havens. The creation of item 28 of the TGIS on land for construction intended for residential use, must be understood within the scope of adjustment and distribution of sacrifices by the different sectors of the population.

The principle of tax equality requires equal taxation of what is equal and unequal taxation of what is unequal, and from it does not result the inhibition of the legislator in determining which facts it wants to tax to the detriment of others, what results is that it is forbidden arbitrary action. In the case at hand, the legislator considered it necessary to tax urban residential properties and land for construction intended for residential use, within the scope of the effort for budget consolidation, to the extent that being the owner of properties with TaxablePropertyValue greater than € 1,000,000.00, intended for housing, reveals a greater indicator of wealth, capable of founding an increased contribution, with a view to the objective of budget consolidation. At the same time it allowed distribution of the sacrifices with those who live from labor income or pensions. Not taxing other land for construction whose intended use is not housing, such as for example (commercial, industrial, services or other) must be understood as a choice of economic policy which, in the legislator's view, would lead not to a consolidation but to a worsening of the budget.

Nor is the legislator constitutionally obliged to tax the totality of the patrimony of the taxpayer, being able legitimately to opt for the taxation of segments of that patrimony, provided that there exists adequate economic substrate therefor. With item 28 of the TGIS the legislator did not intend to make general taxation on patrimony, but only partial taxation of residential properties and land for construction intended for housing with TaxablePropertyValue equal to or greater than € 1,000,000.00, exempting the remainder with TaxablePropertyValue less than that, which to us appears to be a legitimate choice, with sufficient material foundation, constitutionally admissible and which aimed at the promotion of social equity in austerity.

In the event that in properties with TaxablePropertyValue equal to or greater than € 1,000,000.00, residential units of TaxablePropertyValue less than that come to be built, this is a subsequent, hypothetical situation which, if it were to occur, would not fulfill the provision of the norm, hence there would be no taxation, but on 31 December 2015 the reality to be taxed is different and fulfills the provision of the norm and, for this reason, was taxed.

As to the double taxation which, in the petitioner's understanding, item 28 of the TGIS generates negative discrimination of certain taxpayers in relation to others, since in some the same taxable fact is taxed twice and in others, only a single taxation. The tribunal understands that we are in the presence of a tax of a different nature and different active subject which aims to increase the revenues of the State, with the Municipal Property Tax having the nature of a municipal tax with the municipalities as active subject, not discerning in this legislative choice, for the reasons already expounded, constitutional non-conformity.

As to the non-application of the jurisprudence of the CC which considered item 28 of the TGIS constitutional in the wording of Law 55-A/2012 of 29 October, the tribunal considers that the new wording, introduced by Law 83-C/2013 of 31 December, which includes land for construction intended for residential building whose TaxablePropertyValue is equal to or greater than € 1,000,000.00, will not have altered, for the reasons already referred to above, that conformity.

We must take into account that constitutional rights and principles all have the same dignity and value, but, in order for the constitution to be complied with, in certain circumstances, there are rights and principles that give way so that the constitution is complied with. Thus it occurred with the taxation of land for construction with residential use, with TaxablePropertyValue equal to or greater than € 1,000,000.00 which, as has already been mentioned, emerged in a context of grave economic crisis and public finances, with the legislator understanding that its ownership is revelatory of adequate contributory capacity to increase the State's tax revenues.

It is thus concluded that the taxable facts contained in item 28.1 of the TGIS were not chosen in an arbitrary manner, they respect the principles of equality, tax equality and contributory capacity, the legislative choice being perfectly justified and, in our view, in conformity with the CRP.

3.4 – Request for payment of compensatory interest

Given what is referred to in points 3.2 and 3.3, it becomes unnecessary to assess this matter.

IV DECISION

In view of the foregoing, the tribunal decides as follows:

a) Declare without merit the exception of material incompetence of the tribunal raised by the AT.

b) Declare totally without merit the request for arbitral pronouncement, maintaining in the legal order the stamp duty tax assessment acts put at issue therein.

c) Set the value of the case at € 17,209.84 in accordance with the provisions contained in article 299(1) of the CPC[18], article 97-A of the CPPT[19], and article 3(2) of the RCPAT[20].

d) Set the costs, pursuant to (4) of article 22 of the RJAT, in the amount of € 1,224.00 in accordance with the provision of table I referred to in article 4 of the RCPAT, which shall be borne by the petitioner.

Notify.

Lisbon, 6 February 2017

Text prepared by computer, pursuant to article 131(5) of the CPC, applicable by remission of article 29(1), subparagraph e) of the RJAT, with blank lines and reviewed by the tribunal.

The Arbitrator

Arlindo José Francisco

[1] Acronym for Tax Identification Number for Legal Persons
[2] Acronym for Legal Regime of Arbitration in Tax Matters
[3] Acronym for Tax and Customs Authority
[4] Acronym for Administrative Arbitration Center
[5] Acronym for Taxable Property Value
[6] Acronym for General Table of Stamp Duty
[7] Acronym for Municipal Master Plan
[8] Acronym for Constitution of the Portuguese Republic
[9] Acronym for Constitutional Court
[10] Acronym for Stamp Duty
[11] Acronym for General Tax Law
[12] Acronym for Central Administrative Court
[13] Acronym for Taxpayer
[14] Acronym for Municipal Property Tax Code
[15] Acronym for Property Tax Code
[16] Acronym for Stamp Duty Code
[17] Acronym for Municipal Property Tax
[18] Acronym for Civil Procedure Code
[19] Acronym for Tax Procedure and Process Code
[20] Acronym for Rules on Costs in Tax Arbitration Proceedings

Frequently Asked Questions

Automatically Created

Is stamp tax (Imposto do Selo) due under Verba 28.1 TGIS on building land with no approved construction project?
According to the Tax Authority's position in this case, stamp tax under Verba 28.1 TGIS is due on building land (terrenos para construção) valued over €1,000,000, even without an approved construction project. The AT argues that the legal concept of 'properties with residential use' encompasses building land, not just completed buildings, particularly after Law 83-C/2013 explicitly included such land. However, the taxpayer disputes this interpretation, arguing that mere registration as building land without authorized construction plans or owner's intent to build should not trigger taxation.
Can a landowner be taxed under Verba 28 TGIS solely because the municipal plan (PDM) allows future residential use?
The Tax Authority contends that yes, a landowner can be taxed under Verba 28 TGIS solely because the Municipal Master Plan (PDM) classifies the area as suitable for future residential use. The AT's position is that the taxable property value calculation method (VPT) for building land mirrors that of built residential properties, which justifies taxation. Conversely, the taxpayer argues that mere expectation or municipal planning permission for future residential construction, without actual building authorization or owner's intention to construct, is insufficient to constitute 'residential use' under the legal provision and therefore should not trigger stamp duty liability.
What is the CAAD arbitral procedure for challenging stamp tax assessments on high-value properties in Portugal?
The CAAD (Centro de Arbitragem Administrativa) arbitral procedure for challenging stamp tax assessments involves: (1) filing a request for arbitration under Article 2(1)(a) and Article 10(1)(a) of RJAT against the Tax Authority; (2) optional designation of an arbitrator by the taxpayer or automatic assignment by the CAAD President; (3) notification to the AT; (4) constitution of the arbitral tribunal; (5) AT's written response, which may include preliminary exceptions; (6) a procedural meeting under Article 18 RJAT if exceptions are raised; (7) parties may waive oral hearings; and (8) the arbitrator issues a binding decision on the legality of the tax assessment acts.
Does the mere expectation of residential construction on a plot justify stamp tax liability under Portuguese law?
The taxpayer argues that mere expectation of residential construction does not justify stamp tax liability under Verba 28 TGIS. The company contends that without an approved building project or demonstrated intention by the owner to construct residential buildings, the property cannot be classified as having 'residential use.' The taxpayer emphasizes it acquired the land through credit default recovery and has no construction plans. However, the Tax Authority maintains the opposite view: that building land located in areas zoned for residential use by the Municipal Master Plan qualifies for taxation under Item 28.1 TGIS regardless of current construction status or owner's intentions, as the taxable property value methodology treats such land equivalently to built residential properties.
Is the application of Verba 28 TGIS to undeveloped building land unconstitutional under the Portuguese Constitution?
The taxpayer claims that applying Verba 28 TGIS to undeveloped building land violates constitutional principles of equality (Article 13 CRP) and contributory capacity (Article 104(3) CRP), arguing it creates discriminatory double taxation. However, the Tax Authority counters that recent Constitutional Court jurisprudence has upheld the constitutionality of Item 28 TGIS, finding no violations of equality or contributory capacity principles. The AT notes the provision was adopted as an extraordinary fiscal measure during Portugal's economic crisis to tax high-value patrimonial wealth (VPT ≥ €1,000,000). The tribunal raised a preliminary exception questioning whether CAAD arbitral tribunals have material competence to rule on constitutional matters, which must be resolved before addressing the substantive constitutionality claim.