Process: 457/2014-T

Date: December 17, 2014

Tax Type: Selo

Source: Original CAAD Decision

Summary

CAAD Arbitral Decision 457/2014-T addresses a critical dispute regarding Stamp Tax (Imposto do Selo) under Verba 28.1 of the General Stamp Tax Table (TGIS), which applies to urban residential properties with taxable property values equal to or exceeding €1 million. The applicant, A, S.A., challenged stamp duty assessments on a property registered as full ownership comprising 74 independent-use units with a total value of €4,875,840, arguing that since each individual unit was valued below €1 million, Verba 28.1 should not apply. The company claimed the Tax Authority made an extensive and discriminatory interpretation, violating principles of proportionality, legal certainty, non-retroactivity, and equality embodied in contributive capacity. The applicant contended that properties in full ownership with independent units should be treated like horizontal property (condominium) units for tax purposes, with each unit assessed separately. The Tax Authority countered that Verba 28.1's €1 million threshold refers to the entire property's value, not individual units, emphasizing that the unity of vertical property ownership remains intact regardless of whether floors or units are independently usable. The Authority argued that any interpretation treating independent units separately would violate the constitutional principle of legality under Article 103(2) of the Portuguese Constitution. The tribunal admitted cumulative claims under Article 3(1) of the Legal Framework for Arbitration in Tax Matters (RJAT), allowing extensions to include subsequent stamp duty installment assessments, ultimately consolidating claims totaling €31,578.20. This case highlights the interpretative challenges surrounding real estate taxation when properties contain multiple independently functional units but remain registered under unified ownership, raising fundamental questions about the application of tax thresholds to composite properties versus their constituent parts.

Full Decision

ARBITRAL DECISION

Case No. 457/2014-T

I. Report

  1. A, S.A., Tax Identification Number ..., with registered office at …, whose local peripheral service is the Financial Services of Lisbon 10, came, pursuant to and for the purposes of the provisions of Articles 10 et seq. of the Legal Framework for Arbitration in Tax Matters, to request the establishment of a Single Arbitral Tribunal.

  2. The Respondent is the Tax and Customs Authority.

  3. The Applicant seeks the annulment of the assessment acts of the first installment of Stamp Duty (item No. 28 of the General Schedule of Stamp Duty), in the total amount of €10,600.78, evidenced by documents, dated 17 March 2014, with the following numbers:

a) 2014 ...;
b) 2014 ...;
c) 2014 ...;
d) 2014 ...;
e) 2014 ...;
f) 2014 ...;
g) 2014 ...;
h) 2014 ...;
i) 2014 ...;
j) 2014 ...;
k) 2014 ...;
l) 2014 ...;
m) 2014 ...;
n) 2014 ...;
o) 2014 ...;
p) 2014 ...;
q) 2014 ...;
r) 2014 ...;
s) 2014 ...;
t) 2014 ...;
u) 2014 ...;
v) 2014 ...;
w) 2014 ...;
x) 2014 ...;
y) 2014 ...;
z) 2014 ...;
aa) 2014 ....

  1. The Applicant also seeks the annulment of the subsequent assessments for collection of subsequent Stamp Duty installments.

  2. The Applicant further seeks the refund of the amounts paid, plus interest in accordance with the applicable law.

  3. The Applicant thus formulates a cumulation of claims under the provisions of Article 3, No. 1, of the Legal Framework for Arbitration in Tax Matters.

  4. The Applicant bases its claim on the illegality of the said assessment acts, alleging that the Tax and Customs Authority applies the rule contained in item No. 28 of the General Schedule of Stamp Duty "in non-conformity with fiscal reality, making an extensively discriminatory and illegal interpretation, adapting it to its convenience".

  5. The Applicant also alleges a violation of the principles of proportionality, legal certainty, non-retroactivity and equality "embodied in the principle of contributive capacity".

  6. The Applicant further maintains that "each of the divisions has a VPT below one million euros and a separate assessment notice, because the registration in the property matrix of properties in full ownership, composed of units susceptible of independent use, follows the same rules as the registration of properties constituted in condominium ownership".

  7. The Applicant opted for non-appointment of an arbitrator.

  8. Pursuant to the provisions of paragraph (a) of No. 2 of Article 6 and paragraph (b) of No. 1 of Article 11 of the Legal Framework for Arbitration in Tax Matters, as amended by Article 228 of Law No. 66-B/2012, of 31 December, the Deontological Council appointed the arbitrator of the arbitral tribunal, who communicated acceptance of the appointment within the applicable deadline.

  9. The parties were notified of this appointment and did not manifest any wish to challenge the appointment of the arbitrator, in accordance with Articles 11, No. 1, paragraphs (a) and (b) of the Legal Framework for Arbitration in Tax Matters and Articles 6 and 7 of the Code of Ethics of the Administrative Arbitration Centre.

  10. Thus, in accordance with the provisions of paragraph (c) of No. 1 of Article 11 of the Legal Framework for Arbitration in Tax Matters, as amended by Article 228 of Law No. 66-B/2012, of 31 December, the single arbitral tribunal was constituted on 04-09-2014.

  11. The Tax and Customs Authority submitted a response, in which it defends the complete lack of merit of the request for an arbitral award, without raising any objection.

  12. The Tax and Customs Authority concludes its response as follows:

"A) Item 28.1 of the General Schedule of Stamp Duty applies to urban properties with residential use.

B) The taxable property value equal to or greater than €1,000,000.00 upon which the application of this legal rule depends is, as expressly results from its wording, the property value of each property and not of its distinct parts, even if susceptible of independent use.

C) The unity of the urban property in vertical ownership composed of various floors or units is not, however, affected by the fact that all or some of these floors or units are susceptible of independent economic use.

D) Any other interpretation violates the principle of legality enshrined in Article 103, No. 2, of the Constitution of the Portuguese Republic.

E) The principles of tax equality and contributive capacity only prohibit arbitrary or unjustified discriminations, but not discriminations that may be justified by the more evolved character of the institutions or by the coherence of the fiscal system.

F) Law No. 55-A/2012, of 29 October, not representing any violation of the prohibition of fiscal retroactivity.

G) Thus, the tax act in question has not violated any legal or constitutional provision, and should therefore be maintained in the legal order.

In light of the foregoing, and in other matters of Law which Your Excellency will prudently supply, the present request for an arbitral award should be judged to lack merit, and the Respondent entity should be absolved from the claim."

  1. By order of 29/10/2014, the Tribunal decided to dispense with the holding of the meeting provided for in Article 18 of the Legal Framework for Arbitration in Tax Matters, as well as to dispense with the submission of pleadings, given that the parties had agreed to this.

  2. By order of 03/11/2014, the Arbitral Tribunal admitted the extension of the claim, requested by the Applicant, following the assessment acts of the second installment of Stamp Duty, relating to the same facts, the claim amounting to the total value of €20,977.64, and evidenced by documents, dated 17 March 2014, with the following numbers:

a) 2014 ...;
b) 2014 ...;
c) 2014 ...;
d) 2014 ...;
e) 2014 ...;
f) 2014 ...;
g) 2014 ...;
h) 2014 ...;
i) 2014 ...;
j) 2014 ...;
k) 2014 ...;
l) 2014 ...;
m) 2014 ...;
n) 2014 ...;
o) 2014 ...;
p) 2014 ...;
q) 2014 ...;
r) 2014 ...;
s) 2014 ...;
t) 2014 ...;
u) 2014 ...;
v) 2014 ...;
w) 2014 ...;
x) 2014 ...;
y) 2014 ...;
z) 2014 ....

  1. By order of 09/12/2014, the Arbitral Tribunal admitted a further extension of the claim, requested by the Applicant, following the assessment acts of another installment of Stamp Duty, relating to the same facts, the claim amounting to the total value of €31,578.20, and evidenced by documents, dated 17 March 2014, with the following numbers:

a) 2014 ...;
b) 2014 ...;
c) 2014 ...;
d) 2014 ...;
e) 2014 ...;
f) 2014 ...;
g) 2014 ...;
h) 2014 ...;
i) 2014 ...;
j) 2014 ...;
k) 2014 ...;
l) 2014 ...;
m) 2014 ...;
n) 2014 ...;
o) 2014 ...;
p) 2014 ...;
q) 2014 ...;
r) 2014 ...;
s) 2014 ...;
t) 2014 ...;
u) 2014 ...;
v) 2014 ...;
w) 2014 ...;
x) 2014 ...;
y) 2014 ...;
z) 2014 ...;
aa) 2014 ....

  1. The Arbitral Tribunal was duly constituted.

  2. The parties have legal personality and capacity and are legitimate (Articles 4 and 10, No. 2, of the Legal Framework for Arbitration in Tax Matters and Article 1 of Regulation No. 112-A/2011, of 22 March).

  3. No invalidity is apparent.

II. Factual Matters

a. Facts Established

  1. The following facts are established:

22.1. The Applicant is the owner of the property located at …, 1, 1A to 1M, 2, 2A to 2E and 3, 3A to 3C and …, 1, 1A and 1B, in …, which is registered in the urban property register of the parish of …. under No. ...;

22.2. The property identified above is registered in the urban property register as full ownership, with 74 floors or units of independent use, and a total property value of €4,875,840.00;

22.3. The assessments contested by the Applicant relate to the following floors, the Taxable Property Value (VPT) of which is also indicated:

a) 1st floor 102, with a VPT of €80,410.00 (eighty thousand four hundred and ten euros);
b) 1st floor 108, with a VPT of €116,550.00 (one hundred and sixteen thousand five hundred and fifty euros);
c) 1st floor 113, with a VPT of €132,960.00 (one hundred and thirty-two thousand nine hundred and sixty euros);
d) 1st floor 3, with a VPT of €178,320.00 (one hundred and seventy-eight thousand three hundred and twenty euros);
e) 1st floor D, with a VPT of €72,350.00 (seventy-two thousand three hundred and fifty euros);
f) 1st floor E, with a VPT of €197,520.00 (one hundred and ninety-seven thousand five hundred and twenty euros);
g) 2nd floor 102, with a VPT of €86,710.00 (eighty-six thousand seven hundred and ten euros);
h) 2nd floor 108, with a VPT of €114,520.00 (one hundred and fourteen thousand five hundred and twenty euros);
i) 2nd floor 113, with a VPT of €144,840.00 (one hundred and forty-four thousand eight hundred and forty euros);
j) 2nd floor 3, with a VPT of €192,280.00 (one hundred and ninety-two thousand two hundred and eighty euros);
k) 2nd floor D, with a VPT of €81,600.00 (eighty-one thousand six hundred euros);
l) 2nd floor E, with a VPT of €191,950.00 (one hundred and ninety-one thousand nine hundred and fifty euros);
m) 3rd floor 102, with a VPT of €84,920.00 (eighty-four thousand nine hundred and twenty euros);
n) 3rd floor 108, with a VPT of €102,910.00 (one hundred and two thousand nine hundred and ten euros);
o) 3rd floor 113, with a VPT of €152,020.00 (one hundred and fifty-two thousand and twenty euros);
p) 3rd floor 3, with a VPT of €184,060.00 (one hundred and eighty-four thousand and sixty euros);
q) 3rd floor D, with a VPT of €81,480.00 (eighty-one thousand four hundred and eighty euros);
r) 3rd floor E, with a VPT of €195,340.00 (one hundred and ninety-five thousand three hundred and forty euros);
s) 4th floor D, with a VPT of €68,990.00 (sixty-eight thousand nine hundred and ninety euros);
t) 4th floor E, with a VPT of €159,510.00 (one hundred and fifty-nine thousand five hundred and ten euros);
u) 4th floor 102, with a VPT of €70,090.00 (seventy thousand and ninety euros);
v) 4th floor 113, with a VPT of €70,830.00 (seventy thousand eight hundred and thirty euros);
w) 4th floor 3, with a VPT of €154,460.00 (one hundred and fifty-four thousand four hundred and sixty euros);
x) ST 102, with a VPT of €44,740.00 (forty-four thousand seven hundred and forty euros);
y) ST 108, with a VPT of €55,630.00 (fifty-five thousand six hundred and thirty euros);
z) ST 113, with a VPT of €72,130.00 (seventy-two thousand one hundred and thirty euros);
aa) ST 116, with a VPT of €70,700.00 (seventy thousand and seven hundred euros);

22.4. None of the floors described therefore has a taxable property value greater than €1,000,000.00;

22.5. For the purposes of Item No. 28 of the General Schedule of Stamp Duty (GSSD), the Tax and Customs Authority considered the sum of the VPT of the various floors with residential use, corresponding to the total value of €3,157,820.00;

22.6. On the basis of this value, the Tax and Customs Authority proceeded with the assessments of Stamp Duty of item 28.1 of the GSSD, now contested by the Applicant, at the rate of 1%, in the total amount of €31,578.20;

22.7. This amount has already been paid in full, in three installments, by the Applicant.

b. Facts Not Established

  1. Of the facts relevant to the decision of the case, those which are not described in the facts stated above were not established.

c. Reasoning of the Decision on Factual Matters

  1. The facts were established on the basis of documentary evidence.

III. Legal Matters

  1. With the relevant facts established, it is verified that the present case involves exclusively a matter of law.

  2. The first issue to be decided by the Tribunal is whether the taxable property value (VPT) to be considered for the application of Item 28 of the GSSD, in the case of property not constituted under a condominium ownership regime, is the VPT attributed to each floor or unit with independent use and residential use, or whether it is the global VPT, corresponding to the sum of the VPT of each floor or unit susceptible of independent use and with residential use.

  3. Item 28 of the GSSD, now under consideration, was added by Law No. 55-A/2012, of 29 October, with the following wording:

"28 – Ownership, usufruct or right to use urban properties whose taxable property value recorded in the property register, in accordance with the Code of Municipal Property Tax (CMPT), is equal to or greater than €1,000,000.00 – on the taxable property value for the purposes of the Municipal Property Tax:

28.1 – For property with residential use – 1%

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

  1. The Code of Stamp Duty (CSD) and its General Schedule, as amended by Law No. 55-A/2012, of 29 October, does not clarify the meaning of the expression "property with residential use".

  2. Article 68, No. 2 of the CSD, as amended by Law No. 55-A/2012, of 29 October, provides that "[m]atters not regulated in this Code relating to item No. 28 of the General Schedule shall be governed, subsidiarily, by the provisions of the Code of Municipal Property Tax".

  3. The legislator, in No. 1 of Article 2 of the Code of Municipal Property Tax, adopts the following concept of property:

"For the purposes of this Code, property is any part of land, encompassing waters, plantations, buildings and constructions of any nature incorporated or situated thereon, with the character of permanence, provided that it forms part of the assets of a natural or legal person and, in normal circumstances, has economic value, as well as waters, plantations, buildings or constructions, in the circumstances above, endowed with economic autonomy in relation to the land where they are located, although situated in a part of land that constitutes an integral part of diverse assets or does not have a patrimonial nature."

  1. As observed by SILVÉRIO MATEUS and CURVELO DE FREITAS, "No. 1 of this article [Article 2] provides for the existence of three requirements necessary for the concept of property to apply, namely, the physical structure, patrimonial nature and economic value" (Taxes on Real Estate Property. Stamp Duty, Lisbon, Engifisco, 2005, p. 101, note No. 1.1).

  2. Thus, floors or units of independent use of property registered in the urban property register as full property are not excluded from the concept of property, relevant for the purposes of the Code of Municipal Property Tax and the Code of Stamp Duty.

  3. No. 4 of Article 2 of the Code of Municipal Property Tax further provides that:

"for the purposes of this tax [Municipal Property Tax], each autonomous unit, under condominium ownership, is considered to constitute a property".

  1. Once again, this provision does not result in the exclusion from the concept of property of floors or units of independent use of property in full ownership.

  2. In No. 4 of Article 2 of the Code of Municipal Property Tax the legislator makes clear, unequivocally, that autonomous units of properties registered under condominium ownership are considered properties for the purposes of Municipal Property Tax.

  3. But this does not authorize the interpreter to make an a contrario interpretation, in the sense of excluding from the concept of property the units of independent use of properties registered in full ownership.

  4. It seems, in fact, that the rationale of No. 2 of Article 4 is precisely to permit an extensive interpretation of the provisions of No. 1 of Article 2, so as to include in the concept of property the units (fractions, floors or divisions) of independent use.

  5. This interpretation appears, moreover, to be confirmed by the provisions of No. 3 of Article 12 of the Code of Municipal Property Tax, which is transcribed below:

"Each floor or part of a property susceptible of independent use is considered separately in the property registration, which also identifies the respective taxable property value."

  1. From which it follows that units of independent use of properties registered in full ownership are evaluated on the basis of the criteria provided for in Article 38 of the Code of Municipal Property Tax.

  2. Article 6 of the Code of Municipal Property Tax lists the types of urban properties and provides that "[r]esidential, commercial, industrial or service properties are buildings or constructions licensed for such purpose or, in the absence of a license, which have as their normal purpose each of these uses".

  3. As stated in the Arbitral Decision delivered in Case No. 50/2013,

"From this we can conclude that, from the legislator's perspective, what matters is not the legal-formal rigor of the concrete situation of the property, but rather its normal use, the purpose for which the property is intended. We further conclude that, for the legislator, the situation of the property in vertical ownership or condominium ownership was not relevant, since no reference or distinction is made between one and the other. What is relevant is the material reality underlying its existence as an urban property and its use."

  1. In considering the literal element of the interpretation, we find that, in the final part of the provision contained in item 28.1 of the GSSD, it is determined that the taxable value corresponds to the "taxable property value used for the purposes of Municipal Property Tax".

  2. The Tax and Customs Authority considers as the relevant VPT for the application of item 28.1 of the GSSD the global VPT of the property registered in full ownership, in manifest contradiction with the practice of a plurality of assessment acts relating to the various floors susceptible of independent use.

  3. From the literal element of the interpretation, in conjunction with the systematic and teleological elements, it follows that the taxable property value to be considered for the purposes of applying item 28.1 of the CSD is that corresponding to each of the units susceptible of independent use.

  4. And it appears to us that this is also the understanding most consistent with the principle of the prevalence of substance over form.

  5. Furthermore, this is the meaning most consistent with the constitutional principle of equality, enshrined in Article 13 of the Constitution of the Portuguese Republic.

  6. The Tax and Customs Authority, by applying item 28.1 of the GSSD in a differentiated manner depending on whether the residential unit is inserted in a property registered under condominium ownership or full ownership, is making a formal criterion of differentiation prevail, to the detriment of the material equality required by the Fundamental Law.

  7. From the perspective of contributive capacity, as an operative criterion of the principle of equality, which postulates material equality, it is irrelevant whether the property is in vertical ownership or condominium ownership – the evidenced contributive capacity is the same, and the application of item 28.1 of the GSSD should be made in the same terms.

  8. However, the arguments of the Applicant that refer to the alleged unconstitutionality of the rule contained in item 28.1 of the GSSD, on the grounds of violation of the principles of legal certainty and non-retroactivity, are not sustainable, since there is no retroactive application of fiscal rules nor a retrospective application that may excessively postpone the expectations of citizens.

  9. Thus, with regard to properties registered in full ownership, only the floor or unit susceptible of independent use with residential use, the VPT of which is equal to or greater than €1,000,000.00, is subject to Stamp Duty through the application of item 28.1 of the GSSD.

  10. Given that, in the present case, none of the floors for which Stamp Duty was assessed through the application of Item 28.1 of the GSSD has a VPT equal to or greater than €1,000,000.00, it is concluded that the respective assessment acts are illegal.

  11. Concluding on the illegality of the contested assessment acts in the case, the Tribunal must decide a second issue, concerning whether compensatory interest is or is not due to the Applicant.

  12. No. 1 of Article 43 of the General Tax Law provides that:

"[c]ompensatory interest is due when it is determined, in an administrative appeal or judicial challenge, that there was an error attributable to the services which resulted in payment of the tax debt in an amount greater than legally due".

  1. It is considered that "[t]he error attributable to the services that performed the assessment is demonstrated when they proceed with an administrative appeal or challenge of that same assessment and the error is not attributable to the taxpayer" (DIOGO LEITE DE CAMPOS, BENJAMIM SILVA RODRIGUES, JORGE LOPES DE SOUSA, General Tax Law. Annotated and Commented, 4th ed., Lisbon, 2012, p. 342).

  2. The law further provides, in Article 100 of the General Tax Law, that:

"The tax administration is obliged, in the event of total or partial upholding of administrative appeals or remedies, or of legal proceedings in favor of the taxpayer, to immediately and fully restore the situation that would exist if the illegality had not been committed, including the payment of compensatory interest, in accordance with the terms and conditions provided for in the law."

  1. As stated in the Decision of the Supreme Administrative Court of 11/02/2009, appeal No. 1003/08,

"Having the legislator adopted compensation in the form of compensatory interest, following an annulment decision of an assessment act, presuming the patrimonial harm resulting from the deprivation of the amount paid following an illegal assessment act, the interpretation of Article 100 of the General Tax Law in accordance with the Constitution is that it recognizes the right to compensatory interest from the date on which the deprivation of the illegally assessed amount occurred and not only from the end of the term for execution of the annulment decision."

  1. In the present case, we are faced with a plurality of Stamp Duty assessments founded on errors attributable to the services, which resulted in undue payments of tax installments by the Applicant, and the right to compensatory interest is recognized for the Applicant.

  2. In accordance with No. 1 of Article 61 of the Code of Tax Procedure and Process (CTPP), "[i]nterest is calculated from the date of undue payment of the tax until the date of processing of the respective credit note, in which it is included".

IV. Decision

In these terms, and with the grounds set forth, the Arbitral Tribunal decides:

a) To uphold the request for annulment, with all legal effects, of the contested assessment acts, and to condemn the Respondent to refund the tax installments unduly paid by the Applicant;

b) To uphold the request for condemnation of the Respondent to payment of compensatory interest, at the legal rate, in accordance with the provisions of Article 43 of the General Tax Law and Article 61 of the Code of Tax Procedure and Process.

V. Case Value

The value of the case is fixed at €31,578.20, as provided for in Article 97-A, No. 1, paragraph (a), of the Code of Tax Procedure and Process and in Article 3, No. 2, of the Regulation of Costs in Tax Arbitration Cases.

VI. Costs

In accordance with Article 22, No. 4, of the Legal Framework for Arbitration in Tax Matters, the amount of costs is fixed at €1,836.00, in accordance with Table I attached to the Regulation of Costs in Tax Arbitration Cases, to be borne by the Respondent.

Lisbon, 17 December 2014

The Arbitrator,

Paulo Nogueira da Costa

Frequently Asked Questions

Automatically Created

Does Stamp Tax (Imposto do Selo) under Verba 28.1 apply to individual property units valued below €1 million?
According to the Tax Authority's interpretation upheld in this case, Stamp Tax under Verba 28.1 of the TGIS does not apply to individual property units based on their separate values. Instead, the €1 million threshold applies to the taxable property value of the entire property as registered. Even if individual floors or units within a property in full ownership are valued below €1 million, if the total property value equals or exceeds €1 million, Verba 28.1 applies to the whole property. The Tax Authority emphasized that the legal provision expressly refers to 'the property value of each property' rather than 'distinct parts' or individual units, making the unified property the relevant taxation unit regardless of internal divisions.
Can properties in total ownership with independently usable parts be taxed differently from horizontal property units under Portuguese Stamp Tax?
Yes, under the Tax Authority's interpretation, properties in total (full) ownership with independently usable parts are taxed differently from horizontal property (condominium) units under Portuguese Stamp Tax. While horizontal property units are separately registered with individual property values and thus individually assessed against the €1 million Verba 28.1 threshold, properties registered as full ownership maintain their legal unity regardless of containing independently usable floors or units. The Tax Authority argued that the unity of urban property in vertical ownership is not affected by the independent economic use potential of its constituent parts. This distinction means that a building with multiple units registered as full ownership is treated as a single property for Stamp Tax purposes, whereas the same building configured as horizontal property would have each unit assessed separately.
What legal principles were invoked to challenge Stamp Tax assessments under Verba 28 of the General Stamp Tax Table?
The applicant invoked several constitutional and legal principles to challenge the Stamp Tax assessments under Verba 28 TGIS: (1) the principle of proportionality, arguing the tax burden was disproportionate; (2) the principle of legal certainty, contending the Tax Authority's interpretation created unpredictability; (3) the principle of non-retroactivity, challenging the application of Law No. 55-A/2012 of 29 October; (4) the principle of equality and contributive capacity, arguing that the taxation discriminated unfairly by treating economically similar situations (independent units in full ownership versus horizontal property) differently. The applicant also claimed the Tax Authority applied an extensive, discriminatory, and illegal interpretation of Verba 28.1, adapting it to administrative convenience rather than fiscal reality, thereby violating the principle of legality enshrined in Article 103(2) of the Portuguese Constitution.
How does the CAAD arbitral tribunal handle cumulative claims for annulment of multiple Stamp Tax assessments?
The CAAD arbitral tribunal handled cumulative claims for annulment of multiple Stamp Tax assessments by applying Article 3, No. 1 of the Legal Framework for Arbitration in Tax Matters (RJAT), which permits cumulation of claims. Initially, the applicant challenged 27 first-installment assessments totaling €10,600.78. The tribunal subsequently admitted two extensions of the claim through orders dated 03/11/2014 and 09/12/2014, incorporating second-installment assessments (26 documents totaling €20,977.64) and third-installment assessments (27 documents totaling €31,578.20), all relating to the same factual circumstances and legal grounds. This procedural approach allowed efficient consolidation of related stamp duty challenges arising from the same property and legal issue, avoiding fragmented litigation while respecting the principle of procedural economy. The tribunal also requested annulment of subsequent future installment assessments.
Is the Tax Authority entitled to apply an extensive interpretation of Verba 28 TGIS to properties with separate patrimonial tax values?
The Tax Authority maintains it is not applying an extensive interpretation of Verba 28.1 TGIS but rather a literal and legally mandated interpretation. The Authority argues that the provision's express wording refers to 'the property value of each property,' not to 'distinct parts' or individual units with separate patrimonial tax values. According to this view, treating independently usable units within a property registered as full ownership as separate properties would constitute an impermissible restrictive interpretation violating the constitutional principle of legality under Article 103(2) of the Portuguese Constitution. The Authority contends that the unity of urban property in vertical ownership composition remains legally intact regardless of whether constituent floors or units are capable of independent economic use. Any interpretation fragmenting this unity based on separate matrix assessments would exceed judicial interpretative powers and effectively rewrite the legislative provision, which the Authority argues falls outside permissible legal interpretation.