Process: 464/2014-T

Date: December 5, 2014

Tax Type: Selo

Source: Original CAAD Decision

Summary

This CAAD arbitration case (Process 464/2014-T) addresses the controversial application of Stamp Tax under Clause 28.1 of the General Stamp Tax Table (TGIS) to properties held in vertical ownership (propriedade vertical) with multiple independent units. The claimant contested Stamp Tax assessments for 2013 totaling €1,248,680.00 on a building with four floors and three divisions capable of independent use. The core legal dispute centers on whether the taxable base should be the global patrimonial tax value of the entire building or the separate values of each independent division. The claimant argued that, similar to horizontal property regimes, each floor or division capable of independent use should be taxed separately, citing Article 12(3) of the Municipal Property Tax Code (CMTRP), which mandates separate registration and distinct patrimonial values for independent units. The claimant also raised constitutional challenges based on equality and taxpaying capacity principles. The Tax Administration countered that in vertical ownership regimes, there are no autonomous fractions qualifying as separate properties under tax law, making the owner holder of a single unitary property subject to Stamp Tax on its total value. The tribunal accepted jurisdiction under LRATM Article 2(1)(a), and the claimant also sought compensation for damages from providing an allegedly undue bank guarantee to suspend enforcement. This case establishes important precedent for determining Stamp Tax obligations on high-value properties with multiple independent units under vertical ownership structures.

Full Decision

ARBITRAL DECISION

  1. Report

A - General

1.1. A, holder of tax identification number ..., with tax residence at ..., no. ..., 2nd floor, in ... (hereinafter designated "Claimant"), presented, on 03.07.2014, a request for constitution of a sole arbitral tribunal in tax matters, which was accepted, aiming, on the one hand, at the declaration of illegality of the tax acts for assessment of Stamp Tax for the year 2013 and dated 14.03.2014, referring to item 28.1 of the General Table of Stamp Tax (hereinafter "GTST"), relating to a property of which it is the owner, as will be seen further below and, on the other hand, the reimbursement of damages suffered by it due to the undue provision of a bank guarantee.

1.2. Under the terms provided in paragraph a) of no. 2 of article 6th and paragraph b) of no. 1 of article 11th of Decree-Law no. 10/2011, of 20 January, in the version given to it by article 228th of Law no. 66-B/2012, of 31 December, the Deontological Council of the Center for Administrative Arbitration (CAAD) appointed as arbitrator Nuno Pombo, and the parties, after being duly notified, did not express opposition to this appointment.

1.3. By order of 14.07.2014, the Tax and Customs Administration (hereinafter designated "Respondent") proceeded to appoint Ms. Dr. ... and Ms. Dr. ... to intervene in the present arbitral proceeding, in the name and representation of the Respondent.

1.4. In accordance with what is provided in paragraph c) of no. 1 of article 11th of Decree-Law no. 10/2011, of 20 January, in the version given to it by article 228th of Law no. 66-B/2012, of 31 December, the arbitral tribunal was constituted on 04.09.2014.

1.5. On 16.09.2014, the highest official of the Respondent's service was notified to, if wishing, within the period of 30 days, present a response and request the production of additional evidence.

1.6. On 16.10.2014, the Respondent presented its response.

B - Position of the Claimant

1.7. The Claimant is the owner of the property in full ownership or in vertical regime situated at ..., no. 14, in ..., with the registration article ..., of the new parish of ..., with 4 (four) floors and 3 (three) divisions with independent use, with a total patrimonial value of € 1,248,680.00 (one million two hundred and forty-eight thousand six hundred and eighty euros), to which corresponds the certificate that the Claimant annexes to its request as document no. 1, the content of which is deemed to be reproduced.

1.8. The Claimant was notified of the assessments of Stamp Tax (hereinafter designated "ST") which are listed in the table of article 6th of the arbitral decision request (attached under the joint designation of document no. 2 of the said request, the content of which is deemed to be reproduced), which were based on article 1st of the Stamp Tax Code (hereinafter the "STC"), on item 28.1 of the GTST, added by article 4th of Law no. 55-A/2012, of 29 October, and on sub-paragraph i) of paragraph f) of no. 1 of article 6th of the same Law, the payment deadline of which refers to the end of April 2014.

1.9. The Claimant provided a guarantee for payment of the tax required by the assessments referred to above, as evidenced by the document attached to the arbitral decision request with no. 3, the content of which is deemed to be reproduced, petitioning the reimbursement of damages suffered by it with the issuance of an undue bank guarantee.

1.10. The Claimant argues that it was necessary to separate the floors or fractions capable of independent use for purposes of ST assessment, as is the case with autonomous fractions of properties in horizontal ownership, not resulting from law the correspondence of the patrimonial tax value (hereinafter designated "PTV") of a property composed of various independent fractions to the sum of the PTV of the floors or divisions capable of independent use, particularly because, under no. 3 of article 12th of the Code of the Municipal Tax on Real Property (CMTRP), "each floor or part of property capable of independent use is considered separately in the registration record, which also discriminates its respective patrimonial tax value", being consequently the object of separate Municipal Tax on Real Property (MTRP) assessment.

1.11. The Claimant also advocates the unconstitutionality of item 28.1 GTST, for violation of constitutional principles of equality and taxpaying capacity, when interpreted in the sense intended by the Respondent.

C - Position of the Respondent

1.12. The Respondent, in its response, expresses the understanding that the situation of the Property falls literally within the provision of the item in question, adding that in properties under the regime of full ownership there are no autonomous fractions to which tax law can attribute the qualification of property, the Claimant being, consequently, the owner of a single property unitarily considered, and not of each one of the parts or fractions capable of independent use that compose it, reason why the PTV on which the incidence of the ST of item 28.1 of the GTST depends had to be, as it was, the global PTV of the Property and not that of each one of its independent parts.

1.13. The Respondent further argues that it is prohibited from interpreting item 28.1 of the GTST in a manner other than it did, since any other interpretation would violate "the letter and spirit" of the said item and the principle of legality of the essential elements of tax provided for in article 103rd, no. 2, of the Constitution of the Portuguese Republic", since "it is up to law – Law of the Assembly of the Republic and authorized Decree-Law – to establish the essential elements of the incidence of taxes".

1.14. Finally, the Respondent understands that the Claimant does not allege and much less demonstrates what prejudice it incurred as a consequence of the provision of bank guarantee presented for suspension of the tax enforcement process, reason why the prerequisites on which depend the recognition of the requested indemnification are not shown to be proved.

D - Conclusion of the Report

1.15. By order of 30.10.2014, the arbitral tribunal dispensed with the meeting provided for in article 18th of the Legal Regime of Arbitration in Tax Matters (LRATM), since the parties had already brought to the record the necessary and sufficient factual elements for rendering the decision.

1.16. The arbitral tribunal is materially competent, under the terms provided in article 2nd, no. 1, paragraph a) of the LRATM.

1.17. The parties enjoy judicial personality and capacity and have standing under article 4th and no. 2 of article 10th of the LRATM, and article 1st of Order no. 112-A/2011, of 22 March.

1.18. The cumulation of claims made in the present arbitral decision request, in deference to the principle of procedural economy, is justified since the contested assessment acts are based on the same factual basis and appeal to the application of the same rules of law, and the indemnification claim is equally acceptable, in theory, since, without prejudice to the other arguments presented in point 3.1.4. below, article 3rd of the LRATM, by expressly admitting the possibility of "cumulation of claims even if relating to different acts", accommodates, without hermeneutical abuse, the consideration of a claim that flows, in necessary terms, from the judgment that the arbitral tribunal will sustain regarding the validity of the assessments put in issue.

1.19. The proceeding does not suffer from any nullity nor have the parties raised any exceptions that prevent the consideration of the merits of the case, so the conditions are met for the rendering of the arbitral decision.

  1. Factual Matters

2.1. Established Facts

2.1.1. The Claimant is the sole owner of the Property (doc. no. 1, attached with the arbitral decision request).

2.1.2. The Property is constituted in full ownership or vertical regime, having three (and not nineteen as surely by mistake the Respondent refers in article 2nd of its response) floors or divisions capable of independent use (docs. nos. 1 and 2, attached with the arbitral decision request).

2.1.3. All floors or divisions capable of independent use are allocated to housing, there being none allocated to commerce as the Respondent surely by mistake refers in article 2nd of its response (doc. no. 1, attached with the arbitral decision request).

2.1.4. None of the floors or divisions capable of independent use has a PTV equal to or greater than € 1,000,000.00 (one million euros).

2.1.5. The Respondent, for purposes of application of item 28.1 of the GTST, proceeded to the arithmetic sum of the patrimonial values of each one of the floors or divisions (docs. nos. 1 and 2, attached with the arbitral decision request).

2.1.6. The Property has a PTV of € 1,248,680.00 (one million two hundred and forty-eight thousand six hundred and eighty euros) – (doc. no. 1, attached with the arbitral decision request).

2.1.7. The Claimant was notified of the ST assessments referred to in the table contained in article 6th of the arbitral decision request (doc. no. 2, attached with the arbitral decision request).

2.1.8. On 02.07.2014, a request for suspension of tax enforcement process entered the Respondent's services, by which the Claimant provides to the Respondent a bank guarantee in the amount of € 5,914.56 (five thousand nine hundred and fourteen euros and fifty-six cents), dated 15.05.2014 (doc. no. 3, attached with the arbitral decision request).

2.2. Unestablished Facts

The existence of damages that would have been suffered by the Claimant by virtue of the undue provision of bank guarantee was not proved.

  1. Legal Matters

3.1.1. Questions to be Decided

It results from what has been stated above that the questions to be considered are, fundamentally, two:

a) Whether a property constituted in full ownership or vertical regime, but with floors or divisions with independent uses, is a "property with housing allocation" for purposes of application of article 1st of the STC and item 28.1 of the GTST, added by article 4th of Law no. 55-A/2012, of 29 October; and

b) Whether, in case the claim for declaration of illegality is judged as founded and the consequent annulment of the contested assessments, the Claimant, within the scope of the present arbitral proceeding, may obtain the condemnation of the Respondent regarding the reimbursement of damages suffered by it with the undue provision of a bank guarantee.

3.1.2. Item 28.1 of the GTST

Law no. 55-A/2012, of 29 October, among several amendments it promoted to the STC, added, by its article 4th, item 28 to the GTST, which has the following wording:

"28 - Ownership, usufruct or surface right of urban properties whose patrimonial tax value contained in the register, under the terms of the Code of the Municipal Tax on Real Property (CMTRP), is equal to or greater than € 1,000,000 - on the patrimonial tax value used for purposes of MTRP:

28.1 - For property with housing allocation - 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, contained in the list approved by order of the Minister of Finance - 7.5%."

With the heading "transitional provisions", article 6th of Law no. 55-A/2012, of 29 October, and with relevance to what must be decided, established the following:

1 — In 2012, the following rules must be observed by reference to the assessment of stamp tax provided for in item no. 28 of the respective General Table:

a) The taxable event occurs on 31 October 2012;

b) The taxpayer of the tax is the one mentioned in no. 4 of article 2nd of the Stamp Tax Code on the date referred to in the previous paragraph;

c) The patrimonial tax value to be used in the assessment of the tax corresponds to what results from the rules provided for in the Code of the Municipal Tax on Real Property by reference to the year 2011;

d) The assessment of the tax by the Tax and Customs Authority must be carried out by the end of November 2012;

e) The tax must be paid, in a single installment, by taxpayers by 20 December 2012;

f) The applicable rates are as follows:

i) Properties with housing allocation assessed under the terms of the CMTRP: 0.5%;

ii) Properties with housing allocation not yet assessed under the terms of the CMTRP: 0.8%;

iii) Urban properties when the taxpayers who are not natural persons are resident in a country, territory or region subject to a clearly more favorable tax regime, contained in the list approved by order of the Minister of Finance: 7.5%.

As can be verified, item 28.1 refers to "properties with housing allocation". However, not only does this concept not appear defined in any provision of the STC, but also is not used in the CMTRP, a diploma to which article 67th, no. 2 of the STC expressly refers when matters not regulated in the STC are at issue regarding item 28.

3.1.3. "Vertical Ownership" and the Application of Item 28.1 of the GTST

Without prejudice to the interest, not only dogmatic, of fixing the meaning and scope of the concept of "property with housing allocation", it is necessary, first and foremost, to answer the question of whether, for purposes of application of item 28.1 of the GTST, the PTV of each one of the floors or divisions with independent use of a given building can be added, as the Respondent did regarding the Property.

a) The property register of real property in full ownership or vertical regime and the collection of the Municipal Tax on Real Property

It is important to clarify from the outset that "each floor or part of property capable of independent use is considered separately in the property register, which also discriminates its respective patrimonial tax value", as can be read in no. 2 of article 12th of the CMTRP. Also the MTRP, in properties subject to the regime of full ownership, gives typical relevance to each floor or part of property capable of independent use (article 119th, no. 1 of the CMTRP).

That is, it is clear that the legislator, in the CMTRP, did not intend to adhere to the rigor of the legal form of real property rights falling on properties, but rather to the use given to them, particularly in cases where a property, legally speaking, is composed of different floors or parts capable of independent use.

It could be said, not without reasonableness, that the legislator, for purposes of taxation in the context of MTRP, chose to confer autonomy, independence, to each one of the parts or to each one of the floors of a single property, provided that these parts and floors show themselves capable of independent use, to the point of providing for individualized registration in the property register of each one of those independent parts and of imposing on taxation in the context of MTRP a collection that is also autonomous. Despite the legal existence of a single property, it is the legislator itself that not only recommends but imposes the autonomous consideration of each one of the independent parts, for purposes of taxation of property.

b) The application of item 28.1 of the GTST to each one of the independent parts

If that is the case for MTRP, as has been attempted to be demonstrated, it cannot fail to be the same also for ST, particularly for purposes of application of item 28.1 of the GTST.

Moreover, this problem, if the tax, MTRP or ST, were purely proportional, would not exist or would be harmless, since the sum of the parts would necessarily have to correspond to the whole. That is not, however, the case here.

As has been seen, the ST which item 28.1 of the GTST appeals to is only shown to be due regarding properties with housing allocation and, in these, only those that present a PTV equal to or greater than € 1,000,000.00 (one million euros).

There is no reason for the non-consideration of the autonomy of each one of the parts capable of independent use of the Property, nor can it be concluded that, for purposes of application of item 28.1 of the GTST, a unity is imposed that, being indisputable in terms of real property rights, is not in the context of taxation on real property.

Having regard to the letter and spirit of the law, it is not seen that it is the intention of the legislator to apply item 28.1 of the GTST to each one of the parts of a property when only from the sum of all of them results a PTV equal to or greater than that of the legal threshold.

c) The ratio legis of item 28.1 of the GTST

What has been stated above does not ignore the confessed purpose of the proponent of the legislative amendment already referred to. The interpretation that is adopted here is in harmony with what appears to have been the unequivocal intention of the Government, author of the proposal that resulted in this legislative intervention.

When bill no. 96/XII (2nd) was presented and discussed in Parliament, the Secretary of State for Tax Affairs expressly stated:

"The Government proposes the creation of a special tax on residential urban properties of higher value. It is the first time that in Portugal a special tax on high-value properties intended for housing has been created. This tax will be 0.5% to 0.8% in 2012 and 1% in 2013, and will apply to houses valued at equal to or greater than 1 million euros."

Now, the Secretary of State for Tax Affairs presents this bill by referring, without equivocation, to the expression "houses". "Houses valued at equal to or greater than 1 million euros", note well.

Thus, despite the infelicity of the legislative technique adopted, it results with meridian clarity that item 28.1 of the GTST cannot be interpreted in the sense that it encompasses each one of the floors, divisions or parts capable of independent use when only from the respective sum results a PTV equal to or greater than that provided for in the same item. In truth, none of the "houses" of the Property to which we have been referring present, of itself, "value equal to or greater than 1 million euros".

d) Conclusion

From the foregoing, it is the understanding of the arbitral tribunal that the assessment of ST based on item 28.1 of the GTST regarding each one of the floors or parts capable of independent use of the Property is vitiated by illegality, since the mentioned item cannot be interpreted in the sense that it can be applied to floors or parts capable of independent use of a property in full ownership or vertical regime, when only from the sum of each one of those floors or parts can be obtained a PTV equal to or greater than € 1,000,000.00 (one million euros), the PTV of each one of the said floors or parts not exceeding that legal threshold.

The understanding of the arbitral tribunal rejects the judgment of unconstitutionality invoked by the Respondent. It is known that it is up to law – law of the Assembly of the Republic or authorized Decree-Law – the fixing of the essential elements of the incidence of taxes. However, the understanding adopted by the arbitral tribunal does not disregard the principle of legality provided for in no. 2 of article 103rd of the Constitution of the Portuguese Republic, because, as has been attempted to be demonstrated by the arguments presented above, the solution that is advocated results from normative provisions that do not suffer from any organic unconstitutionality.

3.1.4. Indemnification for Undue Provision of Guarantee

The Claimant also presents a claim for indemnification for the undue provision of guarantee.

Claims of this kind are not a novelty in CAAD, there being several decisions in the sense of admitting their cognoscibility by arbitral tribunals. As has already been stated in summary terms, this arbitral tribunal also considers itself able to know of that claim.

Paragraph b) of no. 1 of the LRATM provides that "the arbitral decision on the merits of the claim which admits no remedy or challenge binds the tax administration from the end of the deadline provided for remedy or challenge, this body having to, in the exact terms of the merits of the arbitral decision in favor of the taxpayer and until the end of the deadline provided for the spontaneous execution of judgments of tax courts, restore the situation that would exist if the tax act that is the subject of the arbitral decision had not been committed, adopting the acts and operations necessary for that purpose".

It is not ignored that the legislative authorization granted to the Government by article 124th of Law no. 3-B/2010, of 28 April, on the basis of which the LRATM was approved, determines that the tax arbitral process constitutes an alternative procedural means to the judicial challenge process and to the action for the recognition of a right or legitimate interest in tax matters. Even though paragraphs a) and b) of no. 1 of article 2nd of the LRATM base the competence of arbitral tribunals on "declarations of illegality", it seems reasonable the understanding according to which the powers that in judicial challenge proceedings are attributed to tax courts are comprised in their competencies, it being true that in judicial challenge proceedings, in addition to the annulment of tax acts, claims for indemnification can be considered, whether they relate to indemnificatory interest or to the undue provision of guarantees.

Indeed, the principle of cognoscibility of indemnification claims, in gracious settlement or in judicial proceeding, is justified whenever the damage that is intended to be compensated results from a fact imputable to the tax and customs administration. Manifestations of this principle can be found in no. 1 of article 43rd of the General Tax Law (GTL) and in no. 4 of article 61st of the Code of Procedure and Tax Proceeding (CPTP).

Specifically regarding indemnification in case of undue guarantee, article 171st of the CPTP refers, it resulting clear from that provision that the indemnification claim can be known of in the proceeding in which the legality of the enforceable debt is contested, which is necessary for reasons of procedural economy, since the right to indemnification for guarantee unduly provided depends on what is decided regarding the legality or illegality of the assessment act. Thus, it is necessary to conclude that the arbitral process must also be deemed adequate for considering the claim for indemnification for guarantee unduly provided.

The regime of the right to indemnification for guarantee unduly provided is contained in article 53rd of the GTL, which establishes the following:

Article 53rd
Guarantee in Case of Undue Provision

  1. The debtor who, to suspend execution, offers bank guarantee or equivalent shall be indemnified wholly or partially for the damages resulting from its provision, if it has been maintained for a period exceeding three years in proportion to the outcome in administrative appeal, challenge or opposition to execution that have as their object the guaranteed debt.

  2. The deadline referred to in the previous number does not apply when it is verified, in gracious settlement or judicial challenge, that there was error imputable to the services in the assessment of the tax.

  3. The indemnification referred to in number 1 has as its maximum limit the amount resulting from the application to the guaranteed value of the rate of indemnificatory interest provided for in this law and can be requested in the very proceeding of settlement or judicial challenge, or autonomously.

  4. Indemnification for provision of undue guarantee shall be paid by credit to the revenue of the tax of the year in which payment was made.

In the case sub judice, as has been stated, the contested assessment acts are illegal, since the norms on which they are based do not show themselves to be applicable to the factuality of the proceeding, error which cannot fail to be imputable to the Respondent since the said assessments are of its exclusive initiative and responsibility.

However, the arbitral tribunal cannot condemn the Respondent to pay to the Claimant an indemnification that aims to compensate it for damages that it does not quantify nor even, in the proper sense, allege.

3.1.5. Prejudiced Question: Unconstitutionality Invoked by the Claimant

The Claimant raised the question of unconstitutionality of the norms of sub-paragraph i) of paragraph f) of no. 1 of article 6th of Law no. 55-A/2012, of 29 October, and of item 28.1 of the GTST, with the wording given to it by the same diploma, if they were to be interpreted in the sense that the ST provided there could fall on each one of the independent floors or parts of the Property.

Since the arbitral tribunal did not accept the understanding of the applicability of item 28.1 of the GTST to the case at hand, the consideration of these questions and that of any other defects that may affect the contested assessments becomes prejudiced and procedurally useless.

  1. Decision

Under the terms and with the grounds set forth, the arbitral tribunal decides:

a) To judge the arbitral decision claim as founded with the consequent annulment of the contested assessments, with all legal consequences;

b) To judge as unfounded, for not being proved, the claim for indemnification for guarantee unduly provided.

  1. Value of the Proceeding

In accordance with the provisions of no. 2 of article 315th of the Code of Civil Procedure, in paragraph a) of no. 1 of article 97th-A of the CPTP and also of no. 2 of article 3rd of the Regulation of Costs in Tax Arbitration Proceedings, the value of the proceeding is set at € 12,486.80 (twelve thousand four hundred and eighty-six euros and eighty cents).

  1. Costs

For the purposes of the provisions of no. 2 of article 12 and no. 4 of article 22nd of the LRATM and of no. 4 of article 4th of the Regulation of Costs in Tax Arbitration Proceedings, the amount of costs is set at € 918.00 (nine hundred and eighteen euros), under the terms of Table I attached to the said Regulation, to be borne entirely by the Respondent.

Lisbon, 5 December 2014

The Arbitrator

(Nuno Pombo)

[1] The wording of the present arbitral decision follows the spelling prior to the Orthographic Agreement of 1990.

[2] See DAR I Series no. 9/XII -2, of 11 October, page 32.

[3] See, by way of example, the decisions rendered within the scope of proceedings numbers 233/2013-T, 112/2013-T and 36/2013-T.

Frequently Asked Questions

Automatically Created

Does Stamp Tax under Clause 28.1 TGIS apply to buildings held in vertical property (propriedade vertical) with independent units?
Yes, Stamp Tax under Clause 28.1 TGIS applies to buildings held in vertical property with independent units when the total patrimonial tax value exceeds €1,000,000. However, the key legal dispute is whether the tax applies to the entire building's global value or separately to each independent division. The Tax Administration's position is that vertical property constitutes a single unitary property for Stamp Tax purposes, unlike horizontal property (condominium) where autonomous fractions are treated as separate properties. Property owners may challenge this interpretation through CAAD arbitration, arguing that Article 12(3) of CMTRP mandates separate registration and valuation of independent units.
How is the taxable value calculated for Stamp Tax purposes when a building has multiple independent divisions under a single matrix article?
For Stamp Tax purposes under Clause 28.1 TGIS, when a building has multiple independent divisions under a single matrix article in vertical ownership, the Tax Administration calculates the taxable value based on the global patrimonial tax value of the entire property. This differs from horizontal property regimes where each autonomous fraction has its own patrimonial value for tax purposes. The controversy arises because Article 12(3) of the Municipal Property Tax Code (CMTRP) requires separate registration of each floor or division capable of independent use with discriminated patrimonial values, yet the Tax Administration applies Stamp Tax on the aggregate value, potentially resulting in higher tax liability than if units were held in horizontal ownership.
Can a property owner challenge Stamp Tax assessments on high-value properties through CAAD tax arbitration?
Yes, property owners can challenge Stamp Tax assessments on high-value properties through CAAD (Centro de Arbitragem Administrativa) tax arbitration under Article 2(1)(a) of the Legal Regime of Arbitration in Tax Matters (LRATM). Challenges may be based on: (1) incorrect interpretation of Clause 28.1 TGIS regarding vertical versus horizontal property treatment; (2) improper calculation of taxable base when multiple independent units exist; (3) constitutional violations of equality and taxpaying capacity principles; (4) violation of tax legality principles under Article 103(2) of the Portuguese Constitution. Property owners may also cumulate claims for compensation for damages from providing bank guarantees, though they must prove actual prejudice suffered.
What are the legal grounds for declaring the illegality of Stamp Tax liquidation acts under Verba 28 of the General Stamp Tax Table?
Legal grounds for declaring illegality of Stamp Tax liquidation acts under Verba 28 of the General Stamp Tax Table include: (1) improper determination of the taxable base by aggregating values of independent divisions rather than treating them separately per CMTRP Article 12(3); (2) violation of the equality principle when properties in vertical ownership are taxed differently than equivalent horizontal property arrangements; (3) infringement of taxpaying capacity principles when tax burden doesn't reflect actual economic capacity; (4) breach of tax legality principles under Article 103(2) of the Portuguese Constitution if the interpretation exceeds statutory authorization; (5) misapplication of Clause 28.1 TGIS added by Law 55-A/2012 when independent units exist. The burden is on the taxpayer to demonstrate legal error in the assessment.
Is the property owner entitled to compensation for damages from an undue bank guarantee provided in connection with contested Stamp Tax assessments?
Property owners may be entitled to compensation for damages from an undue bank guarantee provided in connection with contested Stamp Tax assessments, but only if specific prerequisites are met. Under LRATM Article 3, indemnification claims can be cumulated with challenges to assessment acts. However, the taxpayer must allege and demonstrate actual prejudice suffered as a consequence of providing the guarantee, including specific financial losses such as guarantee fees, interest costs, or opportunity costs. The Tax Administration argues that merely providing a guarantee without proving concrete damages is insufficient for compensation. Entitlement depends on: (1) successful challenge to the underlying tax assessment proving it was illegal; (2) proof of causation between the illegal assessment and guarantee provision; (3) quantifiable financial harm beyond normal guarantee costs.