Process: 466/2016-T

Date: December 15, 2016

Tax Type: Selo

Source: Original CAAD Decision

Summary

Process 466/2016-T addresses a critical Stamp Tax dispute concerning the application of Item 28.1 of the General Table of Stamp Tax (TGIS) to properties with multiple independently usable units. The claimant, A.– S.A., challenged 25 Stamp Tax assessments totaling €12,225.20 levied on 25 independent units of a single urban property for 2015. The central legal question involves whether the €1,000,000 patrimonial tax value (PTV) threshold applies to each individual unit or the aggregate property value. The claimant argued that IS should only apply when an individual unit reaches the €1,000,000 threshold, analogous to autonomous fractions in horizontal ownership (condominiums). This interpretation relies on the subsidiary application of Municipal Property Tax (IMI) rules per Article 67(2) of the Stamp Tax Code, emphasizing substance over form. The Tax Authority contended that the threshold applies to the total property value (€1,222,520), triggering IS liability on all units. The arbitral tribunal, established under the RJAT framework, had previously ruled favorably for the claimant in case 748/2014-T for the same property covering 2012-2013. The claimant sought annulment of all 25 assessments, reimbursement of €5,174.43 already paid, and compensatory interest for unduly paid amounts. This case exemplifies the ongoing interpretative conflict between tax authorities and taxpayers regarding vertical ownership structures and highlights the importance of CAAD arbitration in resolving complex Stamp Tax disputes involving high-value real estate.

Full Decision

ARBITRAL DECISION

I – REPORT

1.1. A.– S.A. (hereinafter designated as the "Claimant"), legal entity no. …, with registered office at Rua …, no. …, …, …-… Porto, having been notified of 25 Stamp Tax (IS) assessments relating to 25 units capable of independent use of the urban property registered in the urban cadastre under article …, for the year 2015, made pursuant to item 28.1 of the General Table of Stamp Tax (TGIS), in the total amount of €12,225.20, submitted, on 29/7/2016, a request for establishment of an arbitral tribunal and arbitral ruling, in accordance with the provisions of article 99 of the Tax Procedure and Process Code (CPPT) and articles 2, no. 1, subparagraph a), and 10, no. 1, subparagraph a), of Decree-Law no. 10/2011, of 20/1 (Legal Framework for Arbitration in Tax Matters, hereinafter designated only as "RJAT"), in which the Tax and Customs Authority (AT) is required, in order that: it be declared "the illegality and the consequent annulment of the 25 IS assessments relating to the 25 units capable of independent use of the urban property registered in the urban cadastre under article …, for the year 2015, in the amount of €12,225.20; [the] Claimant [shall be reimbursed of] the sum of €5,174.43, relating to the undue payment of collection notes relating to the single payment of IS in relation to the unit capable of independent use "Basement" and the first installments of IS for the year 2015 in relation to the remaining units capable of independent use aforementioned, and also the remaining installments that may be paid by the Claimant during the pendency of the present proceedings, until the issuance of the arbitral decision; [...] [the] AT [shall be ordered] to pay compensatory interest to the Claimant, owed for the undue payment of the illegally issued assessments."

1.2. On 7/11/2016 the present Single Arbitral Tribunal was established.

1.3. In accordance with article 17, no. 1, of the RJAT, the AT was cited, as the respondent party, to file its answer, in accordance with and for the purposes of the aforementioned article. The AT filed its answer on 7/12/2016, having argued for the total lack of merit of the Claimant's request.

1.4. By order of 9/12/2016, the Tribunal considered, in accordance with the provisions of article 16, subparagraph c), of the RJAT, that the meeting referred to in article 18 of the RJAT was dispensable, and that the case was ready for decision. The date of 15/12/2016 was also set for the issuance of the arbitral decision.

1.5. The Arbitral Tribunal was duly constituted, is materially competent, the case does not suffer from defects that would invalidate it and the Parties have legal personality and capacity, being legitimate.

II – ALLEGATIONS OF THE PARTIES

2.1. The Claimant herein alleges, in its initial petition, that: a) "Law no. 55-A/2012, of 29 October, did not proceed with the qualification of the concepts contained in the aforementioned item no. 28.1, namely, the concept of 'property with residential use'"; b) "observing the provisions of article 67, no. 2, of the Stamp Tax Code (CIS), also amended by the aforementioned Law no. 55-A/2012, of 29 October, one concludes that there is subsidiary application of the provisions of the Municipal Property Tax (IMI) 'to matters not regulated (...) relating to item 28 (...)'"; c) "as has been the settled case law of the Arbitral Tribunal, conveyed, for example, in the Arbitral Decision issued in Case no. 132/2013-T [...], [the] autonomous parts of properties in vertical ownership with residential use should be considered as 'residential urban properties'"; d) "in the same sense, Arbitral Decision no. 50/2013-T states that, in the legislator's view, what matters is not the formal legal rigor of the concrete situation of the property but rather its normal use, the purpose to which the property is destined [...]". Being to conclude, therefore, as the case law of the Arbitral Tribunal does uniformly, by the prevalence of substance over form"; e) "now, to distinguish, in this context, properties in horizontal ownership and in full ownership with units capable of independent use (vertical ownership) would be to disregard the substance of the reality in question, which, as is demonstrated, finds no support either in item 28 of the TGIS, nor in the provisions of the Municipal Property Tax Code (CIMI)"; f) "in view of the foregoing, taking into account article 23, no. 7, of the CIS [...], it is required that, in relation to properties in full ownership with units capable of independent use allocated to residential use, the application of the rule provided for in item 28.1 of the TGIS occurs only when any one of those units individually considered has a Patrimonial Tax Value (PTV) of at least €1,000,000, in the terms that exists for an autonomous fraction of a property in horizontal ownership"; g) "for all the foregoing reasons, the IS assessments on the overall PTV resulting from the sum of the PTV of the 25 units capable of independent use corresponding to €1,222,520.00, are affected by illegality due to the absence of a legal prerequisite for the incidence of IS provided for in item 28.1 of the TGIS"; h) "it is clear [...] that the interpretation made by the AT of item 28.1 of the TGIS is contrary to law, and accordingly, the aforementioned IS assessments are affected by illegality"; i) "[within the scope of case no. 748/2014-T,] the Arbitral Tribunal has already confirmed the Claimant's understanding, having decided favorably the Request for Arbitral Ruling submitted by the Claimant in relation to the IS assessments made pursuant to item 28.1 of the TGIS in relation to the 25 units capable of independent use with reference to the years 2012 and 2013"; j) "for the exact reasons conveyed by the Arbitral Tribunal in the aforementioned decision [...] in relation to IS assessments affecting the 25 units capable of independent use with reference to the years 2012 and 2013, it must be concluded that the IS assessments affecting the (same) 25 units capable with reference to the year 2014, here in dispute, are affected by illegality due to the absence of a legal prerequisite for the incidence of IS provided for in item 28.1 of the TGIS"; l) "the claimant understands it is entitled to compensatory interest for the undue payment of illegal IS assessments".

2.2. In conclusion, the Claimant requests that "the present Request for Arbitral Ruling [be] judged well-founded, as proven and, in consequence: (i) [the] illegality [be] declared and the consequent annulment of the 25 IS assessments relating to the 25 units capable of independent use of the urban property registered in the urban cadastre under article …, for the year 2015, in the amount of €12,225.20; (ii) [the] Claimant [be] reimbursed the sum of €5,174.43, relating to the undue payment of collection notes relating to the single payment of IS in relation to the unit capable of independent use "Basement" and the first installments of IS for the year 2015 in relation to the remaining units capable of independent use aforementioned, and also the remaining installments that may be paid by the Claimant during the pendency of the present proceedings, until the issuance of the arbitral decision; [the] AT [be] ordered to pay compensatory interest to the Claimant, owed for the undue payment of illegally issued assessments."

2.3. For its part, the AT alleges, in its defense: a) that "the Claimant bases its position on decisions of the CAAD, including decisions in which it was the claimant and the decision was favorable to it. However, we continue to understand [that] item 28 of the General Table provides that stamp tax shall be levied on the property, usufruct or right of superficies of urban properties whose patrimonial tax value contained in the cadastre, in accordance with the Code of Municipal Property Tax (C.I.M.I.), is equal to or greater than €1,000,000.00"; b) that "[it results from] item 28.1 of the TGIS and from articles 2, no. 4, of the CIS, and 3, no. 3, subparagraph u), of the CIMI [that] the taxable event of the stamp tax of item 28.1 consists of property, usufruct or right of superficies of properties"; c) that "the patrimonial value relevant for purposes of the incidence of the tax is, thus, the total patrimonial tax value of the urban property and not the patrimonial value of each one of the parts that compose it, even when capable of independent use"; d) that "[it is not apparent] how the Stamp Tax assessments challenged can have violated the literal terms of item 28.1 of the General Table"; e) that "the unit of urban property in vertical ownership composed of various floors or units is not [...] affected by the fact that all or part of those floors or units are capable of independent economic use. Such property does not cease to be one only, and thus, its distinct parts are not juridically equated with autonomous fractions in the horizontal ownership regime"; f) that "any other interpretation would violate, indeed, the letter and spirit of item 28.1 of the General Table and the principle of legality of the essential elements of the tax provided for in article 103, no. 2, of the Portuguese Republic Constitution"; g) that "item no. 28 "[does not suffer from unconstitutionality because] it is not apparent [...] how the taxation in question would have violated the principle of equality"; h) that, "in conclusion, the tax acts challenged, in terms of substance, have not violated any legal or constitutional provision, and should be maintained in the legal order".

2.4. In conclusion, the AT concludes that: "a) item 28.1 of the General Table of Stamp Tax applies to urban properties with residential use; b) the patrimonial tax value equal to or greater than €1,000,000.00 upon which the application of that legal rule depends is, as clearly results from its literal terms, the patrimonial value of each property and not of its distinct parts, even if capable of independent use; c) accordingly, the stamp tax of item 28 was correctly assessed."

III – PROVEN FACTS, UNPROVEN FACTS AND RESPECTIVE GROUNDS

3.1. The following facts are considered proven:

i) The Claimant is the owner of the urban property located at Rua … to …, parish of … (…), municipality and district of Setúbal, registered in the urban cadastre under cadastral article… . As results from the respective property certificate, the aforementioned urban property is in full ownership with 25 units capable of independent use, all of them allocated to "Residential Use" (see Doc. 2 attached to the present proceedings).

ii) For each one of the units capable of independent use of the property, its respective PTV was determined separately, as provided for in the CIMI. The PTV of each one of the 25 units capable of independent use of the property in question vary between €23,210.00 and €53,860.00, being the value corresponding to the sum of the PTV (of the 25 units) of €1,222,520.00 (see table contained in point 14 of the Claimant's initial petition).

iii) On 5/4/2016, the AT proceeded to assess IS, pursuant to item 28.1 of the TGIS, for all units capable of independent use of the aforementioned property, with reference to the year 2015 (see Doc. 1 attached). The 25 IS assessments, corresponding to the 25 units capable of independent use, reach the global amount now challenged of €12,225.20. Of this amount, the global amount of €5,174.43 has been paid to date (i.e., the single payment relating to the "Basement" unit and the first payments relating to the remaining 24 units): see table contained in point 16 of the Claimant's initial petition.

iv) Disagreeing with the aforementioned assessments, the Claimant herein submitted the present request for arbitral ruling on 29/7/2016.

3.2. There are no unproven facts relevant to the decision of the case.

3.3. The facts considered pertinent and proven (see 3.1) are grounded in the analysis of the positions exposed by the parties and of the documentary evidence attached to the present proceedings.

IV – ON THE LAW

In the case now under analysis, the essential questions that arise are those of knowing: 1) whether the subjection to IS, in accordance with the provisions of item no. 28 of the TGIS, is determined by the PTV that corresponds to each one of the parts of the property with residential use, or whether, instead, it is determined by the overall PTV of the property, which would correspond to the sum of all the PTV of the floors or independent units that compose it; 2) whether, as the AT invokes, item no. 28 "[does not suffer from unconstitutionality because] it is not apparent [...] how the taxation in question would have violated the principle of equality"; 3) whether compensatory interest is owed to the Claimant herein.

Let us see then.

  1. At the origin of the first question is item no. 28 of the TGIS, added by article 4 of Law no. 55-A/2012, of 29/10, which provides as follows:

"28 – Property, usufruct or right of superficies of urban properties whose patrimonial tax value contained in the cadastre, in accordance with the Code of Municipal Property Tax (CIMI), is equal to or greater than €1,000,000.00 – on the patrimonial tax value for purposes of Municipal Property Tax (IMI): 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, contained in the list approved by decree of the Minister of Finance – 7.5%."

Law no. 55-A/2012, which entered into force on 30/10/2012, did not proceed with the qualification of the concepts contained in the aforementioned item no. 28, namely, the concept of "property with residential use". However, observing what is provided for in article 67, no. 2, of the Stamp Tax Code (CIS), also amended by the aforementioned Law no. 55-A/2012, it is verified that "to matters not regulated in the present code relating to item 28 of the General Table, the CIMI shall be applied subsidiarily." Given the doubt as to the scope of the aforementioned item, it is justified, therefore, to observe what the CIMI says.

From the reading of the CIMI it is perceived that the concept of "property with residential use" refers, naturally, to the concept of "urban property" which is defined in articles 2 and 4. On the other hand, it is verified that the determination of PTV obeys articles 38 et seq. of the CIMI.

Among the various species of "urban properties" (article 6), mention is expressly made of "residential urban properties" [see no. 1, subparagraph a)], adding then, no. 2 of the same article of the CIMI, that these "are buildings or constructions licensed for such purpose or, in the absence of a license, which have as their normal destination each one of these purposes."

If it is true that no. 4 of article 2 of the CIMI states that, "for purposes of this tax, each autonomous fraction, in the horizontal ownership regime, is deemed to constitute a property", it is also true that there is nothing in the law that points to discrimination between horizontal and vertical ownership properties as regards their identification as "residential urban properties". From this it is concluded that autonomous parts of properties in vertical ownership with residential use should be considered as "residential urban properties".

Indeed, it makes no sense to distinguish in law what the law itself does not distinguish (ubi lex non distinguit nec nos distinguere debemus). Indeed, nothing reveals, either in item no. 28, or in the provisions of the CIMI, a justification for that particular differentiation. Note in this regard what is provided for in article 12, no. 3, of the CIMI: "each floor or part of property capable of independent use is separately considered in the cadastral registration, which also discriminates its respective patrimonial tax value."

The uniform criterion that is required is, thus, the one that determines that the incidence of the rule in question takes place only when some of the parts, floors or units with independent use of property in horizontal or full ownership with residential use, possesses a PTV greater than €1,000,000.00. Setting as the reference value for the incidence of the new tax the overall PTV of the property in question does not find basis in the applicable legislation, which is the CIMI, considering the referral made by the aforementioned article 67, no. 2, of the CIS.

Thus, and observing the case now under analysis, it is verified that, as notes the Claimant, "the PTV of each one of the 25 units capable of independent use of the property in question vary between €23,210.00 and €53,860.00" – being, therefore, all units of value less than €1,000,000.00. From this it is concluded, in view of the above, that the IS referred to in item no. 28 of the TGIS should not be levied on the same, being, consequently, illegal the assessment acts challenged by the Claimant herein.

Indeed, and as well noted in the Arbitral Decision issued in proc. no. 552/2015-T, of 27/1/2016, in a case identical to the one now under analysis, "the main issue brought to the proceedings [...] is to know whether the subjection to Stamp Tax (item 28 of the TGIS) of an urban property not constituted in horizontal ownership is determined by the PTV that corresponds to each one of the units of independent use and with residential use [...], or whether it is determined by the overall PTV of the property, which would correspond to the sum of all the PTV of the floors or units of independent use and with residential use that integrate it [...]. Effectively, from a formal point of view, the AT is correct in stating that a property constituted in horizontal ownership is a distinct legal-tax reality of an urban property in vertical or full ownership. However, if no. 4 of article 2 of the CIMI establishes the legal fiction that each one of the autonomous fractions of a property constituted in horizontal ownership constitutes a property, it does not necessarily follow from this that a part of independent use of an urban property not constituted in horizontal ownership should be considered a property. If the legislator used, in the rule of item 28.1 of the TGIS, the expression 'urban property with residential use', it does not seem legitimate that the AT therein intends to include the floors or units of independent use of properties not constituted in horizontal ownership which, as it itself acknowledges, are not properties, and cannot therefore be equated with autonomous fractions of properties constituted in the horizontal ownership regime. As regards the determination of the patrimonial tax value of properties not constituted in horizontal ownership, article 7, no. 2, of the CIMI applies, but only with respect to 'urban properties with parts classifiable in more than one of the classifications of no. 1 of the previous article', in which case, in accordance with its subparagraph b) '(…) each part is valued by application of the corresponding rules, and the value of the property is the sum of the values of its parts'. And this is the only rule of the CIMI in which reference is made to the 'value [overall] of the property', without, however, this having any relevance at the level of tax assessment. Thus, from the combination of the rules of no. 2 of article 7 and of no. 1 of article 6, both of the CIMI, it results that, if an urban property not constituted in horizontal ownership integrates exclusively parts or units intended for residential use, the value of the property does not equate to the sum of its parts."

It is to be noted, lastly, that this understanding (of an infraconstitutional nature), which has been defended herein, has been upheld by the Supreme Administrative Court (STA), as can be seen from the recent Judgment no. 47/15, of 9/9/2015, in which it was pointed out, clearly, that, "when it comes to a property constituted in vertical ownership, the incidence of IS should be determined, not by the PTV resulting from the sum of the PTV of all units or floors capable of independent use (individualized in the cadastral article), but by the PTV attributed to each one of those floors or units intended for residential use." In the same sense, see, for example, the Judgments of the STA of 2/3/2016 (proc. 1354/15), and of 29/6/2016 (proc. 498/16).

  1. In this regard, what follows herein is followed, because it is fully agreed – namely, as regards the non-necessity of assessment of the rule now in question in light of the constitutional principles and parameters referred to –, with what was pertinently observed in the following recent judgment of the STA (see Judgment of 24/5/2016, issued in proc. 1344/15): "the question that it is incumbent upon to decide relates to the interpretation of items 28 and 28.1 of the General Table of Stamp Tax (TGIS) added by article 4 of Law no. 55-A/2012, of 29/10, in the sense of defining whether it applies to urban properties, with a single cadastral article but constituted by parts with independent use and allocation to which independent PTV were attributed, each one of these of value less than one million euros. This question is no longer new in this Supreme Court and has merited a uniform answer in the sense advocated in the decision appealed [or rather, and as this judgment summarizes: "When it comes to a property constituted in vertical ownership, the incidence of IS should be determined, not by the PTV resulting from the sum of the PTV of all units or floors capable of independent use (individualized in the cadastral article), but by the PTV attributed to each one of those floors or units intended for residential use."], by all, the judgment dated 04.05.2016, appeal no. 0166/16. Also, the Constitutional Court has already ruled on the constitutional dimension of this rule in light of the principles of tax equality, contributive capacity and proportionality, having concluded that, the rule contained in items 28 and 28.1 of the General Table of Stamp Tax, added by article 4 of Law no. 55-A/2012, of 29 October, insofar as it imposes annual taxation on the property of urban properties with residential use, whose patrimonial tax value is equal to or greater than €1,000,000.00, is not unconstitutional, by all the judgment 247/2016, dated 04.05.2016. In the present case there is no need for assessment of the rule in question in light of such constitutional principles and parameters, rather an interpretation that is teleological and systematic of the same is required, and therefore, the jurisprudential orientation that has been followed by the courts, and which will now be followed, does not impair the good doctrine imposed by that Constitutional Court."

  2. In light of what is provided for in no. 5 of article 24 of the RJAT – "interest is due, regardless of its nature, in accordance with the provisions of the general tax law and of the Tax Procedure and Process Code" –, it has been understood that this rule permits the recognition of the right to compensatory interest in arbitral proceedings. It is, thus, justified the analysis of the present request.

Compensatory interest is due when it is determined, in gracious reclamation or judicial challenge, that there has been error attributable to the services from which results payment of the tax debt in an amount greater than that legally due (see article 43, no. 1, of the General Tax Law – LGT). It is, therefore, a necessary condition for the attribution of the aforementioned interest the demonstration of the existence of error attributable to the services: "The right to compensatory interest provided for in no. 1 of article 43 of the LGT [...] depends on it being demonstrated in the proceedings that that act is affected by error as to the factual or legal prerequisites attributable to the AT." (Judgment of the STA of 30/5/2012, proc. 410/12); "The right to compensatory interest provided for in no. 1 of article 43 of the General Tax Law presupposes that it be determined in the proceedings that in the assessment 'there was error attributable to the services', understood as 'error as to the factual or legal prerequisites attributable to the Tax Administration'" (Judgment of the STA of 10/4/2013, proc. 1215/12).

Having occurred, as follows from what was said in point 1), error attributable to the services, this determines, in accordance with the terms previously referred to, the merits of the request for payment of compensatory interest to the Claimant.

V – DECISION

In view of the foregoing, it is decided:

– Declare the illegality of the 25 Stamp Tax assessments challenged, due to error in the legal prerequisites, determining their annulment, as well as the return of the amounts unduly paid.

– Judge the request well-founded also in the part that concerns the recognition of the right to compensatory interest in favor of the claimant.

The value of the case is set at €12,225.20 (twelve thousand two hundred twenty-five euros and twenty cents), in accordance with article 32 of the Code of Tax Procedure and Process (CPTA) and article 97-A of the Tax Procedure and Process Code (CPPT), applicable by force of the provisions of article 29, no. 1, subparagraphs a) and b), of the RJAT, and article 3, no. 2, of the Regulation of Costs in Tax Arbitration Proceedings (RCPAT).

Costs charged to the respondent, in the amount of €918.00 (nine hundred eighteen euros), in accordance with Table I of the RCPAT, given that the present request was judged well-founded, and in compliance with the provisions of articles 12, no. 2, and 22, no. 4, both of the RJAT, and the provisions of article 4, no. 4, of the aforementioned Regulation.

Notify.

Lisbon, 15 December 2016.

The Arbitrator

(Miguel Patrício)

Text drawn up by computer, in accordance with the provisions of article 131, no. 5, of the Code of Civil Procedure (CPC), applicable by referral from article 29, no. 1, subparagraph e), of the RJAT.

The drafting of the present decision is governed by the orthography prior to the Orthographic Agreement of 1990.

Frequently Asked Questions

Automatically Created

What is the Stamp Tax (Imposto do Selo) charged under Verba 28.1 of the TGIS on independently usable property units?
Stamp Tax under Verba 28.1 of the TGIS is an annual tax charged on ownership, usufruct, or surface rights of urban properties with a patrimonial tax value (VPT) equal to or exceeding €1,000,000. The rate is 1% of the PTV as registered in the cadastre according to the Municipal Property Tax Code (CIMI). The key dispute in this case involves whether the €1,000,000 threshold applies to each independently usable unit within a property in full ownership, or to the aggregate value of all units collectively, which significantly impacts tax liability for properties subdivided into multiple independent units.
Can a taxpayer challenge multiple Stamp Tax assessments on separate divisions of the same urban property through tax arbitration?
Yes, taxpayers can challenge multiple Stamp Tax assessments through a single arbitration proceeding under the RJAT (Legal Framework for Arbitration in Tax Matters) established by Decree-Law 10/2011. In this case, the claimant contested 25 separate IS assessments relating to 25 independent units of the same urban property through one arbitration request filed on July 29, 2016, pursuant to Article 99 of CPPT and Articles 2(1)(a) and 10(1)(a) of RJAT. This procedural efficiency allows taxpayers to consolidate related disputes arising from the same legal and factual grounds, avoiding the need for 25 separate proceedings.
What legal grounds support the annulment of Stamp Tax assessments under Verba 28.1 of the TGIS?
The primary legal grounds for annulment of Stamp Tax assessments under Verba 28.1 include: (1) absence of a legal prerequisite for IS incidence when individual units fail to meet the €1,000,000 PTV threshold; (2) incorrect interpretation of 'property with residential use' requiring subsidiary application of IMI rules per Article 67(2) of CIS; (3) failure to distinguish between autonomous fractions in horizontal ownership and independent units in full ownership; (4) violation of the principle that substance should prevail over form in tax law; and (5) inconsistent application of established CAAD jurisprudence recognizing that the threshold applies per independent unit rather than aggregate property value, as evidenced by prior favorable decisions.
How does the CAAD arbitral tribunal process work for contesting Stamp Tax (IS) liquidations under the RJAT?
The CAAD arbitral tribunal process begins with filing a request for arbitration under Article 10 of RJAT within the legal deadline. The tribunal is established (here on November 7, 2016), and the Tax Authority is cited to file its defense (filed December 7, 2016) per Article 17 of RJAT. The tribunal then determines whether a hearing under Article 18 is necessary or if the case can proceed directly to decision (dispensed here on December 9, 2016). The tribunal must verify its competence, party legitimacy, and absence of procedural defects before ruling. A decision deadline is set (December 15, 2016 in this case), and the final arbitral decision addresses the legality of the contested assessments, reimbursement claims, and compensatory interest.
Are taxpayers entitled to compensatory interest (juros indemnizatórios) when Stamp Tax assessments are declared illegal?
Yes, taxpayers are entitled to compensatory interest (juros indemnizatórios) when Stamp Tax assessments are declared illegal and amounts were unduly paid. This right derives from Article 43 of the General Tax Law (LGT), which establishes that the State must pay compensatory interest on tax amounts collected without legal basis. In this case, the claimant specifically requested compensatory interest on €5,174.43 already paid, plus any additional amounts paid during the proceeding. The interest compensates taxpayers for the financial loss caused by the illegal deprivation of funds, calculated from the payment date until reimbursement, and is automatically due upon annulment of the assessments without requiring separate proof of damages.