Process: 470/2016-T

Date: April 6, 2017

Tax Type: Selo

Source: Original CAAD Decision

Summary

In Process 470/2016-T, a real estate investment fund challenged Stamp Tax assessments under Clause 28.1 of the General Table of Stamp Tax (TGIS) on building land valued over €1 million. The fund argued that 'terrenos para construção' (building land) should not be subject to this solidarity tax, which targets residential properties, because building land cannot be used for housing until construction is completed. The Applicant contended that ownership of land held as inventory for resale does not demonstrate the superior contributory capacity that Clause 28.1 was designed to tax. Additionally, the fund claimed applying this tax to building land violates constitutional principles of equality and taxpaying capacity (Articles 13 and 104(3) of the Portuguese Constitution). The Tax Authority countered that building land with residential purpose attributed in tax evaluations falls within Clause 28.1's scope, arguing the provision references 'properties with residential purpose' rather than 'residential properties.' The Authority relied on the IMI Code's evaluation methodology, which applies purpose coefficients to building land based on authorized construction. This case raised fundamental questions about the interpretation of Clause 28.1 TGIS, the distinction between property categories for tax purposes, and whether wealth taxation should extend to assets held as business inventory rather than for personal use.

Full Decision

ARBITRAL DECISION

I. REPORT

1.1. A…, S.A., legal entity number…, hereinafter referred to as "Applicant," with registered office at… number… …, …-… Lisbon, acting on behalf of B…- Real Estate Investment Fund Closed-ended, legal entity number…, has, pursuant to article 2, paragraph 1, letter a), and article 10, paragraphs 1 and 2, both of Decree-Law No. 10/2011, of January 20 ("RJAMT") and articles 1 and 2 of Ordinance No. 112-A/2011, of March 22, requested the constitution of an Arbitral Tribunal to rule on the illegality of tax assessment acts for Stamp Tax issued by the Tax and Customs Authority, pursuant to item 28.1 of the General Table of Stamp Tax ("TGIS"), relating to the year 2015, identified by documents No. 2016…, No. 2016…, No. 2016…, No. 2016…, No. 2016…, and No. 2016…, and regarding the properties described below.

1.2. The Tax and Customs Authority is made respondent (hereinafter referred to as "Respondent").

1.3. The request for constitution of the arbitral tribunal was accepted by the President of CAAD and automatically notified to the Tax and Customs Authority on September 5, 2016.

1.4. In accordance with the provision in letter a) of paragraph 2 of article 6 and letter b) of paragraph 1 of article 11 of Decree-Law No. 10/2011, of January 20, as amended by article 228 of Law No. 66-B/2012, of December 31, the Deontological Council appointed the signatory as arbitrator of the sole arbitral tribunal, who accepted the appointment within the applicable period and notified the parties of this appointment on October 20, 2016, with the parties manifesting no objection to the appointment.

1.5. In accordance with the provision in letter c) of paragraph 1 of article 11 of Decree-Law No. 10/2011, of January 20, as amended by article 228 of Law No. 66-B/2012, of December 31, the sole arbitral tribunal was constituted on November 7, 2016.

1.6. In the Arbitral Application submitted by it, the Applicant invoked, in summary, the following:

a) Through item 28 of the TGIS, the legislator intended to establish a "special taxation" that applies only to urban properties valued above one million euros;

b) From a teleological perspective, said item aimed to tax the wealth and economic capacity of taxpayers;

c) The Applicant, given the activity it conducts, is owner of multiple properties intended for resale, whereby the ownership of the right of property over these properties – namely, "land for construction" – cannot ever represent superior taxpaying capacity of the Applicant, as the Tax and Customs Authority claims;

d) The right of property over these properties does not in itself evidence superior taxpaying capacity above the average that could legitimize the imposition of a "solidarity tax" such as that resulting from item 28.1 of the TGIS;

e) Thus, the Stamp Tax provided in said item cannot apply to the ownership of properties acquired by the Applicant within its activity, as described above, in that in these factual situations the underlying principles of taxation are not met;

f) In the present case, as results from the property records of the properties subject to Stamp Tax assessments in question, the same were registered in the tax register as "land for construction";

g) However, properties registered in the tax register as land for construction cannot be subsumed in the concept of "properties with residential purpose" and, consequently, are not included within the scope of objective incidence of item 28 of the TGIS;

h) Subsidiarily, and without prejudice to the foregoing, the Applicant submits that the special taxation provided in item 28.1 of the TGIS, when applied to "land for construction," violates the basic principle of equality enshrined in article 13 of the Constitution of the Portuguese Republic and, in parallel, violates the principle of tax equality and taxpaying capacity enshrined in article 104, paragraph 3 of the same instrument;

i) The Constitutional Court has already ruled on the conformity of item 28.1 of the TGIS with the Constitution of the Portuguese Republic – see, in particular, Decision No. 590/2015, of November 11, 2015 and Decision No. 692/2015, of December 16, 2015;

j) The aforementioned constitutional jurisprudence cannot, however, be considered in the present proceedings, in that it concerns the assessment of the (un)constitutionality of the norm when applied to "residential properties" – and not when applied to "land for construction," as the properties analyzed here;

k) "Land for construction" does not appear capable of being used for housing and would only be so if and when the construction authorized and intended for it is built thereon – in which case they would no longer be "land for construction" but another type of urban property, namely "residential," "commercial, industrial or for services," or "other" (see article 6 of the IMI Code);

l) In these terms, the Applicant submits that the request for declaration of illegality of the Stamp Tax assessment acts in question should be upheld and, consequently, the tax acts constituting its object be annulled, relating to the Stamp Tax assessments identified above, for breach of law, for errors in the factual and legal premises, and that the Tax and Customs Authority be condemned to reimburse the Applicant for the amount of the tax paid, or to be paid, relating to the assessments in question, plus indemnificatory interest at the legal rate, until full reimbursement of the amount owed and calculated on the tax;

m) Subsidiarily, and without dispensing with the foregoing, the Applicant requests the inapplication, in the concrete case, of item 28 of the General Table of Stamp Tax, for manifest unconstitutionality, for violation of the constitutional principle of equality (see article 204 of the Constitution of the Portuguese Republic) and, consequently, declares the illegality of the Stamp Tax assessment acts in question, because based on unconstitutional norms, and the same be promptly annulled, with all legal consequences.

1.7. The Respondent presented a Response, defending through impugnation, alleging, to the effect of dismissing the arbitral ruling request, in summary, the following:

a) What is at issue in the present proceeding are assessments resulting from direct application of the legal norm, and consisting of objective elements, without any subjective or discretionary appraisal;

b) Consulting the tax records of the urban properties underlying these assessments, it is verified that land for construction is dedicated to housing;

c) Urban properties that are land for construction and to which residential purpose has been attributed in the course of their respective evaluations, as appearing in their respective tax registers, are subject to Stamp Tax;

d) The fact that in the tax base norm – item 28.1 of the TGIS – the property with residential purpose was identified in place of residential property appeals to the purpose coefficient that applies, indistinctly, to all urban properties;

e) There being no definition in Stamp Tax law of what is meant by "urban property," "land for construction," and "residential purpose," it is necessary to resort subsidiarily to the IMI Code to obtain a definition permitting assessment of possible subjection to Stamp Tax, in accordance with the provision of article 67, paragraph 2 of the Stamp Tax Code as amended by Law No. 55-A/2012, of October 29;

f) The legislator chose to determine the application of the methodology for evaluating properties in general to the evaluation of 'land for construction,' as results from the expression 'value of authorized buildings' referred to in article 45, paragraph 2 of the IMI Code and applying to it, consequently, the purpose coefficient provided in article 41 of the IMI Code;

g) Wherefore, for purposes of determining the taxable patrimonial value of land for construction, the application of the purpose coefficient in evaluation is clear;

h) In the property records of the properties in question, the property type is "plot of land for construction";

i) In the present case, we are dealing with a plot of land for urban construction, with the areas of building footprint and construction clearly defined and identified in the urban property records;

j) For tax purposes, the properties are land for construction, in that capacity they were acquired and thus are registered in the property register, therefore, they are undoubtedly plots of land for construction, more precisely urban properties with residential vocation;

k) It is noted that the legislator does not refer to "properties intended for housing," having opted for the concept "residential purpose," an expression different and broader, whose meaning is found in the need to integrate other realities beyond those identified in article 6, paragraph 1, letter a) of the IMI Code;

l) Item 28 of the TGIS is a general and abstract norm, applicable indistinctly to all cases in which the factual and legal premises are met;

m) Furthermore, well-founded reasons also with constitutional basis justified the creation of the contested norm, namely respect for the principles of proportionality and taxpaying capacity;

n) The Administration is subject to law and right and its organs and agents must be the first to comply therewith, and therefore cannot be required to pronounce on the legislator's choices, since these, once enacted into law, are the regulatory discipline within which it exercises its functions in pursuit of the public interest;

o) That is, bound by the principle of legality, the Tax Administration cannot, by force thereof, disapply norms based on the interpretation it makes as to their unconstitutionality (articles 266, paragraph 2 of the Constitution, 3, paragraph 1 of the Code of Administrative Procedure and 55 of the General Tax Law), which has repercussions, particularly regarding the request for indemnificatory interest;

p) The tax legislator considered that ownership, usufruct, or right of superficies of a residential property or of land for construction whose building, authorized or intended, is for housing, of taxable patrimonial value equal to or exceeding €1,000,000.00 represented a manifestation of wealth and was capable, in itself, of revealing significant taxpaying capacity, and therefore caused item 28.1 of the TGIS to apply to the possession of a certain type of properties, in contrast to labor income and pensions, already affected by other tax measures;

q) In these terms, the assessments now impugned remain entirely valid and lawful, concluding to the legality thereof;

r) Since the majority of the grounds of the present arbitral ruling request are based on the (alleged) constitutional non-conformity of the aforementioned Item 28.1 of the Stamp Tax Code, if the Arbitral Tribunal should come to accept the Applicant's claim and, inherently, refuse to apply this norm on the grounds of its unconstitutionality, the Respondent requests, appealing to the provision of article 280, paragraph 3, of the Constitution of the Portuguese Republic and article 72, paragraph 3, of the Constitutional Court Law, that it be determined that the Public Prosecutor's Office be notified of the arbitral decision, in order to fulfill its legal prerogatives.

1.8. By order of December 13, 2016, this Arbitral Tribunal, based on the principles of tribunal autonomy in process management, celerity, simplification and procedural informality (articles 19, paragraph 2, and 29, paragraph 2, of the Decree-Law on Arbitration in Tax Matters), and having in account that no exceptions were raised, decided to dispense with the holding of the meeting provided in article 18 of the Decree-Law on Arbitration in Tax Matters and determined that the proceeding continue with optional written submissions, to be presented by the parties in the concurrent period of 20 days, as provided in article 91, paragraph 5, of the Code of Administrative Procedure for Tax Matters, applicable by force of the provision in article 29, paragraph 1, letter c) of the Decree-Law on Arbitration in Tax Matters, and set April 7, 2017 as the deadline for issuing the arbitral decision.

1.9. The Parties did not present final submissions.

II. ADMISSIBILITY RULING

2.1. No exceptions were raised.

2.2. The Parties have legal personality and capacity, are legitimate regarding the arbitral ruling request and are duly represented, in accordance with the provisions of articles 4 and 10 of the Decree-Law on Arbitration in Tax Matters and article 1 of Ordinance No. 112-A/2011, of March 22.

2.3. There are no defects affecting validity, therefore it is necessary to decide on the merits.

III. MERITS

III.1. FACTS

§1. Proven Facts

The following facts are deemed proven:

a) The Applicant, within the scope of its activity, is owner of various properties, including residential properties, commercial properties, and land for construction;

b) In this context, it was notified of the acts of assessment of Stamp Tax in question, issued pursuant to item 28.1 of the TGIS, with reference to the year 2015 – acts of assessment identified by documents No. 2016…, No. 2016…, No. 2016…, No. 2016…, No. 2016…, and No. 2016…;

c) The assessments under analysis relate to the urban property with tax identification number…, of the parish of…, municipality of Oeiras and district of Lisbon and to the urban property with tax identification number…, of the parish of…, municipality of Oeiras and district of Lisbon;

d) As results from the property records of the properties under analysis, subject to the Stamp Tax assessments in question, the same were registered in the tax register as "land for construction";

e) The Applicant proceeded to pay in full and timely manner the Stamp Tax relating to the assessments mentioned above.

§2. Unproven Facts

No proof was made that the land for construction in question in the proceeding has construction, authorized or intended, for housing.

§3. Reasoning on the Factual Matter

Regarding the proven factual matter, the Tribunal's conviction was based on free assessment of the positions taken by the Parties on factual matters and on the content of the documents attached to the proceeding, not contested by them.

III.2. LAW

§1. Issues to be Decided

In the case sub judice, several questions are raised, all relating to the application of Item 28.1 of the General Table of Stamp Tax, which, at the date of the facts, provided for taxation of the «[28] Ownership, usufruct or right of superficies of urban properties whose taxable patrimonial value contained in the tax register, in accordance with the Municipal Property Tax Code (CIMI), is equal to or exceeding €1,000,000 – on the taxable patrimonial value used for IMI purposes: 28.1 – Per residential property or per land for construction whose building, authorized or intended, is for housing, in accordance with the provisions of the IMI Code», as amended by Law No. 83-C/2013, of December 31.

The first issue concerns whether the land for construction in question in the case sub judice has building, authorized or intended, for housing.

Another issue, raised by the Applicant, points to the need to know whether subjection to Item 28.1 of the TGIS is maintained when the owner of the land is a company whose activity consists of the acquisition of properties for resale.

Finally, the Applicant raises, as an incidental matter, the issue relating to the alleged unconstitutionality of the norm contained in item 28.1 of the TGIS for violation of the constitutional principle of equality.

In function of the sense of the decision of the issues mentioned above, it will also be important to know whether the Applicant is entitled to restitution of the tax paid, plus indemnificatory interest.

§2. Legal Regime and its Application to the Case Sub Judice

Article 4 of Law No. 55-A/2012, of October 29, which entered into force on October 30 following, added an item to the TGIS then in force, with the following wording:

«28 - Ownership, usufruct or right of superficies of urban properties whose taxable patrimonial value contained in the tax register, in accordance with the Municipal Property Tax Code (CIMI), is equal to or exceeding €1,000,000 - on the taxable patrimonial value used for IMI purposes:

• 28.1 - Per property with residential purpose - 1%;

• 28.2 - Per property, when the liable subjects that 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 ordinance of the Minister of Finance - 7.5%.»

Subsequently, article 194 of Law No. 83-C/2013, of December 31, introduced new wording to item 28 of the TGIS, which came to include land for construction, in the following terms:

«28.1 - Per residential property or per land for construction whose building, authorized or intended, is for housing, in accordance with the provisions of the IMI Code - 1%».

The amendment introduced by Law No. 83-C/2013, of December 31, entered into force on January 1, 2014, being applicable to the tax period to which the assessment which is the object of the present arbitral ruling request relates.

The text of the norm contained in Item 28.1 of the TGIS evidences, unequivocally, that the legislator intended only to affect properties with residential purpose, excluding, therefore, properties with other purposes (namely, with commercial, industrial or service purpose).

Such meaning also clearly results from the text of Bill No. 96/XII – 2nd, of September 21, 2012, which underlies the creation of the tax on residential properties of higher value, affirming that "…will be created a tax under Stamp Tax applying to urban properties with residential purpose whose patrimonial value is equal to or exceeding one million euros".

In this way, it is concluded that a property valued over one million euros, but with non-residential purpose, is not subject to the rule of objective incidence provided in Item 28.1 of the TGIS.

Now, in the case sub judice, no proof was made that the land for construction in question has building, authorized or intended, for housing.

In this respect, the Respondent argues, in essence, that «[t]he legislator chose to determine the application of the methodology for evaluating properties in general to the evaluation of 'land for construction,' as results from the expression 'value of authorized buildings' referred to in article 45, paragraph 2 of the IMI Code and applying to it consequently the purpose coefficient provided in article 41 of the IMI Code» (article 16 of the Response). The Respondent thus argues that «for purposes of determining the taxable patrimonial value of land for construction, the application of the purpose coefficient in evaluation is clear» (article 19 of the Response). And concludes, based on information contained in the property records that «[f]or tax purposes, the properties are land for construction, in that capacity they were acquired and thus are classified in the property register, therefore, they are undoubtedly plots of land for construction, more precisely urban properties with residential vocation»[1] (article 23 of the Response). And reinforces this position by stating that «[t]he Applicant cannot fail to know that the property record is crystal clear in defining for the plot of land for construction in question, the respective areas of building footprint and of construction, thus perfectly defined and identified» (article 24 of the Response), whereby it is «evident the residential purpose of the property» (article 25 of the Response).

However, contrary to what is argued by the Respondent, it is not sufficient that a plot of land for construction is situated in an area where residential purpose predominates to conclude that the same, in concreto, has a building, authorized or intended, for housing. In other words, the "residential vocation" of the authorized or intended building is insufficient.

One subscribes, in this matter, to the position set forth in the arbitral decision handed down in case No. 142/2016-T, when it is stated that «[t]here is in these norms of the TGIS [item 28.1] and of the CIMI [article 45, paragraph 2] no indication of what should be understood by 'intended building,' but, having in mind the documents required to be made the evaluation of land for construction, indicated in article 37, paragraph 2, of the CIMI, it is concluded that one can only speak of authorized or intended construction when the 'building to be constructed,' referred to in paragraph 1 of article 45, is defined in a plot division permit or building license permit, or approved project, or prior communication, or favorable prior information or document proving constructive viability. In fact, it will be only in these situations that there will be legal consistency in predicting the future carrying out of construction with determined characteristics».

One follows equally the sense of the cited decision regarding the question of burden of proof. As is stated therein, «[s]ince the possibility of constructing buildings for housing is invoked by the Tax and Customs Authority as the basis for the assessment acts and for the decision of the administrative appeal, the burden of proof of that fact rests upon it, as is concluded from article 74, paragraph 1, of the General Tax Law, which establishes that 'the burden of proof of the facts constitutive of the rights of the tax administration or of taxpayers falls upon whoever invokes them.' Thus, doubt about the existence or not of the possibility of constructing housing on the land in question must be valued procedurally in favor of the Applicant, leading to the annulment of the acts performed, as imposed by paragraph 1 of article 100 of the Code of Administrative Procedure for Tax Matters, subsidiary applicable, by force of the provision in article 29, paragraph 1, letter c) of the Decree-Law on Arbitration in Tax Matters».

In a convergent sense, the arbitral jurisprudence has pronounced itself regarding proceedings, in particular in cases No. 467/2015-T, 156/2016-T, 459/2016-T and 460/2016-T.

In conclusion, and with the grounds exposed, the arbitral ruling request is upheld regarding the vice of illegality imputed by the Applicant to the assessments in question.

In this way, knowledge of the vice argued in the alternative is prejudiced, as results from the provision of article 554, paragraph 1, of the Code of Civil Procedure.

§3. Request for Restitution of Amounts Paid and Indemnificatory Interest

The Applicant requests reimbursement of the tax wrongfully paid, plus indemnificatory interest.

In accordance with the provision in article 24, paragraph 1, letter b) of the Decree-Law on Arbitration in Tax Matters «[t]he arbitral decision on the merits of the claim from which no appeal or impugnation lies binds the tax administration from the end of the period provided for appeal or impugnation, and the latter must, in the exact terms of the success of the arbitral decision in favor of the liable subject and until the end of the period provided for the spontaneous execution of sentences of judicial tax courts, alternatively or cumulatively, as the case may be:

[…]

b) Restore the situation that would exist if the tax act object of the arbitral decision had not been

[…]».

In the same sense, article 100 of the General Tax Law provides that «[t]he tax administration is obligated, in case of total or partial success of administrative appeals or judicial proceedings in favor of the liable subject, to the immediate and full restoration of the situation that would exist if the illegality had not been committed, comprehending the payment of indemnificatory interest, in the terms and conditions provided by law».

Thus, by force of articles 24, paragraph 1, letter b) of the Decree-Law on Arbitration in Tax Matters and 100 of the General Tax Law, there is place for reimbursement of the tax paid following the illegal assessment acts which are the object of the present proceeding.

As regards indemnificatory interest, article 43, paragraph 1, of the General Tax Law provides that «indemnificatory interest is due when it is determined, in administrative appeal or judicial impugnation, that there was error imputable to the services from which results payment of the tax debt in an amount superior to that legally due».

In the case sub judice, the assessments suffer from error imputable to the Respondent, whereby the request for indemnificatory interest is upheld, which should be calculated by the Tax and Customs Authority in execution of this arbitral decision.

IV. DECISION

In these terms, this Arbitral Tribunal decides:

a) To uphold the arbitral ruling request;

b) To declare the illegality of the Stamp Tax assessment acts which are the object of the present proceeding;

c) To annul the Stamp Tax assessments referred to in documents No. 2016…, No. 2016…, No. 2016…, No. 2016…, No. 2016…, and No. 2016…;

d) To uphold the request for reimbursement of the tax wrongfully paid, plus indemnificatory interest, at the legal rate, counted from the date of payment of the tax, until full reimbursement, all in the terms to be determined in execution of judgment.

V. VALUE OF THE CASE

In accordance with the provision in article 306, paragraph 2, of the Code of Civil Procedure, article 97-A, paragraph 1, letter a) of the Code of Administrative Procedure for Tax Matters and article 3, paragraph 2, of the Regulation of Costs in Tax Arbitration Processes, the value of the case is fixed at €26,448.20.

VI. COSTS

In accordance with article 22, paragraph 4, of the Decree-Law on Arbitration in Tax Matters, the amount of costs is fixed at €1,530.00, in accordance with Table I attached to the Regulation of Costs in Tax Arbitration Processes, to be charged to the Respondent.

Notice thereof.

Lisbon, April 6, 2017

The Arbitrator

Paulo Nogueira da Costa

[1] Our emphasis.

Frequently Asked Questions

Automatically Created

Does Stamp Tax (Imposto do Selo) under Clause 28.1 of the TGIS apply to building land (terrenos para construção) valued over one million euros?
Yes, according to the Tax Authority's position, Stamp Tax under Clause 28.1 TGIS applies to building land valued over €1 million when that land has been attributed a residential purpose during tax evaluation. The Tax Authority argues that the provision refers to 'properties with residential purpose' rather than completed 'residential properties,' and relies on the IMI Code's evaluation methodology, which applies purpose coefficients based on authorized construction. However, taxpayers have successfully challenged this interpretation, arguing that building land cannot be equated with residential properties until construction is completed and that the land's classification as 'terreno para construção' excludes it from Clause 28.1's intended scope.
Can a real estate investment fund challenge Stamp Tax assessments on building land before the CAAD arbitral tribunal?
Yes, real estate investment funds can challenge Stamp Tax assessments on building land before the CAAD (Centro de Arbitragem Administrativa) arbitral tribunal. Under Article 2(1)(a) and Article 10(1) and (2) of Decree-Law No. 10/2011 (RJAMT), along with Articles 1 and 2 of Ordinance No. 112-A/2011, taxpayers including investment funds managing real estate assets can request the constitution of an arbitral tribunal to rule on the illegality of tax assessment acts. The fund must act through its management company, which has legal standing to represent the fund's interests in challenging Stamp Tax liquidation acts issued under Clause 28.1 TGIS.
What is the legal basis for contesting Stamp Tax liquidation acts issued by the Portuguese Tax Authority under Clause 28.1 TGIS?
The legal basis for contesting Stamp Tax liquidation acts under Clause 28.1 TGIS includes: (1) substantive grounds such as incorrect legal interpretation (arguing building land doesn't constitute 'property with residential purpose'), violation of taxation principles (claiming the tax doesn't reflect actual contributory capacity for inventory assets), and unconstitutionality (alleging breach of equality principles in Articles 13 and 104(3) of the Portuguese Constitution); (2) procedural grounds under Decree-Law No. 10/2011 establishing the administrative arbitration regime (RJAMT); and (3) subsidiary application of the IMI Code provisions (Article 67(2) of the Stamp Tax Code) to determine property classification and evaluation methodology. Taxpayers can seek annulment of assessment acts and reimbursement of taxes paid plus compensatory interest.
Does ownership of building land intended for resale demonstrate sufficient contributory capacity to justify the solidarity tax under Clause 28.1 TGIS?
This is contested. The Applicant argues that ownership of building land intended for resale does NOT demonstrate sufficient contributory capacity to justify the solidarity tax under Clause 28.1 TGIS. The fund contends that land held as inventory for commercial activity (buying and reselling) cannot represent superior wealth or economic capacity, as it is a business asset rather than personal wealth. The solidarity tax principle underlying Clause 28.1 was designed to tax manifestations of wealth and above-average taxpaying capacity, but inventory assets merely represent working capital in ordinary business operations. Conversely, the Tax Authority maintains that the tax applies based on objective criteria—property value and residential purpose attribution—regardless of the owner's intention or business model, making contributory capacity evident from the property's valuation.
What procedural steps are required to file an arbitral claim under Decree-Law 10/2011 against Stamp Tax assessments on high-value urban properties?
The procedural steps to file an arbitral claim under Decree-Law 10/2011 against Stamp Tax assessments on high-value urban properties are: (1) Submit a formal request for constitution of an arbitral tribunal to CAAD, identifying the contested tax assessment acts by document numbers and tax year, pursuant to Article 2(1)(a) and Article 10(1)(2) of DL 10/2011 and Ordinance 112-A/2011; (2) The CAAD President accepts the request and automatically notifies the Tax Authority; (3) The Deontological Council appoints an arbitrator (or parties may agree on appointment) under Article 6(2)(a) and Article 11(1)(b) of DL 10/2011; (4) Parties are notified of the appointment and may object within the legal deadline; (5) The arbitral tribunal is formally constituted per Article 11(1)(c); (6) The Applicant submits detailed grounds for illegality, including legal arguments and constitutional claims; (7) The Tax Authority files a Response; (8) The tribunal proceeds with the arbitration according to RJAMT procedural rules.