Stamp Tax on Vertical Property: CAAD Ruling 503/2015-T on Illegality of 2014 Assessments

ARBITRAL DECISION

I. Report

1. A…, S.A. (hereinafter "Claimant"), with tax identification number ("NIF") …, with registered office at street…, no.…, Lisbon, filed, on 28 July 2015, pursuant to the combined provisions of articles 2 and 10 of Decree-Law no. 10/2011, of 20 January, i.e., Legal Framework for Arbitration in Tax Matters ("RJAT"), a request for the constitution of an arbitral tribunal in order to declare illegal the acts of assessment of Stamp Duty ("IS") set out below, in the total amount of € 11,399.20, by reference to the tax year 2014, respectively;

The Tax and Customs Authority ("Respondent" or "TA") is the respondent.

A) Constitution of the Arbitral Tribunal

1. Pursuant to the provisions of paragraph a) of article 6(2) and paragraph b) of article 11(1) of the RJAT, the Deontological Council of this Administrative Arbitration Center ("CAAD") appointed the undersigned as sole arbitrator, who communicated acceptance of the appointment within the applicable period, and notified the parties of this appointment on 6 October 2015.

2. Thus, in compliance with the provision of paragraph c) of article 11(1) of the RJAT, and by means of communication from the President of the Deontological Council of CAAD, the Sole Arbitral Tribunal was constituted on 21 October 2015.

B) Procedural History

1. In the request for arbitral determination, the Claimant petitioned for the declaration of illegality of the IS assessments mentioned above, concerning the year 2014, with reference to an urban property, constituted in vertical ownership, located at Street …, nos … to … and … to …, parish of …, municipality of Lisbon, registered in the respective urban property register under article….

2. The TA submitted a reply, requesting the dismissal of the request for arbitral determination, on the grounds that there was no defect of violation of law, requesting that the tax acts under analysis, as they did not violate any legal or constitutional provision, be maintained in the legal order.

3. By order of 14 February 2016, the Sole Arbitral Tribunal, under the authority of paragraph c) of article 16 of the RJAT, and following the request by the TA, decided, without opposition from the parties, that it was not necessary to hold the meeting referred to in article 18 of the RJAT, as a result of the simplicity of the issues at hand, as well as because it considered that it had at its disposal all the necessary elements to make a clear and impartial decision.

4. It also decided, in compliance with article 18(2) of the RJAT, that oral arguments were not necessary, given that the positions of the parties were perfectly defined in their respective pleadings, and set the end of March 2016 as the deadline for the arbitral decision.

5. In the context of the order, it also requested the parties to submit their final submissions. In this regard, it is important to note that both the Claimant and the Respondent chose not to make a statement.

6. On 25 February, the Claimant requested, by application, the addition to the proceedings of the assessments relating to the third instalment of the assessments listed above, which were also paid, which the present tribunal accepted on the same day.

7. The Tribunal was regularly constituted and is competent to assess the issues indicated (article 2(1)(a) of the RJAT), the parties have legal personality and capacity and have full standing (articles 4 and 10(2) of the RJAT and article 1 of Order no. 112-A/2011, of 22 March). No nullities occur and no exceptions were raised, so nothing prevents the judgment on the merits.

8. The present proceedings are thus in a position for the final decision to be rendered.

II. Issue to be Decided

1. The central issue to be assessed and decided regarding the merits of the case, as appears from the procedural documents of the parties, is the following: with reference to properties not constituted in the regime of horizontal ownership, comprised of various floors and divisions capable of independent use (and with residential purpose), what is the Patrimonial Tax Value ("VPT") relevant for the purposes of determining the IS to be paid, pursuant to item no. 28 of the General IS Table ("GIST")?

2. In other words, the present tribunal seeks to determine whether the amount to be considered is the VPT attributed, individually, to each of the parts capable of autonomous use, or, conversely, the total value resulting from the sum of the VPTs of those autonomous fractions.

III. Determination of Factual Issues and Their Reasoning

1. Having examined the documentary evidence produced, the tribunal finds proven, with relevance to the decision of the case, the following facts:

I. The Claimant is the owner of an urban property, constituted in vertical ownership, located at Street…, nos … to … and … to …, parish of …, municipality of Lisbon, registered in the respective urban property register under article….

II. The property mentioned above is comprised of 20 fractions capable of independent use, of which 16 are intended for residential purposes.

III. The Claimant received, with respect to the tax year 2014, and as a result of item no. 28 of the GIST, the assessment notices from the TA, mentioned above, in the total amount of € 11,399.20, having already paid the 1st and 2nd instalments, in the amount of € 7,599.52.

IV. During the course of the proceedings, the Claimant also received the assessment acts relating to the 3rd instalment, which it also paid.

1. The Tribunal's conviction regarding the facts established as proven resulted from the documents attached to the case file and contained in the petition and arguments, not contested, of the parties, as specified in the points of the factual issue stated above.

IV. On the Law

A) Legal Framework

1. Given that the legal issue to be decided in the present proceedings requires the interpretation of the relevant legal texts, it is important, first, to set out the provisions that comprise the relevant legal framework, as of the date of the occurrence of the facts.

2. The subjection to IS of properties with residential purpose resulted from the addition of item no. 28 to the GIST, effected by article 4 of Law 55-A/2012, of 29 October, which typified the following tax facts:

"28 – Ownership, usufruct or right of superficies of urban properties whose patrimonial tax value contained in the register, in accordance with the Municipal Property Tax Code ("IMI") (…), shall be equal to or greater than € 1,000,000.00 – on the patrimonial tax value for the purpose of IMI:

28.1 – For property with residential purpose – 1%

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

1. The aforementioned law also added, in the IS Code, article 23(7), regarding the assessment of IS: "in the case of tax owed for the situations provided for in item no. 28 of the General Table, the tax is assessed annually, in relation to each urban property, by the central services of the Tax and Customs Authority, applying, with the necessary adaptations, the rules contained in the IMI Code", and article 67(2) which provides that "to matters not regulated in the present code relating to item 28 of the General Table, the IMI Code applies subsidiarily".

2. In this context, and taking into account the indication above, let us now focus on the IMI Code.

3. First, attention should be paid to article 2(4) of the IMI Code which states that "for the purposes of this tax, each autonomous fraction, under the regime of horizontal ownership, is considered as constituting a property".

4. In turn, article 12(3) of the IMI Code establishes that "each floor or part of a property capable of independent use is considered separately in the property register, which also discriminates the respective patrimonial tax value".

5. Thus, it is within this legal framework that it is important to decide whether, in cases where the horizontal ownership of an urban property with various autonomous fractions is not constituted, the VPT, for the purposes of item no. 28 of the GIST, is calculated, individually, per fraction capable of being used autonomously, or, alternatively, determined by the sum of the VPTs of those fractions.

B) Arguments of the Parties

1. In summary, the Claimant bases its petition on the following arguments:

2. "… the subjection to IS contained in item no. 28.1 of the GIST is determined by the combination of 2 (two) facts: the residential purpose and the VPT contained in the property register equal to or greater than € 1,000,000.00 (one million euros), and, in the case of urban properties not constituted in the regime of horizontal ownership, comprised of various floors or divisions with independent use and residential purpose, as is the case here, the subjection to IS is determined, not by the total VPT of the property, but by the VPT attributed to each of its floors or divisions".

3. In this sense, the Claimant understands that "… contrary to the TA's understanding, in the taxation of properties there is no distinction based on the type of ownership – vertical or horizontal – but only based on use – residential, commercial, services or others – and that the tax treatment is always carried out fraction by fraction, with or without autonomous nature".

4. In fact, for the Claimant, "article 6 of the IMI Code only indicates the different types of urban properties, among which it mentions residential ones (…) from this it results that, in the view of the tax legislator, what matters is not the legal-formal rigour of the concrete situation of the property, but rather its normal use, the purpose for which the property is intended.

It is concluded that, for the tax legislator, the situation of the property in vertical or horizontal ownership did not matter, as no reference or distinction is made between them. What matters is the material truth underlying its existence as an urban property and its use".

1. Continuing, in the opinion of the Claimant, and "the registration in the property register of properties in vertical ownership, constituted by different parts, floors or divisions with independent use, in accordance with the IMI Code, follows the same registration rules as properties constituted in horizontal ownership, with the respective IMI, as well as the new IS, being assessed individually in relation to each of the parts, there is no doubt whatsoever that the legal criterion for defining the incidence of the new tax must be the same.

Therefore, if the legal criterion requires the issuance of individualized assessments for the autonomous parts of properties in vertical ownership, in the same manner as it establishes for properties in horizontal ownership, it has clearly established the criterion, which must be unique and unequivocal, for defining the rule of incidence of the new tax".

1. Therefore, for the Claimant, the TA cannot "consider as the reference value for the incidence of the new item 28 of the GIST the total value of 16 of the 20 fractions of the urban property in question, when the legislator itself established a different rule under the IMI Code, and this is the Code applicable to matters not regulated regarding item no. 28.1 of the GIST".

2. In summary, the Claimant requested that "given that the requirements upon which the application of item no. 28 of the GIST depends are not met, the Respondent, TA, violated, through incorrect interpretation and application, item no. 28 of the GIST, and the principles of tax legality (…) being illegal the identified IS assessment acts (…) and the same acts should be annulled…".

3. The Claimant concludes its submission by requesting that the assessments mentioned above be declared illegal and, consequently, annulled, and, also, that it be reimbursed the amount already paid (at the date € 7,599.52, now € 11,399.20), plus interest damages.

4. For its part, the Respondent, after being duly notified thereof, submitted its reply in which it defended that, in accordance with item 28.1 of the GIST and with the IMI Code "the relevant patrimonial value for the purpose of the incidence of the tax is, thus, the total patrimonial value of the urban property and not the patrimonial value of each of the parts that comprise it, even when capable of independent use".

5. Indeed, in its opinion "the principle that each urban property corresponds to only one property register entry is only excepted, thus, with respect to mixed properties…".

6. In fact, for the Respondent "the unity of the urban property in vertical ownership comprised of several floors or divisions is, however, not affected by the fact that all or part of these floors or divisions are capable of independent economic use.

Such property does not cease to be one, and therefore its distinct parts are not legally equated with autonomous fractions under the regime of horizontal ownership".

1. In parallel, the Respondent considers that "the fact that the IMI was calculated based on the patrimonial tax value of each part of property with independent economic use does not equally affect the application of item no. 28 of the GIST.

This is because the determining fact for the application of this item of the GIST is the total patrimonial value of the property and not separately that of each of its parts".

1. The Respondent therefore understands that the assessments it carried out result from a correct interpretation and application of the law to the facts, and therefore requests that the claim made be dismissed and it be absolved of the petition.

C) Tribunal's Assessment

1. As an introduction, it should be noted that, in the understanding of the present tribunal, and taking into account the legal framework previously presented, the essential normative proposition to be considered for the decision of the case is that which results from item no. 28 of the GIST.

2. It should also be noted that, in the eyes of the arbitral tribunal, the issue to be decided concerns, exclusively, a matter of law, namely to understand, for the purposes of the application of the aforementioned item, what the relevant VPT is.

3. First, it should be clarified that it is clear, from the wording of the law, that the VPT to be considered, for the purposes of the application of item no. 28 of the GIST, can only be that which is determined under the IMI Code.

4. This is, moreover, what the aforementioned item tells us, word for word, "(…) whose patrimonial tax value contained in the register, in accordance with the Municipal Property Tax Code (…), shall be equal to or greater than € 1,000,000.00".

5. Thus, attention should be paid once again to what follows from article 2(4) of the IMI Code which states that "for the purposes of this tax, each autonomous fraction, under the regime of horizontal ownership, is considered as constituting a property".

6. Reinforced, nevertheless, by article 12(3) of the same Code, which establishes that "each floor or part of a property capable of independent use is considered separately in the property register, which also determines the respective patrimonial tax value".

7. It is concluded, thus, that, for the purposes of calculating the IMI to be paid, the VPT is considered individually, for each floor or part capable of independent use.

8. And if this is the method of determination followed for the IMI, it must necessarily be the same model also applied under item no. 28 of the GIST, in the terms set out above.

9. Nevertheless, and should the doubts raised still subsist, the present tribunal relies on some arbitral decisions previously rendered, which addressed the subject matter under analysis.

10. Thus, first, let us look at decision no. 50/2013-T, of 29 October, which provides as follows.

11. "Law no. 55-A/2012 says nothing about the qualification of the concepts in question, namely, about the concept of 'property with residential purpose'. However, article 67(2) of the IS Code, added by the aforementioned Law, provides that 'to matters not regulated in the present code relating to item 28 of the General Table, the IMI Code applies subsidiarily.

The incidence norm refers, therefore, to urban properties, whose concept is that which results from the provision of article 2 of the IMI Code, with the determination of the VPT being subject to the terms of article 38 and following of the same code.

Consulting the IMI Code, it is found that its article 6 only indicates the different types of urban properties, among which it mentions residential ones (…)

From this we can conclude that, in the view of the legislator, what matters is not the legal-formal rigour of the concrete situation of the property but rather its normal use, the purpose for which the property is intended. We further conclude that for the legislator the situation of the property in vertical or horizontal ownership did not matter, as no reference or distinction is made between them. What matters is the material truth underlying its existence as an urban property and its use.

(…)

Using the criterion that the law itself introduced in article 67(2) of the IS Code, 'to matters not regulated in the present code relating to item 28 of the General Table, the IMI Code applies subsidiarily'" (emphasis ours).

1. In other words, taking into account that the registration in the property register of properties in vertical ownership, for the purposes of the IMI Code, follows the same registration rules as properties constituted in horizontal ownership, with the respective IMI, as well as the new IS, being assessed individually in relation to each of the parts, it does not appear, to the present tribunal, that there is any doubt that the legal criterion for defining the incidence of the new tax must be the same.

2. In this context, if the law requires, with respect to IMI, the issuance of individualized assessment notices for the autonomous parts of properties in vertical ownership, in the same manner as it establishes for properties in horizontal ownership, it will require, in the same terms, with respect to the rule of incidence of item no. 28 of the GIST.

3. Therefore, the IS, under item no. 28 of the GIST, could only be incurred on a particular fraction if this one, possibly, had a VPT greater than €1,000,000.00.

4. And, furthermore, this was indeed the understanding adopted by the TA.

5. Indeed, the TA also issued individualized assessment notices, relating to each of the fractions capable of autonomous use, demonstrating that, in its view, the aforementioned fractions, despite not being legally constituted in horizontal ownership, would, for all purposes, be independent of one another.

6. However, the TA forgot that it could not, by virtue of the framework previously set out, proceed to sum the individual VPTs of the fractions previously mentioned, seeking a value that would already fall within the scope of item no. 28 of the GIST.

7. This while the legislator itself established a different rule under the IMI Code which, as previously mentioned, is the Code applicable to matters not regulated in the IS Code, as regards item no. 28 of the GIST.

8. In summary, the criterion established by the TA, of considering the value of the sum of the individual VPTs attributed to the parts, floors or divisions with independent use, taking advantage of the fact that the property is not constituted in the regime of horizontal ownership, does not find, in the eyes of the present tribunal, legal support, being, namely, contrary to the criterion applicable under IMI and, by reference (in the terms mentioned above), under IS.

9. In this context, the present tribunal considers that the criterion defended by the TA violates the principles of legality and tax equality, and, as well, that of the prevalence of material truth over legal-formal reality.

10. In parallel, note that article 12(3) of the IMI Code does not make any distinction regarding the regime of properties that are in horizontal or vertical ownership.

11. Therefore, and since if the property were in the regime of horizontal ownership, none of its residential fractions would be subject to the incidence of the new tax, the TA cannot treat materially equal situations differently.

12. In this regard, see what was said on this subject in the arbitral decision rendered in the context of case no. 132/2013-T, of 16 December, whose understanding the present tribunal adopts.

"Indeed, it makes no sense to distinguish in the law what the law itself does not distinguish (ubi lex non distinguit nec nos distinguere debemus).

Furthermore, to distinguish, in this context, between properties constituted in horizontal ownership and in full ownership would be an 'innovation' without associated legal support, especially because, as has been stated here, nothing suggests, neither in item no. 28, nor in the provision of the IMI Code, a justification for that particular differentiation.

Note, for example, what article 12(3) of the IMI Code says: each floor or part of a property capable of independent use is considered separately in the property register, which also discriminates the respective patrimonial tax value.

The uniform criterion that is required is, thus, the one that determines that the incidence of the norm in question only takes place when one of the parts, floors or divisions with independent use of a property in horizontal or full ownership with residential purpose has a VPT greater than € 1,000,000.00.

Setting as the reference value for the incidence of the new tax the total VPT of the property in question, as the respondent intended, does not find basis in the applicable legislation, which is the IMI Code, given the reference made by the aforementioned article 67(2) of the IS Code.

(…)

Furthermore, admitting the differentiation of treatment could produce results incomprehensible from a legal point of view and contrary to the objectives that the legislator claimed to have for adding item no. 28. By way of example, suppose the following hypothesis, which seems plausible in light of the interpretation made by the respondent: a citizen who owns a property constituted in full ownership intended for residential use, with the total value of the autonomous units equal to or greater than €1,000,000.00 and the VPT of each one less than €1,000,000.00, is subject to an annual tax of 1% of that value (as occurred in the situation under analysis); whereas another citizen who holds a property with the exact same characteristics as the previous one but which has been constituted in horizontal ownership, with the total value of the autonomous fractions equally equal to or greater than €1,000,000.00 and the VPT of each one less than €1,000,000.00, will not be subject to taxation pursuant to the aforementioned item no. 28.

On the other hand, one could ask: if such fractions have the same owner, why does it not make sense to aggregate, for taxation purposes, their respective VPTs? The answer can be illustrated through another hypothesis: a citizen who owns a property in horizontal ownership, in which each of its 20 fractions has a VPT less than €1,000,000.00, would be subject to taxation if – if such aggregation were allowed – the total VPT exceeded that value; whereas another citizen with identical 20 fractions distributed across 5, 10 or 20 properties would not be subject to any taxation pursuant to the aforementioned item no. 28.

If this line of reasoning makes sense – thus justifying the non-aggregation of the VPTs of fractions of properties in horizontal ownership – there is no apparent reason why the same should not be applied to the autonomous units of properties in full ownership.

Observing, now, the case under analysis, it is found that the VPTs of the floors (autonomous units) of the property with residential purpose vary between (…), such that each one of them is less than €1,000,000.00.

From this it is concluded, as a result of what has been stated, that IS to which item no. 28 of the GIST refers cannot be incurred on the same, being, therefore, illegal the assessment acts contested by the claimant" (emphasis ours).

1. A final point worthy of noting (despite the previous framework being sufficient to recognize the illegality of the assessment acts performed by the TA) is based on the understanding advocated, both by the legislator and by the government itself, at the time of the addition of item no. 28 to the GIST.

2. In this regard, let us focus now on the arbitral decision rendered in the context of case no. 48/2013-T, of 9 October, which analyzes, extensively, the objectives underlying the addition of the aforementioned item.

3. "Law no. 55-A/2012, of 29/10, has no preamble whatsoever, so it is not possible to derive from it the intention of the legislator.

This law from the Assembly of the Republic originated from a bill no. 96/XII (2nd), which, in its statement of reasons, speaks of the introduction of fiscal measures inserted in a broader set of measures to combat budgetary deficit.

In the statement of reasons of the aforementioned bill, it is stated that, 'these measures are fundamental to reinforce the principle of social equity in austerity, guaranteeing an effective distribution of the sacrifices necessary to comply with the adjustment program. The Government is strongly committed to ensuring that the distribution of these sacrifices will be made by all and not just by those who live from the income of their work. In accordance with this objective, this law extends the taxation of capital and property, equitably covering a broad set of sectors of Portuguese society'.

In that statement of reasons it is further stated that, in addition to the increase in the taxation of capital income and capital gains, a rate is created in IS applicable to urban properties with residential purpose whose patrimonial tax value is equal to or greater than one million euros.

That is, in such a statement of reasons, it is also not clarified what is meant by urban properties with residential purpose.

In his intervention in the Assembly of the Republic, in the presentation and discussion of the aforementioned bill, the Secretary of State for Tax Affairs stated the following:

'The Government elected social equity as a priority principle of its fiscal policy. This is even more important in times of rigour as a way to ensure fair distribution of fiscal effort.

In the demanding period that the country is going through, during which it is obliged to comply with the program of economic and financial assistance, it becomes even more pressing to assert the principle of equity. It cannot always be the same - employees and pensioners, bearing the fiscal charges.

For the fiscal system to be more fair it is crucial to promote the broadening of the tax base by requiring increased effort from taxpayers with higher incomes and thus protecting Portuguese families with lower incomes.

For the fiscal system to promote more equality it is fundamental that the effort of budgetary consolidation be shared by all types of income, covering with special emphasis capital income and properties of high value. This matter, it should be recalled, was extensively addressed in the Constitutional Court ruling.

Finally, for the fiscal system to be more fair, it is crucial that everyone be called upon to contribute according to their ability to contribute, granting the tax administration enhanced powers to control and monitor situations of fraud and tax evasion.

In this sense the Government presents, today, a set of measures that effectively reinforce a fair and equitable distribution of the adjustment effort by a broad and comprehensive set of sectors of Portuguese society.

This proposal has three essential pillars: the creation of special taxation on urban properties valued above 1 million euros; the increase in taxation on capital income and capital gains and the strengthening of rules to combat fraud and tax evasion.

First, the Government proposes the creation of a special rate on high-value residential urban properties. This is the first time in Portugal that special taxation is created on high-value properties intended for residential purposes. This rate 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. With the creation of this additional rate the fiscal effort required of these owners will be significantly increased in 2012 and 2013'".

1. Next, it is necessary to gather the conclusions that allow, without room for doubt, to decide on the topic under discussion (that is, whether, for the purposes of the application of item no. 28 of the GIST, in cases where a property with several autonomous fractions, capable of independent use, is not constituted in horizontal ownership, the VPT relevant is determined by the sum of the individual VPTs, or, alternatively, is individually considered).

2. In this sense, it should be noted, first, that this subject matter is, from the outset by force of article 67(2) of the IS Code, subject to the norms of the IMI Code, "to matters not regulated in the present code relating to item 28 of the General Table, the IMI Code applies subsidiarily".

3. As such, and as has been mentioned so many times, in the understanding of the present tribunal, the mechanism for determining the relevant VPT for the purposes of the aforementioned item, is that which is provided for in the IMI Code.

4. Now, article 12(3) of the IMI Code establishes that "each floor or part of a property capable of independent use is considered separately in the property register, which also discriminates the respective patrimonial tax value".

5. The legislator, in the terms previously mentioned, disregarding any prior constitution of horizontal or vertical ownership.

6. Indeed, for the legislator, what matters is the material truth underlying its existence as an urban property and its use.

7. It should be noted that the TA itself seems to agree with the criterion set out, which is why the assessments it itself issues are very clear in their essential elements, from which it follows that the value of incidence is the one corresponding to the VPT of each of the floors and the individualized assessments.

8. Therefore, if the legal criterion requires the issuance of individualized assessments for the autonomous parts of properties in vertical ownership, in the same manner as it establishes for properties in horizontal ownership, it has clearly established the criterion, which must be unique and unequivocal, for defining the rule of incidence of the new tax.

9. Thus, there would be place for the incidence of IS (under item no. 28 of the GIST) only if one of the parts, floors or divisions with independent use presented a VPT greater than € 1,000,000.00.

10. The TA cannot consider as the reference value for the incidence of the new tax the total value of the property, when the legislator itself established a different rule under IMI (and, as previously mentioned, this is the code applicable to matters not regulated regarding item no. 28 of the GIST).

11. In conclusion, the current legal regime does not impose the obligation of constitution of horizontal ownership, so the TA's action translates into arbitrary and illegal discrimination.

12. Indeed, the TA cannot distinguish where the legislator itself understood not to do so, under penalty of violating the coherence of the tax system, as well as the principle of tax legality provided for in article 103 of the Portuguese Republic Constitution, and also the principles of tax justice, equality and proportionality.

13. In the case at hand, the property in question was, at the relevant date of the facts, constituted in full ownership and had 20 fractions with independent use, 16 of which with residential purpose, as results from the documents attached by the Claimant.

14. Given that none of these fractions, individually considered, have a patrimonial value equal to or greater than €1,000,000.00, as results from the documents added to the case file, it is concluded that the legal prerequisite of incidence is not met.

15. Having regard to the above, it does not appear, in the opinion of the present tribunal, necessary to analyze the other issues raised by the Claimant to support the illegality of the assessments listed above.

V. Decision

1. In these terms this Arbitral Tribunal decides:

A) To find the petition for arbitral determination well-founded and, in consequence, to declare illegal and annul the aforementioned IS assessments, by reference to the tax year 2014, from which resulted tax to be paid in the amount of € 11,399.20, relating to the taxation of urban properties with VPT equal to or greater than €1,000,000, in accordance with the provision of item no. 28 of the GIST;

B) To condemn the Respondent to reimburse the Claimant in the amount of € 11,399.20, corresponding to the total value paid by the latter, plus interest damages; and

C) To condemn the Respondent to bear the costs of the proceedings.

VI. Value of the Proceedings

1. The value of the proceedings is set at € 11,399.20, in accordance with article 97-A(1)(a) of the Code of Tax Procedure ("CPPT"), applicable by force of paragraphs a) and b) of article 29(1) of the RJAT and article 3(2) of the Costs Regulation in Tax Arbitration Proceedings ("RCPAT").

VII. Costs

1. In accordance with the provision of article 22(4) of the RJAT, the value of the arbitration fee is set at € 918, in accordance with Table I of the aforementioned Regulation, charged to the Respondent, given the entire well-foundedness of the petition.

Let it be notified.

Lisbon, CAAD, 23 March 2016

The Arbitrator

(Sérgio Santos Pereira)