Process: 506/2018-T

Date: April 29, 2019

Tax Type: IMI

Source: Original CAAD Decision

Summary

CAAD Arbitral Decision 506/2018-T addresses whether AIMI (Additional Municipal Property Tax) applies to urban properties classified as 'terrenos para construção' (construction land). The claimant, A... S.A., challenged an AIMI assessment of €19,101.12 for 2018, arguing that three properties classified as construction land in Amadora should be excluded from AIMI taxation. The properties, designated for office construction under subdivision permit, had combined tax patrimonial values (VPT) of €4,775,279.51. The claimant contended that AIMI should not objectively apply to construction land, requesting a refund plus compensatory interest. The Tax Authority defended the assessment, arguing the properties were properly included under articles 135-A to 135-C of the IMI Code, as they did not fall within statutory exclusions. The case raises constitutional questions about AIMI's objective scope regarding construction land. The arbitral tribunal was constituted on December 20, 2018, with both parties maintaining their positions through successive pleadings. This decision is significant for property developers and investors holding construction land portfolios, as it clarifies whether undeveloped urban land intended for construction falls within AIMI's tax base. The outcome impacts tax planning strategies for real estate companies and the interpretation of AIMI legislation enacted to tax high-value property portfolios.

Full Decision

ARBITRAL DECISION

The Arbitrator Marisa Almeida Araújo, designated by the Deontological Council of the Center for Administrative Arbitration (CAAD) to constitute this Singular Arbitral Tribunal, renders the following arbitral decision,

I – Report

  1. A..., S.A. (hereinafter, "Claimant"), with registered office at ..., no. ..., ... and ..., ..., ...-... Amadora, holder of the Collective Person Identification Number ..., hereby requests the constitution of an arbitral tribunal on 10/10/2019, pursuant to the provisions of articles 2, no. 1, paragraph a), and 10 of Decree-Law no. 10/2011, of 20 January, to assess the legality of the assessment act for the Additional Municipal Property Tax (hereinafter, "AIMI") no. 2018..., for the year 2018, in the amount of €19,101.12, petitioning for the restitution of the amount paid and also the condemnation to the payment of compensatory interest.

The Claimant bases its request on the following grounds:

  • The Tax and Customs Authority ("TA") issued to the Claimant the AIMI assessment no. 2018..., dated 30 June 2018, in the amount of €19,101.12, which it paid on 18 September 2018.

  • For purposes of determining the taxable value of AIMI, the TA considered the sum of the tax patrimonial values ("TPVs"), as of 1 January 2018, of the urban properties listed in the assessment and which are recorded in the property matrices in the ownership of A..., in accordance with no. 1 of article 135-C of the IMI Code.

  • The sum of those TPVs amounted to €4,775,279.51, to which the rate of 0.4% was applied, resulting in AIMI assessed at €19,101.12.

  • For purposes of calculating the taxable value of AIMI, the TA included in the list of urban properties subject to that additional tax:

    • The urban property registered in the property matrix under no. U-..., of the parish of ..., municipality of Amadora, whose TPV, as of 1 January 2018, amounts to €1,828,107.30;

    • The urban property registered in the property matrix under no. U-..., of the parish of..., municipality of Amadora, whose TPV, as of 1 January 2017, amounts to €1,350,773.63;

    • The urban property registered in the property matrix under no. U-..., of the parish of..., municipality of Amadora, whose TPV, as of 1 January 2017, amounts to €1,596,398.58.

  • Those urban properties are all classified, for purposes of the IMI Code, as land for construction, with the type of location coefficient applied corresponding to that for services.

  • In accordance with the subdivision permit no. .../... issued by the Municipal Chamber of Amadora, on those lands for construction – which correspond to lots A (U-...), B (U-...) and H (U-...) – only offices can be constructed.

  • The Claimant considers that AIMI should not have been objectively levied on the lands for construction listed above, concluding that it bore an undue tax in the amount of €19,101.12.

  1. The TA responded and attached the Administrative Process on 1 February 2019, concluding for the dismissal of the arbitral request.

a. The TA concludes that regarding the properties identified in the case which as of 01-01-2018 in accordance with no. 4 of article 8, by reference to no. 3 of article 135-A IMI Code, the Claimant was the owner the TPV was determined in accordance with what is recorded in the matrix, in accordance with nos. 1 and 2 of article 135-C of the IMI Code.

b. The properties, according to the TA, were not covered by the exclusions provided for in no. 2 of article 135-B, nor by no. 3 of article 135-C of the IMI Code and, in accordance with this, the assessment in question in the case was carried out.

  1. Following the proceedings, the meeting referred to in article 18 of the RJAT was waived and the proceedings were ordered to continue with successive pleadings.

The Claimant and Respondent pleaded, maintaining, in essence, their positions already stated in their respective procedural documents.

  1. The request for constitution of the arbitral tribunal was accepted by the President of CAAD and notified to the Tax and Customs Authority in accordance with regulatory procedures.

Pursuant to the provisions of paragraph a) of no. 2 of article 6 and paragraph b) of no. 1 of article 11 of the RJAT, as amended by article 228 of Law no. 66-B/2012, of 31 December, the Deontological Council designated as arbitrator the undersigned, who communicated acceptance of the appointment within the applicable period.

The parties were duly and timely notified of this designation and did not express a desire to refuse it, in accordance with the combined provisions of article 11, no. 1, paragraphs a) and b), of the RJAT and articles 6 and 7 of the Deontological Code.

Thus, in accordance with the provisions of paragraph c) of no. 1 of article 11 of the RJAT, as amended by article 228 of Law no. 66-B/2012, of 31 December, the singular arbitral tribunal was constituted on 20 December 2018.

The arbitral tribunal was regularly constituted and is materially competent in accordance with the provisions of articles 2, no. 1, paragraph a), and 30, no. 1, of Decree-Law no. 10/2011, of 20 January.

The parties have legal personality and capacity, are legitimate and are represented (articles 4 and 10, no. 2, of the same statute and 1 of Order no. 112-A/2011, of 22 March).

The proceedings do not suffer from nullities and no exceptions were invoked.

It is for this Tribunal to assess and decide.

II - Reasoning

Matter of Fact

  1. It is incumbent on the tribunal to select the facts that matter for the decision of the case and to distinguish proven from unproven matters (in accordance with article 123, no. 2, of the CPPT and article 607, no. 3 of the CPC, applicable ex vi article 29, no. 1, paragraphs a) and e), of the RJAT).

Thus, the facts pertinent to the judgment of the case are selected and delimited according to their legal relevance, which is established in light of the various plausible solutions to the legal question(s) (in accordance with former article 511, no. 1, of the CPC, corresponding to current article 596, applicable ex vi article 29, no. 1, paragraph e), of the RJAT).

The following facts were considered proven, with relevance to the decision:

  • The Claimant is a legal entity.

  • As of 1 January 2018, the Claimant was the owner of the following properties:

A.1. The urban property registered in the property matrix under no. U-..., of the parish of ..., municipality of Amadora, whose TPV, as of 1 January 2018, amounts to €1,828,107.30;

A.2. The urban property registered in the property matrix under no. U-..., of the parish of ..., municipality of Amadora, whose TPV, as of 1 January 2017, amounts to €1,350,773.63;

A.3. The urban property registered in the property matrix under no. U-..., of the parish of..., municipality of Amadora, whose TPV, as of 1 January 2017, amounts to €1,596,398.58.

  • The TA issued to the Claimant the AIMI assessment no. 2018..., dated 30 June 2018, in the amount of €19,101.12, which it paid on 18 September 2018.

  • For purposes of determining the taxable value of AIMI, the TA considered the sum of the TPVs, as of 1 January 2018, of the urban properties listed in paragraph A. and which are recorded in the property matrices in the ownership of A..., in accordance with no. 1 of article 135-C of the IMI Code.

  • The sum of those TPVs amounted to €4,775,279.51, to which the rate of 0.4% was applied, resulting in AIMI assessed at €19,101.12.

  • The urban properties identified in paragraph A. are all classified, for purposes of the IMI Code, as land for construction, with the type of location coefficient applied corresponding to that for services.

No other facts were proven with relevance to the decision of the case, considering the possible legal solutions.

The Tribunal formed its conviction regarding the proven facts based on the documents attached to the petition and the administrative process attached by the Tax Authority with its response.

Matter of Law

6. The Positions of the Parties

The Claimant understands that with respect to the objective scope of AIMI, article 135-B of the IMI Code stipulates in its no. 1 that "[t]he additional municipal property tax is levied on the sum of the tax patrimonial values of urban properties located in Portuguese territory of which the taxpayer is the holder."

In turn, no. 2 of said legal provision provides that "[t]he following are excluded from the additional municipal property tax: urban properties classified as 'commercial, industrial or for services' and 'others' in accordance with paragraphs b) and d) of no. 1 of article 6 of this Code."

Literally, no. 2 of article 135-B of the IMI Code does not exclude from the objective scope of AIMI lands for construction, insofar as this only comprises "urban properties classified as 'commercial, industrial or for services' and 'others' in accordance with paragraphs b) and d) of no. 1 of article 6 of this Code", not expressly referring to paragraph c) of no. 1 of article 6 of the same Code, which contemplates lands for construction (regardless of the intended use of the construction authorized or planned for them).

Nevertheless, the Claimant understands that, in accordance with the principles of legal hermeneutics and applicable constitutional tax principles, the objective exclusion from the scope of AIMI provided for in no. 2 of article 135-B of the IMI Code should extend to lands for construction intended for services, particularly when held by companies that acquire them for future development of buildings with such use, as in this case.

Specifically, the Claimant considers that, in accordance with the principles of legal hermeneutics, the exclusion provided for in no. 2 of article 135-B of the IMI Code regarding urban properties classified as industrial, commercial, and for services should be interpreted broadly as expressing legislative intent to also exclude from taxation lands for construction of such properties.

On the other hand, the subjection to AIMI of lands for construction of properties intended for industrial, commercial, and service purposes, in accordance with a literal interpretation of nos. 1 and 2 of article 135-B of the IMI Code, is incompatible with the constitutional principles of tax equality and contributive capacity, enshrined in article 13 and no. 3 of article 104 of the Constitution.

For its part, the Respondent concludes that AIMI is levied on properties classified as residential and as land for construction — regardless of their potential use (given that the law refers, without more, to article 6 of the IMI Code) — insofar as the same do not expressly appear in the rule of negative delimitation of scope.

It may thus be stated, from the Respondent's perspective, that with respect to AIMI levied on urban properties of which legal entities and equivalent structures are owners, usufructuaries, or superficiaries (no. 2 of article 135-A of the IMI Code), the tax assumes the nature of a real tax, insofar as the modeling of the amount to be paid abstracts from the economic dimension of the entities, namely their qualification as small, medium, or large enterprises, and nor does it affect the totality of the net assets of the entities.

With respect to legal entities and equivalent structures, AIMI has the nature of real taxation, thereby reflecting the idea that elements making up the real property assets held by these entities perform, as a rule, an economic function, and thus do not represent mere accumulation of wealth.

The legislator excluded from the scope urban properties classified as "industrial, commercial, or service" and "others", but chose expressly to maintain other properties that may also integrate the assets of companies, such as those classified as residential or lands for construction, by not including them in the negative delimitation provided for. That is, it did not guarantee, nor did it intend to guarantee, in all cases that "real property assets used in the exercise of any economic activity" would not be reached, contrary to what is claimed by the Claimant.

The progressive character of AIMI only has manifestation in the context of taxpayers - natural persons and not when the taxpayers are legal entities or equivalent legal structures. Consequently, when it is emphasized that this is a tax on "real property wealth," it is necessary to reconducto this expression to its real economic dimension, especially since the concept of "wealth" or "fortune" proves adequate when it refers to natural persons and not to legal entities.

7. Assessment of the Issues Raised by the Claimant

The parties, in a well-reasoned manner, assume disparate positions, particularly at the level of interpretation of applicable provisions in light of Constitutional principles of equality and contributive capacity, regarding the question of the objective scope of AIMI, specifically regarding "lands for construction."

In article 135-A, the subjective scope of this tax is defined, establishing that:

"Taxpayers of the additional municipal property tax are natural or legal persons who are owners, usufructuaries, or superficiaries of urban properties located in Portuguese territory", being "equivalent to legal entities any structures or centers of collective interests without legal personality that appear in the property matrices as taxpayers of the municipal property tax."

In turn, article 135-B defines the objective scope of this additional tax, establishing that:

1 - The additional municipal property tax is levied on the sum of the tax patrimonial values of urban properties located in Portuguese territory of which the taxpayer is the holder.

2 - The following are excluded from the additional municipal property tax: urban properties classified as "commercial, industrial or for services" and "others" in accordance with paragraphs b) and d) of no. 1 of article 6 of this Code.

In turn, article 6 of the IMI Code establishes that:

1 - Urban properties are divided into:
a) Residential;
b) Commercial, industrial or for services;
c) Land for construction;
d) Others.

2 - Residential, commercial, industrial or for services are buildings or constructions licensed for such purpose or, in the absence of a license, that have as their normal destination each of these purposes.

3 - Land for construction is understood to be land situated within or outside an urban agglomeration, for which construction or subdivision license or authorization has been granted, prior communication has been accepted, or favorable prior information has been issued for a subdivision or construction operation, and also those declared as such in the acquisition title, excepting lands in which the competent entities prohibit any of these operations, namely those located in green areas, protected areas, or that, in accordance with municipal land use plans, are assigned to spaces, infrastructure, or public facilities.

4 - Included in the provision of paragraph d) of no. 1 are lands situated within an urban agglomeration that are neither land for construction nor are covered by the provision of no. 2 of article 3 and also buildings and constructions licensed or, in the absence of a license, that have as their normal destination purposes other than those referred to in no. 2, and also those in the exception of no. 3.

The draft Budget contained for no. 2 of article 135-B the following wording:

2 - The following are excluded from the additional municipal property tax: urban properties classified as "industrial", as well as urban properties licensed for tourism activity, the latter provided that their destination is duly declared and proven.

The wording that came to be approved was not this one.

This means that article 135-B of the IMI Code (in the approved wording) does not remove the scope of AIMI from lands for construction used by legal entities in the context of their economic activity. What can be concluded is that, if there were to be any distinction, the legislator would have maintained the wording of the proposal, which in fact did not happen.

Thus, it was not based on the activity to which the properties are assigned that the exclusion from scope came to be defined, since, as results from the mentioned no. 2, whose wording did, in fact, come to be approved, non-applicability is based on the types of properties indicated in article 6 of the IMI Code, without any other reference resulting from it.

The negative delimitation of scope is, what we can then conclude, enshrined in objective and not subjective scope, which means that the legislator excluded from the scope urban properties used for "industrial, commercial, or service" purposes and "others", but maintained other properties that may integrate the assets of companies.

As extracted from CAAD award 420/2018-T:

"However, it was not based on the activity to which the properties are assigned that the exclusion from scope came to be defined, as the wording that came to be approved defined non-applicability only based on the types of properties indicated in article 6 of the IMI Code, without any reference to assignment to the functioning of legal entities.

The assignment of a property, which presupposes a use, and the purpose to which it is destined, the "normal destination," underlying the classifications of properties referred to in no. 2 of article 6 of the IMI Code, are distinct concepts.

If the final wording of the Budget had maintained the legislative intent to remove the scope from properties directly assigned to the functioning of legal entities, the reference to this assignment that appeared in the proposal, clearly expressing this legislative option, would certainly have been maintained.

Thus, as this reference to the assignment of properties has been suppressed, there is no legal support to conclude that residential properties and lands for construction assigned to the activity of legal entities do not apply to the scope of AIMI.

Therefore, it is to be concluded that the assignment of properties to economic activities of legal entities does not exclude taxation in AIMI (outside cases where these are properties that previously were exempt or not subject to taxation in IMI, which are not accounted for purposes of AIMI, in accordance with no. 3 of article 135-B of the IMI Code)."

What reasons may underlie the exclusion from taxation in AIMI?

Following the award we have been citing:

"With respect to properties that have the classification of "others" in the face of article 6, nos. 2, paragraph d), and 4, of the IMI Code, one may see a reason for distinction in the fact that these are essentially properties that are not intended for income-generating activities, namely lands situated in urban agglomerations that do not meet the requirements necessary for their classification as land for construction nor are being used for agricultural or forestry purposes, and buildings intended for spaces, infrastructure, or public facilities.

Concerning the removal of taxation with respect to properties intended for commerce, industry, or services, one may discern an explanation in the purpose invoked for the creation of this new tax, which is to finance Social Security, ensured through the allocation of AIMI revenues to the Financial Stabilization Fund of Social Security, provided for in no. 2 of article 1 of the IMI Code, as amended by Law no. 42/2016, of 28 December.

It is not intended with AIMI to burden the taxation of luxury properties, as was primarily aimed at with item 28.1 of the TGIS, as the real property assets of substantial value may be comprised of a plurality of properties of reduced value, but rather to create another avenue of subsidization of the social security system, which is one of the constitutional obligations of the State, provided for in article 63, no. 2, of the Constitution."

The objective or real scope of the additional municipal property tax falls, in accordance with the provision of no. 1 of article 135-B, "on the sum of the tax patrimonial values of urban properties located in Portuguese territory of which the taxpayer is the holder."

Being provided in no. 2 of the same provision an exclusion of scope from "urban properties classified as 'commercial, industrial or for services' and 'others', in accordance with paragraphs b) and d) of no. 1 of said article 6."

Thus subject to AIMI are properties assigned to "residential" purposes and "lands for construction" as defined in article 6 of the IMI Code, without any reference to assignment to the functioning of legal entities, as already stated in Arbitral Award of 22.01.2019, rendered in process 401/2018-T.

Therefore, it is to be concluded that the assignment of properties to economic activities of legal entities does not exclude taxation in AIMI (outside cases where these are properties that previously were exempt or not subject to taxation in IMI, which are not accounted for purposes of AIMI, in accordance with no. 3 of article 135-B of the IMI Code).

The holding of real property assets of high value, regardless of whether or not assigned to economic activity, is tendentially indicative of high contributive capacity, superior to that which is to be presumed to exist when real property of reduced value is held or when it does not exist, so, in principle, the limitation of taxation to the first situations is justified.

In fact, it does not explicitly result from the Report of the 2017 Budget nor from its parliamentary discussion the reasons that will underlie the distinction, for purposes of taxation in AIMI, between the tax patrimonial values of properties classified as residential or land for construction (regardless of their actual assignment to these purposes) and those of urban properties that have other classifications, in the face of article 6 of the IMI Code.

This Tribunal understands, with respect to AIMI, that the literal application of the rules that leads to the scope of the tax, and insofar as it matters here, over "lands for construction," regardless of the assignment that may come to fall to them, given that they do not appear in the negative delimitation of scope.

This understanding follows other decisions, in addition to those cited expressly, among which stand out those rendered in the following cases: 654/2017-T of 03.09.2018, 664/2017-T of 26.06.2018, 667/2017-T of 05.09.2018, 685/2017-T of 06.09.2018, 690/2017-T of 06.09.2018, 692/2017-T of 11.05.2018, 696/2017-T of 23.07.2018, 6/2018-T of 26.07.2018, 306/2018-T of 28.12.2018, and 401/2018-T of 22.01.2019.

On the Unconstitutionality of AIMI

The Claimant further requests that the rules in question be disapplied, invoking the unconstitutionality of the AIMI taxation regime, namely due to violation of the principles of equality and tax equality, and contributive capacity.

It should be said before and more importantly that, although it is incumbent on the Courts to assess (un)constitutionality, the Tax Authority, which is under the hierarchical dependence of the executive, cannot substitute itself for the courts and scrutinize the constitutionality of the laws it is obliged to apply.

As stated in Arbitral Award no. 664/2017-T, "the Constitutional Court has highlighted that one of the essential constitutional objectives of the tax system, alongside the satisfaction of the financial needs of the State and other public entities, is the fair distribution of income and wealth, as is evident from article 103, no. 1, of the Constitution."

We consider it established in this context that the freedom enjoyed by the legislator requires that the principle of contributive capacity have some flexibility and may yield, to a certain extent, before other State purposes.

Hence, when an apparently or tendentially equal situation is treated in an apparently different manner, one can only speak of tax inequality if there are no reasonable grounds that led the legislator to make the choices it made.

That is, what is constitutionally forbidden to the legislator is pure arbitrariness, which will not be the case when it has in view the pursuit of objectives to which it assigns greater value - as is the paradigmatic case of tax benefits, in which the legislator prefers to forgo fiscal revenue to achieve other objectives.

It is, moreover, within this spirit that the legislator, insofar as the case is concerned, only intends to tax properties classified as residential and land for construction, refraining from levying AIMI on the others. That is, it took a measure of distinction of what is unequal, making an option whose justification seems clear: not to increase the tax burden on productive sectors, aimed at the much-touted needs for investment and economic growth.

As, likewise, that Arbitral Award refers, "the ownership of real property assets, for purposes of sale and transformation, in view of obtaining economic results, remains an asset that is indicative of increased contributive capacity, which goes beyond the tax levied on taxable profit by reason of the economic activity carried out. What is at issue, therefore, is not the taxation of real income earned by these entities through the activity carried out, but the complementary contributive capacity that derives from the ownership of the asset and which by itself can facilitate the securing of credit or the strengthening of their negotiating position in the execution of contracts."

Moreover, the contributive capacity of business legal entities, relevant to the assessment of the application of the principle of tax equality, is not evidenced only by income, namely by the results of the activity to which the properties are intended.

In truth, "property provides its holder with special contributive capacity, advantages which by their nature escape the tax on personal income: thus, the ownership of property facilitates the securing of credit, strengthens the negotiating position of its holder in the execution of various contracts, makes it easier to multiply wealth by allowing it to take risks where in principle it would not. In this perspective, property tax is seen as something more than an extension of tax on personal income - it is not a matter here of overloading income already subject to it, but of reaching manifestations of contributive capacity that in fact escape it" (Sérgio Vasques, Contributive Capacity, Income and Assets, in Tax Law, no. 23, p. 36).

In the same vein, we conclude that there does not appear, therefore, to be any unconstitutionality.

Compensatory Interest
  1. The Claimant further requests the condemnation of the Tax Authority to the payment of compensatory interest, at the legal rate, calculated on the tax, until full reimbursement of the amount owed.

The condemnation to payment of compensatory interest takes place, following a declaration of illegality of assessment acts, in accordance with the provisions of articles 43, no. 1, of the General Tax Law and 61, no. 5, of the Code of Tax Procedure.

Having ruled the arbitral request unfounded with respect to the tax act, the condemnation to compensatory interest is also unfounded.

III – Decision

  • To rule the arbitral request wholly unfounded and, in consequence, to absolve the TA of the claims;

  • To condemn the Claimant to payment of costs.

Value of the Cause

The Claimant indicated as the value of the cause the amount of €19,101.11, which was not contested by the Respondent and corresponds to the value of the assessment intended to be opposed, so that amount is fixed as the value of the cause.

Costs

Pursuant to articles 12, no. 2, and 24, no. 4, of the RJAT, and 3, no. 2, of the Regulations of Costs in Tax Arbitration Proceedings and Table I attached to that Regulation, the amount of costs is fixed at €1,224.00, which shall be borne by the Claimant.

Notify.

Lisbon, 29 April 2019

The Arbitrator

(Marisa Almeida Araújo)

Frequently Asked Questions

Automatically Created

Does AIMI (Additional Municipal Property Tax) apply to construction land (terrenos para construção) in Portugal?
Under Portuguese tax law, AIMI generally applies to urban properties based on their tax patrimonial value (VPT) as registered in property matrices. The controversy in this case centers on whether construction land (terrenos para construção) falls within AIMI's objective scope. Article 135-C of the IMI Code establishes that AIMI's taxable value is determined by the sum of VPTs, but the claimant argues construction land should be excluded from this calculation, raising constitutional concerns about the tax's application to undeveloped properties.
What was the outcome of CAAD arbitral decision 506/2018-T regarding AIMI on construction land?
In CAAD Decision 506/2018-T, the claimant A... S.A. challenged an AIMI assessment of €19,101.12 covering three construction land properties in Amadora with combined VPT of €4,775,279.51. The arbitral tribunal had to determine whether construction land classified for office development should be subject to AIMI taxation. The case was constituted as a singular arbitral tribunal under RJAT provisions, with both parties presenting arguments on whether the properties fell within statutory exclusions under articles 135-B and 135-C of the IMI Code.
Can taxpayers challenge AIMI assessments on construction land based on unconstitutionality arguments?
Taxpayers challenging AIMI assessments on construction land can argue unconstitutionality based on the tax's objective incidence. In this case, the claimant argued that levying AIMI on terrenos para construção exceeds constitutional limits, seeking restitution of amounts paid plus compensatory interest. Such challenges require demonstrating that the properties do not generate income or do not fall within the legislative intent of AIMI as a tax on high-value property portfolios. Property classification and VPT calculation methods are key evidentiary elements in these disputes.
How is the taxable value (VPT) calculated for AIMI purposes on urban properties classified as construction land?
For AIMI purposes, the taxable value of construction land is calculated using the sum of tax patrimonial values (VPT) recorded in property matrices as of January 1 of the tax year, per article 135-C of the IMI Code. In this case, three properties had VPTs of €1,828,107.30, €1,350,773.63, and €1,596,398.58, totaling €4,775,279.51. The Tax Authority applied a 0.4% rate to this base, resulting in €19,101.12 AIMI. The properties were classified as construction land with service-type location coefficients, which influenced VPT determination under IMI valuation rules.
Are property owners entitled to a refund and compensatory interest if AIMI is unlawfully charged on construction land?
Property owners may be entitled to restitution and compensatory interest if AIMI is deemed unlawfully charged on construction land. Under Portuguese tax law, when an assessment is annulled or declared illegal, taxpayers can recover amounts paid plus interest calculated from the payment date. In this arbitration, the claimant sought full reimbursement of €19,101.12 paid on September 18, 2018, plus compensatory interest. The right to interest compensation reflects the principle that taxpayers should not bear financial losses from unlawful tax assessments, with interest rates governed by articles 43 and 61 of the LGT (General Tax Law).