Summary
Full Decision
ARBITRATION DECISION
REPORT
A – PARTIES
A…, married, with tax domicile at Avenue …, …, …, …-… Matosinhos, and TIN…, B…, married, with tax domicile at Street …, no. …, …, …-… Porto, and TIN…, C…, divorced, with tax domicile at Street …, …, …, … … PORTO, and TIN…, D…, widowed, with tax domicile at Street …, …, …-… Porto, and TIN … in the capacity of head of estate opened by E…, with tax identification number…, F…, married, with tax domicile at Street…, …, …-… PORTO, and TIN…, G…, divorced, with tax domicile at Street …, …, …-… PORTO, and TIN …, H…, single, with tax domicile at Street …, …, …-… Porto, and TIN … in the capacity of head of estate opened by death of I…, with tax identification number…, J…, married, with tax domicile at Street …, … –…, …-… Porto and TIN … in the capacity of head of estate opened by death of K…, with tax identification number … whose estate has TIN…, L…, married, with tax domicile at Square…, …, …, ..., …-… Lisbon, and TIN…, M…, divorced, with tax domicile at Street … … / … …-… Porto, and TIN …, N…, divorced, with tax domicile at Street …, …, … , …-… Porto, and TIN…, O…, married, with tax domicile at Avenue…, …, … …-… Porto, and TIN …, P…, married, with tax domicile at Street …, …, …-… Porto, and TIN…, Q…, divorced, with tax domicile at Street …, …, …, Cantanhede, and TIN…, R…, divorced, with tax domicile in…, …, Cantanhede, and TIN…, S…, widowed, with tax domicile at Street …, no. …, …-… Porto, and TIN …, hereinafter referred to as Claimant or taxable person.
TAX AND CUSTOMS AUTHORITY (which succeeded the Directorate-General of Taxes, by means of Decree-Law no. 118/2011, of 15 December) hereinafter referred to as Respondent or TA.
The request for constitution of the arbitral tribunal was accepted by the President of CAAD, and the Arbitral Tribunal was duly constituted, on 10-11-2016, to examine and decide on the subject matter of the present proceedings, and automatically notified the Tax and Customs Authority on 10-11-2016, as appears from the respective minutes.
The Claimant did not proceed with the appointment of an arbitrator, wherefore, by virtue of the provisions of no. 1 of article 6 and paragraph b) of no. 1 of article 11 of Decree-Law no. 10/2011, of 20 January, as amended by article 228 of Law no. 66-B/2012, of 31 December, the Deontological Council appointed as arbitrator Paulo Ferreira Alves, with the appointment having been accepted under the terms legally provided.
On 25-10-2016 the parties were duly notified of this appointment and did not manifest any intention to refuse the appointment of arbitrators, in accordance with article 11 no. 1, paragraphs a) and b), of the RJAT and Articles 6 and 7 of the Deontological Code.
In accordance with the provision of paragraph c) of no. 1 of article 11 of Decree-Law no. 10/2011, of 20 January, as amended by article 228 of Law no. 66-B/2012, of 31 December, the singular arbitral tribunal is duly constituted on 10-11-2016.
Both parties agreed to the waiver of the meeting provided for in article 18 of the RJAT.
The arbitral tribunal is duly constituted. It is materially competent, in accordance with 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 legally represented (articles 4 and 10, no. 2, of the same statute and article 1 of Ordinance no. 112-A/2011, of 22 March).
The proceedings do not suffer from defects that would invalidate it.
B – REQUEST
1. The Claimants request the declaration of illegality of the tax assessment acts for Stamp Duty: nos.: no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…; no. 2016…, which set a global collection and tax payable of €14,494.57 (fourteen thousand four hundred and ninety-four euros and fifty-seven cents).
C – CAUSE OF ACTION
2. To support their request for arbitral ruling, the Claimants alleged, with a view to the declaration of illegality of the tax assessment acts for Stamp Duty, already described in point 1 of this Decision, in summary, the following:
I. With a view to the declaration of illegality and annulment of the tax assessment acts for Stamp Duty for the year 2015, resulting from the application of item no. 28.1 of the General Table of Stamp Duty (GTSD), to the urban property registered in the cadastre under article …, of the Union of Parishes …, … and …, of the municipality of Porto, which resulted in a collection in the amount (global) of €14,494.57 (fourteen thousand four hundred and ninety-four euros and fifty-seven cents).
II. The Claimants are owners of the urban property registered in the cadastre under article …, of the Union of Parishes …, … and …, of the municipality of Porto, urban property with entrance at nos. …/… of Street … and Street …, nos. …/…, located in the union of parishes …, … and…, in the municipality Porto, registered in the property cadastre, currently, under article … and which corresponds to the previous article…, respectively:
III. A… was notified in April 2016 of the stamp duty assessments contained in the documents attached by nos. 1 to 8 which are attached and hereby fully reproduced.
IV. B… was notified in April 2016 of the stamp duty assessments contained in the documents attached by nos. 9 to 16 which are attached and hereby fully reproduced.
V. C… was notified in April 2016 of the stamp duty assessments contained in the documents attached by nos. 17 to 24 which are attached and hereby fully reproduced.
VI. D…, in the capacity of head of estate opened by E… was notified in April 2016 of the stamp duty assessments contained in the documents attached by nos. 25 to 32 which are attached and hereby fully reproduced.
VII. F… was notified in April 2016 of the stamp duty assessments contained in the documents attached by nos. 33 to 40 which are attached and hereby fully reproduced.
VIII. G… was notified in April 2016 of the stamp duty assessments contained in the documents attached by nos. 41 to 48 which are attached and hereby fully reproduced.
IX. H…, in the capacity of head of estate opened by death of I… was notified in April 2016 of the stamp duty assessments contained in the documents attached by nos. 49 to 56 which are attached and hereby fully reproduced.
X. J…, in the capacity of head of estate opened by death of K… was notified in April 2016 of the stamp duty assessments contained in the documents attached by nos. 57 to 64 which are attached and hereby fully reproduced.
XI. L…, was notified in April 2016 of the stamp duty assessments contained in the documents attached by nos. 65 to 72 which are attached and hereby fully reproduced.
XII. M…, was notified in April 2016 of the stamp duty assessments contained in the documents attached by nos. 73 to 80 which are attached and hereby fully reproduced.
XIII. N…, was notified in April 2016 of the stamp duty assessments contained in the documents attached by nos. 81 to 88 which are attached and hereby fully reproduced.
XIV. O…, was notified in April 2016 of the stamp duty assessments contained in the documents attached by nos. 89 to 96 which are attached and hereby fully reproduced.
XV. P…, was notified in April 2016 of the stamp duty assessments contained in the documents attached by nos. 97 to 104 which are attached and hereby fully reproduced.
XVI. Q…, was notified in April 2016 of the stamp duty assessments contained in the documents attached by nos. 105 to 112 which are attached and hereby fully reproduced.
XVII. R…, was notified in April 2016 of the stamp duty assessments contained in the documents attached by nos. 113 to 120 which are attached and hereby fully reproduced.
XVIII. S…, was notified in April 2016 of the stamp duty assessments contained in the documents attached by nos. 121 to 128 which are attached and hereby fully reproduced.
XIX. The Claimant alleges that the totality of the amounts that were assessed to them.
XX. Moreover, it submits that some of the claimants will still be notified to pay the second instalment of tax on the basis of the assessments made, which fact will be brought to the proceedings as soon as it occurs, since the value of the assessments made to the claimants herein, on this basis, amounts to €14,494.57.
XXI. The aforementioned property is comprised of 5 storeys, with four upper storeys having residential use and each of these four storeys having two parts capable of independent use, for a total of eight parts capable of independent use, within the meaning of the provision of article 12, no. 3 of CIMI
XXII. The aforementioned property is not constituted under the horizontal property regime
XXIII. In accordance with the provision of that article 12, no. 3 of CIMI, and the provision of article 7 of the same legal instrument, each part capable of independent use was considered separately in the property registration, which discriminated the respective tax property value in accordance with the terms indicated above and reproduced.
XXIV. Given that none of the parts capable of independent use of that property has a tax property value exceeding €1,000,000.00.
XXV. The value corresponding to the TPVs of all storeys and parts of the property with residential use and capable of independent use, cumulatively, totals €1,545,341.75 (€149,398.63 + €166,213.00 + €202,652.99 (x3) + €207,257.05 (x3)).
XXVI. The Tax Authority assessed the stamp duty provided for in item no. 28 and 28.1 of the General Table of Stamp Duty (GTSD), as amended by Law no. 55-A/2012, of 29 October, at the rate of 1%, considering as "tax property value registered in the cadastre, in accordance with the Municipal Property Tax Code (CIMI)", the sum of all the TPVs of the parts with residential use capable of independent use, the aforementioned amount of €1,545,341.75.
XXVII. The Claimant contends that the "tax property value registered in the cadastre, in accordance with the Municipal Property Tax Code (CIMI)" to which item no. 28 of the GTSD refers is not the global value of the property equivalent to the sum of all the TPVs that compose it, as the Tax Authority erroneously considered, but the value of the TPV assigned to each part capable of independent use
XXVIII. Therefore, stamp duty should not have been assessed or collected from any of the authors with regard to any of the parts capable of independent use of the urban property registered in the cadastre under article … of the … (currently article …) above identified, given that as stated above, none of the parts capable of independent use in the property in question has a TPV exceeding €1,000,000.00.
XXIX. Moreover, it alleges that the assessments made by the Tax Authority, which are based on the interpretation of the provision in Item no. 28.1 of the GTSD, which considers that the tax property value registered in the cadastre, in accordance with the Municipal Property Tax Code (CIMI), for the purposes of stamp duty taxation, is the sum of the TPVs of all the parts capable of independent use forming part of property not constituted under horizontal property regime, is also unconstitutional, by violation of the provision of article 103, no. 2 of the CRP, in view of the circumstance that a legal fact is being taxed by a tax that was not created by law
XXX. The Claimant concludes by requesting that it be ruled that the request for ruling by the Arbitral Tribunal is well-founded and, consequently, that the stamp duty assessments (item 28.1 GTSD) for the year 2015, made on 05.04.2016, be annulled with regard to all parts with residential use capable of independent use of the urban property registered in the cadastre under article …, (currently article …) of the union of parishes …, … and …, Porto, above better identified, with all the legal consequences, and condemning the Tax and Customs Authority to reimburse the amounts wrongfully assessed to the Authors plus the corresponding moratory interest accrued and to accrue until full reimbursement of the amounts paid by them.
D – RESPONSE FROM RESPONDENT
3. The Respondent, duly notified for that purpose, submitted its response in a timely manner, in which, in abbreviated summary, it alleged the following:
I. At the date, the Claimants held full ownership of the urban property under analysis, evaluated in accordance with CIMI, within the scope of the general evaluation of urban properties, described as "property in full ownership with storeys or divisions capable of independent use", with tax property value (TPV) exceeding €1,000,000.00.
II. With reference to the year 2015, in compliance with item no. 28.1 of the GTSD, as amended by Law no. 83-C/2013, of 31/12, the wording of which refers to urban properties, evaluated in accordance with CIMI with TPV equal to or exceeding €1,000,000.00, and residential use, the TA proceeded with the notification of the collection documents
III. Article 44, no. 5 of the Stamp Duty Code (SDC), added by Law no. 55-A/2012, of 29/10, provides that, where assessment is warranted, the tax referred to in item 28 of the GTSD is paid, in the periods, terms and conditions defined in article 120 of CIMI, this means that when the amount is equal to or less than €250.00 it is paid in one instalment in the month of April, in two instalments (April and November) when equal to or exceeding €250.00 and equal to or less than €500.00, and it is paid in three instalments, in the months of April, July and November, when its amount exceeds €500.00, in accordance with paragraphs a), b) and c) of no. 1 of the cited article
IV. The concept of property is defined in article 2, no. 1, of CIMI, and it is provided in its no. 4 that, under the horizontal property regime, each autonomous unit is regarded as constituting a property.
V. It follows from the analysis of the normative provision that a "property in full ownership with storeys or divisions capable of independent use" is, unequivocally, different from a property under horizontal property regime, constituted by autonomous units, that is, several properties.
VI. Article 12 of CIMI establishes the concept of property cadastre, and its no. 3 concerns, exclusively, the manner of recording cadastral data.
VII. As regards the assessment of Municipal Property Tax, in the case of properties in full ownership, the value that serves as the basis for its calculation will indisputably be that registered in the property register as "total property value".
VIII. In compliance with the provision of article 119, no. 1 of CIMI, the collection document is sent to the taxable person with discrimination of the parts capable of independent use, the respective tax property value and the collection attributed to each municipality of the location of the properties.
IX. In accordance, with the assessment being correct and the tax calculated being due, no moratory or indemnatory interest is owed, firstly because there is no error attributable to the services, which merely acted, as they should, in strict compliance with the legal norm.
X. In fact, although the assessment of Stamp Duty, in the situations provided for in item no. 28.1 of the GTSD, takes place in accordance with the rules of CIMI, the truth is that the legislator makes exceptions for those aspects that require proper adjustments, namely those in which, as is the case with properties in full ownership, even though with storeys or divisions capable of independent use (although Municipal Property Tax is assessed with respect to each part capable of independent use) for the purposes of Stamp Duty the property as a whole is relevant since the divisions capable of independent use are not regarded as property, but only autonomous units under the horizontal property regime, in accordance with no. 4 of article 2 of CIMI.
XI. What expressly results from the letter of the law is that the legislator intended to tax with item 28.1 under discussion properties as a single legal-tax reality.
XII. The subjection to stamp duty of item 28.1 of the GTSD results from the combination of two facts: residential use and the tax property value of the urban property registered in the cadastre being equal to or exceeding €1,000,000.00
XIII. In fact, it appears from the property register that the property in question is under the full ownership regime, comprised of several parts capable of independent use.
XIV. This being the cadastral information, in accordance with article 23, no. 7 of SDC, the assessment of stamp duty for the year 2015, was carried out by the Tax Administration, taking into account the nature of the urban property at the date of the taxable event, applying, with the necessary adjustments, the rules contained in CIMI
XV. The property being under the full ownership regime (not possessing autonomous units, to which the tax law attributes the qualification of property, because the concept of property in no. 4 of article 2 of CIMI results that only autonomous units of property under horizontal property regime are regarded as properties), it is the global TPV of the property that must, therefore, be relevant.
XVI. Furthermore, the TA submits that the provision of item 28.1 of the GTSD does not constitute any violation of the principle of equality, with no discrimination existing in the taxation of properties constituted under horizontal property regime and properties in full ownership with storeys or divisions capable of independent use, or between properties with residential use and properties with other uses
XVII. Horizontal property and vertical property are distinct legal institutes.
XVIII. The constitution of horizontal property implies, it is a fact, a mere legal alteration of the property, with no evaluation taking place (Circular no. 40.025, of 11.08.200, of DSCA), but the legislator may, however, submit to a distinct tax legal framework, and therefore discriminatory, properties under horizontal property regime and vertical property regime, in particular, benefiting the legally more advanced institute of horizontal property, without such discrimination being necessarily considered arbitrary.
XIX. What is intended to be concluded is that these rules procedures of evaluation, the rules on property registration, and also the rules on the assessment of the parts capable of independent use, do not allow one to affirm that there should be an equation of property under full ownership to the vertical property regime, because, as already mentioned, it would be illegal and unconstitutional.
XX. It is thus a consequence of the taxable event of the stamp duty of item 28.1 consisting of ownership of urban properties whose tax property value registered in the cadastre, in accordance with CIMI, is equal to or exceeding €1,000,000.00, that the relevant property value for the purposes of the incidence of the tax is, thus, the total property value of the urban property and not the property value of each one of the parts that compose it, even when capable of independent use.
XXI. Item 28.1 therefore incides on ownership, usufruct or right of superficies of urban properties with residential use, whose tax property value registered in the cadastre, in accordance with CIMI, is equal to or exceeding €1,000,000.00.
XXII. It is a general and abstract norm, applicable indiscriminately to all cases in which the respective factual and legal requirements are met.
XXIII. Also, the different valuation and taxation of a property in full ownership compared to a property constituted under horizontal property regime results from the different legal effects inherent in these two figures.
XXIV. In effect, the constitution under horizontal property regime determines the division of full ownership and the independence or autonomy of each one of the units that compose it, for all legal purposes, in accordance with no. 2 of article 4 of CIMI and articles 1414 et seq. of the CC, while a property in full ownership constitutes, for all purposes, a single legal-tax reality.
XXV. What is now being argued before the arbitral tribunal was the subject of Binding Information from the TA, with approval dispatch of the Legal Substitute of the Director-General of the Tax and Customs Authority, of 11.02.2013, and on which, for the purposes of Municipal Property Tax and also of stamp duty, by force of the wording of the said item, the owner is not owner of autonomous units, but of a single property, the TA considering that this is the understanding that best accords with the principle of legality inherent in article 8 of the GTL, to which all its activity is devoted.
4. The Respondent concludes by sustaining the legality of the stamp duty assessment acts, and in substance, they violated no legal or constitutional provision, and should be maintained in the legal order.
E – FACTUAL BASIS
5. Before proceeding to the examination of these questions, it is necessary to present the factual matter relevant to its understanding and decision, which was carried out on the basis of documentary evidence and taking into account the facts alleged.
6. In matters of fact relevant to the resolution of the case, this tribunal establishes the following facts as proved:
7. The Claimant is the owner of the urban property, not constituted under the horizontal property regime, located in Porto, at Street …, …/… no.: .., …-… Porto, at Street …, …/… no.: .., …-… Porto and at Street … No.: .., …-… Porto, described in the property cadastre under article…, of the Union of parishes …, … and…, of the municipality of Porto.
8. The aforementioned urban property constitutes a property in full ownership with storeys capable of independent use, with 10 storeys or divisions, with the total property value of €2,125,411.43.
9. From the assessments made appears the following mention: Property Value of the property – Total subject to tax €1,545,3410.75.
10. The property value of the property is €2,125,411.43, and the value of the units of independent use with residential use of the property is €1,545,3410.75.
11. The assessment notes for the respective property relate to the following storeys and divisions, whose property value of the said divisions with independent use, which compose the urban property, was determined separately, in accordance with the provision of article 7, no. 2, subparagraph b), of the Municipal Property Tax Code (CIMI), resulting in the issuance of the following tax acts, here challenged:
11.1 Tax Act no. 2016…, with a tax collection to be assessed of €16.42, and with a TPV of €202,652.99, referring to property registration U–…-3 A;
11.2 Tax Act no. 2016…, with a tax collection to be assessed of €16.79, and with a TPV of €207,257.05, referring to property registration U–…-2 B;
11.3 Tax Act no. 2016…, with a tax collection to be assessed of €16.42, and with a TPV of €202,652.99, referring to property registration U–…-2 A;
11.4 Tax Act no. 2016…, with a tax collection to be assessed of €16.79, and with a TPV of €207,257.05, referring to property registration U–…-2 B;
11.5 Tax Act no. 2016…, with a tax collection to be assessed of €13.47, and with a TPV of €166,213.00, referring to property registration U –…-4 A;
11.6 Tax Act no. 2016…, with a tax collection to be assessed of €16.79, and with a TPV of €207,257.05, referring to property registration U–…-3 B;
11.7 Tax Act no. 2016…, with a tax collection to be assessed of €12.11, and with a TPV of €149,398.63, referring to property registration U –…-1 B;
11.8 Tax Act no. 2016…, with a tax collection to be assessed of €16.42, and with a TPV of €202,652.99, referring to property registration U–…-2 A;
11.9 Tax Act no. 2016…, with a tax collection to be assessed of €140.48, and with a TPV of €202,652.99, referring to property registration U–…-1 A;
11.10 Tax Act no. 2016…, with a tax collection to be assessed of €103.56, and with a TPV of €149,398.63, referring to property registration U–…-1 B;
11.11 Tax Act no. 2016…, with a tax collection to be assessed of €140.48, and with a TPV of €202,652.99, referring to property registration U–…-2 A;
11.12 Tax Act no. 2016…, with a tax collection to be assessed of €143.67, and with a TPV of €207,257.05, referring to property registration U–…-2 B;
11.13 Tax Act no. 2016…, with a tax collection to be assessed of €140.48, and with a TPV of €202,652.99, referring to property registration U–…-3 A;
11.14 Tax Act no. 2016…, with a tax collection to be assessed of €143.67, and with a TPV of €207,257.05, referring to property registration U–…-2 B;
11.15 Tax Act no. 2016…, with a tax collection to be assessed of €115.22, and with a TPV of €166,213.00, referring to property registration U–…-4 A;
11.16 Tax Act no. 2016…, with a tax collection to be assessed of €143.67, and with a TPV of €207,257.05, referring to property registration U–…-4 B;
11.17 Tax Act no. 2016…, with a tax collection to be assessed of €16.42, and with a TPV of €202,652.99, referring to property registration U–…-1 A;
11.18 Tax Act no. 2016…, with a tax collection to be assessed of €12.11, and with a TPV of €149,398.63, referring to property registration U –…-1 B;
11.19 Tax Act no. 2016…, with a tax collection to be assessed of €16.42, and with a TPV of €202,652.99, referring to property registration U–…-2 A;
11.20 Tax Act no. 2016…, with a tax collection to be assessed of €16.79, and with a TPV of €207,257.05, referring to property registration U–…-3 B;
11.21 Tax Act no. 2016…, with a tax collection to be assessed of €16.42, and with a TPV of €202,652.99, referring to property registration U–…-3 A;
11.22 Tax Act no. 2016…, with a tax collection to be assessed of €16.79, and with a TPV of €207,257.05, referring to property registration U–…-3 B;
11.23 Tax Act no. 2016…, with a tax collection to be assessed of €13.47, and with a TPV of €166,213.00, referring to property registration U –…-4 A;
11.24 Tax Act no. 2016…, with a tax collection to be assessed of €16.79, and with a TPV of €207,257.05, referring to property registration U–…-4 B;
11.25 Tax Act no. 2016…, with a tax collection to be assessed of €28.79, and with a TPV of €207,257.05, referring to property registration U–…-4 B;
11.26 Tax Act no. 2016…, with a tax collection to be assessed of €28.79, and with a TPV of €207,257.05, referring to property registration U–…-3 B;
11.27 Tax Act no. 2016…, with a tax collection to be assessed of €28.15, and with a TPV of €202,652.99, referring to property registration U–…-1 A;
11.28 Tax Act no. 2016…, with a tax collection to be assessed of €20.75, and with a TPV of €149,398.63, referring to property registration U –…-1 B;
11.29 Tax Act no. 2016…, with a tax collection to be assessed of €28.15, and with a TPV of €202,652.99, referring to property registration U–…-2 A;
11.30 Tax Act no. 2016…, with a tax collection to be assessed of €28.79, and with a TPV of €207,257.05, referring to property registration U–…-2 B;
11.31 Tax Act no. 2016…, with a tax collection to be assessed of €28.15, and with a TPV of €202,652.99, referring to property registration U–…-3 A;
11.32 Tax Act no. 2016…, with a tax collection to be assessed of €23.09, and with a TPV of €166,213.00, referring to property registration U –…-4 A;
11.33 Tax Act no. 2016…, with a tax collection to be assessed of €16.42, and with a TPV of €202,652.99, referring to property registration U–…-1 A;
11.34 Tax Act no. 2016…, with a tax collection to be assessed of €12.11, and with a TPV of €149,398.63, referring to property registration U –…-1 B;
11.35 Tax Act no. 2016…, with a tax collection to be assessed of €16.42, and with a TPV of €202,652.99, referring to property registration U–…-2 A;
11.36 Tax Act no. 2016…, with a tax collection to be assessed of €16.79, and with a TPV of €207,257.05, referring to property registration U–…-2 B;
11.37 Tax Act no. 2016…, with a tax collection to be assessed of €16.42, and with a TPV of €202,652.99, referring to property registration U–…-3 A;
11.38 Tax Act no. 2016…, with a tax collection to be assessed of €16.79, and with a TPV of €207,257.05, referring to property registration U–…-3 B;
11.39 Tax Act no. 2016…, with a tax collection to be assessed of €13.47, and with a TPV of €166,213.00, referring to property registration U –…-4 A;
11.40 Tax Act no. 2016…, with a tax collection to be assessed of €16.79, and with a TPV of €207,257.05, referring to property registration U–…-4 B;
11.41 Tax Act no. 2016…, with a tax collection to be assessed of €140.48, and with a TPV of €202,652.99, referring to property registration U–…-1 A;
11.42 Tax Act no. 2016…, with a tax collection to be assessed of €103.56, and with a TPV of €149,398.63, referring to property registration U–…-1 B;
11.43 Tax Act no. 2016…, with a tax collection to be assessed of €140.48, and with a TPV of €202,652.99, referring to property registration U–…-2 A;
11.44 Tax Act no. 2016…, with a tax collection to be assessed of €143.67, and with a TPV of €207,257.05, referring to property registration U–…-2 B;
11.45 Tax Act no. 2016…, with a tax collection to be assessed of €140.48, and with a TPV of €202,652.99, referring to property registration U–…-3 A;
11.46 Tax Act no. 2016…, with a tax collection to be assessed of €143.67, and with a TPV of €207,257.05, referring to property registration U–…-3 B;
11.47 Tax Act no. 2016…, with a tax collection to be assessed of €115.22, and with a TPV of €166,213.00, referring to property registration U–…-4 A;
11.48 Tax Act no. 2016…, with a tax collection to be assessed of €143.67, and with a TPV of €207,257.05, referring to property registration U–…-4 B;
11.49 Tax Act no. 2016…, referring to first instalment, with a tax collection to be assessed of €371.53, and with a TPV of €202,652.99, referring to property registration U–…-1 A;
11.50 Tax Act no. 2016…, referring to first instalment, with a tax collection to be assessed of €273.98, and with a TPV of €149,398.63, referring to property registration U–…-1 B;
11.51 Tax Act no. 2016…, referring to first instalment, with a tax collection to be assessed of €371.53, and with a TPV of €202,652.99, referring to property registration U–…-2 A;
11.52 Tax Act no. 2016…, referring to first instalment, with a tax collection to be assessed of €379.97, and with a TPV of €207,257.05, referring to property registration U–…-2 B;
11.53 Tax Act no. 2016…, referring to first instalment, with a tax collection to be assessed of €371.53, and with a TPV of €202,652.99, referring to property registration U–…-3 A;
11.54 Tax Act no. 2016…, referring to first instalment, with a tax collection to be assessed of €379.97, and with a TPV of €207,257.05, referring to property registration U–…-3 B;
11.55 Tax Act no. 2016…, referring to first instalment, with a tax collection to be assessed of €304.72, and with a TPV €166,213.00, referring to property registration U–…-4 A;
11.56 Tax Act no. 2016…, referring to first instalment, with a tax collection to be assessed of €379.97, and with a TPV of €207,257.05, referring to property registration U–…-4 B;
11.57 Tax Act no. 2016…, referring to first instalment, with a tax collection to be assessed of €371.53, and with a TPV of €202,652.99, referring to property registration U–…-1 A;
11.58 Tax Act no. 2016…, referring to first instalment, with a tax collection to be assessed of €273.98, and with a TPV of €149,398.63, referring to property registration U–…-1 B;
11.59 Tax Act no. 2016…, referring to first instalment, with a tax collection to be assessed of €371.53, and with a TPV of €202,652.99, referring to property registration U–…-2 A;
11.60 Tax Act no. 2016…, referring to first instalment, with a tax collection to be assessed of €379.97, and with a TPV of €207,257.05, referring to property registration U–…-2 B;
11.61 Tax Act no. 2016…, referring to first instalment, with a tax collection to be assessed of €371.53, and with a TPV of €202,652.99, referring to property registration U–…-3 A;
11.62 Tax Act no. 2016…, referring to first instalment, with a tax collection to be assessed of €379.97, and with a TPV of €207,257.05, referring to property registration U–…-3 B;
11.63 Tax Act no. 2016…, referring to first instalment, with a tax collection to be assessed of €304.72, and with a TPV €166,213.00, referring to property registration U–…-4 A;
11.64 Tax Act no. 2016…, referring to first instalment, with a tax collection to be assessed of €379.97, and with a TPV of €207,257.05, referring to property registration U–…-4 B;
11.65 Tax Act no. 2016…, referring to first instalment, with a tax collection to be assessed of €371.53, and with a TPV of €202,652.99, referring to property registration U–…-1 A;
11.66 Tax Act no. 2016…, referring to first instalment, with a tax collection to be assessed of €273.98, and with a TPV of €149,398.63, referring to property registration U–…-1 B;
11.67 Tax Act no. 2016…, referring to first instalment, with a tax collection to be assessed of €371.53, and with a TPV of €202,652.99, referring to property registration U–…-2 A;
11.68 Tax Act no. 2016…, referring to first instalment, with a tax collection to be assessed of €379.97, and with a TPV of €207,257.05, referring to property registration U–…-2 B;
11.69 Tax Act no. 2016…, referring to first instalment, with a tax collection to be assessed of €371.53, and with a TPV of €202,652.99, referring to property registration U-…-3 A;
11.70 Tax Act no. 2016…, referring to first instalment, with a tax collection to be assessed of €379.97, and with a TPV of €207,257.05, referring to property registration U–…-3 B;
11.71 Tax Act no. 2016…, referring to first instalment, with a tax collection to be assessed of €304.72, and with a TPV €166,213.00, referring to property registration U–…-4 A;
11.72 Tax Act no. 2016…, referring to first instalment, with a tax collection to be assessed of €379.97, and with a TPV of €207,257.05, referring to property registration U–…-4 B;
11.73 Tax Act no. 2016…, with a tax collection to be assessed of €92.88, and with a TPV of €202,652.99, referring to property registration U–…-1 A;
11.74 Tax Act no. 2016…, with a tax collection to be assessed of €68.47, and with a TPV of €149,398.63, referring to property registration U–…-1 B;
11.75 Tax Act no. 2016…, with a tax collection to be assessed of €92.88, and with a TPV of €202,652.99, referring to property registration U–…-2 A;
11.76 Tax Act no. 2016…, with a tax collection to be assessed of €94.99, and with a TPV of €207,257.05, referring to property registration U–…-2 B;
11.77 Tax Act no. 2016…, with a tax collection to be assessed of €92.88, and with a TPV of €202,652.99, referring to property registration U–…-1 A;
11.78 Tax Act no. 2016…, with a tax collection to be assessed of €94.99, and with a TPV of €207,257.05, referring to property registration U–…-3 B;
11.79 Tax Act no. 2016…, with a tax collection to be assessed of €76.18, and with a TPV of €166,213.00, referring to property registration U–…-4 A;
11.80 Tax Act no. 2016…, with a tax collection to be assessed of €94.99, and with a TPV of €207,257.05, referring to property registration U–…-3 B;
11.81 Tax Act no. 2016…, with a tax collection to be assessed of €92.88, and with a TPV of €202,652.99, referring to property registration U…-1 A;
11.82 Tax Act no. 2016…, with a tax collection to be assessed of €68.47, and with a TPV of €149,398.63, referring to property registration U…-1 B;
11.83 Tax Act no. 2016…, with a tax collection to be assessed of €92.88, and with a TPV of €202,652.99, referring to property registration U–…-2 A;
11.84 Tax Act no. 2016…, with a tax collection to be assessed of €94.99, and with a TPV of €207,257.05, referring to property registration U–…-2 B;
11.85 Tax Act no. 2016…, with a tax collection to be assessed of €92.88, and with a TPV of €202,652.99, referring to property registration U–…-3 A;
11.86 Tax Act no. 2016…, with a tax collection to be assessed of €94.99, and with a TPV of €207,257.05, referring to property registration U–…-3 B;
11.87 Tax Act no. 2016…, with a tax collection to be assessed of €76.18, and with a TPV of €166,213.00, referring to property registration U–…-4 A;
11.88 Tax Act no. 2016…, with a tax collection to be assessed of €94.99, and with a TPV of €207,257.05, referring to property registration U–…-4 B;
11.89 Tax Act no. 2016…, with a tax collection to be assessed of €92.88, and with a TPV of €202,652.99, referring to property registration U–…-1 A;
11.90 Tax Act no. 2016…, with a tax collection to be assessed of €68.47, and with a TPV of €149,398.63, referring to property registration U–…-1 B;
11.91 Tax Act no. 2016…, with a tax collection to be assessed of €92.88, and with a TPV of €202,652.99, referring to property registration U–…-2 A;
11.92 Tax Act no. 2016…, with a tax collection to be assessed of €94.99, and with a TPV of €207,257.05, referring to property registration U–…-2 B;
11.93 Tax Act no. 2016…, with a tax collection to be assessed of €92.88, and with a TPV of €202,652.99, referring to property registration U–…-3 A;
11.94 Tax Act no. 2016…, with a tax collection to be assessed of €94.99, and with a TPV of €207,257.05, referring to property registration U–…-3 B;
11.95 Tax Act no. 2016…, with a tax collection to be assessed of €76.18, and with a TPV of €166,213.00, referring to property registration U–…-4 A;
11.96 Tax Act no. 2016…, with a tax collection to be assessed of €94.99, and with a TPV of €207,257.05, referring to property registration U–…-4 B;
11.97 Tax Act no. 2016…, with a tax collection to be assessed of €92.88, and with a TPV of €202,652.99, referring to property registration U–…-1 A;
11.98 Tax Act no. 2016…, with a tax collection to be assessed of €68.47, and with a TPV of €149,398.63, referring to property registration U–…-1 B;
11.99 Tax Act no. 2016…, with a tax collection to be assessed of €92.88, and with a TPV of €202,652.99, referring to property registration U–…-2 A;
11.100 Tax Act no. 2016…, with a tax collection to be assessed of €94.99, and with a TPV of €207,257.05, referring to property registration U–…-2 B;
11.101 Tax Act no. 2016…, with a tax collection to be assessed of €92.88, and with a TPV of €202,652.99, referring to property registration U–…-3 A;
11.102 Tax Act no. 2016…, with a tax collection to be assessed of €94.99, and with a TPV of €207,257.05, referring to property registration U–…-3 B;
11.103 Tax Act no. 2016…, with a tax collection to be assessed of €76.18, and with a TPV of €166,213.00, referring to property registration U–…-4 A;
11.104 Tax Act no. 2016…, with a tax collection to be assessed of €94.99, and with a TPV of €207,257.05, referring to property registration U–…-4 B;
11.105 Tax Act no. 2016…, with a tax collection to be assessed of €14.39, and with a TPV of €207,257.05, referring to property registration U–…-3 B;
11.106 Tax Act no. 2016…, with a tax collection to be assessed of €14.39, and with a TPV of €207,257.05, referring to property registration U–…-4 B;
11.107 Tax Act no. 2016…, with a tax collection to be assessed of €11.54, and with a TPV of €166,213.00, referring to property registration U–…-4 A;
11.108 Tax Act no. 2016…, with a tax collection to be assessed of €14.07, and with a TPV of €202,652.99, referring to property registration U–…-3 A;
11.109 Tax Act no. 2016…, with a tax collection to be assessed of €14.07, and with a TPV of €202,652.99, referring to property registration U–…-2 A;
11.110 Tax Act no. 2016…, with a tax collection to be assessed of €10.37, and with a TPV of €149,398.63, referring to property registration U–…-1 B;
11.111 Tax Act no. 2016…, with a tax collection to be assessed of €14.39, and with a TPV of €207,257.05, referring to property registration U–…-2 B;
11.112 Tax Act no. 2016…, with a tax collection to be assessed of €14.07, and with a TPV of €202,652.99, referring to property registration U–…-3 A;
11.113 Tax Act no. 2016…, with a tax collection to be assessed of €14.39, and with a TPV of €207,257.05, referring to property registration U–…-4 B;
11.114 Tax Act no. 2016…, with a tax collection to be assessed of €14.39, and with a TPV of €207,257.05, referring to property registration U–…-3 B;
11.115 Tax Act no. 2016…, with a tax collection to be assessed of €11.54, and with a TPV of €166,213.00, referring to property registration U–…-4 A;
11.116 Tax Act no. 2016…, with a tax collection to be assessed of €14.07, and with a TPV of €202,652.99, referring to property registration U–…-1 A;
11.117 Tax Act no. 2016…, with a tax collection to be assessed of €14.07, and with a TPV of €202,652.99, referring to property registration U–…-2 A;
11.118 Tax Act no. 2016…, with a tax collection to be assessed of €10.37, and with a TPV of €149,398.63, referring to property registration U–…-1 B;
11.119 Tax Act no. 2016…, with a tax collection to be assessed of €14.39, and with a TPV of €207,257.05, referring to property registration U–…-2 B;
11.120 Tax Act no. 2016…, with a tax collection to be assessed of €14.07, and with a TPV of €202,652.99, referring to property registration U–…-3 A;
11.121 Tax Act no. 2016…, with a tax collection to be assessed of €28.15, and with a TPV of €202,652.99, referring to property registration U–…-1 A;
11.122 Tax Act no. 2016…, with a tax collection to be assessed of €28.79, and with a TPV of €207,257.05, referring to property registration U–…-1 B;
11.123 Tax Act no. 2016…, with a tax collection to be assessed of €28.15, and with a TPV of €202,652.99, referring to property registration U–…-2A;
11.124 Tax Act no. 2016…, with a tax collection to be assessed of €28.79, and with a TPV of €207,257.05, referring to property registration U–…-2B;
11.125 Tax Act no. 2016…, with a tax collection to be assessed of €28.15, and with a TPV of €202,652.99, referring to property registration U–…-3 A;
11.126 Tax Act no. 2016…, with a tax collection to be assessed of €23.09, and with a TPV of €166,213.00, referring to property registration U–…-4 A;
11.127 Tax Act no. 2016…, with a tax collection to be assessed of €28.79, and with a TPV of €207,257.05, referring to property registration U–…-4 B;
12. The property value of the units of independent use with residential use of the property at the date of the assessments is €1,545,3410.75, and given that none of the parts or storeys with residential use and capable of independent use has a tax property value exceeding €1,000,000.00.
13. The TA assessed the stamp duty provided for in item no. 28 and 28.1 of the General Table of Stamp Duty (GTSD), as amended by article 4 of Law no. 55-A/2012, of 29/10, at the rate of 0.5% and 1%, considering as "TPV – total subject to tax", from the stamp duty assessments resulted in a collection and tax payable in the global amount of €13,906.20.
14. The Claimant proceeded with the payment of tax in the amount of €14,494.57 (thirteen thousand, nine hundred and six euros and twenty cents), corresponding to the collection and respective single instalment and three instalments.
15. The Claimant attached all proof of payment of the tax assessed in the amount of €14,494.57 (fourteen thousand four hundred and ninety-four euros and fifty-seven cents).
F – UNPROVEN FACTS
16. Of the facts with interest for the resolution of the case, contained in the challenge, all the objects of concrete analysis, those which are not contained in the factual matter described above did not prove.
G – ISSUES TO BE DECIDED
17. In view of the positions assumed by the parties in the arguments presented, the central issues to be resolved are the following, which must, therefore, be examined and decided:
a. As alleged by the Claimant:
(i) The declaration of illegality of the tax assessment acts for Stamp Duty, nos., which set a global tax payable of €14,494.57 (fourteen thousand four hundred and ninety-four euros and fifty-seven cents).
H – LEGAL MATTERS
18. In light of the positions assumed by the parties in the pleadings presented, the central issue to be resolved by this arbitral tribunal is to examine the legality of the stamp duty assessment acts, which incided on the residential units of the Claimant in the urban property described above, by violation of law, by erroneous interpretation and application of item 28.1 of the GTSD in the amendments introduced by article 4 of Law no. 55-A/2012, of 29 October.
19. In the case sub judice, it is necessary to determine whether the units subject to the tax are covered by the criteria of incidence of stamp duty, in accordance with item no. 28 of the GTSD, in the amendments introduced by article 4 of Law no. 55-A/2012, of 29 October.
20. It is necessary to verify in the first place whether the units are of residential use, and in the second place whether the TPV of the units registered in the cadastre is equal to or exceeding €1,000,000.00, for such it is necessary to examine the fundamental question, of which TPV of a property in vertical property regime (that is, not horizontal) to be considered for the purposes of the said item. Whether the TPV that corresponds to each one of the parts of the property with residential use individually, or whether, conversely, it is determined by the global TPV of the property, which would correspond to the sum of all the TPVs of the residential units that compose it.
21. The factual matter is fixed and proved, reason why we will now determine the applicable law to the disputed facts, giving priority, in compliance with the provision of subparagraph a) of no. 2 of article 124 of CPPT, to the defects whose success will determine a more stable and effective protection of the interests of the Claimants, as to the defect of law by error as to the requirements of the right of assessment, as to the question of the classification of urban properties under full ownership regime or vertical property regime, within the scope of incidence of article 28 no. 1 of the GTSD, introduced by the Regime of Law no. 55-A/2012, of 29 October.
22. The amendment of the regime as to the subjection to stamp duty of properties with residential use by the addition of item 28 of the General Table of Stamp Duty, made by article 4 of Law 55-A/2012, of 29/10 and amended by Law no. 83-C/2013, of 31 December, went on to typify the following taxable facts, through the following wording:
"28 – Ownership, usufruct or right of superficies of urban properties whose tax property value registered in the cadastre, in accordance with the Municipal Property Tax Code (CIMI), is equal to or exceeding (euro) 1,000,000 – on the tax property value used for the purpose of Municipal Property Tax:
28.1 – For residential property or for land for construction whose authorized or envisaged construction is for residential purposes, in accordance with the provision of the Municipal Property Tax Code - 1%;
28.2 – For property, when the taxable persons who are not natural persons are residents of a country, territory or region subject to a clearly more favourable tax regime, contained in the list approved by ordinance of the Minister of Finance – 7.5%."
23. The transitional provisions are contained in article 6 of Law no. 55-A/2012, which established the rules relating to the assessment of the tax provided for in that item:
"1 – In 2012, the following rules must be observed by reference to the assessment of the stamp duty provided for in item no. 28 of the respective General Table:
a) The taxable event occurs on 31 October 2012;
b) The taxable person of the tax is the one mentioned in no. 4 of article 2 of the Stamp Duty Code on the date referred to in the preceding subparagraph;
c) The tax property value to be used in the assessment of the tax corresponds to what results from the rules provided for in the Municipal Property Tax Code by reference to the year 2011;
d) The assessment of the tax by the Tax and Customs Authority must be carried out by the end of November 2012;
e) The tax must be paid, in a single instalment, by the taxable persons by 20 December 2012;
f) The applicable rates are as follows:
i) Properties with residential use evaluated in accordance with the Municipal Property Tax Code: 0.5%;
ii) Properties with residential use not yet evaluated in accordance with the Municipal Property Tax Code: 0.8%;
iii) Urban properties when the taxable persons who are not natural persons are residents of a country, territory or region subject to a clearly more favourable tax regime, contained in the list approved by ordinance of the Minister of Finance: 7.5%.
2 – In 2013, the assessment of stamp duty provided for in item no. 28 of the respective General Table must incide on the same tax property value used for the purposes of assessment of municipal property tax to be carried out in that year.
3 – The non-delivery, in whole or in part, within the prescribed period, of the amounts assessed as stamp duty constitutes a tax offence, punished in accordance with the law."
24. Regarding the interpretation of this statute, decision 53/2013-T already ruled, which states:
"The terminology used in the said item 28.1 and in the subitems i) and ii) of subparagraph f) of no. 1 of article 6 of Law 55-A/2012 was a concept that is not used in any other tax legislation in these precise terms, which is that of "property with residential use". Namely in CIMI, which in various provisions of SDC in the resources introduced by that Law is indicated as a statute of subsidiary application with respect to the tax provided for in the said item no. 28 [articles 2, no. 4, 3, no. 3, subparagraph u), 5, subparagraph u), 23, no. 7, and 46 and 67 of SDC], such a concept is not used."
25. As regards the concepts of properties, it is necessary for this purpose to resort to the concepts of properties used in CIMI, in which the species of properties are enumerated in its articles 2 to 6, which are transcribed:
Article 2
Concept of Property
1– For the purposes of this Code, property is any parcel of land, encompassing waters, plantations, buildings and constructions of any nature incorporated into or situated on it, with a character of permanence, provided that it forms part of the patrimony of a natural or legal person and, in normal circumstances, has economic value, as well as waters, plantations, buildings or constructions, in the circumstances referred to above, endowed with economic autonomy in relation to the land on which they are situated, although situated on a parcel of land that constitutes an integral part of a patrimony of a different kind or does not have a patrimonial nature.
2 – Buildings or constructions, even though moveable by nature, are regarded as having a character of permanence when devoted to non-temporary purposes.
3 – Permanence is presumed when the buildings or constructions have been situated at the same location for a period exceeding one year.
4 – For the purposes of this tax, each autonomous unit, under the horizontal property regime, is regarded as constituting a property.
Article 3
Rural Properties
1 – Rural properties are parcels of land situated outside an urban agglomeration that are not to be classified as land for construction, in accordance with no. 3 of article 6, provided that:
Are devoted or, in the absence of concrete use, have as normal destination an use generating agricultural income, such as are considered for the purposes of the income tax for natural persons (IRS);
Not having the use indicated in the preceding subparagraph, are not built on or have only buildings or constructions of an accessory nature, without economic autonomy and of reduced value.
2 – Also rural properties are parcels of land situated within an urban agglomeration, provided that, by force of a legally approved provision, they cannot have a use generating any income or can only have a use generating agricultural income and are in fact being devoted to this use.
3 – Also rural properties are:
Buildings and constructions directly devoted to the production of agricultural income, when situated on the parcels referred to in the preceding numbers;
Waters and plantations in the situations referred to in no. 1 of article 2.
4 – For the purposes of this Code, urban agglomerations are considered, in addition to those situated within legally fixed perimeters, nuclei with a minimum of 10 dwellings served by streets for public use, with their perimeter delimited by points 50 m from the axis of the streets, in the transversal direction, and 20 m from the last building, in the direction of the streets.
Article 4
Urban Properties
Urban properties are all those that should not be classified as rural, without prejudice to the provision of the following article.
Article 5
Mixed Properties
1. Whenever a property has rural and urban parts it is classified, in its entirety, in accordance with the main part.
2. If neither of the parts can be classified as main, the property is regarded as mixed.
Article 6
Species of Urban Properties
1 - Urban properties are divided into:
Residential;
Commercial, industrial or for services;
Land for construction;
Other.
2 – Residential, commercial, industrial or for services are the buildings or constructions licensed for such purposes or, in the absence of a licence, which have as normal destination each of these purposes.
3 – Land for construction is considered to be parcels of land situated inside or outside an urban agglomeration, for which a licence or authorization has been granted, admitted prior notification or issued favourable prior information on a subdivision or construction operation, and also those which have been declared as such in the acquisition title, excepting parcels in which the competent entities forbid any of those operations, namely those located in green areas, protected areas or which, in accordance with municipal land use plans, are devoted to public spaces, infrastructure or facilities. (Amended by Law no. 64-A/08, of 31-12)
4 – Falling under the provision of subparagraph d) of no. 1 are parcels of land situated within an urban agglomeration that are not 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 licence, which have as normal destination purposes other than those referred to in no. 2 and also those of the exception in no. 3.
26. Regarding the interpretation of tax norms, for the case sub judice, article 11 of the General Tax Code tells us, which establishes the essential rules for the interpretation of tax laws, which does so in the following terms:
Article 11
Interpretation
In determining the meaning of tax norms and in qualifying the facts to which they apply, the general rules and principles of interpretation and application of laws are observed.
Whenever tax norms employ terms particular to other branches of law, the same must be interpreted in the same sense that they have therein, unless otherwise directly derived from the law.
Persisting doubt about the meaning of the norms of incidence to be applied, the economic substance of the taxable facts must be considered.
Gaps resulting from tax norms covered by the law-making reservation of Parliament are not capable of being filled by analogy.
27. For the purposes of this provision, it is also necessary to resort to the general principles of interpretation of laws, to which no. 1 of article 11 of the GTC refers, which are established in article 9 of the Civil Code, which establishes the following:
Article 9
Interpretation of the Law
1– Interpretation must not confine itself to the letter of the law, but must reconstruct from the texts the legislative intent, having especially in account the unity of the legal system, the circumstances in which the law was elaborated and the specific conditions of the time in which it is applied.
2– However, the interpreter cannot consider the legislative intent that does not have in the letter of the law a minimum of verbal correspondence, even if imperfectly expressed.
3– In fixing the meaning and scope of the law, the interpreter will presume that the legislator adopted the most correct solutions and was able to express his intent in appropriate terms.
28. In light of the legal basis already presented, and considering the articles transcribed and mentioned, the following interpretative hypotheses emerge regarding the concept of "property with residential use", as a concept referring to residential properties, and as a concept distinct from "residential properties".
29. It follows from articles 2 to 6 of CIMI transcribed above, that the legislator does not use, in the classification of properties, the concept of "property with residential use", equally this concept, with this terminology, is not found in any other statute.
30. The lack of exact terminological correspondence of the concept of "property with residential use" with any other used in other statutes may give rise to various interpretative hypotheses.
31. The text of the law, being the starting point for the interpretation of the expression "properties with residential use", and on the basis of it that the "legislative intent" must be reconstructed, as imposed by no. 1 of article 9 of the Civil Code, applicable by force of the provision of article 11, no. 1, of the GTC, already transcribed.
32. Regarding the interpretation of the concept of "property with residential use", it is important to cite decision 53/2013-T which already ruled on this matter. A decision which also sustains two interpretative hypotheses regarding the concept of "property with residential use", respectively in the same sense as the present decision, as a concept referring to residential properties, and as a concept distinct from "residential properties"
33. Decision 53/2013-T writes, regarding the concept of "property with residential use" as referring to residential properties:
"The concept closest to the literal sense of this expression used is manifestly that of "residential properties", defined in no. 2 of article 6 of CIMI as encompassing "the buildings or constructions" licensed for residential purposes or, in the absence of a licence, which have as normal destination residential purposes.
If it is understood that the expression "property with residential use" coincides with that of "residential properties", it is manifest that the assessments will suffer from error as to the factual and legal requirements, since all the properties with respect to which Stamp Duty was assessed under the said item no. 28.1 are land for construction, without any building or construction, required to meet that concept of "residential properties".
Therefore, if one adopts the interpretation that "property with residential use" means "residential property", the assessments whose declaration of illegality is requested will be illegal, because there is on any of the parcels any building or construction.
However, the non-coincidence of the terms of the expression used in item no. 28.1 of the GTSD with that which is extracted from no. 2 of article 6 of CIMI, points in the sense that it was not intended to use the same concept."
34. Regarding the interpretation of the second hypothesis: Concept of "property with residential use" as a concept distinct from "residential properties", we cite again decision 53/2013-T, in which it writes:
"The word "use", in this context of the use of a property, has the meaning of "action of directing something to a determined use." ( [3] )
"When, as is usually the case, the norms (legislative formulas) allow more than one meaning, then the positive function of the text is translated into giving stronger support to or more strongly suggesting one of the possible meanings. In that, of the possible meanings, some will correspond to the most natural and direct meaning of the expressions used, while others will only fit within the verbal framework of the norm in a forced, artificial way. Now, in the absence of other elements that induce the choice of the sense less immediate to the text, the interpreter should opt in principle for that meaning that best and most immediately corresponds to the natural meaning of the verbal expressions used, and in particular to their technical-legal meaning, in the supposition (not always exact) that the legislator knew how to express his intent correctly". ( [4] )
The relevance of the text of the law is especially emphasized in the matter of interpretation of the norms of incidence of Stamp Duty, which are reduced to an amalgam, under a common denomination, of an incongruous set of taxes of completely distinct natures (on income, on expenditure, on property, on acts, etc.), which leaves little room for application of the primary interpretative criterion, which is the unity of the legal system, which demands its global coherence.
The recognized lack of coherence of Stamp Duty is particularly abundant in the case of this item no. 28.1, hastily included on the margins of the General State Budget, by a tax legislator without perceivable global tax guidance, who successively implements norms of fiscal aggravation in step with the setbacks in budget execution, the impositions of international institutional creditors (represented by the "troika") and the oversight of the Constitutional Court.
In truth, although in the "Statement of Reasons" of Bill no. 96/XII/2nd. ( [5] ), on which Law no. 55-A/2012 was based, reference is made to the laudable concern of the Government to "reinforce the principle of social equity in austerity, ensuring an effective distribution of the necessary sacrifices to meet the adjustment program" and to its commitment "to ensure that the distribution of those sacrifices will be made by all and not just by those who live on the income from their work", it is manifest, on the one hand, that these reasons of equity, certainly existing, did not begin to apply in mid-2012, already existing at the beginning of the year, when the General State Budget came into force, and on the other, that the scope of item no. 28.1, by taxing additionally properties with residential use and not also properties that do not have it, reveals that the concerns of social equity and the proclaimed intention of distribution of sacrifices to all, affects far more some than truly all.
In this context, in the absence of secure interpretative elements that allow detecting legislative coherence in the solution adopted in the said item no. 28.1 or the correctness or incorrectness of the solution adopted (relevant for interpretative purposes in light of no. 3 of article 9 of the Civil Code), the content of the legal text must be the primary element of interpretation, in accordance with the presumption, imposed by the same no. 3 of article 9, that the legislator knew how to express his intent in appropriate terms.
In light of those meanings of the words "use" and "used", which are "give destination" or "apply", the formula used in that item no. 28.1 of the GTSD manifestly encompasses properties that are already applied to residential purposes, so it is necessary to investigate whether it will also encompass properties that, although not yet applied to residential purposes, are destined for them and those whose destination is unknown. (…)
Therefore, it will be necessary to clarify when a property can be understood to be devoted to a residential purpose, in particular whether it is when this destination is fixed for it in a licensing act or similar, or only when the effective allocation of that destination is realized.
From the outset, the comparison of item no. 28.1 of the GTSD with no. 2 of article 6 of CIMI, which defines the concept of residential properties, points manifestly in the sense that an effective use is necessary.
In truth, a building or construction licensed for residential use or, even without a licence, but which has residential use as normal destination, is, in light of no. 2 of that article 6, a residential property.
Therefore, on the assumption that the legislator of Law no. 55-A/2012 knew how to express his intent in appropriate terms (as imposed by article 9, no. 3, of the Civil Code which one must presume), if he intended to refer to those properties already licensed for residential use or which have residential use as normal destination, he would certainly have used the concept of "residential properties", which would express perfectly and clearly his intent, in light of the definition given by that no. 2 of article 6 of CIMI.
Consequently, it must be presumed that the use of a different expression is intended to a different reality, so, in good hermeneutics, "property with residential use" cannot be a property merely licensed for residential use or destined for that purpose (that is, it will not be enough that it be a "residential property"), having to be a property that already has effective use for that purpose.
That this is the meaning of the expression "use", in the same context of classification of properties that CIMI makes, is confirmed by article 3 in which, with respect to rural properties, reference is made to those "that are devoted or, in the absence of concrete use, have as normal destination a use generating agricultural income", which shows that use is concrete, effective. In fact, as seen from the final part of this text, a property may have as destination a certain use and be or not devoted to it, which shows that use is, at the level of the connection of a property to a certain use, something more intense than the mere destination and which may or may not occur, downstream of this and not upstream. ( [6] )
The correctness of this interpretation in the sense that only properties that are effectively devoted to residential use fall within the scope of item no. 28.1 of the GTSD is also confirmed by the ratio legis perceptible from the restriction of the scope of application of the norm to properties with residential use, in the context of the "circumstances in which the law was elaborated and the specific conditions of the time in which it is applied", which article 9, no. 1, of the Civil Code also establishes as interpretative elements. ( [7] ).
From the outset, the limitation of the taxation in Stamp Duty to "properties with residential use" allows one to perceive that it was not intended to encompass within the scope of incidence of the tax properties with use for services, industry or commerce, that is, properties devoted to economic activity, which is understood in a context in which, as is notorious, the economy is in a recessionary spiral, publicly proclaimed at the highest level, with unemployment rates reaching maximum historical levels, with avalanche of business closures derived from economic unsustainability. (bold in original)
Bearing in mind this situation and it being well known and public that the revival of economic activity and the increase in exports are the doors out of the crisis, it is understood that legislative measures were not taken that would hinder economic activity, in particular the aggravation of the tax burden that hinders it and affects competitiveness in international terms.
Therefore, it must be concluded that the interpretative elements available, including the "circumstances in which the law was elaborated and the specific conditions of the time in which it is applied", clearly point in the sense that it was not intended to encompass within the scope of incidence of item no. 28.1 the situations of properties that are not yet devoted to residential use, in particular land for construction held by businesses. ( [8] )"
35. In light of the foregoing, it is verified that the units intended for residential use are encompassed by the norm of incidence by item 28.1, because they are urban properties and properties with residential use, the concept of which results from article 2 of CIMI.
36. It remains, however, to decide now for the purposes of application of item no. 28 of the GTSD, which TPV to consider in properties under vertical regime (that is, not horizontal) whether individually determined by the TPV that corresponds to each one of the parts of the property with residential use, or whether determined by the global TPV of the property, which would correspond to the sum of all the TPVs of the residential units that compose it.
37. It is important for the purposes of the case sub judice to refer to decision 50/2013-T, which tells us, regarding the treatment to be conferred for the purposes of item 28.1 of the GTSD to properties in vertical property ownership and cumulatively which TPV (individual or global) to consider:
"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 to which the property is destined. We conclude furthermore that for the legislator the situation of the property in vertical or horizontal property ownership did not matter, as no reference or distinction is made between one and the other. What matters is the material truth underlying its existence as an urban property and its use."
38. It is also important to refer from the respective decision:
" Using the criterion that the law itself introduced in article 67, no. 2 of the Stamp Duty Code, "to matters not regulated in the present code relating to item 28 of the General Table shall be subsidiarily applied." .
Now, being so, considering that the registration in the property cadastre of properties in vertical property ownership, constituted by different parts, storeys or divisions with independent use, in accordance with CIMI, obeys the same rules of registration of properties constituted in horizontal property ownership, with the respective Municipal Property Tax, as well as the new Stamp Duty, being assessed individually in relation to each one of the parts, it offers no doubt that the legal criterion for defining the incidence of the new tax has to be the same. (…)
Therefore, if the legal criterion imposes the issuance of individualized assessments for the autonomous parts of properties in vertical property ownership, in the same manner as it establishes for properties in horizontal property ownership, it clearly established the criterion, which has to be unique and unequivocal, for the definition of the rule of incidence of the new tax.
Thus, there would only be place for the incidence of the new stamp duty if any of the parts, storeys or divisions with independent use presented a TPV exceeding €1,000,000.00.
It cannot, thus, the TA consider as the reference value for the incidence of the new tax the total value of the property, when the legislator himself established a different rule in the context of CIMI, and this is the code applicable to matters not regulated as regards item 28 of the GTSD
The criterion sought by the TA, of considering the value of the sum of the TPVs attributed to the parts, storeys or divisions with independent use, on the argument that the property is not constituted under the horizontal property ownership regime, finds no legal support and is contrary to the criterion that applies in the context of CIMI and, by reference, in the context of Stamp Duty.
To which is added the fact that the law itself expressly establishes, in the final part of item 28 of the GTSD, that the Stamp Duty to incide on urban properties of value equal to or exceeding €1,000,000.00 – "on the tax property value used for the purpose of Municipal Property Tax." .
Thus, the adoption of the criterion defended by the TA violates the principles of legality and fiscal equality, as well as the prevalence of material truth over the legal-formal reality.
The tax legislator in article 12, no. 3 of CIMI says that "each storey or part of property capable of independent use is considered separately in the property registration which likewise discriminates the respective tax property value." , makes no distinction as to the regime of properties that are under horizontal or vertical property ownership, if the property were under horizontal property ownership regime, none of its residential units would suffer incidence of the new tax, therefore the TA cannot treat equal situations differently.
39. In the same sense decided the decision of the arbitral tribunal of CAAD, no. 132/2013-T:
"Moreover, admitting the differentiation of treatment could produce results incomprehensible from a legal point of view and damaging to the objectives that the legislator said it had for adding item no. 28. By way of example, suppose the following hypothesis, which seems plausible in light of the interpretation made by the now respondent: a citizen who is the owner of a property constituted in full property ownership intended for residential use, the global value of the autonomous units being equal to or exceeding €1,000,000.00 and the TPV of each one below €1,000,000.00, is subject to an annual taxation of 1% of that value (as happened in the situation under analysis); yet another citizen who holds a property with the exact same characteristics as the former but which has been constituted in horizontal property ownership, being, equally, the global value of the autonomous units equal to or exceeding €1,000,000.00 and the TPV of each one below €1,000,000.00, will not be subject to taxation in accordance with the mentioned item no. 28...
On the other hand, one might ask: if such units have the same owner, why does it not make sense to aggregate, for taxation purposes, the respective TPVs? The answer may be illustrated by means of another hypothesis: a citizen who is the owner of a property in horizontal property ownership, in which each one of its 20 units possesses a TPV below €1,000,000.00, would be subject to taxation if – should one admit such aggregation – the global TPV exceeded that amount; yet another citizen with identical 20 units distributed by 5, 10 or 20 properties would not be subject to any taxation in accordance with the said item no. 28...
If this line of reasoning makes sense – thus justifying, therefore, the non-aggregation of the TPVs of the units of properties in horizontal property ownership –, no plausible reason is seen for why the same should not be applied to the autonomous units of properties in full property ownership.
Observing now the case under analysis, it is verified that the TPVs of the storeys (autonomous units) of the property with residential use vary between €104,140.00 and €113,780.00, therefore each one of them is below €1,000,000.00. From this it is concluded, as a result of what was referred to, that on them the stamp duty referred to in item no. 28 of the GTSD cannot incide, being, therefore, illegal the acts of assessment challenged by the claimant."
40. On this subject, and following the case law of CAAD and of the Administrative Supreme Court in proceedings 50/2013-T, 132/2013-T, 48/2013-T, 50/2013-T, 144/2013-T, 132/2013-T, 95/2013-T, 248/2013-T, 240/2013-T, 183/2013-T, 185/2013-T, 280/2013-T, 26/2014-T, 182/2013-T, 30/2014-T, 35/2014-T, 88/2014-T, 72/2014-T, 428/2014-T, 639/2014-T, 724/2014-T, 754/2015-T, 755/2015-T, 766/2015-T, 10/2016-T, 20/2016-T, 43/2016-T, 45/2016-T, 134/2016-T, 120/2016-T, 298/2016-T, 203/2016-T, 214/2016-T, 214/2016-T and 327/2016-T and the case law of the Administrative Supreme Court in the same sense, respectively in the decisions: no. 047/15, of 09/09/2015, Proceedings no. 1354/15, of 02/03/2016, Proceedings no. 1534/15, of 27/04/2016, Proceedings no. 166/16, of 04/05/2016, Proceedings no. 172/16, of 04/05/2016, Proceedings no. 1504/15, of 04/05/2016, Proceedings no. 1352/15, of 24/05/2016, Proceedings no. 1344/15, of 24/05/2016, and Proceedings no. 498/16, of 29/06/2016.
41. In light of the foregoing, and applying what is told to us by the decisions transcribed above, to the present case, it follows that for the purposes of application of item 28 of the GTSD to properties in vertical property ownership, the same rules of CIMI that apply to properties in horizontal property ownership apply, and in the same sense the TPV for the purposes of the application of the item is the individual TPV of each independent residential unit, it being that in the present case none of the units exceeds the incidence criterion of €1,000,000.00.
42. The material truth is that which imposes itself as the determining criterion of contributive capacity and not the mere legal-formal reality of the property, given that the constitution of horizontal property ownership implies a mere legal alteration of the property not even imposing a new evaluation, which such finding does not appear coherent with the decision of the TA to tax the residential parts of a property in vertical property ownership, based on the global TPV of the property and not on what is effectively attributed to each part.
43. The current legal regime does not impose an obligation to constitute horizontal property ownership, so the action of the TA translates itself into an arbitrary and illegal discrimination. The TA cannot distinguish where the legislator itself understood not to do so, under pain of violating the coherence of the tax system, as well as the principle of tax legality provided for in article 103, no. of the CRP, and also the principles of justice, equality and fiscal proportionality.
44. Since none of the units intended for resid[ential use...]
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