Summary
Full Decision
ARBITRAL DECISION
I – Report
1.1. A..., with NIF..., and her sister, B..., with NIF..., resident at Rua..., n.º 1, 2.º Esq. and 1.º Esq., respectively, ...-... Lisbon (hereinafter referred to as "Applicants"), having been notified of the collection of Stamp Tax relating to the year 2014, made by the Tax Authority pursuant to item 28.1 of the General Stamp Tax Table (TGIS) as amended by art. 194 of Law no. 83-C/2013, of 31/12, in the total amount of €5,761.82, filed, on 29/7/2015, a request for constitution of an arbitral tribunal and for arbitral decision, under the terms set out in art. 10 of Decree-Law no. 10/2011, of 20/1 (Legal Framework for Arbitration in Tax Matters, hereinafter referred to as "RJAT"), in which the respondent is the Tax and Customs Authority ("AT"), seeking, in summary, the annulment of the "Stamp Tax assessments issued and now challenged, and in any case, it should be declared unconstitutional item 28 of the TGIS, specifically item 28.1 in its current wording and consequently annul, on that basis, the aforementioned assessments."
1.2. On 28/10/2015 the present Single Arbitral Tribunal was constituted.
1.3. On 29/10/2015, the AT was served, as the respondent party, to present a response, under the terms of art. 17, no. 1, of the RJAT. The AT presented its response on 1/12/2015, having argued, in summary, for the complete dismissal of the Applicants' claim. Upon being notified of the AT's response, the Applicants decided to make a statement on the same by means of a request dated 21/12/2015. On 5/1/2016, the AT requested the removal of the request. The Tribunal decided to reject the request for removal by an order of 8/1/2016.
1.4. By order of 4/1/2016, the Tribunal considered it unnecessary to hold the hearing provided for in art. 18 of the RJAT, as well as the production of testimonial evidence requested by the Applicants because the process contained all the elements necessary for the decision. The Tribunal also set the pronouncement of the decision for 11/1/2016.
1.5. The Arbitral Tribunal was regularly constituted, is materially competent, the process does not suffer from defects that invalidate it and the Parties have legal personality and capacity, being duly constituted.
II – Allegations of the Parties
2.1. The Applicants allege, in their initial petition, that: a) "it is clear that for the AT there is grounds for the incidence of stamp tax, by virtue of the property value of the land reaching the amount of €5,185,640.00, that is, being superior to the limit of €1,000,000.00"; b) "the legislator, in its insatiable voracity for revenue collection, altered the wording of the rule to include land for construction in it, provided that there is building construction, authorized or envisaged, for housing thereon. Now, in the case in question this does not occur"; c) "it would be up to the AT to demonstrate that, on the land in question, there is authorized or envisaged building construction for housing"; d) "the land in question has no authorized or envisaged building construction for housing"; e) "the assessment acts being challenged are thus not substantiated, since they were not minimally framed within the requirements on which the application of item 28.1 of the TGIS to land for construction depends"; f) "given that the law makes the application to land for construction of item 28.1 of the TGIS depend on verification of a requirement – land for construction whose authorized or envisaged building construction is for housing – then the AT, when assessing the tax, should have stated why it understands that the land in question falls within that circumstance. Which minimally did not occur in the case in question"; g) "there is no building permit nor approved project in effect"; h) "but there is more: that item 28.1 of the TGIS, at least in its current wording, is manifestly unconstitutional"; i) "the alleged substantive unconstitutionality of the rule in question results, firstly, from its manifest opposition to art. 104, no. 3, of the Constitution of the Republic [...]. [...] the application of the aforementioned item 28.1 of the TGIS not only does not contribute to the desired and desirable equality, but leads to the creation of profound and even desperate injustices and inequalities [because] such a rule, disregarding the general situation of the taxpayer's assets, which may for example consist only of land for construction valued by the AT at more than a million euros, will penalize that taxpayer inequitably, in comparison with others who are owners of many properties (perhaps also land for construction), but, because none of them reaches that limit, escapes the tax in question"; j) "nor can the discrimination of properties used for housing purposes be understood in light of the principle of equality", l) "item 28.1 under analysis further violates the principle of contributory capacity, which is the ordering principle of the tax legal system, as a principle apt to confer coherence on the excessive casuistry that frequently marks tax legislation [...] and breaches the principle of proportionality, imposing on some taxpayers an excessive or even unbearable sacrifice".
2.2. The Applicants conclude that, in light of the foregoing, "the Stamp Tax assessments issued and now challenged should be annulled, and in any case, item 28 of the TGIS should be declared unconstitutional, specifically item 28.1 in its current wording and, consequently, the aforementioned assessments should be annulled on that basis, thus ruling the arbitral decision claim well-founded."
2.3. For its part, the AT alleges, in its defense, that: a) "the present request for arbitral decision has as its object the declaration of unconstitutionality of the tax incidence rule contained in item 28.1 of the TGIS and, in consequence, of the Stamp Tax assessments relating to the property, better identified above, and, concomitantly, the annulment of the aforementioned assessments"; b) "no doubt can subsist for the year now at issue, i.e., 2014, inasmuch as, with Law no. 83-C/2013 of 31-12-2013, the wording of that provision was altered to explicitly include land for construction as an objective element of the incidence of the rule, so that any attempt necessarily fails to raise any interpretive question of the wording of the Law"; c) "There is no [...] any basis for the alleged illegality that the Applicant seeks to impute to the assessments sub judice, the respondent Entity having acted in strict compliance with the law, to which it is rigorously bound, subsuming the tax fact to the express regulatory provision"; d) "it follows from the documents contained in the Administrative File (AF) the following: On 28/01/2011 a Model 1 declaration for Property Tax (IMI) was presented for the purpose of registration and/or updating of urban properties in the property tax roll, with a property location plan and construction viability project being annexed (see AF). For that reason, it was from the manifestation of will of the taxpayer upon presenting the Model 1 IMI declaration, with the respective elements attached by it, that the AT proceeded to the respective registration/updating of the property tax roll. Resulting therefrom: Type of property: 'Land for construction' / 'Type of location coefficient: Housing'. Property tax roll that was updated with the allocation resulting from the request and documents presented by the taxpayer. [...] no error exists in the property tax roll and in the respective allocation inasmuch as the approved building project contained in file no. .../EDIF/… of 07.07.2009 of the Lisbon City Council contemplates 'the construction (...) of three buildings intended for housing (...)'. [...] – see AF"; e) "it is therefore evident from the summary table contained in the AF the approval of the building request and approval of the architectural project presented, intended for HOUSING"; f) "For all the foregoing, the assessments at issue constitute a correct interpretation and application of the law to the facts, not suffering from the vice of violation of law"; g) "we do not see that from [the rule contained in item 28.1 of the TGIS] results the violation of the principles of proportionality, legality, citizen confidence and contributory capacity"; h) "the non-inclusion of properties commercial, industrial or for services, is intuitive in light of the historical, political, social and economic circumstances that surrounded the creation of item 28.1, since it is well-known and public that the revitalization of economic activity and the increase of exports are the ways out of the crisis, it is understood that legislative measures were not taken that would hinder economic activity, namely the increase of the tax burden that hinders it and affects international competitiveness. We are therefore faced with a legitimate criterion of rational and logical differentiation, in no way violating constitutional dictates, which requires the limitation of incidence of the taxation in question to luxury residential properties or with residential allocation, with the exclusion and to the detriment of properties with strictly economic allocations"; i) "the AT understands that the provision of item 28 of the TGIS does not constitute any violation of the principle of equality of art. 13 of the CRP. In effect, item 28.1 of the TGIS applies to ownership, usufruct or surface right of urban properties with residential allocation, whose property value for taxation purposes recorded in the property tax roll, under the terms of the Property Tax Code (CIMI), is equal to or superior to €1,000,000.00, that is, it applies to the value of the property. It is, it should be repeated, a general and abstract rule, applicable indiscriminately to all cases in which the factual and legal presuppositions are verified"; j) "the measure implemented seeks to achieve maximum effectiveness as to the objective to be attained, with minimum harm to other public interests that do not constitute any arbitrariness of the distinction made by Item 28.1 as a function of the residential allocation of the properties. Rather, it is a legitimate, legal and constitutional choice of the legislator"; l) "the question of unconstitutionality of item 28 of the TGIS, added by Law no. 55-A/2012, of 29 October and of its no. 1 (item 28.1 TGIS), added by Law no. 55-A/2012, of 29 October, and later amended by Law no. 83-C/2013, of 31 December), specifically the violation of the principles of tax equality, contributory capacity and proportionality, the Constitutional Court understood [in its Decision of 11/11/2015, issued in case 542/14] that: 'not verifying the violation of the constitutionality parameters invoked by the appellant, nor of any others, the appeal is therefore dismissed' [...]. In these terms, the learned court concluded that the rule in question, i.e., item 28 of the TGIS, does not suffer from any unconstitutionality, there being no violation of the constitutional principles that shape tax law, specifically the principles of tax equality, contributory capacity and proportionality".
2.4. The AT concludes that, for all the foregoing, "the assessments at issue constitute a correct interpretation and application of the law to the facts, not suffering from any illegality or unconstitutionality, and should consequently be ruled upon as unfounded and the Respondent Entity absolved from the claim."
III – Proven Facts, Unproven Facts and Respective Grounds
3.1. The following facts are considered proven:
i) The applicants are co-owners of the land for construction situated at Rua..., between n.os ... and..., parish of..., municipality of Lisbon, with a property value for tax purposes of €5,185,640.00.
ii) The assessments now in question are based on the property value for tax purposes recorded in the property tax roll, and the fact that there exists, regarding the property in question, an approved building project contained in file no. .../EDIF/…, of 7/7/2009, of the Lisbon City Council (see AF appended to the case file) – the AT having assessed, in consequence, the Stamp Tax of item 28.1 of the TGIS, in the wording given to it by art. 194 of Law no. 83-C/2013, of 31/12.
iii) The aforementioned approved building project includes the entire property (which has a total area of 9,010 m2) – see AF appended to the present case file – and not only the area of location of 5,180 m2 intended, within the scope of the project, for the location of buildings.
iv) The present request for arbitral decision seeks the declaration of unconstitutionality of the tax incidence rule contained in item 28.1 of the TGIS and, in consequence, of the Stamp Tax assessments relating to the property, better identified above, and, concomitantly, the annulment of the aforementioned assessments.
v) Dissatisfied with the assessment in question, the Applicants filed the present request for arbitral decision on 29/7/2015.
3.2. There are no unproven facts relevant to the decision of the case.
3.3. The facts considered pertinent and proven (see 3.1) are based on the analysis of the positions exposed by the parties and the documentary evidence attached to the case file.
IV – Preliminary Issue
The request for declaration of unconstitutionality of item 28.1 of the TGIS, in its current wording, given by art. 194 of Law no. 83-C/2013, of 31/12, and which appears in the present petition for arbitral decision, requires a prior analysis, from which it follows the conclusion that this request cannot fail to be dismissed.
In effect, there is no doubt that the aforementioned request for declaration of unconstitutionality was petitioned by the Applicants ("[it should] be declared unconstitutional item 28 of the TGIS, specifically item 28.1 in its current wording"); and that the Arbitral Tribunal does not have competence to declare the unconstitutionality of the aforementioned rule (or any other).
Thus, for the foregoing, it is concluded that the present Arbitral Tribunal is incompetent to examine (and decide on) the aforementioned request (which does not exhaust the claims being the object of the present litigation), as an exception to the suit occurs leading to the absolution of the AT as to the same, in accordance with the provisions of arts. 576, no. 2, and 577, subpara. a), and 278, no. 1, all of the Code of Civil Procedure, ex vi art. 29, no. 1, subpara. e), of the RJAT.
V – On the Law
In the present case, the essential questions that arise are whether, as the Applicant alleges: i) the taxation in Stamp Tax of land for construction "whose authorized or envisaged building construction is for housing" violates the constitutional principles of equality in tax matters and contributory capacity, and the constitutional principle of real income; ii) whether, in the land for construction in question, there exists authorized or envisaged building construction for housing.
i) For the resolution of the question raised, it is important to analyze the evolution and framework of the aforementioned item 28, both before and after the amendment determined by art. 194 of Law no. 83-C/2013, of 31/12 (which is the wording applicable to the present case).
In that sense, it is useful to make reference to the Decision of the Administrative Court of 9/4/2014 (case no. 1870/13), which, like other decisions of the Administrative Court – e.g.: Decision of 9/4/2014 (case no. 48/14); Decisions of 23/4/2014 (case nos. 270/14, 271/14 and 272/14); Decision of 25/11/2015 (case 1338/15) – makes a detailed historical and chronological analysis of the evolution and framework of item 28 now under analysis:
"The concept of 'property (urban) with residential allocation' was not defined by the legislator. Neither in Law no. 55-A/2012, which introduced it, nor in the Property Tax Code, to which no. 2 of article 67 of the Stamp Tax Code (also introduced by that Law) refers subsidiarily. And it is a concept that, probably due to its imprecision – a fact all the more serious given that from its function the scope of objective incidence of the new taxation is delimited –, had a short life, inasmuch as it was abandoned upon entry into force of the State Budget Law for 2014 (Law no. 83-C/2013, of 31 December), which gave new wording to that item no. 28 of the General Table, and which now delimits its scope of objective incidence through the use of concepts that are legally defined in article 6 of the Property Tax Code.
This amendment – to which the legislator did not attribute an interpretative character, nor does it seem to us that it did –, merely makes it unequivocal for the future that land for construction whose authorized or envisaged building construction is for housing is included in the scope of item 28.1 of the General Table of Stamp Tax (provided that its property value for tax purposes is of a value equal to or superior to 1 million euros)". [End of quote.]
Before the legislative amendment that innovatively passed to include the aforementioned land for construction, it was necessary to ascertain, making use of various interpretative elements, whether, in the absence of literal reference, such land could, nonetheless, be included in the scope of objective incidence of the aforementioned item 28. And, for that reason, the aforementioned decision proceeded, saying:
"[Providing no clarification] [the legislator] in relation to past situations [i.e., assessments prior to 2014], such as the one at issue in the present case, it does not appear possible to adopt [as to these] the appellant's interpretation, inasmuch as it does not result unequivocally either from the letter, or from the spirit of the law that the intention of this has been, ab initio, to encompass in its scope of objective incidence land for construction for which building construction has been authorized or envisaged for housing purposes, as results today unequivocally from item 28.1 of the General Table of Stamp Tax. [Emphasis ours.]
From the letter of the law nothing unequivocal follows, in fact, for it itself, in using a concept which it did not define and which also was not defined in the provision to which it referred subsidiarily, lent itself, unnecessarily, to equivocations, in a matter – of tax incidence – in which certainty and legal security should also be paramount concerns of the legislator.
And from its 'spirit', ascertainable in the statement of reasons of the legislative proposal that is at the origin of Law no. 55-A/2012 (Legislative Proposal no. 96/XII – 2nd, Diário da Assembleia da República, Series A, no. 3, 21/09/2012, p. 44 [...]) nothing else follows but the concern to garner new tax revenues, from sources of wealth 'more spared' in the past from the rapacity of the Tax Authority than from labour income, particularly from capital income, securities gains and property, reasons which bring no relevant contribution to the clarification of the concept of 'properties (urban) with residential allocation', inasmuch as they take it as established, without any concern to clarify it. Such clarification will, however, have arisen – as reported in the Arbitral Decision rendered on 12 December 2013, in case no. 144/2013-T, available in the CAAD database –, upon presentation and discussion in the Parliament of that legislative proposal, in the words of the Secretary of State for Tax Affairs, who is reported to have stated expressly, as gathered from the Diário da Assembleia da República (Official Records I Series no. 9/XII – 2, of 11 October, p. 32) that: 'The Government proposes the creation of a special rate on high-value urban residential properties. It is the first time in Portugal that a special taxation on high-value properties intended for housing is created. This rate will be 0.5% to 0.8% in 2012 and 1% in 2013, and will apply to houses valued at equal to or more than 1 million euros' (emphasis ours), from which it is gathered that the reality to be taxed with which it is concerned is, after all, and notwithstanding the terminological imprecision of the law, 'the (urban) residential properties', in common language 'houses', and not other realities.
[...]. [...] given that the tax incidence rule of stamp tax refers to urban properties with 'residential allocation', without any specific concept being established for that purpose, it cannot be extracted from it that in the same is contained a future potentiality, inherent in a distinct property that perhaps will be built on the land.
It is concluded therefore, in conformity with what was decided in the sentence under appeal that, resulting from article 6 of the Property Tax Code a clear distinction between urban properties 'residential' and 'land for construction', these cannot be considered as 'properties with residential allocation' for the purposes of the provision in item no. 28.1 of the General Table of Stamp Tax, in its original wording, which was given to it by Law no. 55-A/2012, of 29 October." [End of quote.]
In summary, from this it is inferred that: 1) with the new wording of item 28.1 of the TGIS, given by art. 194 of Law no. 83-C/2013, of 31/12 (applicable to the present case, as it is the tax for the year 2014), the scope of objective incidence of the rule was innovatively broadened, by explicitly including land for construction for which authorized or envisaged building construction for housing has been made; 2) the application of the aforementioned wording is unequivocal, leaving no room for doubt, given the literal element of the rule in question.
In effect, for correct legal interpretation it is necessary to take into account, firstly, the starting point and limit which is constituted by the literal element.
In the same sense, see, among many others, the following: "To interpret the law is to attribute a meaning to it, to determine its sense in order to understand its correct application to a specific case. Legal interpretation is carried out through elements, means, factors or criteria that should be used harmoniously and not in isolation. The first are the words in which the law is expressed (literal element); the others to which one subsequently resorts constitute the elements, generally, called logical (historical, rational and teleological). The literal element, also called grammatical, are the words in which the law is expressed and constitute the starting point of the interpreter and the limit of interpretation." (Decision of the Administrative Court of 29/11/2011, case 701/10).
From the foregoing it follows that the possibility of making use of the various interpretative elements is not ruled out in order, from them, to reconstruct the legislative thought (see art. 9, no. 1, of the Civil Code). However, always keeping in mind that this legislative thought will have to have a minimum correspondence with the letter of the law (see art. 9, no. 2) and that, in fixing the sense and scope of the law, the interpreter has to presume that the legislator adopted the most appropriate solutions and that it knew how to express its thought in adequate terms (see art. 9, no. 3).
Otherwise, there would be the risk of falling into a subjectivity that the aforementioned art. 9 does not allow – a risk that could, without any justification, prevent the application of legal texts by reason of overvaluing elements external to it but which were deemed to be those that would express the true will of the legislator.
In this same sense, see the following decision: "BAPTISTA MACHADO refers, regarding the position of our Civil Code on the problem of interpretation: «I - Art. 9 of this Code, which refers to the matter, did not take a position in the controversy between the subjectivist doctrine and the objectivist doctrine. This is proved by the fact that it does not refer, either to the 'will of the legislator', or to the 'will of the law', but instead points as the scope of interpretative activity the discovery of 'legislative thought' (art. 9, 1). This expression, purposefully colorless, means exactly that the legislator did not want to commit itself. [...] II - The aforementioned text begins by saying that interpretation should not be confined to the letter but should reconstruct from it the 'legislative thought'. Letter (text) and spirit (thought) of the law are opposed, stating that interpretative activity should – as it could not fail to be – seek this from that. The letter (the linguistic utterance) is thus the starting point. But not only, for it also exercises the function of a limit, under the terms of art. 9, 2: it cannot be considered as comprised among the possible senses of the law that legislative thought (spirit, sense) «that does not have in the letter of the law a minimum verbal correspondence, even if imperfectly expressed». It may be necessary to proceed with an extensive or restrictive interpretation, or even perhaps to a corrective interpretation, if the verbal formula was extremely unfortunate, to the point of completely missing the target. But, even in this latter case, it will be necessary that from the 'failed' text there is drawn at least indirectly an allusion to that sense which the interpreter comes to adopt as a result of interpretation. This rules out the excess of an extreme subjectivity that tends to abstract completely from the legal text when, through any elements external to the text, it discovers or believes it discovers the will of the legislator. This does not mean that it is not possible to verify the eventuality of texts appearing in such a way ambiguous that only recourse to those external elements enables us to extract some sense from them. But, in such hypotheses, this sense can only be valid if it is still possible to establish some relationship between it and the unfortunate text that it is intended to interpret." (Decision of the Supreme Court of Justice no. 4/2015, of 24/3/2015).
Now, from the present legal text none of the exceptional situations identified above is extracted and which, in theory, could lead to a restrictive or even corrective interpretation: it does not follow from the text now in question even an allusion to the sense that the Applicant proposes for it in the case; and there is in it no insuperable contradiction or ambiguity (neither small nor great) that justifies recourse to external elements to determine, by them, what should be understood when reading the (literal) text. These conclusions were already implicit in the analysis that the aforementioned Decision of the Venerable Administrative Court made of the "unequivocal inclusion for the future [of] land for construction whose authorized or envisaged building construction is for housing [in the] scope of item 28.1 of the General Table of Stamp Tax".
For the foregoing, it is undeniable to recognize that the literal amendment in question, in addition to being unequivocal, expresses an amendment of the legislative thought to which the applicator cannot be insensible (under the penalty of moving from "interpretation" to "alteration of sense" of the rule, which is, as is known, forbidden to it); furthermore, it is evident that the new wording allows to identify, more clearly, and using concepts legally defined in article 6 of the Property Tax Code, the scope of objective incidence of the rule in question.
Regarding the allegation of the Applicants that the taxation in Stamp Tax of land for construction "whose authorized or envisaged building construction is for housing" violates the constitutional principles of equality in tax matters and contributory capacity, and the constitutional principle of real income, it is appropriate to refer, in toto, to the reasoning contained in the recent Decision of the Constitutional Court of 11/11/2015, according to which – note that, although analyzing the previous wording of the rule and, therefore, not considering, specifically, land for construction, no reason is seen not to extend its argumentative line to the same, also for the reasons already exposed above – it is made clear that the rule of items 28 and 28.1 of the TGIS does not violate the alleged constitutional principles, in imposing annual taxation on the ownership of urban properties with residential allocation whose property value for tax purposes of a value equal to or superior to €1,000,000.00. In effect, read the following excerpts:
"The appellant understands that the questioned normation deserves constitutional censure, for violation of the principles of proportionality, equality and contributory capacity, fundamentally based on the consideration, on the one hand, that the measure is not apt for the intended purpose and, on the other, that it arbitrarily affects only some owners of some property. [...] the appellant's argumentation [considers that the taxation singled out assumes], in its view, a non-systematic and arbitrary character, based on the consideration that the taxation of real estate property should be done under the Property Tax and Municipal Property Tax, and by discriminating without rational basis taxpayers with the same contributory capacity. Without cause, it is advanced. Firstly, the insertion of the taxation in question within the scope of Stamp Tax, and not in other types of taxes, does not, in itself, result in infraction of any constitutionality parameter. Even if it were to be concluded that the introduction of a factor of incoherence, or even imbalance, in the system of taxation of real estate property [...], the mere non-systematicity of the questioned rule is not suitable to determine constitutional censure [...]. Neither is there found in the tax incidence rule in question an arbitrary fiscal measure, because it is devoid of rational basis. [...] the legislative amendment [determined by Law no. 55-A/2012, of 29/10] had as its purpose to broaden the taxation of property, making it fall more intensely on the ownership which, by its value considerably superior to that of the generality of urban properties with residential allocation, reveals greater indicators of wealth and, as such, is susceptible to founding the imposition of the increased contribution for the sanitation of public accounts on its holders, in realization of the aforementioned «principle of social equity in austerity». [...]. It should be noted that the Constitution does not impose the creation of a general tax on property, assigning taxation the function of contributing to equality among citizens (article 104, no. 3, of the Constitution), being the legislator free as to the solution to adopt. It can, as noted by CASALTA NABAIS, in pursuit of such constitutional objective, "proceed with the discrimination of properties, taxing the highest and exempting the lowest or adopting progressive rates" (op. cit., page 436). And even if it is possible to extract from the principle of contributory capacity a general model on property with a tax base extended to all manifestations of wealth, the obstacles of practicability that oppose it are susceptible to leading in reality to the creation of inequalities among taxpayers. [...]. [...] there persists an effective connection between the tax contribution and the economic presupposition selected for the object of the tax, without infringing the principle of contributory capacity, whose scope, not being excluded, diminishes in the field of taxation of property, as compared to what happens in taxation on income. [...]. Not verifying the violation of the constitutionality parameters invoked by the appellant, nor of any others, the appeal is therefore dismissed [...]. (Decision of the Constitutional Court no. 590/2015, of 11/11/2015).
ii) For the foregoing, it was concluded that the rule of item 28.1 is clear when it states that it includes land for construction "whose authorized or envisaged building construction is for housing", which means – proceeding with a mere declarative interpretation –, that the authorization or envisioning of building construction for housing is contemplated. Thus, having been attached to the present case sufficient elements to consider that, in the present case, it is land for construction with an approved building project (see documents contained in the AF appended to the case), it is concluded that the Applicants are not right.
The Applicants alleged, however, by way of a request of 14/12/2015, although "the AT sustains that for the land in question the building project was approved contained in file no. .../EDIF/2006, attaching a copy of the letter from the Lisbon City Council in which such approval was communicated to the then owner", "such letter [...] is of 9 July 2009, that is, more than six years [and] we are at the end of 2015 and there is no building permit! [therefore] the project in question is already filed, given the time that has elapsed, never having come to be issued a building permit." In this regard, no additional reason is seen that could call into question what was decided – it is merely recognized that an approved building project exists, as had been stated by the Respondent, and it should also be noted that no proof was made in these case files that the aforementioned project is currently filed.
The Applicants further add that, in any case, if it is understood that "there was an approved building project" (which is evident), then "from the documents presented by the AT to support its thesis, the following must be concluded: that, the land having a total area of 9,010 m2, the area of location of the buildings is only 5,180 m2 (see assessment form, project submitted to the Lisbon City Council, opinion proposal no. .../2011, the property record itself and, finally, the entire administrative file) [...] and that in the valuation of the property this was determinative and taken into account, having been attributed a value of €3,266,985.55 to the part of the land intended for housing and €1,918,652.78 to the remaining part intended for other allocation, which is exactly the one mentioned above (see the certificate of property record content). Adding these two portions the amount of €5,185,640.00 which is the property value of the property. This means very clearly that the stamp tax of item 28.1 of the TGIS, if to be applied, should only apply to the first of those portions (€3,266,985.55), because it is this the value of the land in which housing can be built. [...]. [...] always and in any case the assessments in question would be incorrect, so they should always be annulled and at most replaced with others that had as their tax base the value of €3,266,985.55 (because it is only there that housing can be built) and not the value of €1,918,652.78 (because there it cannot be built)."
In this part, it should be noted that, although there exists the distinction referred to by the Applicants between the part of the property intended for housing and the other part intended for other allocations, it is clear, from the reading, in particular, of the aforementioned proposal no. .../2011, that the building project that the Lisbon City Council approved, through File .../EDI/…, on 7/7/2009, refers to the property (which has a total area of 9,010 m2). Thus, it is concluded that the project refers to the property in its entirety, even if, for urban planning or other reasons, the project contemplates, in one part, the construction of buildings (with the aforementioned area of location of 5,180 m2), and in another a "remaining area" (integrated with the previous one and not separable from it) of 3,380 m2, "intended for green area, pedestrian path and widening of the...". In other words, the building project is only approved to the extent that it includes the entirety of the 9,010 m2, so it cannot be split into two parts, as the Applicants wish (even if these parts are identified distinctly for purposes of assessing the value of the property). It should be noted, finally, that it is not by virtue of the fact that the entirety of the land does not consist of area of location of buildings that the entirety of the land, which is the object of the said project, loses the qualification of land for construction whose building construction is for housing.
In summary: the arguments of the Applicants are, for the foregoing, without merit, so it is concluded that the actions of the AT do not deserve, in the case under analysis, any censure.
VI – DECISION
In light of the foregoing, it is decided:
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To find verified the existence of an exception to the suit, by reason of material incompetence, regarding the request for declaration of unconstitutionality of item no. 28.1 of the TGIS, in the wording given to it by article 194 of Law no. 83-C/2013, of 31/12.
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To rule the request for arbitral decision unfounded, in the part relating to the Stamp Tax assessment for the year 2014, maintaining the same entirely in the legal order, and accordingly absolving the respondent entity from the claim.
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To rule the request unfounded also in the part that concerns the recognition of the right to compensatory interest in favor of the applicants.
The value of the case is set at €6,244.66 (six thousand two hundred forty-four euros and sixty-six cents), under the terms of articles 32 of the Administrative Procedure Code and 97-A of the Tax Procedure Code, applicable by virtue of the provision in art. 29, no. 1, subparas. a) and b), of the RJAT, and in art. 3, no. 2, of the Regulation of Costs in Tax Arbitration Proceedings (RCPAT).
Costs borne by the applicants, in the amount of €612.00, under the terms of Table I of the RCPAT, and in compliance with the provision in articles 12, no. 2, and 22, no. 4, both of the RJAT, as well as with the provision in art. 4, no. 4, of the aforementioned Regulation.
Notify.
Lisbon, 11 January 2016.
The Arbitrator,
Miguel Patrício
Text prepared by computer, under the terms of the provision in art. 131, no. 5, of the Code of Civil Procedure, applicable by remission of art. 29, no. 1, subpara. e), of the RJAT.
The drafting of the present decision is governed by Portuguese spelling prior to the Orthographic Agreement of 1990.
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