Stamp Tax on High-Value Property: Verba 28.1 TGIS and Independent Units Without Horizontal Property

ARBITRAL DECISION

Process no. 520/2014-T

Claimant: A, NIF …, resident at Rua … Lisbon.

Respondent: Tax and Customs Authority

ARBITRAL DECISION

I. Report

1. A, NIF …, resident at Rua … Lisbon (hereinafter referred to as "Claimant"), submitted on 25/07/2014 a request for constitution of an arbitral tribunal in tax matters, which was accepted, seeking the declaration of illegality of the tax acts of assessment of Stamp Tax, concerning the application of item 28.1 of the General Table of Stamp Tax (hereinafter "GTST") to the urban property located at Avenida …, no. …, in …, Union of Parishes of …, … and …, municipality of Oeiras, listed in article … of the urban property registry of the Union of Parishes of …, … and …, municipality of … and district of Lisbon, urban property of which he is the owner, for the year 2013, presenting a joinder of claims for procedural economy.

2. Pursuant to the provisions of subparagraph a) of no. 2 of article 6 and subparagraph 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 of the Administrative Arbitration Centre designated as arbitrator Ana Teixeira de Sousa, and the parties, after being duly notified, did not object to this designation.

3. Thus, in accordance with the provisions of subparagraph 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 arbitral tribunal was constituted on 26.09.2014.

4. The senior official of the service of the Tax and Customs Authority (hereinafter referred to as "Respondent") was notified to, if willing, within 30 days, submit a response and request additional evidence production, and a response was submitted on 10.11.2014, subscribed by the jurists Ms. … and …, on behalf and in representation of the Respondent.

5. In view of the Response of the Tax Authority, the tribunal, through an order of 10.03.2014, decided that the meeting referred to in article 18 of the RJAT is dispensed with and that the final decision will be presented by 26 March 2015.

The request for arbitral pronouncement

1. Summarizing, the grounds presented by the Claimant are as follows.

2. The claimant is the owner of the urban property located at Avenida …, in …, Union of Parishes of …, … and …, municipality of …, with patrimonial values separated by floors with independent use.

3. This property is composed of eighteen floors with independent use, the value of which was determined separately, in accordance with the provisions of article 7, no. 2, subparagraph b) of the Code of Municipal Property Tax (DOC. 1).

4. The said property, despite being composed of eighteen floors with independent use, is not constituted under a horizontal property regime.

5. Each of the floors has a patrimonial value determined autonomously, in accordance with the Code of IMI.

6. In 2014 the Claimant was notified of 16 documents for payment, in the month of April 2014, of Stamp Tax under Item 28.1 of the GTST, first installment, concerning the following properties:

1. Accordingly, the Claimant understands that the object of the present request for pronouncement is constituted by the Stamp Tax assessments, issued by the Lisbon 7 Tax Office, through the application of item 28.1 of the GTST, identified above and contained in Table 2 (See Docs. nos. 2 to 17), which amount to the value of Stamp Tax of €4,540.45 and which correspond to the first installment of Stamp Tax.

2. The Claimant alleges the ILLEGALITY OF THE ASSESSMENT ACTS for the following reasons.

3. In the Claimant's view, the essential legal question to be decided is whether, with reference to properties not constituted in a horizontal property regime, composed of various floors, which is the relevant patrimonial value for tax purposes.

4. Article 67, no. 2 of the CIS refers matters not regulated in this Code concerning item no. 28.1 of the General Table to the subsidiary application of the provisions contained in the CIMI.

5. Article 12, no. 3 of the CIMI provides that each floor or part of a property capable of independent use is considered separately in the property registry entry, which also discriminates the respective patrimonial value for tax purposes.

6. According to the Claimant, the conduct of the Tax Authority, by applying the Stamp Tax to properties in vertical ownership, as is the case here, considering them as a whole, despite being composed of several autonomous parts with independent use – and which therefore could easily exceed one million euros – corresponds to the use of an opportunistic criterion that cannot be endorsed, for the most elementary reasons of legality and equity.

7. Now, being so, considering that the entry in the property registry of properties in vertical ownership, composed of different floors with independent use, in accordance with the CIMI, follows the same registration rules as properties constituted in horizontal property regimes, and their respective IMI, as well as the Stamp Tax, are levied individually in relation to each of the parts, there is no doubt that the legal criterion for defining the incidence of the new tax must be the same.

8. Indeed, for purposes of IMI, autonomous fractions and parts of properties capable of independent use have exactly the same legal treatment.

9. From this the Claimant concludes that to levy the Stamp Tax in question here, the Tax and Customs Authority created a fictional patrimonial value for tax purposes – corresponding to the sum of the patrimonial values for tax purposes relative to the parts capable of independent use of the property – which does not in fact correspond to the "patrimonial value for tax purposes used for purposes of IMI".

10. Considering the above, only when the "patrimonial value for tax purposes used for purposes of IMI" of any of the parts capable of independent use is superior to one million euros can the taxation provided for in item 28 of the GTST operate.

11. In truth, the legislator, in introducing this legislative innovation, clearly sought to tax "luxury residences", with patrimonial value equal to or exceeding €1,000,000.00, on which a special rate of stamp tax passed to apply, intending to introduce a principle of taxation on wealth manifested in the ownership of luxury property with residential use.

12. Clearly, the legislator understood that this value, when attributed to a residence (house, autonomous fraction or floor with independent use) reflects an above-average taxpaying capacity and, as such, likely to determine a special contribution to ensure fair distribution of the tax burden.

13. Which is not the case with the property in question, where all floors have a value far below the limit of one million euros.

14. On the other hand, the fiscal legislator cannot treat equal situations differently.

15. In fact, if the property were in a horizontal property regime, none of its housing fractions would be subject to the incidence of the new tax.

16. The material truth is what imposes itself as the determining criterion of taxpaying capacity and not the mere legal-formal reality of the property.

17. Consequently, the discrimination effected by the Tax Authority reflects an arbitrary and illegal discrimination; nothing in the law imposes, moreover, the establishment of horizontal property.

18. For all this, the Claimant requests to be judged with merit in the request for arbitral pronouncement, consequently annulling the impugned assessment acts with the legal consequences arising therefrom.

Response of the Tax and Customs Authority

1. The Tax and Customs Authority (or Respondent) submitted a response maintaining the impugned assessments based, briefly, on the following arguments.

2. Contrary to what is defended by the Claimant, it follows unequivocally from the letter of the law that the legislator intended to tax with item 28.1 of the GTST properties as a single legal-tax reality.

3. In the Respondent's view, what is at issue here is exclusively a set of assessments relative to a single property, and which result from the direct and immediate application of the legal norm, which translates into objective elements, without any subjective or discretionary appreciation.

4. However, the thesis defended by the Claimant lacks legal support, because although the assessment of the Stamp Tax, in the situations provided for in item no. 28.1 of the GTST, is processed in accordance with the rules of the CIMI, the truth is that the legislator reserves the aspects that require the necessary adaptations, namely those in which, as is the case with properties in full ownership, even though with floors or divisions capable of independent use (although the IMI is levied in relation to each part capable of independent use) for purposes of Stamp Tax the property as a whole is relevant, since the divisions capable of independent use are not considered as property, but only the autonomous fractions in the horizontal property regime, in accordance with no. 4 of article 2 of the CIMI.

5. For the Respondent, what expressly results from the letter of the law is that the legislator intended to tax with item 28.1 in discussion the properties as a single legal-tax reality.

6. Indeed, the subjection to stamp tax of item 28.1 of the General Table annexed to the CIS results from the conjunction of two facts: the residential use and the patrimonial value of the urban property entered in the registry being equal to or exceeding €1,000,000.00.

7. In accordance with the rules of the CIMI, with the property in full ownership, not possessing autonomous fractions to which fiscal law attributes the qualification of property, because from the notion of property in article 2 of the CIMI, only autonomous fractions of property in horizontal property regimes are considered as properties - no. 4 of the cited article 2 of the CIMI.

8. From the above, the defect of violation of law due to error as to the legal presuppositions must be judged without merit, maintaining in the legal order the impugned assessments by constituting a correct application of the law to the facts.

9. Also the argument concerning violation of the principle of tax equality cannot be accepted, because this principle prohibits arbitrary or unjustified discriminations but not discriminations possibly justified by the more advanced character of the institutes or by the coherence of the tax system.

10. Taxation under Stamp Tax follows the criterion of adequacy, aimed at taxing the wealth embodied in the ownership of high-value properties, emerging in a context of economic crisis that cannot be ignored.

11. The Tax and Customs Authority notes that the property registry entry of each part capable of independent use is not autonomous by matrix, but appears in a discrimination in the registry of the property as a whole.

12. What is intended to be concluded is that these norms, evaluation procedures, the norms on property registry entry, and also the norms on the assessment of the parts capable of independent use, do not permit to affirm that there should exist an equation of the property in full ownership regime to the vertical property regime, because this would be illegal and unconstitutional.

13. These legal-civil regimes are different, and fiscal law respects them!

14. Indeed, considers the Respondent, the establishment in horizontal property determines the cleavage/division of full ownership and the independence or autonomy of each of the fractions that constitute it, for all legal purposes, in accordance with no. 2 of article 4 of the CIMI and article 1414 and following of the CC, being that a property in full ownership constitutes, for all purposes, a single legal-tax reality.

15. By which the Respondent concludes that the assessments are correct and should be maintained and the request for pronouncement should be judged without merit, absolving the Respondent entity from the request.

Object of the request

1. The question that the Claimant intends to have decided is:

· Legality of the assessment of the Stamp Tax provided for in item 28.1 of the GTST (added by article 4 of Law no. 55-A/2012, of 29 October) concerning the global patrimonial value for tax purposes of a building, corresponding to the sum of the patrimonial values for tax purposes of various floors or divisions capable of independent use.

Preliminary examination

1. The arbitral tribunal is materially competent, in accordance with the provisions of articles 2, no. 1, subparagraph a) of the Legal Regime of Arbitration in Tax Matters.

2. The parties enjoy legal personality and capacity and have legitimacy in accordance with article 4 and no. 2 of article 10 of the Legal Regime of Arbitration in Tax Matters (RJAT), and article 1 of Regulation no. 112-A/2011, of 22 March.

3. The process does not suffer from any nullity nor were any exceptions raised by the parties that obstruct the consideration of the merits of the case, so the conditions for issuance of the arbitral decision are met.

II. GROUNDS

Proven facts

Based on the documents submitted by the Claimant (request for arbitral pronouncement, Docs. nos. 1 to 17 attached with that Request; Response of the Tax Authority), the following factual basis is established:

1. The Claimant is the owner of a property composed of floors or divisions in full or vertical ownership, that is, not constituted in horizontal property (article 1 of the Request for arbitral pronouncement; article 1 of the Response and assessment documents attached to the file by the Claimant with the Request, whose content is considered reproduced).

2. On 18.03.2014, the Claimant was notified of a set of assessments for payment, in the month of April 2014, of Stamp Tax under Item 28.1 of the GTST, concerning the property identified in article 1 of the PI.

3. The amounts referred to in the assessments as the total patrimonial value for tax purposes of the property identified correspond to the values mentioned in point 11 of the present decision of the arbitral tribunal, in the global amount of €4,540.45.

4. These amounts refer to the first installment of the Stamp Tax for the year 2013, to be levied in April 2014.

5. The assessments referred to the year 2013, indicated as the basis item 28.1 of the GTST, applied the rate of 1% to the patrimonial value for tax purposes of the property subject to IMI, but taking into account the global patrimonial value for tax purposes of the property in which each of the taxed properties was included.

Unproven facts

1. The unproven facts are considered irrelevant for the consideration of the merits of the case.

The applicable law

The scope of incidence of item 28 of the General Table of Stamp Tax

1. It results from the positions of the Parties that the essential question in the present case consists of knowing whether in the case of properties in full ownership, with floors or divisions of independent use but not constituted in a horizontal property regime, the patrimonial value for tax purposes to be considered for purposes of incidence of Stamp Tax provided for in item 28.1 of the GTST should correspond to the patrimonial value for tax purposes of each floor or division with residential use and independent use, or the sum of the patrimonial values for tax purposes corresponding to the floors or divisions of independent use with residential use. That is, to know whether the patrimonial value for tax purposes relevant as a criterion for the incidence of the tax is the corresponding to the sum of the patrimonial value for tax purposes attributed to the different parts or floors (global patrimonial value for tax purposes) or, rather, the patrimonial value for tax purposes attributed to each of the parts or residential floors.

2. This question has already been considered in various cases within the scope of Tax Arbitration [1], and no arguments have been identified so far that would break the unanimity that has been achieved in the decisions issued.

3. We follow in this case essentially the grounds in Case 194/2014-T of 28.07.2014, which we fully subscribe to.

4. Beginning by making reference to the relevant legal provisions in the tribunal's decision-making.

5. Item 28 of the General Table of Stamp Tax, annexed to the Code of Stamp Tax (CIS), was added by article 4 of Law no. 55-A/2012, of 29 October, with the following content:

"28 – Ownership, usufruct or right of superficies of urban properties whose patrimonial value for tax purposes contained in the registry, in accordance with the Code of Municipal Property Tax (CIMI), is equal to or greater than €1,000,000 – on the patrimonial value for tax purposes for purposes of IMI:

28.1 – Per property with residential use – 1%;

28.2 – Per property, when the taxpayers who are not natural persons are residents in a country, territory or region subject to a clearly more favorable tax regime, listed in a regulation approved by the Minister of Finance – 7.5%."

1. According to the amendments to the Code of Stamp Tax, introduced by article 3 of Law no. 55-A/2012, of 29/10, the stamp tax provided for in item 28 of the GTST applies to a legal situation (no. 1 of article 1 and no. 4 of article 2 of the CIS), in which the respective taxpayers are those referred to in article 8 of the CIMI (no. 4 of article 2 of the CIS), to whom falls the burden of the tax (subparagraph u) of no. 3 of article 3 of the CIS).

2. The provision in the CIS, as amended by Law no. 55-A/2012, whether in article 4, no. 6 ("In the situations provided for in item 28 of the General Table, the tax is due whenever the properties are situated in Portuguese territory"), or in article 23, no. 7 ("Where the tax is due by the situations provided for in item no. 28 of the General Table, the tax is levied annually, in relation to each urban property, by the central services of the Tax and Customs Authority, applying, with the necessary adaptations, the rules contained in the CIMI"), combined with article 1 of the CIMI, consider the property itself as the taxable event (the situation that triggers taxation) as long as it reaches the value provided for in item 28 of the General Table of Stamp Tax, regardless of the number of taxpayers, possessors (as owners, usufructuaries or superficiaries) of the goods in question [2].

3. As to the rates, subparagraph f) of no. 1 of the same article 6 of Law no. 55-A/2012, provides for the application in 2012 of a rate lower than the rate of 1% provided for in item 28.1 of the GTST for properties with residential use, further distinguishing between cases of properties assessed in accordance with the Code of IMI (rate of 0.5%) and properties with residential use not yet assessed in accordance with the Code of IMI (rate of 0.8%).

4. From 2013 onwards, the normally applicable rate is 1%.

The concept of property used in item 28 of the GTST

1. The concept of "properties with residential use" used in item 28.1 [3] is not expressly defined in any provision of the CIS nor in the CIMI, the regulation to which no. 2 of article 67 of the CIS refers.

2. In the case at hand, whether we consider the Claimant's property in vertical ownership or each of the respective autonomous divisions, it is (not contested) a property classified as urban and residential in accordance with the criteria established in articles 2, 4 and 6 of the Code of IMI, applicable by referral from article 67 of the CIS.

3. Thus, the only issue is the exact meaning of the application of the "patrimonial value considered for purposes of IMI", contained in the norm of incidence of stamp tax in the text of item 28: in the case of properties in full ownership but with floors or divisions capable of independent use, is the patrimonial value for tax purposes relevant the one corresponding to the sum of the patrimonial value for tax purposes of the various divisions/floors, as the Tax Authority claims, or should be taken into account the patrimonial value for tax purposes of each of the respective autonomous floors or divisions, as the Claimant defends?

4. Now this provision is integrated into a text that defines as the object of incidence of stamp tax the "Ownership, usufruct or right of superficies of urban properties whose patrimonial value for tax purposes contained in the registry, in accordance with the Code of Municipal Property Tax (CIMI), is equal to or greater than €1,000,000 – on the patrimonial value for tax purposes for purposes of IMI" (bold ours).

5. As has been repeatedly invoked and admitted, the Code of IMI establishes, both as regards property registry entry and discrimination of the respective patrimonial value for tax purposes, and as regards the assessment of the tax, the autonomization of the parts of urban property capable of independent use and the segregation/individualization of the patrimonial value for tax purposes relative to each floor or part of property capable of independent use.

6. Thus, each property corresponds to a single article in the registry (no. 2 of article 80 of the CIMI) but, according to no. 3 of article 12 of the same Code, concerning the concept of property registry (registration of the property, its characterization, location, patrimonial value for tax purposes and ownership), "each floor or part of property capable of independent use is considered separately in the property registry entry, which discriminates the respective patrimonial value for tax purposes", not taking as reference the sum of the patrimonial values attributed to the autonomous parts of the same property, but the value attributed to each of them individually considered.

7. As to the assessment of the IMI - application of the rate to the taxable base - article 119, no. 1 provides that "the competent collection document" contains the "discrimination of the properties, their parts capable of independent use, respective patrimonial value for tax purposes and the amount collectible (...)".

8. That is, the rule is autonomization, the characterization as "property" of each part of a building, provided it is functionally and economically independent, capable of independent use [4], in accordance with the concept of property defined right in no. 1 of article 2 of the CIMI: property is any fraction (of land, comprising waters, plantations, buildings and constructions of any nature incorporated or based in it, with a character of permanence) provided it is 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 above, endowed with economic autonomy (presentation and emphasis ours). [5]

9. Thus, when no. 4 of article 2 provides that "For purposes of this tax, each autonomous fraction, in the horizontal property regime, is considered as constituting a property", it does not establish properly an exceptional or special regime for properties in horizontal property.

10. Each building in horizontal property (article 92) has only one property registry entry (no. 1), describing the building generically and mentioning the fact that it is in a horizontal property regime (no. 2) and the property registry autonomy is concretized in the attribution to each of the autonomous fractions, described in detail and individualized, of a capital letter, according to alphabetical order (no. 3). This seems to be the specificity of buildings in horizontal property; in other cases, of properties in vertical or full ownership, the divisions or floors with autonomy but without the legal status of horizontal property, the registry also consecrates autonomy but evidencing the units with indication of the type of floor/story.

11. On the other hand, the argument that "taxation under Stamp Tax follows the criterion of adequacy, aimed at taxing the wealth embodied in the ownership of high-value properties, emerging in a context of economic crisis that cannot at all be ignored", is not acceptable, because the different treatment of properties in horizontal and vertical property regimes is neither justified as "a discrimination imposed by the need to impose coherence to the tax system" (what coherence?) nor can it be freed from the qualification of arbitrary by treating differently substantially identical realities, and, if they were different, even with the risk of treating more heavily situations generally related to lower taxpaying capacity than those that would have more favorable treatment.

12. Nor does the argument of the Respondent convince that in the case of properties in full ownership, even though with floors or divisions capable of independent use, notwithstanding the IMI being levied in relation to each part capable of independent use, the patrimonial value for tax purposes on which the incidence of the Stamp Tax of item no. 28.1 of the General Table depends had to be, as it was, the global patrimonial value for tax purposes of the properties, and not that of each of its autonomous floors or parts, because item no. 28.1 of the GTST is applied according to the rules of the CIMI but "with reservation of the aspects that require the necessary adaptations". (emphasis ours).

13. There is thus no visible reason in the law approved for, in the matter of incidence of the Stamp Tax provided for in item 28.1 of the GTST, to give to the fractions of properties in "vertical ownership", endowed with autonomy, treatment different from that granted to properties in horizontal property, when in either of those situations the IMI is applied to the patrimonial value for tax purposes evidenced in the registry for each of the autonomous units.

14. The interpretation above sustained, resulting from the analysis of the letter of the law and its insertion in the set of other applicable tax norms, is the most consonant with the spirit of the legislative amendments introduced by Law no. 55-A/2012, of 29 October.

15. As has already been evidenced in other arbitral decisions, "the legislator in introducing this legislative innovation considered as the determining element of taxpaying capacity the urban properties, with residential use, of high value (luxury), more rigorously, of value equal to or exceeding €1,000,000.00, on which a special stamp tax rate passed to apply, intending to introduce a principle of taxation on wealth manifested in the ownership, usufruct or right of superficies of urban properties of luxury with residential use. For this reason, the criterion was the application of the new rate to urban properties with residential use, whose patrimonial value for tax purposes is equal to or exceeding €1,000,000.00". (...) "The justification for the measure designated as 'special rate on the highest value residential urban properties' rests on the invocation of the principles of social equity and tax justice, calling upon the holders of high-value properties intended for residential use to contribute in a more intense manner, with the new special rate applying to 'houses of value equal to or exceeding 1 million euros. Clearly the legislator understood that this value, when attributed to a residence (house, autonomous fraction or floor with independent use) reflects an above-average taxpaying capacity and, as such, likely to determine a special contribution to ensure fair distribution of the tax burden." [6]

16. Now, it seems to completely lack adherence to reality the sustaining of the thesis that the ownership of fractions devoid of the status of horizontal property denotes greater taxpaying capacity than if they are endowed with that nature.

17. On the contrary, in the majority of cases, as evidenced by Arbitral Decision no. 50/2013, "many of the properties existing in vertical property are old, with undeniable social utility, since in many cases they accommodate residents with modest and more accessible rents, factors that must necessarily be taken into account."

18. Factuality applicable to the concrete case in which the Claimant indicates that the properties are already old and inhabited by elderly persons.

19. Thus, it is considered correct the interpretation that item 28 of the GTST does not encompass each of the floors, divisions or parts capable of independent use when only from the respective sum does a patrimonial value for tax purposes superior to that provided by the same item result.

20. As decided in other arbitral cases, this tribunal understands that regarding the date of constitution of the tax obligation, fiscal nexus, determination of the taxable base, assessment and payment of the stamp tax in question, the corresponding rules of the CIMI are applicable, by express referral from articles 5, no. 1, subparagraph u), 4, no. 6, 23, no. 7, 44, no. 5, 46, no. 5 and 49, no. 3, of the CIS.

21. To subject to the new stamp tax autonomous parts without the legal status of horizontal property, that is, as long as vertical property is maintained, and not to subject any of the housing fractions if the property were in a horizontal property regime, would constitute violation of the constitutional principle of equality, treating equal situations in a different manner.

22. In the case at hand, verifying that none of the "fractions" of any of the buildings in question present, per se, "value equal to or superior to 1 million euros", there is no place for incidence of item 28 provided in the General Table of Stamp Tax.

Conclusion

Thus, the present arbitral tribunal concludes that the assessments of Stamp Tax, based on item 28/28.1 of the GTST, concerning each of the floors or parts capable of independent use, property of the Claimant, object of the present case, are flawed with illegality, because the said provisions cannot be interpreted in the sense of their application to floors or parts capable of independent use of a property in vertical ownership, when only from the sum of each of these floors or parts is it possible to obtain a patrimonial value for tax purposes equal to or exceeding €1,000,000.00 (one million Euros), with the patrimonial value for tax purposes of each of the said floors or parts not exceeding that legal threshold.

And, as results from the factuality established, none of the floors intended for residential use, of the property, in vertical ownership, object of this case, has patrimonial value equal to or superior to €1,000,000.00, it is concluded that the legal presupposition of incidence of the Stamp Tax provided for in Item 28 of the GTST is not verified.

Decision

Pursuant to the terms and with the grounds set forth, the arbitral tribunal decides to judge the request for arbitral pronouncement with merit, with the consequent annulment of the impugned assessments, with all legal consequences.

Value of the case

In accordance with the provisions of no. 2 of article 315 of the CPC, subparagraph a) of no. 1 of article 97-A of the CPPT and also of no. 2 of article 3 of the Regulation of Costs in Tax Arbitration Cases, the value of the case is fixed at €4,540.45 (four thousand, five hundred and forty euros and forty-five cents).

Costs

For the purposes of the provisions of no. 2 of article 12 and no. 4 of article 22 of the RJAT and of no. 4 of article 4 of the Regulation of Costs in Tax Arbitration Cases, the amount of costs is fixed at €612.00, in accordance with Table I annexed to said Regulation, to be borne entirely by the Respondent.

Notify parties.

Lisbon, 26 March 2015

The Arbitrator

(Ana Teixeira de Sousa)

[Text produced by computer, in accordance with article 131, number 5 of the Code of Civil Procedure (CPC), applicable by referral from article 29, no. 1, subparagraph e) of the Legal Regime of Tax Arbitration. The writing of the present decision follows the old orthography.]

[1] Regarding the application of item 28 of the GTST in the case of properties in vertical ownership, decisions are already published on the CAAD website, namely, in Cases 50/2013-T; 132/2013-T; 181/2013-T; 183/2013-T; 185/2013-T; 248/2013-T; 240/2013-T; 280/2013-T, available at www.caad.org.pt.

[2] The provision in Law no. 55-A/2012, of 29 October, concerning the new item 28 of the General Table of Stamp Tax, entered into force on the day following publication of the law, that is, 30 October 2012. Article 6 of Law no. 55-A/2012, provides for transitional provisions by virtue of which, in that first year of validity, that is, 2012: the taxable event occurs on 31 October (when, in accordance with article 8 of the CIMI, applicable by referral from no. 4 of article 2 of the CIS, would be on 31 December); the taxpayer of the tax is the holder of the property (no. 4 of article 2 of the CIS) also on that 31 October; the patrimonial value for tax purposes to be used in the assessment of the tax corresponds to that which results from the rules provided for in the CIMI with reference to the year 2011; the assessment of the tax by the Tax Authority is effected by the end of November 2012; the tax shall be paid in a single installment, by the taxpayers, by 20 December of that year 2012.

[3] The wording of this number was amended by Law no. 83-C/2013, of 31 December, now using the concept "residential property", but the assessments object of the present case refer to the year 2012.

[4] On this aspect, and in line with the commentary cited in the previous note, see the grounds contained in decision no. 248/2013-T: "The autonomization in the registry of the parts functionally and economically independent of a property in full ownership is related to reasons of a fiscal and extra-fiscal nature. On the fiscal level, this autonomization has to do with the very determination of the patrimonial value for tax purposes, which constitutes the taxable base of the IMI, given that the formula for determining that value, provided for in article 38 of the same Code, contains indices that vary depending on the use attributed to each of these parts. On the extra-fiscal level, this autonomization continues to find justification in the relevance attributed to the patrimonial value for tax purposes of properties and their autonomous parts in the legislation on urban leasing." There is also mentioned no. 1 of article 15-O, of Decree-Law no. 287/2003, of 12/11, added by Law no. 60-A/2011, of 30/11 (providing that the safeguard clause concerning the increase in IMI taxation resulting from the general assessment of urban properties is applicable per property or part of urban property that is the object of said assessment) as confirming the individualization, for tax purposes, of the autonomous parts of urban properties.

[5] As observed in Case 132/2013: "The norms (...) listed establish the principle of autonomization of the independent parts of an urban property, even when not constituted in a horizontal property regime. That is, each part capable of independent use should be, for purposes of IMI, valued in view of its specificities and use, resulting in an autonomous patrimonial value for tax purposes, individualizable and corresponding to each part capable of independent use."

[6] Excerpts from the Decision in case no. 50/2014-T, also referring to Arbitral Decision in case no. 48/2013-T, regarding the analysis of the Discussion of the legislative proposal in the Assembly of the Republic.