Stamp Tax on Vertical Property and Undivided Inheritance – CAAD Case 539/2014-T

ARBITRAL DECISION

I. Report

1. A…, with tax identification number ("TIN") …, married, resident at Avenida …, in Lisbon; B…, with TIN …, divorced, resident at Rua …, in São João do Estoril; and C…, with TIN …, married, resident at Avenida …, in Lisbon (hereinafter jointly referred to as "Claimants"), filed, on the 28th of July 2014, in accordance with the combined provisions of articles 2 and 10 of Decree-Law no. 10/2011, of 20 January, i.e., Legal Framework for Arbitration in Tax Matters ("LFATM"), a request for constitution of an arbitral tribunal, in order to declare the following assessments illegal:

relating to Stamp Duty ("SD"), in the total amount of € 3,874.06, with the Tax Authority and Customs Authority ("Respondent" or "TACA") as defendant.

A) Constitution of the Arbitral Tribunal

1. Pursuant to the provisions of no. 1 of article 6 and subparagraph b) of no. 1 of article 11 of the LFATM, the Ethics Council of this Administrative Arbitration Centre ("AAC") appointed the undersigned as sole arbitrator, who communicated acceptance of the appointment within the applicable time frame, and notified the parties of this appointment on 16 September 2014.

2. Therefore, in compliance with the provisions of subparagraph c) of no. 1 of article 11 of the LFATM, and through the communication of the President of the Ethics Council of the AAC, the Sole Arbitral Tribunal was constituted on 1 October 2014.

B) Procedural History

1. The first Claimant is the head of the estate of D…, which has two other heirs, namely B... and C... (respectively the second and third Claimants).

2. In the request for arbitral decision, the Claimants petitioned for the declaration of illegality of the SD assessments detailed above, relating to the year 2013 (namely the 1st installment), with reference to an urban property, located at Avenida …, in the parish of Avenidas Novas, registered in the urban property registry of that parish, municipality of Lisbon, under article ....

3. The aforementioned property forms part of the estate of D…, which remains undivided.

4. The TACA filed a response, petitioning for the dismissal of the request for arbitral decision, as there is no violation of law, requesting that the tax acts under examination, as they do not violate any legal or constitutional provision, be maintained in the legal order.

5. By decision of 12 February 2015, the Sole Arbitral Tribunal, pursuant to the provisions of subparagraph c) of article 16 of the LFATM, and following the request by the TACA, decided, without opposition from the parties, that it was not necessary to hold the hearing referred to in article 18 of the LFATM, as a result of the simplicity of the matters at issue as well as on the grounds that it had at its disposal all the elements necessary to reach a clear and impartial decision.

6. It likewise decided, in accordance with no. 2 of article 18 of the LFATM, that oral submissions were not necessary, as the positions of the parties were clearly defined in their respective pleadings, and set 30 March 2015 as the deadline for the arbitral decision.

7. The Tribunal was properly constituted and is competent to examine the questions indicated (article 2, no. 1, subparagraph a) of the LFATM), the parties have legal personality and capacity and have full standing (articles 4 and 10, no. 2 of the LFATM and article 1 of Order no. 112-A/2011, of 22 March). There are no nullities whatsoever and no exceptions have been raised, so nothing prevents judgment on the merits.

8. The present case is thus in a position for a final decision to be rendered.

II. Question to be Decided

1. The fundamental question to be examined and decided regarding the merits of the case, as emerges from the parties' procedural documents, is as follows: with reference to properties not constituted in a horizontal property regime, comprised of various floors and divisions capable of independent use (and with residential allocation), what is the Taxable Patrimonial Value ("TPV") relevant for purposes of determining the SD to be paid, in accordance with Item no. 28 of the General Table of SD ("GTSD")?

2. That is, this tribunal aims to ascertain whether, as the Claimants allege, the amount to be considered is the TPV attributed, individually, to each part capable of autonomous use, or, conversely, the total value resulting from the sum of the TPVs of those autonomous units, as the Respondent suggests.

III. Decision on Factual Matters and its Reasoning

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

I. The first Claimant is the head of an undivided estate of which an urban property forms part, registered under article ... in the urban property registry of the parish of Avenidas Novas, municipality of Lisbon, in vertical property ownership, comprised of 13 units, independent from each other.

II. The aforementioned undivided estate has, in addition to the head, two other heirs, who, as previously mentioned, are the second and third Claimants of the present request, respectively.

III. The individual TPV and allocation of each of the autonomous units are as follows:

IV. The first Claimant, as head of the undivided estate, received, in respect of the 2013 financial year and as a result of what is set out in Item no. 28 of the GTSD, the assessment notices from the TACA, mentioned above, relating to the first installment of SD, in the amount of € 3,874.06.

1. The Tribunal's conviction regarding the facts found proven resulted from the documents attached to the case file and contained in the request and the uncontested allegations of the parties, as specified in the factual matters points enumerated above.

2. There is no factual matter relevant to the decision of the case found not proven.

IV. On the Law

A) Legal Framework

1. Given that the legal question to be decided in the present case requires interpretation of the pertinent legal texts, it is important, first of all, to set out the norms that compose the relevant legal framework, at the date of occurrence of the facts.

2. The subjection to SD of properties with residential allocation resulted from the addition of Item no. 28 to the GTSD, carried out by article 4 of Law 55-A/2012, of 29 October, which typified the following taxable facts:

"28 – Ownership, usufruct or surface right of urban properties whose taxable patrimonial value contained in the registry, in accordance with the Municipal Tax on Real Estate Code (MTREC), is equal to or greater than € 1,000,000.00 – on the taxable patrimonial value for purposes of MTRE:

28.1 – For property with residential allocation – 1%

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

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

2. In this context, and having regard to the indication above, let us now focus on the Municipal Tax on Real Estate Code ("MTRE").

3. First, attention should be drawn to article 2, no. 4 of the MTRE Code which tells us that "for purposes of this tax, each autonomous unit, in the horizontal property regime, is deemed to constitute a property".

4. On the other hand, no. 3 of article 12 of the MTRE Code establishes that "each floor or part of a property capable of independent use is considered separately in the property registry entry, which also specifies its respective taxable patrimonial value".

5. Thus, it is within this legal framework that it is important to decide whether, in cases where the horizontal property ownership of an urban property with various autonomous units is not constituted, the TPV, for purposes of Item no. 28 of the GTSD, is calculated, individually, per unit capable of being used autonomously, or, alternatively, determined by the sum of the TPVs of those units.

B) Arguments of the Parties

1. In this regard, the Claimants, in their request, allege, in summary, the following:

2. Having regard to the assessments issued by the TACA, it is clear that, in the latter's view, the criterion for determining the incidence of SD, in cases of properties constituted in vertical ownership, is the total TPV of the floors (whether or not they have residential allocation).

3. However, in the Claimants' opinion, this understanding is "grossly incorrect", particularly since, as emerges from the documents attached by them, only five of the thirteen units have residential allocation.

4. In fact, as the Claimants state, "Now, as has been seen, there are eight floors – out of a total of thirteen – that are not being used for residential purposes, being rented out for other purposes. They are the basement, the right ground floor, the 1st right, the 1st left, the 2nd right, the 2nd left, the 3rd right and the 3rd left".

"Therefore and at least with respect to these, the stamp duty in question should not and cannot be applied, due to the manifest lack of framework within item no. 28.1 of the GTSD".

1. On the other hand, as regards the five units that have residential allocation, the Claimants consider that the TACA used an opportunistic criterion to frame them within the terms of Item no. 28 of the GTSD.

2. Indeed, in their words, "considering that the registration in the property registry of properties in vertical ownership, comprised of different floors with independent use, in accordance with the MTREC, follows the same registration rules for properties constituted in horizontal ownership, and that the respective MTRE, as well as the new SD, are assessed individually in relation to each part, it offers no doubt that the legal criterion for defining the incidence of the new tax must be the same".

"Moreover, the AT itself admits that this is the criterion, which is why the assessment notices themselves are very clear in their essential elements, from which the values of incidence are those corresponding to the TPVs of the various floors, each one individually. And it is thus that we have individualized assessments, sent to the 1st claimant, in his capacity as head of estate".

1. In this way, in the Claimants' view, there would only be incidence of SD if one of the divisions referred to above individually presented a TPV equal to or greater than € 1,000,000, since if "the legal criterion imposes the issuance of individualized assessments for the various floors of properties in vertical ownership, in the same manner as it establishes for properties in vertical ownership, it clearly established the criterion, which must be unique and unequivocal, for defining the rule of incidence of the new tax".

2. Likewise, the Claimants also make reference to both the spirit of the norm (Item no. 28 of the GTSD) and its legislative intent, asserting that the property in question has undeniable social utility, ensuring that it departs, for that reason, from the group of properties that the legislator intended to tax, when Item no. 28 was added to the GTSD.

3. In conclusion, the Claimants believe that the request for arbitral decision submitted by them should be upheld, consequently annulling the assessment acts impugned.

4. In this regard, the Claimants also point out that the request for arbitral decision relating to case no. 100/2014-T, which concerned the same property, but in respect of the 2012 financial year, was recently upheld, naturally hoping that the same will occur for the present case.

5. For its part, the Respondent, after being duly notified to do so, filed its response in which, in summary, alleged the following:

6. The TPV relevant for purposes of the incidence of SD, under the Stamp Duty and MTRE Codes, is the TPV of the urban property and not the TPV of each of the units that comprise it, even if they can be used independently.

7. For the Respondent, this is also the understanding to be followed in cases of undivided estate, and the "ideal share value of each heir" cannot be considered.

8. In the Respondent's view, the urban property in question, not being constituted in a horizontal property regime, its unity is not affected by the mere fact that all or part of the divisions that comprise it may be susceptible to independent economic use.

9. Indeed, in the Respondent's words, "such property remains, by the fact that it is just one, one nevertheless, and thus its distinct parts are not juridically equated to autonomous units in a horizontal property regime".

10. It is in this sense that, in the Respondent's view, Item no. 28 of the GTSD is drafted.

"A type of incidence according to which the taxable patrimonial value of urban properties on which the application of Item 28.1 of the General Table depends is the taxable patrimonial value of each floor or division capable of independent use and not the overall taxable patrimonial value of urban property with residential allocation certainly has no expression in law".

1. On the other hand, the Respondent also does not share the Claimants' understanding, which considers that the assessments above referred to would have violated the principle of equality.

2. In conclusion, the Respondent requests that the present request for declaration of illegality, whose purpose is embodied in the annulment of the contested assessments, be dismissed, absolving the Respondent of the request.

C) Tribunal's Examination

1. By way of introduction, it should be noted that, in the understanding of the present tribunal, and having regard to the legal framework previously presented, the essential normative proposition to be considered for the decision of the case is that which results from Item no. 28 of the GTSD.

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

3. First, it should be clarified that it is clear, from the letter of the law, that the TPV to be considered, for purposes of applying Item no. 28 of the GTSD, can only be that which is determined within the scope of the MTRE Code.

4. Indeed, this is what the aforementioned item tells us, ipsis verbis, "(…) whose taxable patrimonial value contained in the registry, in accordance with the Municipal Tax on Real Estate Code (MTREC), is equal to or greater than € 1,000,000.00".

5. Therefore, attention should be drawn, once again, to what results from article 2, no. 4 of the MTRE Code which tells us that "for purposes of this tax, each autonomous unit, in the horizontal property regime, is deemed to constitute a property".

6. Reinforced, however, by article 12, no. 3 of the same Code, which establishes that "each floor or part of a property capable of independent use is considered separately in the property registry entry, which also specifies its respective taxable patrimonial value".

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

8. And if this is the method of determination followed for the MTRE, it must necessarily also be the model applied within Item no. 28 of the GTSD, in the terms set out above.

9. However, and should the doubts raised still subsist, the present tribunal relies on some prior arbitral decisions that have addressed the matter under examination.

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

11. "Law no. 55-A/2012 says nothing regarding the qualification of the concepts in question, in particular, regarding the concept of 'property with residential allocation'. However, article 67, no. 2 of the Stamp Duty Code, added by the aforementioned Law, provides that 'to matters not regulated in the present code relating to item 28 of the General Table, the MTREC applies subsidiarily'.

The rule of incidence refers, therefore, to urban properties, the concept of which results from the provisions of article 2 of the MTREC, with the determination of TPV subject to the terms of article 38 and following of the same code.

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

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

(…)

Using the criterion that the law itself introduced in article 67, no. 2 of the Stamp Duty Code, 'to matters not regulated in the present code relating to item 28 of the General Table the [MTREC] applies subsidiarily'" (emphasis added).

1. That is, having regard to the fact that the registration in the property registry of properties in vertical ownership, for purposes of the MTRE Code, follows the same registration rules as properties constituted in horizontal ownership, with the respective MTRE, as well as the new SD, assessed individually in relation to each part, it does not appear to the present tribunal that there is any doubt that the legal criterion for defining the incidence of the new tax must be the same.

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

3. Accordingly, SD, within the scope of Item no. 28 of the GTSD, could only be levied on a particular unit if it, possibly, had a TPV greater than €1,000,000.00.

4. And, moreover, this was indeed the understanding adopted by the TACA.

5. Indeed, the latter (TACA) also issued individualized assessment notices, relating to each of the units capable of autonomous use, demonstrating that, in its opinion, the aforementioned units, although not juridically constituted in horizontal ownership, would, for all purposes, be independent from each other.

6. However, the TACA overlooked that it could not, by virtue of the framework previously set out, proceed to sum the individual TPVs of the previously mentioned units, seeking a value that would already fall within the base of incidence of Item no. 28 of the GTSD.

7. This when the legislator itself established a different rule within the scope of the MTRE Code which, as previously mentioned, is the code applicable to matters not regulated in the Stamp Duty Code, as regards Item no. 28 of the GTSD.

8. In summary, the criterion established by the TACA, of considering the value of the sum of individual TPVs attributed to the parts, floors or divisions with independent use, availing itself of the fact that the property is not constituted in a horizontal property regime, does not find, in the eyes of the present tribunal, legal support, and is, in particular, contrary to the criterion applicable under MTRE and, by referral (in the terms mentioned above), under SD.

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

10. Likewise, note that article 12, no. 3 of the MTRE Code makes no distinction as to the regime of properties constituted in horizontal or vertical ownership.

11. As such, and given that if the property were constituted in a horizontal property regime, none of its residential units would be subject to incidence of the new tax, the TACA cannot treat materially equal situations differently.

12. In this regard, see what was stated on this topic in the Arbitral Decision rendered in case no. 132/2013-T, of 16 December, an understanding which the present tribunal endorses.

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

Additionally, to distinguish, in this context, between properties constituted in horizontal ownership and in full ownership would be an 'innovation' without associated legal support, particularly since, as has been stated here, nothing suggests, either in item no. 28 or in the provisions of the MTREC, a justification for that particular differentiation.

Note, by way of example, what article 12, no. 3, of the MTREC states: each floor or part of a property capable of independent use is considered separately in the property registry entry, which also specifies its respective taxable patrimonial value.

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

Setting as the reference value for the incidence of the new tax the overall TPV of the property in question, as the now respondent intended, finds no basis in the applicable legislation, which is the MTREC, given the referral made by the cited article 67, no. 2 of the Stamp Duty Code".

(…)

"Furthermore, admitting such differentiation in treatment could produce results incomprehensible from a legal standpoint and contrary to the objectives that the legislator claimed to have when adding item no. 28. By way of example, suppose the following scenario, which seems plausible in light of the interpretation made by the now respondent: a citizen who owns a property constituted in full ownership intended for residence, with the overall value of autonomous units equal to or exceeding €1,000,000.00 and the TPV of each one less than €1,000,000.00, is subject to annual taxation of 1% of that value (as occurred in the situation under analysis); whereas another citizen who holds a property with the exact same characteristics as the previous one but which has been constituted in horizontal ownership, also with the overall value of autonomous units equal to or exceeding €1,000,000.00 and the TPV of each one less than €1,000,000.00, will not be subject to taxation under the aforementioned item no. 28.

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

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

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

From this it is concluded, as a result of what has been stated, that the SD referred to in item no. 28 of the GTSD cannot be levied on them, being therefore illegal the assessment acts impugned by the claimant" (emphasis added).

1. A final point worth noting (although the previous framework is sufficient to recognize the illegality of the assessment acts performed by the TACA) rests on the understanding advocated, both by the legislator and by the government itself, when Item no. 28 was added to the GTSD.

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

3. "Law no. 55-A/2012, of 29/10, has no preamble, so from it the legislator's intention cannot be extracted.

Such law of the National Assembly had its origin in the bill no. 96/XII (2nd), which, in its explanatory memorandum, speaks of the introduction of fiscal measures inserted in a broader set of measures to combat the budget deficit.

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

In that explanatory memorandum it is further stated that, beyond the increase in taxation of capital income and securities gains, a rate is created under stamp duty levied on urban properties with residential allocation whose taxable patrimonial value is equal to or greater than one million euros.

That is, in such explanatory memorandum, neither is it clarified what is meant by urban properties with residential allocation.

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

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

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

For the tax system to be fairer, it is crucial to promote the expansion of the tax base requiring increased effort from taxpayers with higher incomes and thus protecting Portuguese families with lower incomes.

For the tax system to promote more equality, it is essential that the budget consolidation effort be shared by all types of income, covering with particular emphasis capital income and high-value properties. This matter, it should be noted, was extensively addressed in the Constitutional Court's ruling.

Finally, for the tax system to be more equitable, it is crucial that all are called to contribute according to their ability to pay, granting the tax administration enhanced powers to control and monitor situations of fraud and tax evasion.

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

This proposal has three essential pillars: the creation of special taxation on urban properties worth more than 1 million euros; the increase in taxation on capital income and securities gains; and the strengthening of anti-fraud and tax evasion rules.

First, the Government proposes the creation of a special tax on the highest-value residential urban properties. It is the first time in Portugal that special taxation on high-value properties intended for residence has been created. This rate will be 0.5% to 0.8% in 2012, and 1%, in 2013, and will be levied on houses worth equal to or greater than 1 million euros. With the creation of this additional tax, the fiscal effort required of these owners will be significantly increased in 2012 and 2013'".

1. Next, it is necessary to gather the conclusions that allow, without room for doubt, to decide on the matter under discussion (that is, whether, for purposes of applying Item no. 28 of the GTSD, in cases where a property with various autonomous units, susceptible to independent use, is not constituted in horizontal ownership, the TPV relevant is determined by the sum of individual TPVs, or, alternatively, is individually considered).

2. In this sense, it should be stated, first, that this matter is, from the outset by virtue of article 67, no. 2 of the Stamp Duty Code, subject to the norms of the MTRE Code, "to matters not regulated in the present code relating to item 28 of the General Table, the MTREC applies subsidiarily".

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

4. Now, article 12, no. 3 of the MTRE Code establishes that "each floor or part of a property capable of independent use is considered separately in the property registry entry, which also specifies its respective taxable patrimonial value".

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

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

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

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

9. Thus, there would only be incidence of SD (within the scope of Item no. 28 of the GTSD) if one of the parts, floors or divisions with independent use presented a TPV exceeding € 1,000,000.00.

10. The TACA cannot consider as the reference value for the incidence of the new tax the overall value of the property, when the legislator itself established a different rule under MTRE (and, as previously mentioned, this is the code applicable to matters not regulated as regards Item no. 28 of the GTSD).

11. In conclusion, the current legal regime does not impose the obligation to constitute horizontal ownership, so that the conduct of the TACA amounts to arbitrary and illegal discrimination.

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

13. In the case at hand, the property in question is constituted in vertical ownership and contains 13 units with independent use, as was proven above.

14. Given that none of these units has a taxable patrimonial value equal to or greater than €1,000,000.00, as results from the documents attached to the case file, it is concluded that the legal presupposition of incidence is not met.

IV. Decision

1. Terms under which this Arbitral Tribunal decides:

A) To uphold the request for arbitral decision and, consequently, to declare illegal and annul the SD assessments above mentioned, in respect of 2013, which resulted in tax due in the amount of € 3,874.06, relating to the taxation of urban properties with TPV equal to or greater than €1,000,000, in accordance with the provisions of Item no. 28 of the GTSD;

B) To condemn the Respondent for the costs of the proceedings.

V. Value of the Case

1. The value of the case is fixed at € 3,874.06, in accordance with article 97-A, no. 1, para. a), of the Tax Procedural Code, applicable pursuant to paragraphs a) and b) of no. 1 of article 29 of the LFATM and no. 2 of article 3 of the Regulations on Costs in Tax Arbitration Proceedings ("RCTAP").

VI. Costs

1. In accordance with the provisions of article 22, no. 4, of the LFATM, the arbitration fee is fixed at € 612, in accordance with Table I of the aforementioned Regulations, charged to the Respondent, given the full merit of the request.

Let it be notified.

Lisbon, AAC, 25 March 2015

The Arbitrator

(Sérgio Santos Pereira)