Process: 559/2016-T

Date: February 20, 2017

Tax Type: IMT Selo

Source: Original CAAD Decision

Summary

CAAD Process 559/2016-T addresses the constitutional validity of retroactive application of IMT and Stamp Tax rules to FIIAH (Real Estate Investment Funds for Residential Letting). The claimant, managing a FIIAH fund, challenged €918.75 IMT and €735.00 Stamp Tax assessments on property acquired under the original exemption regime (Law 64-A/2008, Article 8). Law 83-C/2013 (2014 State Budget) amended Article 8 by adding conditions (nos. 14-16) and a transitional provision applying the new regime to pre-2014 acquisitions. The claimant argued this constituted unconstitutional retroactivity violating Article 103(3) CRP, as the new conditions did not exist when the property was acquired under full exemption. The Tax Authority countered that: (1) the arbitral tribunal lacks competence for abstract constitutionality review; (2) the amendments merely clarified existing requirements rather than creating new obligations; (3) the original regime always required properties be 'intended exclusively for permanent residential letting'; and (4) the three-year transitional period preserved legal certainty. The AT further argued that even if unconstitutional, this would cause voidability not nullity, and that exemptions always ceased upon non-compliance with conditions per Article 14(2) EBF. This case critically examines the boundary between legislative clarification and retroactive taxation, with significant implications for FIIAH fund taxation and protection of legitimate tax expectations.

Full Decision

ARBITRAL DECISION

I. REPORT

On 14 September 2016, the company A…, SA, with the NIPC … and with registered office at …, no. …, …, in Lisbon, in its capacity as Managing Company of the B… – CLOSED REAL ESTATE FUND FOR RESIDENTIAL LETTING, with the NIPC … (hereinafter Claimant), pursuant to the combined provisions of Articles 2, no. 1, paragraph a) and 10 of Decree-Law no. 10/2011, of 20 January, which approved the Legal Framework for Arbitration in Tax Matters (RJAT), requested the constitution of an Arbitral Tribunal, in which the Tax Authority and Customs Authority is respondent (hereinafter AT or Respondent), with a view to the declaration of nullity, or, alternatively, the annulment of the assessment of Municipal Tax on Onerous Transfers of Real Estate (IMT) no. …, in the amount of € 918.75 and of the Stamp Tax assessment (Item 1.1 of the General Table of Stamp Tax (TGIS) no. …, in the amount of € 735.00, as well as the conviction of the Respondent to refund the amounts paid by virtue of the same assessments, plus compensatory interest that may be due in accordance with law.

Summary of the Parties' Positions

a. Of the Claimant:

The "Special Regime Applicable to Real Estate Investment Funds for Residential Letting (FIIAH) and Real Estate Investment Companies for Residential Letting (SIIAH)", approved by Articles 102 to 104 of Law no. 64-A/2008, of 31 December (State Budget for 2009) established, in its Article 8, the respective tax regime, in accordance with which were exempt from IMT "the acquisitions of urban real estate or autonomous fractions of urban real estate intended exclusively for letting for permanent residential use, by the investment funds referred to in no. 1" (Article 8, no. 7, paragraph a)) and from Stamp Tax "all acts practised, provided they are connected with the transfer of urban real estate intended for permanent residential use which occurs as a result of the conversion of the right of ownership of such real estate into a right of lease over the same, as well as with the exercise of the purchase option provided for in no. 3 of Article 5." (Article 8, no. 8).

Article 235 of Law no. 83-C/2013, of 31 December (State Budget for 2014), added to Article 8 of the "Special Regime Applicable to Real Estate Investment Funds for Residential Letting (FIIAH) and Real Estate Investment Companies for Residential Letting (SIIAH)" nos. 14 to 16, further enshrining in no. 2 of its Article 236 a transitional law provision, stipulating that the amendments introduced to that Article 8 would apply to real estate that has been acquired by FIIAH as from 1 January 2014 (no. 1), and equally applicable "to real estate that has been acquired by FIIAH before 1 January 2014, with the three-year period provided for in no. 14 being counted, in those cases, as from 1 January 2014".

The Claimant alleges that, since the acquisition of the autonomous fraction that is the subject of the impugned assessments was effected within the framework of the initial wording of Article 8 of the "Special Regime Applicable to Real Estate Investment Funds for Residential Letting (FIIAH) and Real Estate Investment Companies for Residential Letting (SIIAH)", its taxation could not occur in the light of the amendments introduced to that provision by Article 235 of Law no. 83-C/2013, of 31 December, as did in fact occur, under penalty of unconstitutionality, as this constitutes a retroactive application of nos. 14 to 16 of the said Article 8, in violation of the provisions of no. 3 of Article 103 of the Constitution of the Portuguese Republic (CRP).

The Claimant contends that nos. 14 to 16 of Article 8 of the said Regime, came to establish, ex novo, conditions the fulfilment of which is dependent on the right to exemption from IMT and Stamp Tax, non-existent at the date of acquisition of the taxed real estate, by concretizing the concept of "urban real estate intended for letting for permanent residential use", as well as the circumstances under which those comprising the assets of FIIAH cease to benefit from the exemption provided for in nos. 7, paragraph a) and 8 of the same Article.

The Claimant thus considers that, since Article 235 of Law no. 83-C/2013, of 31 December, introduced a new regime of expiry of exemptions, the provision of no. 2 of Article 236 of the same Law, by determining the retroactive application of that new regime to situations occurring under the previous law and already consolidated in the legal order, would suffer from unconstitutionality, a defect that would vitiate the impugned assessments, made pursuant to no. 16 of Article 8 of the "Special Regime Applicable to Real Estate Investment Funds for Residential Letting (FIIAH) and Real Estate Investment Companies for Residential Letting (SIIAH)".

The assessments that are the subject of these proceedings shall be null, due to abstract illegality or, if it is considered that such defect gives rise only to voidability, the same shall be annulled as illegal.

b. Of the Respondent:

In its Reply, the AT invoked the material incompetence of the arbitral tribunal to appreciate the "abstract illegality of the assessments", arising from the unconstitutionality of the norm(s) in question, as petitioned, as the request for abstract review of constitutionality can only be formulated by the entities referred to in no. 2 of Article 281 of the Constitution of the Portuguese Republic (CRP). It further argues the passive illegitimacy of the Respondent, given that the Tax Administration cannot refuse to apply norms on the grounds of their unconstitutionality, as it is subject to the principle of legality, in accordance with Article 266, no. 2 of the CRP.

The AT further contends that the amendments introduced by Law no. 83-C/2013, of 31 December (State Budget for 2014), to the tax regime applicable to FIIAH and SIIAH, approved by Article 102 of Law no. 64-A/2008, of 31 December (State Budget for 2009) was limited to concretizing the meaning of the expression "urban real estate intended exclusively for letting for permanent residential use", coming to expressly provide a regime of cessation of the tax benefit, in the event of non-compliance with that legal requirement.

That, however, the said amendments do not entail retroactivity, as at the date of the creation of the tax regime applicable to FIIAH, taxable persons wishing to benefit from the exemptions from IMT and Stamp Tax therein provided would have to comply with the condition that the assets acquired were intended exclusively for letting for permanent residential use.

That the impugned assessments do not entail any injury to the principles of legal certainty and protection of legitimate expectations, as the transitional provision contained in no. 2 of Article 236 of Law no. 83-C/2013, of 31 December, established a three-year transitional period for application of the amendments introduced to the "Tax Regime of FIIAH", not merely ceasing, immediately, all exemptions in progress that did not prove to possess the legal requirements.

That it is manifest that, from the beginning of the "Tax Regime of FIIAH", the benefit could always cease once the respective conditions ceased to be met, and further, in accordance with no. 2 of Article 14 of the EBF, the alienation of the real estate to which the assessments at issue pertain would always determine that the exemptions of which the Claimant benefited upon its acquisition would cease to have effect.

On the other hand, the AT contends that, even if the transitional provision of no. 2 of Article 236 of Law no. 83-C/2013, of 31 December, were unconstitutional, this would not entail the nullity of the assessments, but only their voidability, abstract illegality being invoked only as a ground for opposition to tax enforcement and not for judicial challenge.

The AT concludes by pleading for its absolution from the instance or, if not so understood, for the dismissal of the request for arbitral pronouncement, with dismissal of all claims as formulated.

By arbitral order of 19 January 2017, the holding of the meeting referred to in Article 18 of the RJAT was dispensed with, and the Parties were invited to submit successive written arguments within a period of 10 days, commencing with the Claimant, with 20 February 2017 being designated for the pronouncement of the arbitral decision.

The Parties did not submit arguments.

II. PRELIMINARY ISSUES

1. The singular arbitral tribunal is competent and was regularly constituted on 7 December 2016, in accordance with Articles 2, no. 1, paragraph a), 5 and 6, all of the RJAT.

2. The parties have legal personality and capacity, are legitimate and are legally represented, in accordance with Articles 4 and 10 of the RJAT and Article 1 of Ordinance no. 112-A/2011, of 22 March.

3. The proceedings do not suffer from defects that would invalidate it.

4. The joinder of claims is admissible, in accordance with the provisions of no. 1 of Article 3 of the RJAT, insofar as the request for arbitral pronouncement formulated, and its merit, depend on the appreciation of the same circumstances of fact and the interpretation and application of the same principles or rules of law.

III. GROUNDS

III.1 MATTERS OF FACT

The factual matter relevant to the understanding and decision of the case, after critical examination of the documentary evidence attached to the request for arbitral pronouncement and taking into account the facts alleged by the Parties, is fixed as follows:

A) Established Facts

1. The autonomous fraction designated by the letter "C" of the urban property registered under article … of the parish and municipality of …, intended for residential use, was acquired by the "B… – CLOSED REAL ESTATE FUND FOR RESIDENTIAL LETTING", on 31 December 2013, for the sum of € 91,875.00;

2. At the time of acquisition of the identified autonomous fraction, the acquirer benefited from the exemptions from IMT and Stamp Tax, in accordance with Article 8, nos. 7, paragraph a) and 8, respectively, of the Special Regime Applicable to FIIAH and SIIAH;

3. On 15 June 2016, the "B… – CLOSED REAL ESTATE FUND FOR RESIDENTIAL LETTING" addressed a request to the Head of the Finance Service of …, in which it informed of the alienation of the previously identified autonomous fraction and requested the assessment of IMT and Stamp Tax that is the subject of these proceedings;

4. On 16 June 2016, the Tax Authority and Customs Authority issued assessments of IMT no. …, in the amount of € 918.75 and Stamp Tax (item 1.1 of the TGIS) no. …, in the amount of € 735.00, relating to the acquisition of the right of ownership over the said autonomous fraction by the "B… – CLOSED REAL ESTATE FUND FOR RESIDENTIAL LETTING", on 31 December 2013, with exemption from such taxes;

5. The impugned assessments were paid on 17 June 2016.

B) Unproven Facts

There are no facts with relevance to the decision of the case that have been considered unproven.

III.2 LEGAL ISSUES

1. Preliminary Issues

In the Reply submitted to the file, the AT invoked the material incompetence of the arbitral tribunal to appreciate the abstract unconstitutionality of the norms contained in nos. 14 to 16 of Article 8 of the Special Regime Applicable to FIIAH and SIIAH, added by Article 235 of Law no. 83-C/2013, of 31 December, as well as of the transitional provision of no. 2 of Article 236 of the same Law, as petitioned, as the request for abstract review of constitutionality can only be formulated by the entities referred to in no. 2 of Article 281 of the Constitution of the Portuguese Republic (CRP), as well as the passive illegitimacy of the Respondent, given that the Tax Administration cannot refuse to apply norms on the grounds of their unconstitutionality, as it is subject to the principle of legality, in accordance with Article 266, no. 2 of the CRP.

This arbitral tribunal considers that what results from the initial petition is not the request for the declaration of abstract unconstitutionality of the said provisions of Law no. 83-C/2013, of 31 December, but rather the appreciation of the legality of the concrete assessments of IMT and Stamp Tax that are being impugned, issued on the basis of the said norms.

In this manner, and even though the Respondent is bound by the principle of legality, in accordance with Article 266, no. 2 of the CRP, which prevents the refusal to apply any legal norms on the grounds of their unconstitutionality, it is incumbent upon the courts "the duty to examine whether the norms relevant to the decision of the question submitted to their appreciation are or are not in conformity with constitutional precepts"[1].

Since it is a matter of appreciation of the legality of the impugned assessments, the exceptions invoked by the Respondent are not considered to have been established.

2. The Question to be Decided

The disputed question in the present arbitral action consists of whether the acquisition of real estate by a Real Estate Investment Fund for Residential Letting (FIIAH), in a date prior to 1 January 2014, with the exemptions provided for in Article 8, nos. 7, paragraph a) (IMT) and 8 (Stamp Tax), of the "Special Regime Applicable to Real Estate Investment Funds for Residential Letting (FIIAH) and Real Estate Investment Companies for Residential Letting (SIIAH)", hereinafter, in simplified form, Special Regime of FIIAH, can be taxed before the expiry of the three-year period established by no. 2 of Article 236 of Law no. 83-C/2013, of 31 December (State Budget for 2014), if such real estate has been alienated, outside the situations provided for in Article 5 of that Special Regime of FIIAH.

3. The Applicable Law

Article 8 of the Special Regime of FIIAH, approved by Articles 102 to 104 of Law no. 64-A/2008, of 31 December, established the tax regime applicable to FIIAH that were to be constituted during the five years subsequent to its entry into force, with respect to real estate acquired by them for residential letting.

Specifically with respect to IMT and Stamp Tax, nos. 7 and 8 of that Article 8 provided that:

"7 – Are exempt from IMT:

a) The acquisitions of urban real estate or autonomous fractions of urban real estate intended exclusively for letting for permanent residential use, by the investment funds referred to in no. 1;

b) The acquisitions of urban real estate or autonomous fractions of urban real estate intended for own permanent residential use, as a result of the exercise of the purchase option referred to in no. 3 of Article 5 by the tenants of real estate comprising the assets of the investment funds referred to in no. 1.

8 – Are exempt from stamp tax all acts practised, provided they are connected with the transfer of urban real estate intended for permanent residential use which occurs as a result of the conversion of the right of ownership of such real estate into a right of lease over the same, as well as with the exercise of the purchase option provided for in no. 3 of Article 5."

Article 235 of Law no. 83-C/2013, of 31 December, added to Article 8 of the Special Regime of FIIAH, nos. 14 to 16, with the following wording:

"Article 8 - [...]

(…)

14 - For the purposes of the provisions in nos. 6 to 8, urban real estate is considered to be intended for letting for permanent residential use whenever it is the subject of a letting contract for permanent residential use within three years counted from the moment it came to form part of the assets of the fund, the taxable person being required to communicate and provide proof to the AT of the respective actual letting, within 30 days following the end of the said period.

15 - When real estate has not been the subject of a letting contract within the three-year period provided for in the preceding number, the exemptions provided for in nos. 6 to 8 shall cease to have effect, the taxable person being required in that case to request from the AT, within 30 days following the end of the said period, the assessment of the respective tax.

16 - Should real estate be alienated, with the exception of the cases provided for in Article 5, or should the FIIAH be subject to liquidation, before the expiry of the period provided for in no. 14, the taxable person shall equally request from the AT, before the alienation of the real estate or the liquidation of the FIIAH, the assessment of the tax owed in accordance with the preceding number."

Concurrently, no. 2 of Article 236 of the cited Law no. 83-C/2013, of 31 December, established a transitional law provision, defining the terms of applicability of the new nos. 14 to 16 of Article 8 of the Special Regime of FIIAH, to real estate acquired by them in a date prior to 1 January 2014.

The following is the wording of no. 2 of Article 236 of Law no. 83-C/2013, of 31 December:

"Article 236 - Transitional provision under the special regime applicable to FIIAH and SIIAH

1 – (…)

2 - Without prejudice to the provisions of the preceding number, the provisions of nos. 14 to 16 of Article 8 of the special regime applicable to FIIAH and SIIAH, approved by Articles 102 to 104 of Law no. 64-A/2008, of 31 December, are equally applicable to real estate that has been acquired by FIIAH before 1 January 2014, with the three-year period provided for in no. 14 being counted, in those cases, as from 1 January 2014."

In addition to the norms just referred to, it is also necessary to invoke Article 10 of the IMT Code (Recognition of exemptions) and Articles 7 (Oversight) and 14 (Extinction of tax benefits) of the Tax Benefits Statute (EBF).

4. The Impugned IMT and Stamp Tax Assessments

As is evident from the request for arbitral pronouncement, the Claimant seeks the appreciation of the legality of the impugned assessments, exclusively in light of the norm on the basis of which they were issued, that is, no. 16 of Article 8 of the Special Regime of FIIAH, and of the transitional law provision of no. 2 of Article 236 of Law no. 83-C/2013, of 31 December, considering their unconstitutionality, due to retroactive application to a situation occurring entirely within the framework of prior law.

The Claimant invokes, for this purpose, the nature of taxes of single obligation, both of IMT and Stamp Tax, whose tax event, temporally located, is exhausted in the practice of the act of acquisition of the real estate, and in the fact that it was recognized the exemption of such taxes at the time of acquisition of the autonomous fraction that is the object of taxation, an acquired right already crystallized in its legal sphere at the date of the amendments to the Special Regime of FIIAH.

The AT contends that, since its beginning, the Special Regime of FIIAH has always clearly defined the conditions that conditioned the granting of exemptions from IMT and Stamp Tax to FIIAH, with reference to real estate acquired by them, "intended exclusively for letting for permanent residential use" and that, regardless of the amendments introduced to it by Law no. 83-C/2013, of 31 December, the AT could always, within the scope of the duty of oversight of the conditions of tax benefits referred to in Article 7 (current no. 1) of the EBF, decide for the maintenance of the exemptions or for the restoration of the regime of standard taxation (Article 14, no. 1 of the EBF) and that, in accordance with no. 2 of the said Article 14 of the EBF, "when the tax benefit relates to the acquisition of assets intended for the direct fulfilment of the purposes of the acquirers, it shall cease to have effect if they are alienated or given another use without authorization of the Minister of Finance, without prejudice to any other sanctions or different regimes established by law".

Let us see which side is right:

With respect to the so-called "abstract illegality of the assessment", defined jurisprudentially as the situation in which "the illegality does not reside directly in the act which applies the law to the concrete case, but in the law itself whose application is made, arising from the absence of law in force at the date of the facts to which the obligation that provides for its assessment pertains or the non-authorization of its collection at the date in which the respective assessment occurred"[2], which constitutes grounds both for opposition to tax enforcement and for judicial challenge, in accordance with Articles 204, no. 1, paragraph a) and 99, both of the Code of Tax Procedure and Process (CPPT), respectively, it shall be said that, in the concrete case of the present proceedings, at the date of the facts to which the tax obligation pertains, the taxes in question (IMT and Stamp Tax) were in force, and it was also provided both for their assessment and for the collection of the respective revenue.

The argumentation of the Claimant lacks merit in this respect.

Just as the Claimant is not right, in asserting that, being taxes of single obligation, the fact object of taxation, both in the context of IMT and in the context of Stamp Tax, was exhausted on the date of acquisition of the ownership of the real estate by the Fund: it is that, although the onerous acquisition of the right of ownership over real estate constitutes the tax event embraced by the norms of objective incidence of each of those taxes (cf., respectively, Article 2, no. 1 of the IMT Code, Article 1, no. 1 of the Stamp Tax Code and item 1.1 of the General Table attached to it), it does not, by itself, determine the birth of the tax obligation, if the tax event is paralyzed in the face of the existence of a negative condition of taxation[3], such as exemption. In these cases, only with the extinction of the tax benefit is the tax event produced or, in the words of the legislator of the EBF, is the regime of "standard taxation" restored.

Nor would the recognition, at the request of the Fund and in a date prior to that of the acquisition of the autonomous fraction that is the subject of the assessments of IMT and Stamp Tax being impugned, in accordance with Article 10 of the IMT Code, of the exemptions contained in nos. 7, paragraph a) and 8 of Article 8 of the Special Regime of FIIAH, determine that such exemptions became definitively crystallized in the legal-tax order, as they have always been, since the creation of the Special Regime of FIIAH by Law no. 64-A/2008, of 31 December, conditioned to the verification of the condition that the urban real estate or autonomous fractions of urban real estate acquired by FIIAH are intended "exclusively for letting for permanent residential use".

However, it is evident from the proven factuality that the impugned assessments were issued at the request of the taxable person, in which it expressly informs the local services of the AT of the alienation of the autonomous fraction to which the same assessments pertain. There remain, therefore, no doubts that, with the alienation of the taxed real estate, it was given a use different from that which was the condition for the maintenance of the exemption recognized upon its acquisition, in December 2013.

Nor can it, on the other hand, be invoked the specialness of the regime created by Law no. 64-A/2008, of 31 December, which, in the view of the Claimant, would determine the definitive crystallization of the exemptions granted, as in the silence of the legislator regarding the causes of expiry of the exemptions from IMT and Stamp Tax provided for in nos. 7, paragraph a) and 8 of Article 8 of the Special Regime of FIIAH, it should be understood that those contained in Part I of the EBF are applicable, extensible to all tax benefits (Article 1 of the EBF).

Thus, given the powers of oversight of the AT with respect to "the control of verification of the conditions of the respective tax benefits and of the compliance with the obligations imposed on the holders of the right to the benefits" (Article 7 of the EBF, in the wording in force at the date of the facts), the AT could always, in the absence of verification of such conditions, determine the restoration of the regime of standard taxation.

Concluding, for the reasons set forth above, that the assessments that are the subject of these proceedings could always have been issued by the AT, independently of the amendments introduced by Article 235 of Law no. 83-C/2013, of 31 December to Article 8 of the Special Regime of FIIAH, or of the transitional provision of no. 2 of Article 236 of the same law, which determined the application of those amendments to real estate acquired by FIIAH in a date prior to 1 January 2014, the appreciation of the constitutionality of the said provisions of the State Budget Law for 2014 becomes irrelevant to the decision of the case.

It is further concluded that, not constituting the assessments now being impugned acts injurious to the rights and legally protected interests of the taxable person, as they have not determined the payment of the taxes in an amount higher than that legally provided, the same should remain in the legal order.

As the assessed taxes are shown to be owed, the appreciation of the question relating to the requested compensatory interest is prejudiced.

IV. DECISION:

In harmony with the grounds of fact and law set forth, it is decided to find that the requests for declaration of nullity or annulment of the acts of assessment of IMT no. …, in the amount of € 918.75 and of the assessment of Stamp Tax (Item 1.1 of the TGIS) no. …, in the amount of € 735.00, are not well-founded and such assessments shall remain.

VALUE OF THE PROCEEDINGS: In harmony with the provisions of Article 306, nos. 1 and 2 of the CPC, Article 97-A, no. 1, paragraph a) of the CPPT and Article 3, no. 2 of the Regulation of Costs in Tax Arbitration Proceedings, the value of the proceedings is fixed at € 1,653.75 (one thousand six hundred and fifty-three euros and seventy-five cents).

COSTS: Calculated in accordance with Article 4 of the Regulation of Costs in Tax Arbitration Proceedings and Table I attached to it, in the amount of € 306.00 (three hundred and six euros), charged to the Claimant.

Lisbon, 20 February 2017.

The Arbitrator,

/Mariana Vargas/

Text prepared by computer, in accordance with no. 5 of Article 131 of the CPC, applicable by reference of paragraph e) of no. 1 of Article 29 of DL 10/2011, of 20 January.

The wording of the present decision is governed by the 1990 Orthographic Agreement.

[1] - Thus, J. J. Canotilho and Vital Moreira, Constitution of the Portuguese Republic, Annotated, Vol. II, 4th Edition revised (reprint), Coimbra Editora, p. 519.

[2] - Cf. by way of example, the Decision of the Supreme Administrative Court, of 09/04/2014, in the appeal no. 076/14.

[3] - Considering exemption as a "negative condition, [which] will prevent the constitution of a legal tax bond", cf. MARTINEZ, Pedro Soares, "Tax Law", 7th Edition, Almedina, Coimbra, 1993, pp. 188 and 189.

Frequently Asked Questions

Automatically Created

Are FIIAH real estate investment funds exempt from IMT on acquisitions of residential properties for permanent housing?
Yes, under Article 8(7)(a) of the Special Regime for FIIAH and SIIAH (Law 64-A/2008), acquisitions of urban real estate or autonomous fractions intended exclusively for letting for permanent residential use by these investment funds are exempt from IMT. However, this exemption depends on the property being effectively used for permanent residential letting and compliance with regime conditions.
How did Law 83-C/2013 change the IMT and Stamp Tax exemption regime for FIIAH and SIIAH funds?
Law 83-C/2013 (2014 State Budget) introduced substantive changes through Article 235, adding nos. 14-16 to Article 8 of the FIIAH/SIIAH regime. These amendments: (1) concretized the meaning of 'urban real estate intended exclusively for permanent residential letting'; (2) established a three-year period during which properties must be let for permanent housing; (3) created an express regime for cessation of exemptions when legal requirements are not met; and (4) specified tax consequences for non-compliance. Article 236(2) provided a transitional rule applying these changes to pre-2014 acquisitions.
What is the three-year transitional rule for properties acquired by FIIAH before January 1, 2014?
Article 236(2) of Law 83-C/2013 establishes that for properties acquired by FIIAH before January 1, 2014, the three-year period referenced in Article 8(14) is counted from January 1, 2014 (not from the original acquisition date). This transitional provision applies the new regime requirements to previously acquired properties, giving funds a grace period to comply with the amended conditions for maintaining IMT and Stamp Tax exemptions.
Can a FIIAH fund claim reimbursement of IMT and Stamp Tax paid plus compensatory interest through tax arbitration?
Yes, FIIAH funds can claim reimbursement through tax arbitration. Under Articles 2(1)(a) and 10 of the RJAT (Decree-Law 10/2011), taxpayers may request arbitration seeking declaration of nullity or annulment of tax assessments and reimbursement of amounts paid plus legally due compensatory interest. In this case, the claimant successfully invoked arbitral jurisdiction to challenge IMT and Stamp Tax assessments totaling €1,653.75, demonstrating that tax arbitration is a viable remedy for FIIAH funds contesting assessments.
Does the Stamp Tax exemption under the FIIAH special regime apply to all acts connected with the transfer of residential urban properties?
Under the original Article 8(8) of the FIIAH/SIIAH special regime, the Stamp Tax exemption applied specifically to 'all acts practised, provided they are connected with the transfer of urban real estate intended for permanent residential use which occurs as a result of the conversion of the right of ownership of such real estate into a right of lease over the same, as well as with the exercise of the purchase option' under the regime. The exemption is not unlimited but tied to specific transactions involving conversion from ownership to lease and purchase option exercises for permanent residential properties.