Stamp Tax on Vertical Property Buildings: CAAD Rules on Verbas 28 and 28.1 TGIS (Decision 560/2014-T)

ARBITRAL DECISION

THE PARTIES

Claimant: A, NF ..., resident at Street ..., ..., in Oeiras (...), acting in her own name and in representation, in the capacity of head of the undivided estate left by the death of B, NF ....

Respondent: TAX AND CUSTOMS AUTHORITY (TAA).

DECISION

REPORT

a) On 29-07-2014, A, NF ..., submitted to the Administrative Arbitration Centre (AAC) a request seeking, under the Legal Framework for Tax Arbitration (LFTA), the establishment of a Singular Arbitral Tribunal (SAT).

b) The request is signed by counsel in representation of the Claimant.

THE CLAIM

c) The Claimant petitions for the annulment of the assessment acts for Stamp Duty (SD) under item 28 of the General Table of Stamp Duty (GTSD), relating to the year 2013, which total 5,864.62 euros, dated 18.03.2014, relating to the following property articles corresponding to floors or divisions capable of independent use of an urban property in vertical ownership regime:

Taxpayer NF ...

Total..................................................................... 2,932.31 €

Taxpayer NF ...

Total..................................................................... 2,932.31 €

floors or divisions capable of independent use which make up the following real estate property:

• Urban property located in Cascais, at Street ..., ..., registered in the urban property register of the parish of Union of Parishes of ... and ..., municipality and district of Cascais.

d) It submits, in summary, that the assessment acts "suffer from a defect of violation of law, by error as to the assumptions" and that "the legal incidence requirement of SD provided for in item 28.1 of the General Table of Stamp Duty is not met".

e) It argues that "since these are urban properties not constituted in horizontal property regime, comprised of various floors or divisions with independent use and "residential use" (or "residential property"), as is the case here, subjection to SD is determined, not by the total TPV of the property, but by the TPV attributed to each of its floors or divisions".

f) And concludes: "The TAA cannot, thus, consider as the reference value for the incidence of SD the total value of the urban property, when the legislature itself established a different rule under the Municipal Property Tax Code, and this is the Code applicable to matters not regulated as regards item 28 of the GTSD", noting that "none of the 7 (seven) floors has a patrimonial value equal to or greater than €1,000,000.00 (one million euros), it should be concluded that the legal incidence requirement of SD provided for in item 28 of the GTSD is not met".

g) And that the incidence rule, in the interpretation implemented by the TAA, "is illegal and unconstitutional (by) considering as the reference value the corresponding sum of the TPV attributed to each floor or division" for "violation of the principle of equality and proportionality in tax matters".

h) It petitions generally for the annulment of the tax acts identified in c), the refund of the amounts paid and the payment of compensatory interest.

OF THE ARBITRAL TRIBUNAL

i) The request for constitution of the SAT was accepted by the President of the AAC and automatically notified to the TAA on 30.07.2014.

j) By the Deontological Council of the AAC, the signatory of this decision was appointed as arbitrator, and the parties were notified thereof on 16.09.2014.

k) Therefore, the Singular Arbitral Tribunal (SAT) has been duly constituted as of 01.10.2014 to appraise and decide the subject matter of this dispute.

l) All these acts are documented in the notification of constitution of the Singular Arbitral Tribunal dated 01.10.2014, which is hereby reproduced.

m) The TAA was notified on 03.10.2014, in accordance with and for the purposes of Article 17-1 of the LFTA. In this order, given that questions identical to those already raised in many other cases already decided by the AAC are raised in this proceeding, the parties were invited to state their position on the waiver of the hearing referred to in Article 18 of the LFTA and likewise on pleadings.

n) In the response submitted by the TAA on 30.10.2014, it requested that the hearing of the parties not take place and likewise that no pleadings be filed.

o) Therefore, by order of 04.11.2014, the SAT waived the holding of the hearing referred to above if the Claimant did not expressly object thereto within 5 days.

p) Therefore, since both parties dispensed with, expressly or tacitly, the holding of the hearing of the parties under Article 18 of the LFTA and the filing of supplementary pleadings, these procedural acts did not take place.

PROCEDURAL REQUIREMENTS

q) Standing, capacity and representation – the parties have legal personality and capacity, are legitimate and are properly represented.

r) Adversarial process – the TAA was notified in accordance with subsection m). All orders issued in the proceeding and all documents attached were notified to the opposing party.

s) Dilatory pleas – the proceeding is not vitiated by any defects and the request for arbitral ruling is timely as it was filed within the period prescribed in paragraph a) of paragraph 1 of Article 10 of the LFTA.

SUMMARY OF THE CLAIMANT'S POSITION

As to the possible illegality of the assessment acts by non-conformity with the incidence rule of item 28.1 of the GTSD

t) The Claimant maintains that the taxable patrimonial value (TPV) relevant in the case under discussion, given that it concerns a property in full ownership comprising floors or divisions with independent use, all with residential use, is not the sum of all such floors or divisions, but the TPV of each one.

u) It submits that the assessment acts "suffer from a defect of violation of law, by error as to the assumptions" and that "the legal incidence requirement of SD provided for in item 28.1 of the General Table of Stamp Duty is not met".

v) And concludes: "The TAA cannot, thus, consider as the reference value for the incidence of SD the total value of the urban property, when the legislature itself established a different rule under the Municipal Property Tax Code, and this is the Code applicable to matters not regulated as regards item 28 of the GTSD", adding that "none of the 7 (seven) floors has a patrimonial value equal to or greater than €1,000,000.00 (one million euros), it should be concluded that the legal incidence requirement of SD provided for in item 28 of the GTSD is not met".

w) It argues that the incidence rule, in the interpretation implemented by the TAA, "is illegal and unconstitutional (by) considering as the reference value the corresponding sum of the TPV attributed to each floor or division" for "violation of the principle of equality and proportionality in tax matters".

SUMMARY OF THE TAX AND CUSTOMS AUTHORITY'S POSITION

As to the possible illegality of the assessment acts by non-conformity with the incidence rule of item 28.1 of the GTSD

x) The TAA argues that "what is at issue here are assessments that result from the direct application of the legal rule, which translates into objective elements, without any subjective or discretionary appreciation."

y) Adding: "although the assessment of SD, under the conditions provided for in item 28.1 of the GTSD is carried out in accordance with the rules of the Municipal Property Tax Code, the fact is that the legislature reserves the aspects that require the necessary adjustments", "as is the case with properties in full ownership, even though with floors or divisions capable of independent use, for although the Municipal Property Tax be assessed in relation to each part capable of independent use" "... for the purposes of SD the property in its entirety is relevant, for divisions capable of independent use are not deemed to be property, but only the autonomous units in the horizontal property regime, as provided for in Article 2-4 of the Municipal Property Tax Code"

z) It submits that there is no violation of the principle of equality because there is no discrimination between properties in horizontal ownership and properties in full ownership with floors or divisions capable of independent use, or between properties with residential use and properties with other uses.

aa) The different valuation and taxation of a property in full ownership as opposed to a property in horizontal ownership stems from the different legal effects inherent in these two figures.

bb) These are distinct realities, valued by the legislature in different ways.

cc) Arguing for the legality of the tax acts because they constitute a correct application of the law to the facts, both at the level of ordinary tax law and at the level of constitutional principles (principles of equality, contributory capacity and proportionality).

II. ISSUES FOR THE TRIBUNAL TO RESOLVE

On this matter, the AAC has already ruled in several decisions in which the substantive issue is the same, namely, the scope of the provision of the incidence rule of items 28 and 28-1 of the GTSD is discussed.

The limit of interpretation is the letter, the text of the rule. What remains is the "task of interconnection and evaluation that escapes the literal domain".

Starting from the principle that every rule has a provision (and a disposition), the issue here is to determine, by delimiting, whether the incidence rule, as drafted – in its provision – (ownership of urban properties ... with residential use ... whose taxable patrimonial value recorded in the register, under the terms of the Municipal Property Tax Code, is equal to or greater than 1,000,000.00 euros – on the taxable patrimonial value used for purposes of the Municipal Property Tax), allows or not the understanding that as to properties "with residential use" in vertical ownership, with floors or divisions capable of independent use, held by an entity, the TPV on which the rate will be imposed should be its sum or should the individual TPV of each floor or division capable of independent use be considered, in the same manner as occurs with properties in horizontal property regime.

Fundamentally, what is at issue is the adoption of an appropriate reading of the scope of the provision of the incidence rule of items 28 and 28.1 of the GTSD, in light of what Article 23(7) of the Stamp Duty Code states regarding the determination of the taxable base and the subsequent operation of tax assessment:

"Where the tax is due by virtue of the situations provided for in item no. 28 of the General Table, the tax is assessed annually, in relation to each urban property, by the central services of the Tax and Customs Authority, applying, with the necessary adjustments, the rules contained in the Municipal Property Tax Code."

It is clear from the position adopted by the TAA – Article 15 of the Response – that the assessments at issue were made on the basis of Article 23(7) of the Stamp Duty Code which permits "the necessary adjustments" of the rules of the Municipal Property Tax Code.

As we have stated in other decisions, regarding the interpretation of tax rules there is a rule, although it may be considered residual, which is found in Article 11(3) of the General Tax Law: "if doubt persists as to the meaning of the incidence rules to be applied, regard shall be had to the economic substance of the tax facts". This is a criterion to be used in the hermeneutics of interpretation of rules.

We do not advocate an "economic interpretation" of rules of tax law.

But it appears to us that we may also appeal here to the analysis of the "economic substance of the tax facts" to properly implement the "necessary adjustments of the rules contained in the Municipal Property Tax Code", with a view to resolving the issue at hand.

We are thus, solely and exclusively, within the scope of the activity of interpretation and application of rules, namely, in the task of delimiting the legal and factual situations that should be deemed to be encompassed in the provision of the incidence rule of this new tax and which results from the combination of items 28 and 28-1 of the GTSD and in this case what should be deemed acceptable at the level of the "necessary adjustments of the rules contained in the Municipal Property Tax Code", following the mandate of Article 23(7) of the Stamp Duty Code.

The question of the conformity of the provision of the incidence rule, in light of the constitutional text, will only arise if the interpreter reaches the conclusion that a specific and unequivocal reading of the law – correctly applied to a specific case – violates one or more constitutional principles with such intensity that the legislative option adopted could not have been adopted, also taking into account that the TAA cannot, on the basis of any unconstitutionality of rules, not declared by the courts, refrain from applying the law, in the meaning it considers most accurate.

It appears to us that the crucial issue to which the SAT should respond is the following:

Do items 28 and 28-1 of the GTSD, as tax incidence rules, as drafted – in their provision – (ownership of urban properties ... with residential use ... whose taxable patrimonial value recorded in the register, under the terms of the Municipal Property Tax Code, is equal to or greater than 1,000,000.00 euros – on the taxable patrimonial value used for purposes of the Municipal Property Tax), allow or not the understanding that as to properties "with residential use" in vertical ownership, with floors or divisions capable of independent use, held by an entity, the TPV on which the rate will be imposed should be its sum or should the individual TPV of each floor or division capable of independent use be considered, in the same manner as occurs with properties in horizontal property regime?

The answer to this question will determine whether the claim is well-founded or not, and if the answer is not in accordance with what was duly argued by the TAA, it will not be necessary for the SAT to rule on the other grounds invoked by the Claimant in the request for arbitral ruling, with possible repercussions on the validity of the assessment acts at issue.

III. FINDINGS OF FACT PROVED AND NOT PROVED. GROUNDS

Facts relevant to the decision to be adopted are the following facts, which are considered proved, indicating the respective documents (proof by documents) and/or the articles of the Claimant's request and the TAA's response as to the facts admitted by agreement, as grounds:

Facts Proved

1. The Claimant, A, NF ..., is recorded as owner, in the proportion of 14/48, of the ownership right to the urban property in full ownership regime, with floors or divisions capable of independent use, more specifically regarding the residential floors that comprise it, namely: articles... R/C E; ... R/C D; ...1st; ...2nd; ...3rd; ...4th and ...5th, of the urban property located in Cascais, at Street ..., registered in the urban property register of the parish of Union of Parishes of ... and ..., municipality and district of Cascais – Document No. 23 (property register card) attached with the request for ruling.

2. B – head of the estate (represented by A) NF ..., is recorded as owner, in the proportion of 14/48, of the ownership right to the urban property in full ownership regime, with floors or divisions capable of independent use, more specifically regarding the residential floors that comprise it, namely: articles ...R/C E; ... R/C D; ...1st; ...2nd; ...3rd; ...4th and ...5th, of the urban property located in Cascais, at Street ..., registered in the urban property register of the parish of Union of Parishes of ... and ..., municipality and district of Cascais – Document No. 23 (property register card) attached with the request for ruling.

3. The Claimant was notified, on 27.03.2014, in her personal name and on an undetermined date, but in July 2014, in the name of the undivided estate, of the assessments of Stamp Duty under item 28 of the GTSD, as expressed in subsection c) of the Report, generating a total assessment of 5,864.62 euros – Article 4 and 5 of the request for ruling, Documents 1 to 22 attached with the request for ruling (SD assessment notices) and Article 4 of the TAA's response.

4. The floors or divisions capable of independent use subject to taxation with residential use have TPV ranging from 34,980.00 euros (ground floor E – article ...R/C E) and 178,360.00 euros (1st floor - ...1st), the sum of their TPV totalling 1,005,360.00 euros – Document No. 23 (property register card) attached with the request for ruling.

5. In the urban property register card of the property referred to in 1) and 2) it states: "Total patrimonial value: €1,005,360.00" – Document No. 23 attached with the request for ruling (urban property register card).

6. In the assessment notices it states "Total Patrimonial Value of the property subject to tax: 1,005,360.00" euros, which corresponds to the sum of the TPV of the residential floors of the property identified in 1) and 2) – Documents 1 to 22 attached with the request for ruling (SD assessment notices).

7. Tax assessed with reference to 2013 and on the basis of item 28.1 of the GTSD, as worded by Law 55-A/2012, of 29 October, respectively – Documents 1 to 22 attached with the request for ruling (SD assessment notices), Article 4 of the TAA's response and documents nos. 1 to 12 attached by the Claimant on 07.11.2014.

8. The Claimant proceeded to pay the tax – 3 instalments due – for the partial amounts, totalling the global amount of 5,864.62 euros, indicated in c) of the Report – Documents nos. 24 to 45 attached with the request for ruling, documents nos. 1 to 12 attached by the Claimant on 07.11.2014 and the TAA's overall position in its response.

Facts Not Proved

There is no other factuality alleged that is relevant to the correct resolution of the procedural dispute.

The established factual matter results from the documents attached by the Claimant, whose contents and probative values did not merit dissent from the TAA and from facts admitted, expressly or tacitly, by agreement of the parties.

IV. CONSIDERATION OF THE ISSUES FOR THE SAT TO RESOLVE

Do items 28 and 28-1 of the GTSD, as tax incidence rules, as drafted – in their provision – (ownership of urban properties ... with residential use ... whose taxable patrimonial value recorded in the register, under the terms of the Municipal Property Tax Code, is equal to or greater than 1,000,000.00 euros – on the taxable patrimonial value used for purposes of the Municipal Property Tax), allow or not the understanding that as to properties "with residential use" in vertical ownership, with floors or divisions capable of independent use, held by an entity, the TPV on which the rate will be imposed should be its sum or should the individual TPV of each floor or division capable of independent use be considered, in the same manner as occurs with properties in horizontal property regime?

The subjection to Stamp Duty of properties with residential use resulted from the addition of items 28, 28-1 and 28-2 to the General Table of Stamp Duty, effected by Article 4 of Law 55-A/2012, of 29/10, which typified the following tax facts:

"28 – Ownership, usufruct or right of superficies of urban properties whose taxable patrimonial value recorded in the register, under the terms of the Municipal Property Tax Code (MPTC), is equal to or greater than €1,000,000 – on the taxable patrimonial value used for purposes of the Municipal Property Tax:

28-1 – For a property with residential use – 1%;

28-2 – For a property, where the taxpayers that are not natural persons are resident in a country, territory or region subject to a clearly more favorable tax regime, listed in the approved regulation by order of the Minister of Finance – 7.5%."

With relevance to the case we note:

• Article 23(7) of the Stamp Duty Code regarding tax assessment: "Where the tax is due by virtue of the situations provided for in item no. 28 of the General Table, the tax is assessed annually, in relation to each urban property, by the central services of the Tax and Customs Authority, applying, with the necessary adjustments, the rules contained in the Municipal Property Tax Code."

• Article 2(4) of the MPTC: "For purposes of this tax, each autonomous unit, in the horizontal property regime, is deemed to constitute a property."

• Article 12(3) of the MPTC: "Each floor or part of property capable of independent use is considered separately in the property register entry which also determines its respective taxable patrimonial value".

It appears to us that the answer to the issue raised in this request for ruling has to do with the reading made by the TAA of Article 23(7) of the Stamp Duty Code.

The TAA must have considered, in order to proceed to the sum of the TPV of the floors or divisions/parts of the urban property, in order to determine whether the minimum TPV of 1,000,000.00 euros is attainable, for each urban property, that floors or divisions capable of independent use are not by formal legal definition deemed urban properties.

This is what results from the TAA's response – see Article 15.

And it must have considered that such addition of TPV is required because the law states that "the necessary adjustments" of the "rules of the MPTC" must be carried out (Article 23(7) of the Stamp Duty Code).

But is this reading of the law the most accurate one?

In fact, although items 28 and 28.1 speak of "urban properties" and "per property" and Article 23(7) of the Stamp Duty Code states that "the tax is assessed annually, in relation to each urban property", what is relevant here, at the level of the determination of the eligible taxable base and assessment of this tax, is to ensure that "... with the necessary adjustments, the rules contained in the MPTC" are applied as stated in the aforementioned Article 23(7) of the MPTC. But, obviously, "adjustments" provided they are necessary.

What happened – as to urban properties with residential use, in vertical ownership, with floors or divisions capable of independent use – is that the "adjustment" the TAA made, in the operations of assessment of SD, was to sum the TPV of each floor or division independent and intended for residential purposes (excluding the TPV of floors or divisions intended for other purposes), creating a new legal reality, without legal support, which is a global TPV of urban properties in vertical ownership, with residential use.

This operation in the tax process (incidence – determination of the taxable base – assessment – payment) will violate the literal element of the incidence rule, item 28 of the GTSD, which states that this tax is based on "the taxable patrimonial value used for purposes of the Municipal Property Tax".

This is because the TAA, in the operation of determining the taxable base and the subsequent assessment of SD under items 28 and 28.1 of the GTSD (operation of applying a rate to the taxable base), as to urban properties with residential use, in vertical ownership, with floors or divisions capable of independent use, should not consider any taxable patrimonial value (on which the ad valorem rate of the tax is imposed) other than that which results exclusively from Article 12(3) of the MPTC. Both for the Municipal Property Tax and for this SD.

And for the reason that urban properties in vertical ownership, as a whole, do not have TPV. The law determines in these cases that the TPV be attributed to each floor or part of the property separately.

The above conclusion will not be affected by the fact that in the property register cards of this type of property the "total patrimonial value" is indicated which corresponds to the sum of the TPV of all floors, regardless of their use. What is relevant for this taxation is not the "total patrimonial value" but only the "taxable patrimonial value" of urban properties with residential use.

Creating a new legal reality, with a view to finding a new way of determining the taxable base (a TPV for floors or parts of property capable of independent use, with residential use, separated from the TPV of the others with different purposes) does not constitute having legal support in the "necessary adjustments" referred to in Article 23(7) of the Stamp Duty Code.

In this case, the sum of the TPV of the floors, with residential use, coincides with the "total patrimonial value" recorded in the register and with the "total patrimonial value of the property subject to tax" placed in the collection notices. But this only occurs because the owners do not have any floor intended for non-residential purposes, in terms of actual use.

Moreover, there is non-conformity with the literal element of the final part of the incidence rule (item 28 of the GTSD) which states that the tax is based on "the taxable patrimonial value used for purposes of the Municipal Property Tax" and therefore, should not be based on the sum of taxable patrimonial values of properties, parts of properties or floors, and there is no sign of legal support in the operation of adding the taxable patrimonial values of floors or parts of property capable of independent use, with residential use, excluding the TPV of the others with different purposes, in order to reach the eligible taxation threshold of 1,000,000.00 euros or more.

That is, it is not in accordance with the law, the creation of a new TPV for purposes of taxation in SD as regards item 28 of the GTSD, as results from the placement in all collection notices of "total patrimonial value of the property subject to tax" – subsection 5 of the established factual matter.

What means that when Article 23(7) refers to that "…the tax is assessed annually, in relation to each urban property", this expression "each urban property" is intended to encompass, in light of the interpretation and application principles stated, urban properties in horizontal ownership and floors or parts of urban properties in vertical ownership, provided they are intended for residential purposes, but always starting from a single taxable base for all legal purposes: the taxable patrimonial value used for purposes of the Municipal Property Tax (final part of item 28 of the GTSD).

The issue does not, in our view, need to be raised at the level of violation of the Constitution, it being sufficient, in compliance with what is stated in Article 23(7) of the Stamp Duty Code, that an interpretation be made, "with the necessary adjustments of the rules of the MPTC" which will be to consider that the expression "each urban property" encompasses not only floors in horizontal ownership (which are urban properties by operation of law) as well as "floors or parts of property capable of independent use" (Article 12(3) of the MPTC).

If for example for the floors that make up the autonomous units of residential urban properties, in horizontal ownership, (although they are by definition and "by operation of law" urban properties) the TPV are not added to determine the threshold of the eligible TPV for subjection to SD, per taxpayer, of 1,000,000.00 euros (operation of determination of the taxable base), why should this occur as to the "parts of property or floors" of properties in vertical ownership?

In both cases the same contributory capacity of the taxpayers is manifested (their level of wealth at the level of immovable assets). It is the same "economic substance" analyzed from different perspectives. In both situations the same "ability-to-pay" is manifested.

In fact, it is the aforementioned rule, in its literality, particularly the final part of item 28 of the GTSD, combined with Article 23(7) of the Stamp Duty Code, that allows to conclude, with the "necessary adjustments of the rules of the MPTC" that the TPV of floors or part of the property identified above should not be added to find a new TPV.

The Claimant alleges, fundamentally, the non-conformity of the tax acts with tax law, alleging the illegality contained in paragraph a) of Article 99 of the Code of Tax Procedure: "erroneous characterization ... of tax facts".

With the grounds expressed above, the SD assessments being challenged carried out in the manner in which they were, are not in accord with the incidence rule of items 28 and 28-1 of the GTSD, occurring, in this case, the illegality provided for in paragraph a) of Article 99 of the Code of Tax Procedure.

Since the first ground of the claim formulated by the Claimant in the request for ruling (subsection d) of the Report) is upheld, it is not necessary to rule on the other grounds (subsections e) and f) of the Report), by manifest uselessness.

As a consequence of the above stated, the Claimant's requests for annulment of the tax acts submitted to the Arbitral Tribunal are well-founded, since the SD assessments carried out by the TAA are not in conformity with the law, in the reading advocated above.

It is evident from the facts proved (subsection 4) of Part III of this decision) that none of the floors or part of property has, per se, a TPV that is equal to or greater than the taxation threshold indicated in item 28 of the GTSD (TPV equal to 1,000,000.00 euros).

Request for Compensatory Interest

In the legislative authorization on which the Government based itself to approve the LFTA, granted by Article 124 of Law no. 3-B/2010, it states that "the tax arbitration process must constitute an alternative procedural means to the challenge procedure and to the action for recognition of a right or legitimate interest in tax matters".

Although paragraphs a) and b) of Article 2(1) of the LFTA use the expression "declaration of illegality" to define the jurisdiction of the arbitral tribunals functioning in the AAC and do not make reference to constitutive (annulatory) and condemning decisions, it should be understood, in accordance with the aforementioned legislative authorization, that their jurisdiction comprises the powers that in the challenge procedure are attributed to tax tribunals in relation to the acts whose appreciation of legality falls within their jurisdiction.

Therefore, a condemnation of the tax administration to payment of compensatory interest may be rendered here.

Article 43 of the General Tax Law "merely establishes an expedited and, so to speak, automatic means of indemnifying the injured party. Regardless of any allegation and proof of damages suffered, he is entitled to the indemnification established therein, translated into compensatory interest in the cases included in the provision (…)" Decision of the Supreme Administrative Court of 2-11-2006, case 604/06, available at www.dgsi.pt"

In the case at hand, the Claimant proved that it proceeded to pay the tax assessed – the three instalments assessed – for the amounts indicated in c) of the Report, as stated in subsection 8) of the established factual matter, and therefore has the right to compensatory interest counted from the date of payment, total or partial, of the tax assessments now annulled until the date of issuance of the respective credit notes, with the time period for such payment to be counted from the start of the time period for the spontaneous execution of this decision (Article 61, paragraphs 2 to 5, of the Code of Tax Procedure), at the rate determined in accordance with the provisions of Article 43(4) of the General Tax Law.

V. DECISION

Pursuant to and based on the grounds set out above, it is held:

1. That the Claimant's claim is well-founded, annulling the Stamp Duty assessments referred to in subsection c) of the Report, generating a total assessment of 5,864.62 euros, with reference to the urban property in full ownership, with floors or divisions capable of independent use, more specifically regarding the residential floors that comprise it (property articles) namely: ...R/C E; ... R/C D; ...1st; ...2nd; ...3rd; ...4th and ...5th, of the urban property located in Cascais, at Street ..., registered in the urban property register of the parish of Union of Parishes of ... and ..., municipality and district of Cascais, for non-conformity with the rules contained in items 28 and 28.1 of the GTSD and in Article 23(7) of the Stamp Duty Code.

2. Consequently, the TAA is held liable for proceeding to refund to the Claimant whatever has been paid.

3. It is further held that the Claimant's request for condemnation of the TAA to payment of compensatory interest to the Claimant is well-founded, such interest to be counted from the date of payment of the SD tax instalments, in whole or in part, until the date of issuance of the respective credit note, with the time period for such payment to be counted from the start of the time period for the spontaneous execution of this decision (Article 61, paragraphs 2 to 5, of the Code of Tax Procedure), at the rate determined in accordance with the provisions of Article 43(4) of the General Tax Law.

Case Value: in accordance with the provisions of Article 3, paragraph 2, of the Regulation on Costs in Tax Arbitration Proceedings (and paragraph a) of Article 97-A(1) of the Code of Tax Procedure), the case value is fixed at 5,864.62 euros.

Costs: in accordance with the provisions of Article 22, paragraph 4, of the LFTA, the amount of costs is fixed at €612.00, in accordance with Table I attached to the Regulation on Costs in Tax Arbitration Proceedings, to be borne by the respondent.

Notify.

Lisbon, 24 November 2014

Singular Arbitral Tribunal,

Augusto Vieira

Document prepared by computer in accordance with the provisions of Article 131, paragraph 5, of the Code of Civil Procedure, applicable by reference from Article 29 of the LFTA.

The present decision is written in accordance with the orthography prior to the Orthographic Agreement of 1990.