Summary
Full Decision
ARBITRAL DECISION
The arbitrators José Poças Falcão (president), José Joaquim Sampaio e Nora and Ana Teixeira de Sousa (members), appointed by the Ethics Council of the Centre for Administrative Arbitration (CAAD) to form the present arbitral tribunal, hereby agree as follows:
1. REPORT
1.1. A... - SPECIAL CLOSED REAL ESTATE INVESTMENT FUND, taxpayer no. ..., hereinafter referred to as "Claimant", represented by its managing company B... - Real Estate Investment Funds Management Company, S.A., with registered office at ..., no. ..., ..., in Lisbon, with the unique registration number and legal entity number ... and with share capital of € 2,500,000 (two million five hundred thousand euros), submitted on 16/11/2018 a request for constitution of tribunal and for arbitral ruling.
1.2. The object of the request for arbitral ruling is the legality of the assessments of Municipal Tax on Onerous Property Transfers (IMT - Imposto Municipal sobre as Transmissões Onerosas de Imóveis) contained in Document no. ..., in the total amount of €162,632.23, as well as the act of implied rejection of the administrative claim filed against them on 19 April 2018, to which were assigned the nos. ...2018..., ...2018..., ...2018..., ...2018..., ...2018..., ...2018..., ...2018..., ...2018... .
1.3. The Ethics Council appointed as arbitrators of the collective arbitral tribunal the signatories, who communicated acceptance of the appointment within the statutory period.
1.4. On 29/01/2019 the arbitral tribunal was constituted.
1.5. In compliance with the provision of art. 17, nos. 1 and 2 of Decree-Law no. 10/2011, of 20 January (RJAT - Legal Regime of Tax Arbitration), the Respondent was notified on 05/02/2019 to, if it so wished, present a response, request the production of additional evidence and remit the administrative case (PA).
1.6. On 13/03/2019 the Respondent informed the case that it did not intend to present a Response.
1.7. The tribunal on 20/03/2019 decided to dispense with the holding of the meeting to which art. 18, no. 1 of the RJAT refers, based on the absence of exceptions to be decided and the unnecessary nature of inviting the parties to correct procedural documents, as well as dispensing the parties from presenting allegations, considering that the issues subject of the request for arbitral ruling are sufficiently analyzed by case law including from the CAAD.
1.8. A date was set for delivery of the decision in accordance with the orders of 20-3-2019 and 24-5-2019.
2. POSITION OF THE PARTIES
The Claimant begins by justifying the timeliness of the request since it also requests, in this proceeding, the annulment of the act of implied rejection of the administrative claim referred to, so as to prevent the raising of procedural obstacles to the appreciation of the merits of the claims formulated here, in similar fashion to what has already occurred in past proceedings, given the various positions of the learned Arbitral Tribunals on this same question (see, for example, what occurred in the Arbitral Award delivered on 05.05.2014 in the context of case no. 261/2013-T, available for consultation at https://caad.org.pt/tributario/decisoes/).
For this purpose it bases itself on the following:
2.1. The IMT assessments have as payment deadline 20 December 2017.
2.2. The said period of 120 days, calculated in accordance with article 279 of the Civil Code, pursuant to article 20, no. 1, of the CPPT (Tax Procedure and Process Code), ended on 19 April 2018.
2.3. On 19 April 2018 the aforementioned administrative claim was filed against the IMT assessments contained in Document no. ... .
2.4. Having the said administrative claim been presented before the competent service for this purpose on 19 April 2018, the statutory period of 4 months for decision ended on 19 August 2018, calculated in accordance with the provisions of articles 20, no. 1 of the CPPT and 279, subsection c) of the Civil Code.
2.5. Considering, therefore, the administrative claim to have been tacitly rejected as of the end of that day 19 August 2018.
2.6. Thus, the period of 90 days provided for in article 10, no. 1, subsection a) of the RJAT, calculated in accordance with article 102, no. 1, subsection d) of the CPPT, ends on 18 November 2018, a Sunday and a non-business day, therefore extending to the end of 19 November 2018.
The Claimant then defends itself by challenging based on the following arguments.
2.7. The Claimant assumes the legal nature of a special closed real estate investment fund, in accordance with the provisions already referred to in articles 215 to 217 of the General Regime of Collective Investment Organisms approved by Law no. 16/2015, of 24 February.
2.8. On the other hand, it is to be noted that since 1 January 2006, a particular tax regime has been provided for in the EBF (Tax Benefits Statute), for real estate investment funds in forest resources, as is the case of the Claimant.
2.9. For which reason, in the absence of a special rule for real estate investment funds in forest resources, it should be straightforwardly concluded that the exemption from Transfer Tax/IMT enshrined in article 1 of Decree-Law no. 1/87 applies to real estate investment funds in forest resources.
2.10. Additionally, and for the same reason that the exemption from Transfer Tax/IMT enshrined in article 1 of Decree-Law no. 1/87 applies to all real estate investment funds, without distinction, it is an established fact that the same is applicable not only to open real estate investment funds, but also to closed real estate investment funds, whether of public or private subscription, as is the case of the Claimant.
2.11. This conclusion having already been reached in the arbitral decisions delivered on 15 March 2018, in the context of case no. 547/2017-T (of which a copy is attached under the designation of Document no. 13) and on 24 May 2018, in the context of case no. 622/2017-T (of which a copy is attached under the designation of Document no. 14).
2.12. In the understanding of the Claimant, articles 46 and 49 of the EBF, in their successive versions, which the Claimant describes through the request for arbitral ruling, enshrined exemptions and reductions of IMT rates applicable to the acquisitions of real property by certain real estate investment funds ("on exit").
2.13. Contrary to article 1 of Decree-Law no. 1/87, which manifestly enshrines an exemption from IMT applicable to the acquisitions of real property by all real estate investment funds ("on entry").
2.14. Article 1 of Decree-Law no. 1/87 provides: "Acquisitions of immovable property made for a real estate investment fund by its respective management company are exempt from transfer tax."
2.15. Now, in the opinion of the Claimant, the aforementioned acquisitions should have been exempt from IMT on the basis of this article 1 of Decree-Law no. 1/87.
2.16. Indeed, not only has this norm never ceased to be in force in the Portuguese legal order, as will be seen better below, but it also makes no distinction between the various legally permissible types of real estate investment funds, and is consequently applicable to the Claimant.
2.17. The exemptions and reductions of IMT rate successively enshrined in articles 46 and 49 of the EBF have always been directed at "real property integrated in" all or some real estate investment funds.
2.18. Or, in more colloquial language, but perhaps more striking: the exemptions and reductions of IMT rate successively enshrined in the various versions of articles 46 and 49 of the EBF are attributed on exit and not on entry of those real estate investment funds.
2.19. Indeed, as João Espanha states, "In truth, this new IMT exemption (now not for the acquisition of real property by REI, but for the transfer/alienation of real property by REI) is perfectly suited to the extra-fiscal purposes or objectives set out in the preamble of DL 1/87, since it is clear that it greatly contributes to the promotion of real estate investment the possibility of REI placing on the market real property whose acquisition is not burdened by the successor of the 'most stupid tax in the world' - see Espanha, João (2007), Op. Cit., p. 60.
2.20. In this regard, it was stated in the Arbitral Decision delivered on 28 April 2017 in the context of case no. 544/2016-T, relating to the same question which is here discussed (of which a copy is attached under the designation of Document no. 5)
2.21. The question that is raised here is therefore that of the correct interpretation of the said expression "real property integrated in" with respect to the mentioned exemptions and reductions of IMT rate.
2.22. It is clear that article 1 of Decree-Law no. 1/87 and articles 46 and 49 of the EBF, in their successive versions and as regards IMT, are rules with completely distinct scope of application.
2.23. And article 46 saw its scope of application progressively restricted, ceasing to be applicable to Closed Real Estate Investment Funds, while article 49 was even repealed by article 215 of Law no. 7-A/2016 of 30 March.
2.24. Now in the case of Decree-Law no. 1/87 it must be concluded that there has never been lapse, express repeal, tacit repeal or general repeal, in particular of its article 1, the exemption from IMT provided therein remaining fully in force in the Portuguese legal order.
2.25. Which, not having been applied to the acquisitions in question here, carries with it the illegality of the IMT assessments corresponding to them.
2.26. On the other hand, even if one does not agree with the interpretation of articles 1 of Decree-Law no. 1/87 and 46/49 of the EBF sustained by the Claimant, it will always have to be concluded that the first presents itself as a special rule as against those latter rules and that, as such, it is not for that reason also repealed, and the exemption flowing therefrom should therefore have been applied to the assessments in question here.
2.27. Indeed, even if it is concluded, contrary to what the Claimant sustains, that the exemptions and reductions of IMT rate successively enshrined in articles 46 and 49 of the EBF are applicable to the acquisitions of real property by certain real estate investment funds ("on entry", therefore), it will still have to be concluded that the exemption from Transfer Tax/IMT enshrined in article 1 of Decree-Law no. 1/87 is fully in force at present.
2.28. Article 7, no. 3 of the Civil Code provides that "General law does not repeal special law, except if such is the unequivocal intention of the legislator".
2.29. Now, it is easy to understand that article 1 of Decree-Law no. 1/87 presents itself as a special rule as against articles 46 and 49 of the EBF.
2.30. Indeed, whereas articles 46 and 49 of the EBF establish, on the one hand, exemptions not only from IMT but also from Property Tax and, on the other, attribute these exemptions not only to real estate investment funds, but also to pension funds and retirement savings funds...
2.31. ...article 1 of Decree-Law no. 1/87 provides for an exemption from a single tax (IMT) and in favor of a single type of taxpayer (real estate investment funds).
2.32. And this was also the conclusion reached in the Arbitral Decision delivered on 28 April 2017 in the context of case no. 544/2016-T, where it was stated "[…] even if it is understood that the EBF constitutes general law as regards tax benefits, article 7, no. 3 of the Civil Code provides that 'general law does not repeal special law, except if such is the unequivocal intention of the legislator'. It being certain that no factual or legal data permit discerning an unequivocal intention of the legislator to repeal the exemption of article 1 of Decree-Law no. 1/87, of 3 January."
2.33. As well as in the Arbitral Decisions delivered on 26 June 2017, in the context of case no. 677/2016-T (of which a copy is attached under the designation of Document no. 9), on 15 January 2017, in the context of case no. 440/2017-T (of which a copy is attached under the designation of Document no. 10), on 9 March 2018, in the context of case no. 580/2017-T (of which a copy is attached under the designation of Document no. 11) and on 20 October 2018, in the context of case no. 130/2018-T (of which a copy is attached under the designation of Document no. 12).
2.34. From which results equally the illegality of the two IMT assessments in question.
2.35. And it being consequently owed to the Claimant indemnificatory interest, in accordance with the provisions of article 43 of the LGT (General Tax Law).
2.36. As was concluded, always unanimously, without any dissenting votes, in the arbitral decisions delivered by the collective tribunals constituted, also at the request of the present Claimant, with the Centre for Administrative Arbitration in the context of cases no. 544/2016-T, no. 677/2016-T, no. 440/2017-T, no. 580/2017-T and no. 130/2018-T, of which copies have already been attached.
2.37. These conclusions being fully applicable to a special closed real estate investment fund in forest resources and of private subscription, as is the case of the Claimant, insofar as the tax regime enshrined in articles 22-B/24 of the EBF has always been limited to income taxes, having never provided anything with respect to IMT, and insofar as the exemption from Transfer Tax/IMT enshrined in article 1 of Decree-Law no. 1/87 is applicable to all real estate investment funds, without distinction.
The Tax and Customs Authority (AT), entity sued in the arbitral process identified above, having been notified to respond in accordance with the terms and for the purposes of article 17 of the Legal Regime of Tax Arbitration (RJAT), approved by Decree-Law no. 10/2011, of 20 January, informed the case that it was not presenting a response.
3. PRELIMINARY DETERMINATION
The arbitral tribunal was regularly constituted on the basis of articles 2, no. 1, subsection a) and 10, no. 1 of the RJAT, being competent to appreciate and decide the request for arbitral ruling.
The parties, who are properly represented, enjoy legal personality and capacity and have standing (articles 4 and 10, no. 2, of the same decree-law and 1 of Order no. 112-A/2011, of 22 March).
The proceeding does not suffer from any nullities.
4. FACTUAL MATTER
4.1. Facts that are considered proved:
4.1.1. The Claimant is a Special Closed Real Estate Investment Fund, subject to the particular tax regime for real estate investment funds in forest resources and their respective participants, of articles 215 to 217 of the General Regime of Collective Investment Organisms (RGOIC) approved by Law no. 16/2015, of 24 February.
4.1.2. The Claimant was issued notes of assessment of Municipal Tax on Onerous Property Transfers (IMT) contained in Document no. ..., in the total amount of €162,632.23, with a payment deadline of 20 December 2017.
4.1.3 – On 19 April 2018 the Claimant filed an administrative claim against the assessments referred to in the previous number, having been assigned the nos. ...2018..., ...2018..., ...2018..., ...2018..., ...2018..., ...2018..., ...2018..., ...2018... and ...2018... to those administrative claim proceedings.
4.1.4 – Having not been subject to any decision, they were considered presumptively rejected by virtue of no decision having been communicated to the present Claimant until 19 August 2018.
4.1.5. The IMT resulting from the assessments referred to in 4.1.2 and subsequently claimed was assessed by the Claimant as a result of the acquisition by public deed of sale and purchase executed on 20 December 2017 of full ownership of the mixed property located at ..., ... and ..., in the civil parish of ..., municipality of ..., described in the Property Registry Office of ... under no. ... of the same civil parish and to which correspond the nine entries in the property matrix indicated in Document no. ... .
4.1.6. On that acquisition IMT was assessed at the rate of 6.5%, under article 17, no. 1, subsection d), of the IMT Code, which provides for the application of that rate to "acquisitions of other urban properties and other onerous acquisitions".
4.1.7. The now Claimant paid the assessed tax in the amount referred to in 4.1.2.
4.1.8. The request for arbitral ruling was presented on 15/11/2018.
4.2. Facts that are not considered proved
There are no facts of relevance to the arbitral decision that have not been given as proved.
4.3. Basis for the factual matter considered proved
The factual matter given as proved has its genesis in the documents used for each of the alleged facts and whose authenticity was not called into question, having not been challenged by the Respondent AT.
5. QUESTION FOR DECISION
5.1 The sole question to be resolved is whether the Claimant enjoys or not an exemption from IMT on the acquisitions of immovable property for the funds it administers.
The Claimant defends that the real estate transaction it effected enjoys the exemption from IMT enshrined in article 1 of Decree-Law no. 1/87, of 3 January, which establishes that "acquisitions of immovable property made for a real estate investment fund by its respective management company are exempt from transfer tax".
In its understanding, the legislator had the intention to maintain, as regards IMT, the exemptions applicable to transfer tax; and the exemption was not repealed by express law, nor tacitly; in particular, it was not repealed by article 46 of the Tax Benefits Statute (EBF).
And, thus, the assessment challenged is illegal, for not having given effect to the exemption referred to.
It invokes, in support of this understanding, case law from this Centre for Administrative Arbitration.
Finally, having noted that there was an erroneous interpretation of law by the AT, the Claimant requests that it be paid indemnificatory interest accruing on the amount illegally assessed, paid by it in due time.
5.2 The AT, not having exercised the right of response, did not explain its position.
But that it is opposed to that of the Claimant results immediately from the fact that it effected the assessment challenged and did not grant any of the administrative claims.
That is, for the Respondent, the exemption which the Claimant claims to enjoy does not exist. And it does not exist - we know it from what in other cases it has defended in arbitral tribunals - by having been tacitly repealed by article 46 of the EBF, which will have replaced the exemption of which acquisitions made by Real Estate Investment Funds benefited by an exemption pertaining to alienations effected by those same Funds.
Thus, it is to be supposed that, for the AT, there is no error attributable to it, and the Claimant's claim relative to indemnificatory interest will lack foundation.
5.3 - What follows corresponds to what has already been written in various awards from this Centre for Tax Arbitration and which corresponds to the unanimous trend of decisions on this matter.
We are aware, from what was established in the factual section, of the nature of the taxpayer, the verification of the taxable event and the date of its occurrence, and that of the tax act questioned.
It is a factuality which, in addition to not being contested due to lack of response by the AT, is demonstrated in a clear and unequivocal manner by the documents attached to the proceedings.
The question posed to us is, therefore, that of the (non)existence of a rule preventing taxation: the Claimant claims that there is no occasion for taxation as it benefits from a rule attributing it an exemption; the AT, having proceeded to the assessment identified, will understand that the rule of exemption is not in force.
The rule in question is that of article 1 of Decree-Law no. 1/87, of 3 January.
5.4 Article 7 of the Civil Code establishes:
"1. When it is not intended to have temporary effect, a law ceases to be in force only if it is repealed by another law.
2. Repeal may result from express declaration, from incompatibility between the new provisions and the preceding rules, or from the circumstance that the new law regulates the entire subject matter of the prior law".
According to Professors Pires de Lima and Antunes Varela, in Fundamental Notions of Civil Law (5th edition, Coimbra, 1961, pp. 109 et seq.), "a law may cease to be in force either by having been repealed or by having lapsed. (...) One speaks of lapse of a law when it ceases to be in force by force of any circumstance inherent in the law itself, independent, therefore, of a new manifestation of the will of the legislator".
The lapse of a law results, more frequently, from it itself establishing its period of validity (when that period expires), or from its aiming to achieve a determined end (when this is achieved), or from being a transitional law (when the state of affairs serving as its premise ends).
As for repeal, the cited Authors say that "(...) results from a new manifestation of will by the legislator, contrary to that which served as the basis for the force of the law".
Repeal may be express – the new law points out the provisions it wishes to repeal – or tacit – the old law is incompatible with the new, the most recent legislative choice prevailing.
They clarify, finally, that "The incompatibility between the two laws may result from a direct and substantial conflict existing between their respective provisions or from the circumstance that the new law establishes a new, complete regime of the relations in question".
5.5 - In the case at hand, there are no signs that Decree-Law no. 1/87 has lapsed. It is important, therefore, to know whether it was repealed.
Again here it is necessary to distinguish, as there is not known, at the time of the taxable event and the assessment, a rule that expressly put an end to the force of Decree-Law no. 1/87.
Thus, what is important to decide is whether tacit repeal occurred.
5.6 - In article 1 of Decree-Law no. 1/87, of 3 January, it was established that "acquisitions of immovable property made for a real estate investment fund by its respective management company are exempt from transfer tax".
The Transfer Tax Code and the Code on Inheritance and Gift Tax (CSISSD), approved by Decree-Law no. 41,969, of 24 November 1958, was then in force. In the version given by Decree-Law no. 223/82, of 7 June, transfer tax was charged "on transfers, for consideration, of the right of property or of fragmented figures of that right, on immovable property".
Making use of the legislative authorization given by Law no. 26/2003, of 30 July, Decree-Law no. 287/2003, of 12 November, was published, which approved the IMT Code.
The prior legal texts that referred to transfer tax came to be considered as referring to IMT, in accordance with article 28, no. 2 of Decree-Law no. 287/2003; and article 31, repealing the CSISSD, kept in force "(...) tax benefits (...) relating to the municipal transfer tax established in legislation outside the Code approved by Decree-Law no. 41,969, of 24 November 1958, and in the Tax Benefits Statute, which come to be reported to IMT".
Until this moment it seems secure that real estate investment funds enjoyed exemption from IMT on the acquisitions of immovable property.
5.7 - In 2006, Law 53-A/2006, of 29 December, amended article 46, no. 1 of the EBF, which came to provide that there were exempt from IMT "the onerous transfers of immovable property integrated in real estate investment funds (...)".
The immovable property integrated in a fund are nothing other than those which that fund has already acquired – which leads to the conclusion that, this time, the exemption referred to alienation and not acquisition.
Article 81, no. 3, subsection e) of Bill no. 478/2006, of 13 October – Bill for the State Budget for 2007 - expressly repealed Decree-Law no. 1/87, of 3 January, but such repeal came not to be enshrined in the State Budget Law for 2007 – Law no. 53-A/2006, of 29 December.
It is true that the non-acceptance, by the 2007 State Budget Law, of that Bill does not constitute a conclusive argument, since it can have two meanings.
One is that the legislator did not wish to repeal Decree-Law no. 1/87, of 3 January, by seeking to keep it in force.
Another is that the legislator understood not to repeal expressly the said Decree-Law no. 1/87 by considering that it was no longer then in force, which would make redundant (and even erroneous, as legislative technique) the repeal.
But this second hypothesis is not plausible and does not favor the thesis of the AT: it is that it was in the 2007 State Budget Law that the legislator amended article 46, no. 1 of the EBF, enshrining the (new) exemption from IMT for real estate investment funds "constituted and which operate in accordance with national legislation".
That is: if the legislator, when establishing the new tax benefit, wished to extinguish the prior one, by substitution, it was the appropriate moment to say that Decree-Law no. 1/87 was repealed.
Since the two benefits are distinct from one another, it is inconceivable that that of the 2006 Law would replace, without more, that of the 1987 Decree-Law.
The legislator of 1987 exempted (in a modernizing reading) from IMT "(...) acquisitions of immovable property made for a real estate investment fund by its respective management company".
That of 2006 exempted from IMT "the onerous transfers of immovable property integrated in real estate investment funds (...)".
Whereas in 1987 one spoke of acquisitions, clearly not encompassing alienations, in 2006 one speaks of transfers (which can be either acquisitions or alienations), being by the addition of the word "integrated in" that it is concluded that the reference is limited to alienations. That which is already "integrated in" cannot any longer be acquired, but only alienated, by the "integrator"; conversely, that which is not yet "integrated in" cannot be alienated by one who does not integrate it, can only be acquired to come to be "integrated in".
It seems, therefore, clear, not only that the legislator of 1987 only wished to benefit acquisitions by real estate investment funds, but also that the legislator of 2006 only alluded with the benefit granted to alienations by those same funds.
Each benefit, distinct as they are, does not mutually exclude each other, do not contradict each other, are not antinomial, can be applied both without any incoherence.
And one cannot claim that the legislator of 2006, when enshrining a benefit pertaining to alienations, established a complete regime of tax benefits in favor of real estate investment funds and repealed, with that entire treatment of the matter, the benefit in force since 1987, since such does not coherently result from the law and does not correspond to the principle that the legislator "knew how to express his thought in adequate terms." – See art. 9, no. 3 of the Civil Code.
In summary, the legislator of Law no. 53-A/2006, upon rejecting the Government's proposal to expressly repeal Decree-Law no. 1/87, knew that:
- that Decree-Law was in force, as it had even referred to it in its initial proposal;
- the benefit which, by article 82, it introduced in article 46 of the EBF, was cumulative with that of article 1 of Decree-Law no. 1/87;
- Law no. 53-A/2006 did not contain a complete regime of tax benefits attributed to real estate investment funds;
Therefore, it cannot be concluded, from that rejection of the Government's proposal, other than that it wished to maintain the benefit attributed by Decree-Law no. 1/87.
5.8 - On the other hand, nothing exists in the legislative evolution that has occurred since the approval of the EBF by Decree-Law 215/89, of 1 July, and in the successive State Budget Laws, that can be qualified as a systematization of the regime of tax benefits as regards property taxes of real estate investment funds, such that it can be claimed that at some point the legislator created a new regime, complete, incompatible with the subsistence of Decree-Law no. 1/87. Nor is there any concrete rule that shows itself to be irreconcilable with this decree-law. As was seen, article 46 (later 49) of the EBF, in the version given to it by the 2003 State Budget Law, is harmonizable with article 1 of Decree-Law no. 1/87.
5.9 - What has been said is sufficient to support the decision which is hereby rendered.
But it is important also to add that the question posed to this tribunal has been posed other times to arbitral tribunals within the scope of the CAAD, and by them decided, at least twenty-seven times.
All these decisions were in the sense advocated by the Claimant, without any dissenting vote.
There is, therefore, formed, in the arbitral tribunals, a strong jurisprudential trend, convergent and without dissidences, which flows in the direction of maintaining in the legal order article 1 of Decree-Law no. 1/87, of 3 January, after Law no. 53-A/2006, of 29 December.
Which is not without significance, and should be attended to, in reinforcement of the grounds adduced, in light of the mandate of article 8, no. 3 of the Civil Code, which determines that "(...) the judge shall take into account all cases that merit analogous treatment, in order to obtain a uniform interpretation and application of law".
5.10 - Meanwhile, Law no. 71/2018, of 31 December, which approved the State Budget for 2019, came into force.
It provides, in its article 319:
"There are hereby repealed (...) articles 1 and 8 of Decree-Law no. 1/87, of 3 January, which creates tax incentives to the constitution of real estate investment funds".
Now, this provision leaves no doubt as to the correctness of what has been thus far expounded.
The said article 1 of Decree-Law no. 1/87 was in force until its repeal by Law no. 71/2018, that is, it had not until then been expressly or tacitly repealed.
Consequently, it was in full force when the acquisition of immovable property occurred that led to the assessment challenged, which for that reason is illegal.
To admit otherwise would be to impute to the legislator of 2018 a glaring error, expressly repealing a rule that was already then non-existent in the legal order.
6. INDEMNIFICATORY INTEREST
The Claimant also petitions for the condemnation of the Respondent to pay indemnificatory interest, calculated on the entirety of the tax paid – point 4.1.7 of the facts proved - from the date on which tax was paid that is now annulled until the date on which the amount unduly paid is reimbursed to the Claimant, such interest accrued and accruing from that date.
With respect to indemnificatory interest, article 43, no. 1 of the LGT prescribes that "indemnificatory interest is owed when it is determined, in an administrative claim or judicial challenge, that there was error attributable to the services resulting in payment of the tax debt in an amount greater than legally due."
In the case now under consideration, the error affecting the assessment challenged is exclusively attributable to the Respondent AT, which assessed the tax without any factual or legal support and even contrary to express law, and thus there can be no doubt that the Claimant has the right to receipt of indemnificatory interest.
That is, pursuant to subsection b) of article 24 of the RJAT, article 35, no. 10 and article 43, no. 1 of the General Tax Law and article 61, no. 5 of the Tax Procedure and Process Code, the Respondent incurred in error attributable to it upon proceeding to the assessment, and it must therefore pay to the Claimant indemnificatory interest on the amount paid, calculated at the legal rate, from its payment until the restitution of the tax.
Therefore, the now Claimant has the right to be reimbursed with respect to the amount it paid unduly and, further, to be indemnified for the unduly payment through the payment of indemnificatory interest, by the Respondent, from the date of payment of the amount, until reimbursement, at the supplementary legal rate, in accordance with nos. 1 and 4 of article 43 and no. 10 of article 35 of the LGT, article 559 of the Civil Code and Order no. 291/2003, of 8 April.
7. DECISION
In light of the foregoing, the arbitrators of this Arbitral Tribunal hereby agree to judge fully well-founded the request for declaration of illegality of the note of assessment of Municipal Tax on Onerous Property Transfers (IMT) contained in Document no. ..., in the total amount of €162,632.23, which is hereby declared annulled; to condemn the Tax and Customs Authority to reimburse to the Claimant the amount of tax unduly paid, such amount increased with indemnificatory interest at the legal rate in force; to condemn the Respondent in the costs of the present proceeding, as the losing party.
8. VALUE OF PROCEEDING
In accordance with the provisions of art. 305, no. 2, of the CPC (Civil Procedure Code) and art. 97-A, no. 1, subsection a), of the CPPT and art. 3, no. 2, of the Regulation of Costs in Tax Arbitration Proceedings, the proceeding is assigned a value of € 162,632.23 Euros.
9. COSTS
Pursuant to art. 22, no. 4, of the RJAT, the amount of costs is fixed, entirely at the charge of the Respondent, at € 3,672.00, in accordance with Table I attached to the Regulation of Costs in Tax Arbitration Proceedings.
Lisbon and CAAD, 29-5-2019
The Arbitrator President
(José Poças Falcão)
The Arbitrator Member
(José Joaquim Sampaio e Nora)
The Arbitrator Member
(Ana Teixeira de Sousa)
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