CAAD 574/2014-T: Stamp Tax on Vertical Property Under Verba 28 TGIS – Arbitral Decision

ARBITRAL DECISION

I. REPORT

1. The company A..., Lda., (hereinafter referred to as the "Claimant"), taxpayer with tax identification number ("NIF") ..., with registered office at Avenue ..., in Lisbon, with capital of € 5,000, filed on 29 July 2014, pursuant to the combined provisions of Articles 2 and 10 of Decree-Law No. 10/2011 of 20 January, namely the Legal Framework of Arbitration in Tax Matters ("RJAT"), a petition for the constitution of an arbitral tribunal in order to declare illegal the tax assessments relating to Stamp Duty ("IS"), concerning the fiscal year 2013 (as demonstrated below), in the total amount of € 3,346.84, with the Tax and Customs Authority ("Respondent" or "ATA") being the defendant party.

A) Constitution of the Arbitral Tribunal

1. Pursuant to Article 6(1) and Article 11(1)(b) of the RJAT, the Ethics Council of this Administrative Arbitration Centre ("CAAD") designated the undersigned as sole arbitrator, who communicated acceptance of the appointment within the applicable period, and notified the parties of such designation on 16 September 2014.

2. Thus, in accordance with Article 11(1)(c) of the RJAT, and through communication from the President of the Ethics Council of the CAAD, the Sole Arbitral Tribunal was constituted on 6 October 2014.

B) Procedural History

1. In the petition for arbitral ruling, the Claimant petitioned for a declaration of illegality of the IS assessments previously mentioned, in the total amount of € 3,346.84.

2. The aforementioned assessments concern a property located on ..., Street, registered in the land register of the parish of ... under article ..., municipality of Lisbon, and described in the Land Registry Conservatory of Lisbon under No. ... – ....

3. The ATA submitted a response, petitioning for dismissal of the petition for arbitral ruling, on the grounds that there was no violation of law, requesting that the tax acts under analysis, as they did not violate any legal or constitutional provision, be maintained in the legal order.

4. By order issued on 14 February 2015, the Sole Arbitral Tribunal, pursuant to Article 16(c) of the RJAT, and following the request by the ATA, decided, without opposition from the parties, that it was not necessary to hold the hearing referred to in Article 18 of the RJAT, as a result of the simplicity of the matters in question and because it considered that it had all the necessary elements to render a clear and impartial decision.

5. It likewise decided, in accordance with Article 18(2) of the RJAT, that oral argument was not necessary, as the positions of the parties were clearly defined in their respective pleadings, and set 27 March 2015 as the deadline for the arbitral decision.

6. The Tribunal was duly constituted and is competent to examine the issues indicated (Article 2(1)(a) of the RJAT), the parties have legal personality and capacity and have full standing (Articles 4 and 10(2) of the RJAT and Article 1 of Administrative Order No. 112-A/2011 of 22 March). There are no irregularities and no objections were raised, and therefore nothing prevents examination of the merits.

7. Thus, the present case is in a position for a final decision to be rendered.

II. Issue to be Decided

1. The central issue to be examined and decided regarding the merits of the case, as arising from the parties' procedural documents, is the following: with reference to properties not constituted under a horizontal ownership regime, comprising various floors and divisions susceptible to independent use (and with residential purpose), what is the Tax Patrimonial Value ("VPT") relevant for the purpose of calculating the IS to be paid pursuant to Item No. 28 of the General Table of IS ("TGIS").

2. That is, this tribunal seeks to determine whether, as the Claimant alleges, the amount to be considered is the VPT attributed individually to each part susceptible to autonomous use, or, instead, the total value resulting from the sum of the VPTs of those autonomous units, as suggested by the Respondent.

III. Determination of Factual Matters and Their Grounds

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

I. The Claimant is the owner of an urban property, registered in the land register of the parish of ... under article ..., municipality of Lisbon, and likewise described in the Land Registry Conservatory of Lisbon under No. ... – ..., constituted under a regime of full ownership and by units susceptible to independent use (some of which have residential purpose).

II. The individual VPT of each of the autonomous units, relevant to the present arbitral ruling, is as follows:

[Table with VPT values - specific values omitted in original]

III. The Claimant, with respect to the fiscal year 2013 (and as a result of the provisions of Item No. 28 of the TGIS), received the tax assessment notices from the ATA, mentioned above, relating to the first installment of IS, in the total amount of € 3,346.84.

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

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

IV. On the Law

A) Legal Framework

1. Given that the legal issue to be decided in the present case requires the interpretation of the relevant legal provisions, it is important, first of all, to enumerate the norms that comprise the relevant legal framework, as of the date of the occurrence of the facts.

2. The subjection to IS of properties with residential purpose resulted from the addition of Item No. 28 to the TGIS, effectuated by Article 4 of Law 55-A/2012 of 29 October, which typified the following taxable events:

"28 – Ownership, usufruct or surface right of urban properties whose tax patrimonial value registered in the matrix, pursuant to the Code of the Municipal Property Tax (CIMI), is equal to or greater than € 1,000,000.00 – on the tax patrimonial value for the purpose of IMI:

28.1 – For property with residential purpose – 1%

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

1. The aforementioned law also added to the IS Code Article 23(7), relating to the assessment of IS: "in the case of tax due for 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 adaptations, the rules contained in the CIMI", and Article 67(2) which provides that "to matters not regulated in the present code relating to item 28 of the General Table the CIMI is subsidiarily applied".

2. In this context, and taking into account the indication above, let us now turn to the Code of the Municipal Property Tax ("IMI").

3. First, note Article 2(4) of the IMI Code which states that "for the purposes of this tax, each autonomous unit, under the horizontal ownership regime, is considered as constituting a property".

4. For its part, Article 12(3) of the IMI Code establishes that "each floor or part of a property susceptible to independent use is considered separately in the land registry entry, which also sets out the respective tax patrimonial value".

5. Thus, it is within this legal framework that it is important to decide whether, in cases where the horizontal ownership of an urban property with various autonomous units is not constituted, the VPT, for the purposes of Item No. 28 of the TGIS, is calculated individually, that is to say per unit susceptible to autonomous use, or, alternatively, determined by means of the sum of the VPTs of those units.

B) Arguments of the Parties

1. In this regard, the Claimant in its petition alleged, in summary, the following:

2. Having been "notified to pay the amounts (…) relating to the stamp duty of each one of the floors of the property, which was never constituted nor separated under a horizontal ownership regime", the Claimant stressed that the VPT of the units that, in accordance with the above, were subject to IS, was determined individually, as follows from the IMI Code.

3. In this way, in the understanding of the Claimant, it became clear that "none of the independently evaluated parts have a value greater than 1,000,000.00 euros)".

4. Wherefore, in the opinion of the same, "article 28 no. 1 of the stamp duty tax table cannot be applied to parts of properties susceptible to independent use", as would have been done in the present situation.

5. In fact, the Claimant understands that the taxation of the aforementioned units, pursuant to Item No. 28 of the TGIS, constitutes a violation of that provision, because, despite having a residential purpose, the units previously mentioned do not have, individually, "the value of a million euros".

6. In this way, the Claimant petitioned for a declaration of illegality "of the assessment of stamp duty on real property, contained in item 28 no. 1 of the general table of stamp duty", and likewise the annulment of the assessments listed above.

7. In parallel, the Claimant also requested that it be allowed to "provide security by cash deposit", so as to make possible the suspension of the fiscal enforcement proceedings presently underway, until the present arbitral decision is rendered.

8. For its part, the Respondent, after being duly notified for this purpose, submitted its response in which, in summary, alleged the following:

9. The Claimant bases its petition for arbitral ruling on the fact that the criterion for taxation of the autonomous parts of properties in vertical ownership must follow the same pattern as the taxation of properties in horizontal ownership.

10. However, for the Respondent, the thesis defended by the Claimant lacks legal support, "since although the assessment of IS, in the situations provided for in item no. 28.1 of the TGIS, is carried out in accordance with the rules of the CIMI, the truth is that the legislator makes exceptions for those aspects that require proper adaptation".

11. Indeed, in the opinion of the Respondent, "the tax patrimonial value relevant for the purposes of the incidence of the tax is thus the total tax patrimonial value of the urban property and not the tax patrimonial value of each one of the parts that compose it, even if susceptible to independent use.

As is the case with properties in full ownership, even if with floors or divisions susceptible to independent use, since, although IMI is assessed in relation to each part susceptible to independent use, for the purposes of IS, the property is considered in its entirety since divisions susceptible to independent use are not considered as property, but only autonomous units under the horizontal ownership regime (…)".

1. Wherefore, in this perspective, it is not apparent how the present assessments could have violated the literal tenor of Item No. 28 of the TGIS.

2. In parallel, in the understanding of the Respondent, the unit of a determined urban property, constituted in vertical ownership, is not put into question when the same is composed of floors or divisions with the possibility of having independent economic use.

3. In fact, citing the Respondent, "such property remains but one, and therefore its distinct parts are not legally equated to autonomous units under the horizontal ownership regime".

4. In the opinion of the present tribunal, it is clear that, for the Respondent, the institutions of horizontal and vertical ownership are autonomous and distinct realities.

5. Indeed, in the words of the Respondent, "horizontal and vertical ownership are differentiated legal institutions.

They are distinct realities valued by the legislator in different ways and with necessarily different effects, and it cannot be concluded that there is alleged discrimination in violation of the principle of equality".

1. The Respondent concludes its response by stating that "the assessment at issue embodies a correct interpretation and application of the law to the facts, not suffering from any defect of violation of the law, whether of the CRP or of the CIS, and therefore the claim should be judged without merit and the Respondent Entity should be absolved of the claim".

2. Regarding the executive request submitted by the Claimant, as explained above, the Respondent understands that, "given that the competence of the tribunals is defined, pursuant to Article 2(1) of the RJAT, as competence to control legality, executive claims are excluded from such competence".

3. Stating, in this way, that, in its opinion, the present tribunal is incompetent to examine the aforementioned executive request.

C) Tribunal's Examination

1. In the understanding of the present tribunal, and taking into account the legal framework previously presented, the essential normative proposition to be taken into account for the decision of the case is that which results from Item No. 28 of the TGIS.

2. It should also be noted that, in the eyes of the arbitral tribunal, the issue to be decided concerns exclusively a matter of law, namely understanding, for the purposes of applying the aforementioned item, how the relevant VPT is determined.

3. First, it should be clarified that it is clear, from the literal wording of the law, that the VPT to be considered, for the purposes of applying Item No. 28 of the TGIS, can only be that which is determined within the framework of the IMI Code.

4. This is precisely what is stated, in the exact words, in the aforementioned item "(…) whose tax patrimonial value registered in the matrix, pursuant to the Code of the Municipal Property Tax (CIMI), is equal to or greater than € 1,000,000.00" (emphasis ours).

5. Thus, noting once again what follows from Article 2(4) of the IMI Code which states that "for the purposes of this tax, each autonomous unit, under the horizontal ownership regime, is considered as constituting a property".

6. Reinforced, nevertheless, by Article 12(3) of the same Code, which establishes that "each floor or part of a property susceptible to independent use is considered separately in the land registry entry which also determines the respective tax patrimonial value".

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

8. And if this is the method of determination followed for IMI, it must necessarily be the model likewise applied under Item No. 28 of the TGIS, in the manner explained above.

9. Nevertheless, and if doubts raised still subsist, the present tribunal relies on certain arbitral decisions previously rendered, which addressed the matter under analysis.

10. Thus, first, let us note decision No. 50/2013-T, of 29 October, which states the following.

11. "Law No. 55-A/2012 says nothing about the qualification of the concepts in question, namely, about the concept of 'property with residential purpose'. However, Article 67(2) of the IS Code, added by the aforementioned Law, provides that 'to matters not regulated in the present code relating to item 28 of the General Table the CIMI is subsidiarily applied'.

The tax incidence provision refers, thus, to urban properties, the concept of which is that which results from Article 2 of the CIMI, with the determination of the VPT following the terms provided for in Article 38 and following of the same code.

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

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

(…)

Using the criterion introduced by the law itself in Article 67(2) of the IS Code, 'to matters not regulated in the present code relating to item 28 of the General Table the CIMI is subsidiarily applied'" (emphasis ours).

1. That is, taking into account that the registration in the property matrix of properties in vertical ownership, for the purposes of the IMI Code, follows the same rules as the registration of properties constituted under horizontal ownership, and their respective IMI, as well as the new IS, being assessed individually in relation to each of the parts, it does not appear, to the present tribunal, that there is any doubt that the legal criterion for defining the incidence of the new tax must be the same.

2. In this context, if the law requires, in relation to the assessment of IMI, the issuance of individualized assessment notices for the autonomous parts of properties in vertical ownership, in the same manner as it establishes for properties under horizontal ownership, it will require, in the same terms, in relation to the rule of incidence of Item No. 28 of the TGIS.

3. Wherefore, the IS, under Item No. 28 of the TGIS, could only apply to a determined unit if this, possibly, had a VPT exceeding €1,000,000.00.

4. And, further, this was indeed the understanding adopted by the ATA.

5. In fact, the latter (ATA) also issued individualized assessment notices, referring to each of the units susceptible to autonomous use, demonstrating that, in its opinion, the aforementioned units, despite not being legally constituted under horizontal ownership, would be, for all purposes, independent of each other.

6. However, the ATA overlooked that it could not, by virtue of the framework previously set out, proceed to sum the individual VPTs of the units previously mentioned, seeking a value that would already fall within the basis of incidence of Item No. 28 of the TGIS.

7. This when the legislator itself established a different rule under the IMI Code which, as previously mentioned, is the code applicable to matters not regulated in the IS Code, as regards Item No. 28 of the TGIS.

8. In summary, the criterion established by the ATA of considering the value of the sum of individual VPTs assigned to the parts, floors or divisions with independent use, making use of the fact that the property was not constituted under a horizontal ownership regime, does not find, in the eyes of the present tribunal, legal support, and is notably contrary to the criterion applicable under IMI and, by referral (in the terms mentioned above), under IS.

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

10. In parallel, note that Article 12(3) of the IMI Code makes no distinction regarding the regime of properties that are under horizontal or vertical ownership.

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

12. In this regard, see what was said regarding this subject in the arbitral decision issued in the context of Case No. 132/2013-T, of 16 December, an understanding which the present tribunal adopts.

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

Moreover, to distinguish, in this context, between properties constituted under horizontal and full ownership would be an 'innovation' without associated legal support, particularly because, as has been stated here, nothing indicates, neither in item no. 28, nor in the provisions of the CIMI, a justification for that particular differentiation.

Note, for example, what Article 12(3) of the CIMI states: each floor or part of a property susceptible to independent use is considered separately in the land registry entry, which also sets out the respective tax patrimonial value.

The uniform criterion that is required is, thus, that which determines that the incidence of the provision in question takes place only when one of the parts, floors or divisions with independent use of property in horizontal or full ownership with residential purpose, has a VPT greater than €1,000,000.00.

Setting as the reference value for the incidence of the new tax the global VPT of the property in question, as the then respondent intended, does not find a basis in applicable legislation, which is the CIMI, given the referral made by Article 67(2) of the IS Code.

(…)

Furthermore, admitting such differentiation in treatment could produce results incomprehensible from a legal standpoint and contrary to the objectives that the legislator said it had for adding item no. 28. By way of example, suppose the following hypothesis, which seems plausible in light of the interpretation made by the then respondent: a citizen who is the owner of a property constituted under full ownership intended for residential purposes, with the global value of autonomous units equal to or exceeding €1,000,000.00 and the VPT of each one below €1,000,000.00, is subject to annual taxation of 1% of that value (as occurred in the situation under analysis); already another citizen who owns a property with the exact same characteristics as the previous one but which has been constituted under horizontal ownership, with the global value of autonomous units equally equal to or exceeding €1,000,000.00 and the VPT of each one below €1,000,000.00, will not be subject to taxation pursuant to the aforementioned item no. 28.

On the other hand, one could ask: if such units have the same owner, why does it not make sense to aggregate, for the purposes of taxation, their respective VPTs? The answer can be illustrated by another hypothesis: a citizen who is the owner of a property in horizontal ownership, in which each of its 20 units has a VPT below €1,000,000.00, would be subject to taxation if – if such aggregation were admitted – the global VPT exceeded that value; already another citizen with identical 20 units distributed among 5, 10 or 20 properties would not be subject to any taxation pursuant to the aforementioned item no. 28.

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

Looking now at the case under analysis, it is noted that the VPTs of the floors (autonomous units) of the property with residential purpose vary between (…), therefore each of them is below €1,000,000.00.

From this it is concluded, as a result of what has been stated, that the IS referred to in item no. 28 of the TGIS cannot apply to them, and therefore the assessment acts challenged by the claimant are illegal" (emphasis ours).

1. A final point worth highlighting (although the previous framework is sufficient to recognize the illegality of the assessment acts carried out by the ATA), is based on the understanding advocated, both by the legislator and by the government itself, at the time of the addition of Item No. 28 to the TGIS.

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

3. "Law No. 55-A/2012, of 29/10, has no preamble, therefore it is not possible to extract the legislator's intention from it.

This law of the Assembly of the Republic originated from the draft law no. 96/XII (2nd), which, in its statement of reasons, speaks of the introduction of fiscal measures inserted in a broader set of measures to combat budget deficit.

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

In that statement of reasons it is also stated that, in addition to the increase in taxation of capital income and gains on securities, a rate is created under stamp duty tax affecting urban properties with residential purpose whose tax patrimonial value is equal to or exceeding one million euros.

That is, in such a statement of reasons, what is meant by urban properties with residential purpose is also not clarified.

In its intervention in the Assembly of the Republic, in the presentation and discussion of the aforementioned draft law, the Secretary of State for Fiscal Affairs made the following statement:

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

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

For the tax system to be more just it is decisive to promote the expansion of the tax base, requiring increased effort from taxpayers with higher income, and thereby protecting Portuguese families with lower income in this way.

For the tax system to promote more equality it is fundamental that the effort for budget consolidation be distributed among all types of income, encompassing with special emphasis capital income and high-value properties. This matter, it is recalled, was extensively addressed in the Constitutional Court ruling.

Finally, for the tax system to be more equitable, it is crucial that everyone be called to contribute according to their capacity to pay, giving the tax administration reinforced powers to control and supervise situations of tax fraud and evasion.

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

This proposal has three essential pillars: the creation of special taxation on urban properties with value exceeding 1 million euros; the increase in taxation of capital income and on securities gains and the strengthening of rules to combat tax fraud and evasion.

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

1. Next, it is necessary to gather the conclusions that will permit, without room for doubt, deciding on the subject in discussion (that is, whether, for the purposes of applying Item No. 28 of the TGIS, in cases where a property with various autonomous units, susceptible to independent use, is not constituted under horizontal ownership, the relevant VPT is determined by means of the sum of individual VPTs, or, alternatively, is individually considered).

2. In this sense, it should first be noted that the present subject matter is, from the outset by force of Article 67(2) of the IS Code, subject to the norms of the IMI Code, "to matters not regulated in the present code relating to item 28 of the General Table the CIMI is subsidiarily applied".

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

4. Now, Article 12(3) of the IMI Code establishes that "each floor or part of a property susceptible to independent use is considered separately in the land registry entry, which also sets out the respective tax patrimonial value".

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

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

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

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

9. Thus, there would only be grounds for the incidence of IS (under Item No. 28 of the TGIS) if one of the parts, floors or divisions with independent use presented a VPT exceeding €1,000,000.00.

10. The ATA cannot consider as the reference value for the incidence of the new tax the total value of the property (that is, the sum of all units with residential purpose), when the legislator itself established a different rule under IMI (and, as previously mentioned, this is the code applicable to matters not regulated as regards Item No. 28 of the TGIS).

11. In conclusion, the current legal regime does not impose the obligation to constitute horizontal ownership, therefore the action of the ATA translates into arbitrary and illegal discrimination.

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

13. In the case at issue, the property in question is constituted in vertical ownership, composed of units with independent use (five of which have residential purpose), as proven above.

14. Given that none of these units, individually considered, has a tax patrimonial value equal to or exceeding €1,000,000.00, as results from the documents attached to the file, it is concluded that the legal prerequisite for incidence is not met.

15. Additionally, and as regards the request for security by cash deposit, requested by the Claimant, with the objective of suspending the fiscal enforcement proceedings presently underway (as previously mentioned), the present tribunal understands that such decision falls outside its sphere of action.

16. Indeed, pursuant to Article 2(1) of the RJAT, the competence of arbitral tribunals is limited to the control of legality of administrative acts, particularly those of a tax nature, excluding from this context the subject matter previously referred to.

17. In this way, the present tribunal abstains from examining the executive request made by the Claimant.

V. DECISION

1. For these reasons, this Arbitral Tribunal decides:

A) To judge the petition for arbitral ruling as well-founded and, in consequence, to declare illegal and to annul the IS assessments mentioned above, by reference to 2013, from which resulted tax to be paid in the amount of € 3,346.84, relating to the taxation of urban properties with VPT equal to or exceeding €1,000,000, pursuant to Item No. 28 of the TGIS;

B) Not to rule on the executive request made by the Claimant;

C) To condemn the Respondent to bear the costs of the proceedings.

V. Value of the Proceedings

1. The value of the proceedings is set at € 3,346.84, pursuant to Article 97-A(1)(a) of the CPPT, applicable by force of Article 29(1)(a) and (b) of the RJAT and Article 3(2) of the Regulation of Costs in Tax Arbitration Proceedings ("RCPAT").

VI. Costs

1. In accordance with Article 22(4) of the RJAT, the arbitration fee is set at € 612, pursuant to Table I of the aforementioned Regulation, to be borne by the Respondent, given the full success of the claim.

Notify hereof.

Lisbon, CAAD, 24 March 2015

The Arbitrator

(Sérgio Santos Pereira)