Stamp Tax on Construction Land (Verba 28.1 TGIS): CAAD Arbitration 578/2015-T

ARBITRAL DECISION

1. REPORT

1.1.

The company A…, S.A., legal entity no.…, with registered office at avenue…, no.…, …, …-… Lisbon, hereinafter referred to as the Applicant, submitted, on 1 September 2015, a request for arbitral pronouncement in which it seeks the declaration of illegality of the acts of assessment of Stamp Tax in the total amount of € 113,358.34, relating to the year 2014 and to item 28.1 of the General Table of Stamp Tax (GTST), with the Tax and Customs Authority being the respondent, hereinafter referred to as the Respondent or TA.

1.2.

The assessments relate to two urban properties (building plots): one located on …Street, no.…, in Lisbon, registered in the urban property matrix of the parish of…, municipality of Lisbon, under article…, and another located on …Avenue, in Setúbal, registered in the urban property matrix of the union of parishes of … (…, … and…), municipality of Setúbal, under article….

1.3.

His Excellency the President of the Deontological Board of the Administrative Arbitration Center (CAAD) appointed as arbitrator-president, the Honourable Councillor Maria Fernanda Maçãs, and as co-arbitrators Dr. Suzana Fernandes da Costa and Dr. Sérgio Santos Pereira (arbitrators-members).

1.4.

On 2 December 2015, 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), the Respondent was notified on 2 December 2015 to, if it so wished, submit a response, request additional evidence, and remit the administrative file.

1.6.

On 21 December 2015, the Applicant submitted to the file the payment notifications received, with respect to the 3rd instalment of the assessments mentioned above, and likewise, the respective proof of payment, which it had declared would be attached to the Request for Arbitral Pronouncement. In this regard, it should be noted that the amount in dispute was paid in full by the Applicant.

1.7.

On 15 January 2015, the Respondent submitted its response, in which it concluded that the request for declaration of illegality should be judged unfounded.

1.8.

The tribunal, on 18 January 2015, as no evidence had been requested and reserving the possibility that the parties might wish to present oral arguments, dispensed with the hearing referred to in art. 18 of the RJAT and invited the parties to state whether they intended to submit arguments and to clarify the form they should take, oral or written. 2 June 2016 was fixed as the deadline for pronouncement of the arbitral decision.

1.9.

Only the Applicant submitted written arguments.

2. SUBJECT MATTER OF THE DISPUTE

To support its claim, the Applicant begins by stating that the subjection of building plots with a tax-assessed property value exceeding one million euros is expressly provided for when there is building work, authorized or intended, for residential purposes, and that building plots without any authorized or intended building work cannot be subject to item 28.1.

In the Applicant's view, "the indeterminability of the concept of intended building work is incompatible with the legal and constitutional requirement that the objective scope of the tax must be determined by Law." It further states that the legislator's choice to subject to Stamp Tax only building plots with building work authorized or intended for residential purposes also calls into question the principles of tax equality and contributive capacity, enshrined in the Constitution, and does not meet the requirements provided for in the General Tax Law (GTL) and in the Constitution of the Portuguese Republic (CPR) as regards its respective objective scope.

The Applicant further mentions that, with regard to the matrix article…, a request for construction of a residential and commercial building was filed with the Municipal Chamber of… in 2009, a licence which, as it was not used, lapsed.

In any case, the Applicant alleges that, as regards this building plot, the use will be mixed, with one part of the property potentially assigned to services and another to residential purposes. And that, as this property does not have building work intended exclusively for residential purposes, the respective Stamp Tax assessment should be annulled.

As regards the matrix article…, the Applicant contends that it does not have any authorized or intended building work and that for that reason, the respective Stamp Tax assessment should be annulled.

The Applicant ultimately requests restitution of tax improperly paid, as well as the condemnation of the TA to pay compensatory interest, under art. 43 of the GTL, from the date of payment of the tax until its effective reimbursement.

In this sequence, the Applicant requests:

a) the declaration of illegality and consequent annulment of the Stamp Tax assessments, in the total amount of € 113,358.34, relating to the year 2014 and to item 28.1 of the GTST, relating to two urban properties (building plots);

b) the restitution of the tax improperly paid;

c) and the condemnation of the TA to pay compensatory interest, under art. 43 of the GTL, from the date of payment of the tax until its effective reimbursement.

Duly notified for this purpose, the TA submitted a response, defending the maintenance of the taxing acts under challenge, requesting the dismissal of the claim, and alleging that the Applicant's properties have the characteristics contained in the definition of building plot for purposes of applying item 28.1 of the GTST, in the wording given by Law no. 83-C/2013, that is, building plot for which the building work, intended, is for residential purposes, in accordance with the provisions of the Property Tax Code (PTC).

Indeed, the TA considers that the urban property with matrix article … of the parish of…, municipality of Lisbon, has the characteristics contained in the definition of building plot for the purposes of Item 28.1 of the GTST, since "it appears from the administrative file sent by Lisbon…, that in 2009, a request was submitted by the present applicant to the Head of the SF Lisbon… in which was attached a document evidencing the constructive viability of the plot issued by the Municipal Chamber of… on 9 October 2009.

In such document, which according to the TA results from a Prior Information Request, issued by the competent authority, "it is stated that the plot located in the Street and Area in question has multiple classifications and zoning regulations, but with relevance to this instance attention is drawn to the fact that the plot in question is part of the «Plan for Conservation, Reconstruction and Urban Rehabilitation Lisbon-Belém», which is already in terms of reference and approved plans".

Similarly, as regards the second urban property, with matrix article…, the Respondent considers that the legal type provided for in Item 28.1 of the GTST is met, since it has a project for predominantly residential building work and, furthermore, it is "located in an area predominantly residential – as stated in the certificate of the M.C. of … attached to the administrative file in referring that it is an «Consolidated Urban Space», thus, the commercial use will always be a complement to the residential".

It further states that item 28.1 does not violate the principles of tax equality and contributive capacity because it is a general and abstract rule, applicable in the same way to all cases in which the factual and legal prerequisites are met.

The TA concludes by requesting that, should the Arbitral Tribunal accept the Applicant's claim and refuse to apply item 28.1 of the GTST on the grounds of unconstitutionality, the Public Prosecutor's Office be notified of the arbitral decision, so that it may comply with its legal prerogatives.

In its arguments, the Applicant came to contravene the understanding advocated by the TA, with respect to the two urban properties in question, stating that, in the case of the urban property with matrix article…, "the document provided by the IRFP, which constitutes the response to an «Information Request», requested by A… under the principle of open administration, enshrined in art. 17 of the Code of Administrative Procedure (CAP), and not a Prior Information Request (PIR) as, certainly by mistake, the IRFP refers.

The above information does not have the capacity to allow us to conclude, as the IRFP states, that the building work intended for such building plot is for residential purposes, wherefore the Applicant reiterates that, as no request for a building licence for a building intended for residential purposes was filed with the Municipal Chamber of… – which certainly would fall within the concept of authorized building work –, the building plot under challenge does not have any authorized or intended building work for residential purposes".

On the other hand, as regards matrix article…, the Applicant reinforces that, "as demonstrated in PI, with reference to this property, a request for construction of a residential and commercial building was filed with the Municipal Chamber of…, in 2009 (…). However, as the said licence was not used (…), it lapsed".

3. PRELIMINARY MATTERS

Art. 3, no. 1, of the RJAT, provides that: "The joinder of claims even if relating to different acts and the joinder of parties are admissible when the merits of the claims depend essentially on the assessment of the same factual circumstances and on the interpretation and application of the same principles or legal rules".

Thus, the joinder of claims underlying the present proceedings is admissible, inasmuch as it concerns assessment acts of the same tax, Stamp Tax. As there is also identity between the subject matter of fact and the merits of the claim depend on the interpretation of the same principles and legal rules, cfr. art. 3, no. 1, of the RJAT.

Consequently, the proceeding is not affected by nullity, no issues have been raised that would prevent assessment of the merits of the case, the arbitral tribunal is regularly constituted and is materially competent to hear and decide the claim, and consequently the conditions exist for the final decision to be delivered.

4. FACTUAL MATTERS

4.1. Facts considered proven

4.1.1.

The Applicant was notified of the taxing acts for assessment of Stamp Tax in relation to the properties registered in the property matrices as follows identified:

i) …, urban, parish of…, municipality of Lisbon and with a tax-assessed property value of € 8,476,866.58;

ii) …, urban, union of parishes of…, municipality of Setúbal and with a tax-assessed property value of € 2,858,967.30;

4.1.2.

The Applicant was notified of the Stamp Tax assessments, already paid in full, relating to the year 2014, in relation to each of such matrix entries, broken down as follows:

i) …, urban, in the amount of € 12,270.40;

4.1.3.

The properties described in 4.1.1 are registered matricially as "building plots" (cfr. doc no. 4, attached with the arbitral Request).

4.1.4.

With respect to the property with matrix article…, Information No.…/…/…/…/2000 was issued on 30/09/2009 by the Municipal Chamber of…, with the following content:

"(….)

Subject: Right to information - General conditions for urban planning operation

(….)

In view of the information request submitted, it is proposed to inform:

• The planning instrument in force is the Municipal Master Plan, resolution of the Council of Ministers no.…/94, published in the Official Journal no.…, of 29 September 1994.

• The location in question is classified, in accordance with the urban space classification plan, as Historic Orchards and Gardens.

• The property in question is part of the Municipal Heritage Inventory List with reference 32.21 - Complex of …/Street …no.… .

• The plot is located in an Area of Historical Interest, and is part of the Riverside Front in accordance with the environmental constraints plan.

• It is located in an area of Potential Archaeological Value – level of intervention 2 in accordance with the Municipal Inventory plan.

• It is included in a Zone of Special Protection, and therefore requires consultation with IGESPAR, which means that the procedure to be presented will always be a licensing procedure, regardless of the works to be carried out.

• It is further informed that the plot in question is part of the «Plan for Conservation, Reconstruction and Urban Rehabilitation "Lisbon-Belém"», which is already in terms of reference and approved plans.

• Any work of demolition, alteration or construction is governed by the Legal Regime for Urban Planning and Building – Decree-Law no. 555/99, of 16 December, in the wording given by Law no. 60/2007, of 4 September.

• The RPDML establishes in articles 13, 14, 15, 21, 23, 24, 83 with reference to art. 18 Section II (Parking and Garages), the rules to be observed in the construction, expansion or alteration of buildings.

• Construction projects must comply with the RGEU and other general and municipal legislation in force. (…)" (doc no. 1, attached to the file by the Applicant).

4.1.5.

With respect to the property with matrix article…, the Applicant submitted, in 2009, to the Municipal Chamber of…, a request for construction of a residential and commercial building, and the architectural project was approved and a period of six months was granted to request approval of the specialty projects (in accordance with the dispatch of approval of the project, as per doc no. 5 submitted by the Applicant, the contents of which are deemed to be reproduced).

4.1.6.

From the comparison between points 4.1.3 and 4.1.5 it follows that, as of the date of issuance of the matrix certificate, attached to the file, no construction had yet been carried out on the property in question.

4.1.7.

The Stamp Tax assessments in question, in the amount of €113,358.34, are paid in full.

4.2. Facts not considered proven

There are no other facts with relevance to the arbitral decision that have not been given as proven.

4.3. Grounds for the factual matters considered proven

The factual matters given as proven are based on the documents used for each of the facts alleged and whose authenticity was not called into question.

5. LEGAL MATTERS

5.1. As to the merits

Given all that has been set out above, the Applicant challenges the Stamp Tax assessments under review on the basis of the following grounds:

• Illegality due to error in the factual and legal prerequisites.

• Unconstitutionality of item 28.1 of the GTST, in the wording given by Law no. 83-C/2013, of 31 December, for violation of the constitutional principles of contributive capacity, tax equality and legality, given the indeterminability of the concept of "intended building work" and based on a mere expectation of the possibility of being able to construct a building with residential use.

The Administration is subordinate to the Constitution, as is any power or body of the State, but what characterizes it is the immediate subordination to law, with there being no Administration without legal mediation. The principle of legality, understood in a broad sense (of the legality of the administration), constitutes the prerequisite and foundation of all administrative activity, with administrative activity directly linked to the Constitution only being possible in exceptional circumstances.[1]

Accordingly, it is necessary, first and foremost, to determine whether or not the taxing acts of assessment at issue in this arbitral request are in accordance with the immediate parameter to which the Tax Administration is subordinate, in the case at hand: item 28.1 of the GTST, according to the wording given by Law no. 83-C/2013, of 31 December.

As we have seen, the Applicant alleges, in summary, that the Stamp Tax assessments in question are illegal due to error in the factual and legal prerequisites.

It is necessary to assess this.

1. On the meaning and scope of item 28.1 of the GTST, according to the wording given by art. 194 of Law no. 83-C/2013, the Decision of CAAD, of 4 February 2016, case no. 467/2015-T, addressed this in terms which, as they merit our adherence, we now proceed to reproduce, in the following terms:

"For the resolution of the question identified above, it is important to bear in mind, first and foremost, the evolution and framework of the aforementioned item 28, both before and after the amendment determined by article 194 of Law no. 83-C/2013, of 31 December (which is, as stated, the wording applicable to the present case).

In that sense, it is useful to refer to the Decision of the Superior Administrative Court (SAC) of 9 April 2014 (case no. 1870/13), which, like other decisions of the SAC – e.g.: Decision of 9 April 2014 (case no. 48/14), Decisions of 23 April 2014 (case nos. 270/14, 271/14 and 272/14), Decision of 25 November 2015 (case 1338/15) – makes a detailed historical and chronological analysis of the evolution and framework of item 28 under review:

'The concept of «urban property with residential use» was not defined by the legislator. Neither in Law no. 55-A/2012, which introduced it, nor in the Property Tax Code, to which no. 2 of article 67 of the Stamp Tax Code (likewise introduced by that Law) refers, on a subsidiary basis. And it is a concept which, probably due to its imprecision – a fact all the more serious given that on it depends the scope of the objective scope of the new taxation –, had a short life, as it was abandoned when Law of the Budget of the State for 2014 (Law no. 83-C/2013, of 31 December) came into force, which gave new wording to item no. 28 of the General Table, and which now delimits its objective scope through the use of concepts that are legally defined in article 6 of the Property Tax Code.

This amendment – to which the legislator did not attribute an interpretive character, nor does it appear to us that it did –, merely makes it unambiguous for the future that building plots for which the building work, authorized or intended, is for residential purposes, are included within the scope of item 28.1 of the General Table of Stamp Tax (provided that its respective tax-assessed property value is of a value equal to or greater than 1 million euros)". (End of quotation.)

Before the legislative amendment which, in an innovative way, came to include the aforementioned building plots, it was necessary to ascertain, making use of various interpretive elements, whether, in the absence of such literal reference, such building plots could nevertheless be included within the objective scope of item 28.

It is for that reason that it is understandable that the aforementioned decision proceeded, saying:

"[Nothing] clarifying [the legislator] with respect to past situations [i.e., assessments prior to 2014], such as that which is at issue in the present proceedings, it does not appear that [with respect to these] the interpretation of the appellant can be endorsed, since it does not result unambiguously, either from the letter or from the spirit of the law, that the intention thereof was, ab initio, to encompass within its objective scope building plots for which the construction of residential buildings was authorized or intended, as clearly results today from item 28.1 of the General Table of Stamp Tax.

From the letter of the law nothing unambiguous results, indeed, as it itself, when using a concept which it did not define and which was not defined in the statute to which it referred on a subsidiary basis, needlessly lent itself to ambiguity in a matter – of tax scope – in which certainty and legal security should also be paramount concerns of the legislator.

And from its 'spirit', apprehensible in the explanatory memorandum of the bill that is the source of Law no. 55-A/2012 (Bill no. 96/XII – 2nd, Parliamentary Record, series A, no. 3, 21 September 2012, p. 44 [...]) nothing more results than the concern to raise new tax revenue, from sources of wealth 'less spared' in the past from the Tax administration's reach than work income, in particular capital income, securities gains and property, reasons which bring no relevant contribution to clarification of the concept of «urban properties with residential use», as they give it for granted, without any concern to clarify it. Such clarification came to be made – as informed in the Arbitral Decision delivered on 12 December 2013, in case no. 144/2013-T, available in the CAAD database –, when the aforementioned bill was presented and discussed in Parliament, in the words of the State Secretary for Tax Affairs, which reportedly stated expressly, as is gathered from the Parliamentary Record (DAR I Series no. 9/XII – 2, of 11 October, p. 32) that: «The Government proposes the creation of a special rate on high-value residential urban properties. For the first time in Portugal, a special taxation on high-value properties intended for residential purposes is being created. This rate will be 0.5% to 0.8% in 2012 and 1% in 2013, and will apply to houses valued at equal to or greater than 1 million euros» (underlining ours), from which it is gathered that the reality to be taxed in view was, after all, and notwithstanding the terminological imprecision of the law, «urban properties with residential use», in ordinary language «houses», and not other realities.

[...]. [...] as the rule on the scope of stamp tax refers to urban properties with «residential use», without any specific concept being established for this purpose, one cannot extract from it that it contains a future potentiality, inherent to a distinct property that might possibly be built on the plot.

It is concluded, therefore, in accordance with the decision in the judgment under appeal, that, as it results from article 6 of the Property Tax Code a clear distinction between urban properties «residential» and «building plots», the latter cannot be considered as «properties with residential use» for the purposes of item no. 28.1 of the General Table of Stamp Tax, in its original wording, as given to it by Law no. 55-A/2012, of 29 October." (End of quotation.)

In summary, it emerges from the case law of the venerable Superior Administrative Court that, with the new wording of item 28.1 of the GTST, given by art. 194 of Law no. 83-C/2013, of 31 December (and applicable to the present proceedings), the objective scope of the rule was expanded, in an innovative way, by including, in an explicit manner, building plots for which building work has been authorized or is intended for residential purposes.

Having made this essential historical-legal framework, it is now necessary, in a second moment, to analyze the terms of the aforementioned expansion of the objective scope of the rule in question and to assess the legality of its application to the case at hand.

The new wording of item 28.1 of the GTST (given, as stated, by art. 194 of Law no. 83-C/2013, of 31 December) states as follows: "For a residential property or for a building plot for which the building work, authorized or intended, is for residential purposes, in accordance with the provisions of the Property Tax Code".

The essential question which, in this context, arises, is whether, in the absence of a provision or expectation of «building work for residential purposes» with respect to the building plots under analysis, the application of Stamp Tax, as carried out by the TA, can be accepted.

To answer the aforementioned question, it appears to be particularly useful to consider the following: "with respect to building plots, whether or not located within an urban agglomeration, as defined in art. 3/4 of this statute [PTC], such must, as such, be considered to be building plots with respect to which there has been granted: - a licence for subdivision; - a building licence; - an authorization for subdivision; - an authorization for building; - a favorable prior notification of a subdivision or building operation was admitted; an information prior favorable to a subdivision or building operation was issued, as well as; - those that have been declared as such in the acquisition title, and it should be noted that, also for that purpose, only the acquisition title with the form prescribed by civil law should be relevant, that is, the public deed or the authenticated private document referred to in art. 875 of the Civil Code." [see ANTÓNIO SANTOS ROCHA / EDUARDO JOSÉ MARTINS BRÁS – Taxation of Property. Property Tax-Property Transfer Tax and Stamp Tax (Annotated and Commented). Coimbra, Almedina, 2015, p. 44].

In light of the requirements cited above – with which we agree here, as they translate and make explicit what the legal and administrative requirements are for the consideration of any building plots as building plots encompassed by item 28.1 of the GTST – it is verified that, in the case now under review, the building plots in question meet none of them.

Indeed, and as was stated in the course of the evidence, no documentary support was submitted with the present proceedings that attests that the acts in issue were carried out with respect to properties with approved projects for construction (whether or not yet with or already with the aforementioned building licences and authorizations), or properties that are located in an area where building for residential purposes is intended (with the aforementioned prior notifications or favorable prior information for the execution of subdivision or building operations). As such demonstration has not been made, one cannot consider that the building plots in question have building work, authorized or intended, for residential purposes, in accordance with the PTC."

It is important to note further that, although the properties at issue here are registered matricially as being "building plots", this does not justify the automatic application of item 28.1 of the GTST, as, it seems, it clearly follows, mere matrix registration does not constitute, in itself, demonstration that a property has building work for residential purposes intended.

Proof of what has just been stated is the fact that, as ANTÓNIO SANTOS ROCHA and EDUARDO JOSÉ MARTINS BRÁS likewise state (op. cit., p. 46), "the properties located in urbanized areas or included in areas covered by approved urbanization plans [...] should only be considered as building plots when, by action taken by the respective owner, there is verified, alternatively, the issuance of any one of those documents [«granting of licences, building or subdivision authorizations, favorable prior notifications or information for the same purpose»]".

The same authors add (see ibidem) – reinforcing the understanding, already expressed here, that, without building or subdivision licences or authorizations, mere registration of the properties as building plots does not justify, in itself, the application of item 28.1 of the GTST, the following (which is particularly relevant in the case of the property corresponding to matrix article …):

"The properties already described in the matrix as building plots, with respect to which the subdivision, licence or building authorization has lapsed, and in which no building operation has even been commenced, should, by means of the lapse provision, recover their previous nature".

In the same sense, see likewise, JOSÉ MANUEL FERNANDES PIRES, (Lectures on Property and Stamp Taxes. Coimbra, Almedina, 3rd ed., 2015, pages 110 to 112): "The right to build is not inherent in the right of ownership, but is born anew in the property owner's patrimony only when an administrative act by the competent public authority recognizes and authorizes the owner to build or subdivide. [...] only when that right is constituted in the property owner's legal sphere is it established by the Property Tax Code that we are dealing with a building plot. As such constitutive act is carried out by the public authority at the request of the property owner, the classification of a property as a building plot depends always on the will of the property owner."

In summary, it is clear, in the case being dealt with, that the incidence of tax on building plots cannot be materialized with mere registration thereof as such in the matrix, but rather, and in a decisive manner, through the verification of the actual potential for building on the aforementioned plots (which must be assessed in the individual case and revealed through the existence of the documents described above). In other words, that the incidence of tax, for purposes of item 28.1, materializes only with the verification of the "actual use", using the apt expression of JOSÉ MANUEL FERNANDES PIRES (op. cit., p. 507).

Without such demonstration of actual building potential – which, as stated, did not occur in the case being reviewed here –, the purposes underlying the new wording of the text of item 28.1 of the GTST are not fulfilled, which is why it is concluded that the assessments in question are in error as alleged by the Applicant."

1. Applying the above to the case at hand, it is verified that, with respect to the property corresponding to matrix article…, it results from the evidence that, in 2009, a request was submitted to the Municipal Chamber of…, for construction of a residential and commercial building, of which the architectural project was approved, and a period of six months was granted to the Applicant to submit the specialty projects (cfr. point 4.1.5 of the facts given as proven).

According to the Applicant's allegation, the aforementioned building licence is currently lapsed, as it was not used.

The Respondent confirms such lapse (cfr. art. 32 of the Reply), which is in fact verified.

Let us see.

In fact, it was proven that a six-month period was granted in 2009 to the Applicant to carry out the architectural project. Non-execution of the aforementioned dispatch within the established deadline resulted in the lapse of the licence.

Indeed, pursuant to the provision of art. 20, no. 4, of Decree-Law no. 555/99, of 16 December, in the wording given by Decree-Law no. 177/2001, of 4 June, "The interested party must request approval of the specialty projects necessary for the execution of the work within a period of six months from notification of the act approving the architectural project, if such projects have not been submitted with the initial request".

For its part, no. 6 of the same provision states that "Failure to submit the specialty projects within the period established in no. 4, (…) results in the lapse of the act approving the architectural project and the official archiving of the licensing process".

Now, with the lapse of the act approving the architectural project, there ceases to exist on the aforementioned property any building work authorized or intended, within the terms and for the purposes provided for in item 28.1 of the GTST, according to the wording given by Law no. 83-C/2013 of 31 December.

This is borne out by the matrix certificate, issued in 2015, attached to the file, in which the property in question is, still, at that date, described as a "building plot".

Moreover, over and above that, we are dealing with a property in which part is potentially assigned to services and another to residential purposes, whereby it does not have building work intended exclusively for residential purposes. This is, therefore, a situation not provided for, having regard to both the literal element and the rationale of the rule on the scope of the tax.

The argument of the TA thus fails.

With respect to the property corresponding to matrix article…, the TA argues that it has the characteristics contained in the definition of building plot for purposes of item 28.1 of the GTST, in the wording given by Law no. 83-C/2013, by reason of the existence of a Prior Information Request thereon.

Against this argument, the Applicant alleges that the document referred to by the TA does not constitute a Prior Information Request (PIR), but merely a response to an Information Request, requested under the principle of open administration enshrined in art. 17 of the Code of Administrative Procedure.

Let us see.

From the examination of the document in question, which has as its heading, as we have seen, "Subject: Right to Information - General conditions for urban planning operation" (reproduced at point 4.1.4 of the evidence), it results that it is issued under the general right to information enshrined in art. 100 of Decree-Law no. 555/99, of 16 December, and has as its content information precisely "On the legal instruments for territorial development and planning in force for a given area of the municipality, as well as on the other general conditions to which urban planning operations must comply …" (no. 1 of the aforementioned provision).

Now, a prior information request is not limited to mentioning the general conditions mentioned, but rather has the content established in art. 14 of Decree-Law no. 555/99, of 16 December, the binding effects referred to in art. 17, and follows, in summary, the regime established in arts. 14 to 17 of Decree-Law no. 555/99, of 16 December.

Thus, the Applicant is correct in alleging that it did not request any prior information request from the competent authorities, whereby the property corresponding to matrix article… does not have any authorized or intended building work, within the terms and for the purposes provided for in item 28.1 of the GTST according to the wording given by Law no. 83-C/2013 of 31 December.

As the understanding of the Applicant as regards the issue referred to is well-founded, it is a bar to further consideration, pursuant to art. 124 of the Code of Procedure and Tax Process (CPPT), ex vi art. 29, no. 1, lit. c), of the RJAT, to the knowledge of the remaining arguments of the Applicant (with no prejudice to this decision as regards the most stable or effective protection of the interests thereof).

All the more so, as the assessment regarding the application or non-application due to unconstitutionality of the rule in question would never constitute, in the case at hand, a ratio decidendi of the impugned decision.

5.2. Compensatory interest and reimbursement of the amount paid

In light of the provision of no. 5 of art. 24 of the RJAT – in the part stating that "payment of interest, regardless of its nature, is due in accordance with the terms provided for in the general tax law and in the Code of Procedure and Tax Process", it has been understood that such rule permits the recognition of the right to compensatory interest in arbitral proceedings.

Thus, the analysis of the request for payment of compensatory interest to the Applicant is justified.

Compensatory interest is due when it is determined, in a gracious objection or judicial challenge, that there has been error attributable to the tax services from which results payment of the tax debt in an amount greater than that legally due (see art. 43, no. 1, of the GTL).

It is, therefore, a necessary condition for the awarding of such interest the demonstration of the existence of error attributable to the tax services. In that sense, see, for example, the following decisions: "The right to compensatory interest provided for in no. 1 of art. 43 of the GTL [...] depends on it having been demonstrated in the proceedings that such act is affected by error as to the factual or legal prerequisites attributable to the TA." (Decision of the Superior Administrative Court of 30 May 2012, case 410/12); "The right to compensatory interest provided for in no. 1 of art. 43 of the General Tax Law presupposes that it is determined in the proceedings that in the assessment «there was error attributable to the tax services», understood as the «error as to the factual or legal prerequisites attributable to the Tax Administration»" (Decision of the Superior Administrative Court of 10 April 2013, case 1215/12).

Now, as there was, as results from what was said at point 5.1 of this arbitral decision, error attributable to the services – which leads to the annulment of the tax acts in question and the consequent reimbursement of the amounts paid by the Applicant, pursuant to art. 173, no. 1, of the CPPT, ex vi art. 29, no. 1, lit. c), of the RJAT –, it is concluded, without need for further consideration, by the well-foundedness of the request for payment of compensatory interest to the Applicant.

6. DECISION

Given all the above, it is decided:

• To judge the present request for arbitral pronouncement well-founded and, in consequence, to annul the Stamp Tax assessments in question, determining the reimbursement of the amounts unduly collected.

• To judge the request also well-founded in the part relating to the recognition of the right to compensatory interest in favor of the Applicant.

7. VALUE

The value of the case is fixed at € 113,358.34 (one hundred and thirteen thousand three hundred and fifty-eight euros and thirty-four cents), pursuant to art. 32 of the Code of Procedure in Administrative Courts and 97-A of the CPPT, applicable by virtue of the provision of art. 29, no. 1, lits. a) and b), of the RJAT, and in art. 3, no. 2, of the Regulation of Costs in Tax Arbitration Proceedings (RCPAT).

8. COSTS

Costs at the charge of the Respondent, in the amount of € 3,060, pursuant to Table I of the RCPAT, and in compliance with the provision of arts. 12, no. 2, and 22, no. 4, both of the RJAT, as well as pursuant to art. 4, no. 4, of the aforementioned Regulation.

Notify.

Lisbon, 19 April 2016.

The Arbitrators,

(Fernanda Maçãs)

(Suzana Costa)

(Sérgio Santos Pereira)

[1] For further discussion on the binding of the Administration to law and to the Constitution, cfr. GOMES CANOTILHO / VITAL MOREIRA – Constitution of the Portuguese Republic, Annotated. Coimbra, Coimbra Editora, 4th ed., 2014, pp. 798 et seq.