Stamp Tax Verba 28.1 TGIS on Vertical Property: Independent Units VPT Threshold in CAAD 580/2014-T

ARBITRATION DECISION

I – REPORT

a) Subject matter of the dispute:

1. A – Real Estate Company, SA, with the TIN …, with headquarters at Rua …, Lisbon, filed a request with the Administrative Arbitration Centre (CAAD) for the constitution of a sole arbitral tribunal, pursuant to the articles combined with articles 2 and 10 of the Legal Framework for Arbitration in Tax Matters (RJAT), wherein the Tax and Customs Authority (AT) is respondent, containing, cumulatively, requests for a declaration of illegality and consequent removal from the legal order of the stamp duty assessments – item 28.1 of the TGIS, with a total value of € 12,341.90, relating to the year 2012 and to fifteen units of independent use, intended for housing, of the urban property situated at Estrada … and Rua …, registered in the matrix, at the date of the assessments, under article … of the parish of …, of which the claimant was the owner on 31 December 2012;

2. Subsidiarily, an assessment is also requested of the error of the AT in issuing the contested assessments, and a conditional request for payment of compensatory interest on the amounts that may be paid until the date of delivery of the arbitration decision;

3. The request for arbitration was filed with the CAAD on 29 July 2014, with the AT being automatically notified thereof on 30 July 2014;

4. The Claimant chose not to designate an arbitrator, whereby, pursuant to article 6, no. 2, letter a), of the RJAT, the undersigned was designated by the President of the CAAD Deontological Council to serve on this arbitral tribunal, an assignment which she accepted in accordance with the legally provided terms.

b) Factual background:

In summary, the Claimant bases its claims on the following facts:

a) The claimant was, on 31 December 2012, the owner of the urban property situated at Estrada … and Rua …, registered in the matrix, at the date of the assessments, under article … of the parish of …;

b) The said property had, in the year 2012, mixed use, being composed of eighteen storeys or units of independent use, fifteen of which intended for housing, and was not at that time constituted as horizontal property ownership;

c) The tax property value (VPT) of the various units of independent use was determined separately, in accordance with article 7, no. 2, letter b), of the Municipal Property Tax Code (hereinafter, CIMI), with none of the parts or units intended for housing reaching the VPT value of € 1,000,000.00, although the sum of their VPT amounts to the total value of € 1,234,190.00, which the AT considered to be the total value subject to tax;

d) The stamp duty assessment notices that are the subject of the arbitration request (with nos. 2014 …; 2014 …; 2014 …; 2014 …; 2014 …; 2014 …; 2014 …; 2014 …; 2014 …; 2014 …; 2014 …; 2014 …; 2014 …; 2014 … and 2014 …) were issued on 26 January 2014, for payment in a single instalment during the month of April of the same year, containing the following identification elements:

e) At the time of the request, the tax had not been paid by the Claimant, and was in the coercive collection phase, in tax executions that are pending and from which suspension was requested, through the attachment of assets of the executed party.

Proven Facts: The Tribunal's conviction, as to the facts stated above, which are deemed proven, derives from the critical analysis of the arbitration request and the documents attached thereto, as well as from the response provided by the AT, which makes reference to them, admitting them by agreement.

Unproven Facts: There are no facts relevant to the decision that should be considered unproven.

II – PRELIMINARY MATTERS:

The parties have legal personality and capacity, are legitimate and are duly represented (articles 4 and 10, no. 2, of the RJAT and article 1 of Order no. 112-A/2011, of 22 March).

The Sole Arbitral Tribunal was regularly constituted at the CAAD on 2 October 2014, and is materially competent to appraise and decide the dispute that is the subject of the present proceedings.

The cumulation of claims is permitted by article 3, no. 1, of the RJAT, given that their merits depend, in the concrete case, essentially on the appraisal of the same factual circumstances and the interpretation and application of the same principles or rules of law, as it involves several assessments concerning the same tax and property.

Notified to file a reply, in accordance with article 17 of the RJAT, the AT timely filed its response, in which it advocates for the rejection of the request and the maintenance of the tax acts that are the subject of the arbitration request, requesting the waiver of the meeting referred to in article 18 of the RJAT, of the examination of the witnesses cited by the Claimant, as well as of written pleadings, considering that the position of the parties "is broadly and clearly defined", for which documentary evidence submitted together with the initial petition suffices.

No exceptions were raised and the request is timely.

By way of an arbitration order of 10 November 2014, of which the parties were notified on the following day, it was decided to waive the holding of the meeting provided for in article 18 of the RJAT, and it was determined that the proceedings continue with successive written pleadings, designating 16 December 2014 for the delivery of the arbitration decision.

The parties did not file any pleadings.

III – REASONING:

With the factual background established above, a decision must be made.

Article 124, no. 1, of the Code of Tax Procedure and Process (CPPT), applicable subsidiarily to the tax arbitration process, by virtue of article 29, no. 1, letter a), of the RJAT, provides that "In the sentence, the tribunal shall appraise as a priority the defects that lead to a declaration of non-existence or nullity of the contested act and, afterwards, the defects alleged that lead to its annulment," in accordance with the order established in its no. 2, letters a) and b).

Now, as a first matter, the Claimant argues that "The contested assessments are affected by nullity resulting from the unconstitutionality of the provision [of item 28 of the TGIS], or of the interpretation of the invoked provision, (…)" – point 10 of the I.P.

However, as a general rule, the defects of a tax act are grounds for its annulment, with tax acts only being null when, as administrative acts, they "lack any of the essential elements or for which the law expressly provides this form of invalidity," in accordance with the provision of no. 1, article 133 of the Code of Administrative Procedure (CPA), namely those enumerated in letters a) to i) of its no. 2.

As the Claimant does not specify the cause of the alleged nullity of the assessments that are the subject of the arbitration request, it may be concluded, by process of elimination, that such cause is that provided for in letter d) of no. 2 of the aforementioned article 133 of the CPA, that is, the violation of the "essential content of a fundamental right," such as the right to private property, enshrined in article 62 of the Constitution of the Portuguese Republic, which, "being (…) in several of its components of a negative or defensive nature, (…) possesses a nature analogous to the «rights, freedoms and guarantees»"[1].

However, although an illegal tax assessment constitutes a violation of the right to property, "not all illegal assessments can be considered to be affected by nullity, since the law expressly provides for them the sanction of annulment, as is evident from the fact that it provides for a period for their contestation"[2], established by article 102 of the CPPT and, in the tax arbitration process, by article 10, no. 1, letters a) and b) of the RJAT.

However, "It is not any violation of a fundamental right that letter d) of no. 2 of art. 133 of the Code of Administrative Procedure refers to, but only the violation of its essential content. A violation of this type will only occur when in its face the fundamental right affected is left without appreciable practical expression, which is not the case with an illegal assessment, which only limitedly affects the property rights of its recipients"[3].

As, moreover, the Claimant itself recognizes by stating, in article 61 of the I.P., that "(…) the contested assessments are either affected by errors of fact, or errors of law, or material unconstitutionality resulting from the aforementioned violation of the constitutional principles of equality, proportionality and prohibition of retroactivity of tax law, all generating its invalidity and annulment" (sic) – bold in the original and underlined by us.

It is therefore concluded that the possible application of an unconstitutional provision does not generate nullity of the tax act, but only its annulment.

In the judgment, the judge must pronounce on all matters that must be appraised, refraining from pronouncing on matters outside its jurisdiction (final segment of no. 1 of article 125 of the CPPT), and the matters within the cognisance of the tribunal are, in accordance with no. 2 of article 608 of the Code of Civil Procedure (CPC), applicable subsidiarily to the tax arbitration process, by reference of article 29, no. 1, letter e), of the RJAT, "the matters that the parties have submitted to its appraisal, except those whose decision is prejudiced by the solution given to others (…)".

The matters brought before the tribunal, with relevance to the resolution of the dispute, are those of determining whether, in an urban property not subject to the horizontal property ownership regime, the subjection to stamp duty, under item no. 28 of the TGIS, is determined by the Tax Property Value (VPT) corresponding to each of the parts of the property, economically independent and with housing allocation, as the Claimant argues, or whether, on the contrary, it is determined by the global VPT of the property, which would correspond to the sum of all VPT of the storeys or units of independent use and with housing allocation that compose it, as the AT argues, and whether any of the interpretations in conflict is unconstitutional, by violation, inter alia, of the principles of legality and tax equality.

The Claimant's position is, in summary, as follows:

· "The property (…) has mixed use (…) with each of the following 'storey or unit with independent use' subsequently identified intended for a non-housing purpose: Ground Floor; LJB, all intended for commerce";

· "(…) even though (…) it has a global VPT exceeding 1M€, none of the storeys or units susceptible of independent use, to which the Tax Authority assigned autonomous VPT (…) in accordance with art. 7, no. 2 /b) of the CIMI, and whatever their purpose – housing or other – has a VPT exceeding the value of 1M€";

· "The amendments to the Stamp Duty Code (CIS) made through Law 55-A/2012", consisted of: (i) the addition to the General Table of Stamp Duty, attached to the CIS, of a new item no. 28, which also defines the rate and contains an express reference to the Municipal Property Tax Code (CIMI or IMI) (..); (ii) a reference "to the CIMI [of] all remaining matters arising from the new Item 28 (…); (iii) the subsidiary application of the CIMI in all matters related to the new item 28 of the General Table not regulated in the CIS (art. 67/2)";

· The issuance of the contested assessments constitutes an "arbitrary taxation, without perceivable or rational basis, which would allow to discern the reason why it is intended to tax substantially identical realities, such as properties intended for collective housing that are not subject to the horizontal property ownership regime, in which the AT assigns to each unit an autonomous VPT, always below 1M€, versus the same reality, in which each unit of the property is already subject to the horizontal property ownership regime";

· "(…) are affected by errors of fact, as they considered that the mixed properties (sic) of the claimant, in which none of the 'storeys susceptible of independent use' that compose the property in 'total ownership' and whose individual value for VPT purposes is below 1M€, wrongly subsumed to the species of buildings or constructions licensed or intended for 'housing, commercial, industrial' purposes mentioned in art. 6, no. 1, a) and b) and no. 2 of the CIMI, to which item 28 and 28.1 of the General Table annexed to the CIS refer, ex vi of art. 67/2 of the CIS, both added by arts. 3 and 4 of Law 55-A/2012, also violating, and beyond the alleged unconstitutionalities invoked, all the cited provisions" – bold in the original;

· "As it constitutes unanimous jurisprudence of this Arbitration Centre, particularly in the reasons explained in the cited Arbitration Decision handed down in Case 50-T/2013, of 29/10/2013, (…), the interpretation proposed by the AT to tax collective housing properties ([m]ixed or not), composed of various units that are not in the horizontal property ownership regime also suffers from an error of law" – bold in the original.

· The category of properties intended for housing with VPT exceeding 1 M€ that the legislator chose in Law 55-A/2012, to define which properties are covered by the new rule of incidence of urban properties of Item no. 28 of the General Table annexed to the CIS, corresponds, thus, to each of the units (autonomous units susceptible of independent use) and therefore endowed with autonomous VPT, in urban properties intended for housing, understood as an existing construction and intended for that purpose and not any other category thereof" – bold and underlined in the original;

· "In view of the principle of specific typicality, only each of the units (autonomous units susceptible of independent use) and therefore endowed with autonomous VPT urban properties of the type 'construction that can serve for housing purposes' can be covered by the rule of incidence of Item no. 28 of the General Table annexed to the CIS, under pain of material unconstitutionality of that provision by violation of the principle of tax legality (art. 106, now art. 103, no. 2, CR), in its dimensions of the principle of 'typicality' and, in particular, of 'determinability' (corollary of the idea of rule of law – art. 2 CRP) of the tax 'incidence' rule [cf. art. 168, now art. 165, no. 1, letter i), CRP)" – bold and underlined in the original;

· "The contested assessments are affected by obvious lack of reasoning, in violation of the provisions of art. 36 et seq. of the CPPT, in art. 77/6 of the LGT, art. 125 of the CPA and art. 268, no. 3 of the CRP, as it is not perceivable to a normal recipient the reason why the entire property, decomposed for assessment purposes into as many assessments as there are units susceptible of independent use, whose value is below one million euros" and "lack of prior hearing of the claimant at a time before its issuance, determining its illegality (art. 60/1/a) of the LGT)".

For its part, the AT's position, defending the rejection of the arbitration request, is, synthetically, as follows (although by manifest oversight reference is made to 16 units of independent use, intended for housing, when, in reality, there are only 15):

· "(…) the property value of the storeys/parts with housing allocation taken into account in the assessments was that corresponding to € 1,234,190.00 and to the year 2012.)" and "It was on this value of € 1,234,190.00 that the A.T. assessed, in accordance with articles 6°, no. 1, letter f), sub-letter i), the stamp duty of item 28.1 of the General Table, in the version given by art. 4 of Law no. 55-A/2012, of 29 October, at the rate of 1 per cent";

· "(…) The situation of the claimant's properties subsumes itself, linearly, which is to say, literally, within the provision of the item in question (…);

· "From the notion of property in article 2 of the CIMI, only the autonomous fractions of property in the horizontal property ownership regime are regarded as properties – no. 4 of the cited article 2 of the CIMI. Therefore," "Finding that the properties of which the claimant is the owner are in the total ownership regime, it does not possess autonomous fractions, to which tax law attributes the qualification of property";

· "Thus, the now claimant, for the purposes of IMI and also of stamp duty, by virtue of the wording of the said item, is not the owner of 18 autonomous fractions, but of a single property";

· "what the now claimant intends is for the AT to consider, for the purposes of assessing the present tax, that there is analogy between the total ownership regime and the horizontal property ownership regime, as there should not be discrimination in the legal-tax treatment of these two property regimes, as it is illegal";

· "Now, to pretend that the interpreter and applier of tax law applies, by analogy, to the total ownership regime, the horizontal property ownership regime is what is abusive and illegal, as we shall see in detail";

· "And the interpreter of tax law cannot equate these regimes, in accordance with the rule according to which the concepts of other branches of law have the meaning in tax law that is given to them in those branches of law, or in the words of article 11, no. 2 of the LGT, on the interpretation of tax law: 'Whenever, in tax provisions, terms particular to other branches of law are used, they must be interpreted in the same sense that they have there, unless otherwise directly follows from the law'";

· "On the other hand, taking also into account that in determining the meaning of tax provisions and in qualifying the facts to which they apply, the general rules and principles of interpretation and application of laws are observed, in accordance with article 11, no. 1 of the LGT, which thus refers to the Civil Code, its article 10 on the application of analogy, determines that this will only be applicable in case of gaps in the law";

· "Now the tax law does not contain any gap! The CIMI, to which the cited item refers, determines that in the horizontal property ownership regime the fractions constitute properties. As the property is not subjected to this regime, legally the fractions are parts susceptible of independent use, without common parts";

· "We cannot, therefore, accept that it is considered that for the purposes of item 28.1 of the General Table annexed to the CIS, the parts susceptible of independent use have the same tax regime as the autonomous fractions of the horizontal property ownership regime";

· "The unity of the urban property in vertical ownership composed of various storeys or units is not (…) affected by the fact that all or part of these storeys or units are susceptible of independent economic use". "Such a property does not cease, by being only one, not being, thus, its distinct parts legally equated to the autonomous fractions in the horizontal property ownership regime";

· "The fact that the IMI was calculated based on the tax property value of each part of property with independent economic use does not equally affect the application of item 28, no. 1 of the General Table";

· "It is what results from the fact that the determining element of the application of that item of the General Table is the total property value of the property and not separately that of each of its parcels", for "Any other interpretation would violate, that is, the letter and spirit of item 28.1 of the General Table and the principle of legality of the essential elements of the tax provided for in article 103°, no. 2, of the Constitution of the Portuguese Republic (CRP)";

· "A rule of incidence according to which the tax property value of urban properties on which the application of item 28.1 of the General Table depends is the property value of each storey or unit susceptible of independent use and not the total tax property value of the urban property with housing allocation certainly has no expression in the law";

· "It is therefore unconstitutional, as offensive of the principle of tax legality, the interpretation of item 28.1 of the General Table, to the effect that the property value on which its incidence depends is calculated globally and not storey by storey or unit by unit";

· "In this vein, the claimant's request that the horizontal property ownership regime be applied, by analogy, to its property, considering that each of the fractions susceptible of independent use constitutes a property, does not succeed, as this would not be interpreting the provisions of the CIMI, and consequently of the CIS, but would subvert the entire regime established there, with the violations of the principles referred to above".

Describing the positions of the parties, it should first be noted that the AT is correct in stating that a property constituted in horizontal property ownership is a legal-tax reality distinct from an urban property in "total ownership" and that each of the units susceptible of independent use of an urban property in "total ownership" cannot be regarded as a property.

Indeed, the rules of interpretation, which have the text as their starting point, require this, with the function of eliminating any meaning that has no support in the letter of the law[4].

First and foremost, because no. 4 of article 2 of the CIMI establishes the legal fiction that each of the autonomous fractions of a property constituted in horizontal property ownership constitutes a property, whereas a unit of independent use, of an urban property not constituted in horizontal property ownership, continues to be only that – a part of a property and not a property, as, moreover, the AT itself recognizes in its response when it states that "only the autonomous fractions of property in the horizontal property ownership regime are regarded as properties".

This alone would be sufficient to conclude that, as the legislator has fixed distinct tax qualifications for legally differentiated realities (properties and parts of properties), it is not legitimate for the applier of the provision, in the name of the "necessary adaptations" referred to in article 23, no. 7 of the Stamp Duty Code (CIS), to create a new rule of incidence of that tax, a matter subject to the principle of tax legality inherent in article 103, no. 2, of the Constitution of the Portuguese Republic, according to which the essential elements of taxes – incidence, rate, tax benefits and taxpayer guarantees – are established by law of the National Assembly.

Now, item 28 of the TGIS, added by article 4 of Law no. 55-A/2012 of 29 October, came to determine, in its original wording, applicable to the case at hand, the objective incidence of stamp duty on urban properties with housing allocation, whose tax property value, for IMI purposes, is equal to or greater than € 1,000,000.00 (and not, as the AT understands, on parts of properties or on the global VPT of a property not constituted in horizontal property ownership, corresponding to the sum of the VPT of the parts that compose it), by establishing that stamp duty is charged on:

«28 — Ownership, usufruct or surface right of urban properties whose tax property value shown in the matrix, in accordance with the Municipal Property Tax Code (CIMI), is equal to or greater than € 1,000,000 — on the tax property value used for IMI purposes:

28.1 — For property with housing allocation — 1%;

28.2 — For property, when the taxpayers that are not natural persons are resident in a country, territory or region subject to a clearly more favourable tax regime, contained in the list approved by order of the Minister of Finance — 7.5%.»

Here too the literal element of the provision must be the starting point for its interpretation and, "in the absence of other elements that induce the choice of the less immediate sense of the text, the interpreter should opt in principle for that sense which better and more directly corresponds to the natural meaning of the verbal expressions used, and namely to their technical-legal meaning, in the supposition (not always exact) that the legislator knew how to express his thinking correctly"[5].

That the AT's action goes beyond the rule of incidence of item 28 of the TGIS seems evident, in not respecting the VPT for IMI purposes, which, for properties not constituted in horizontal property ownership is individualized in relation to each of the parts or units of independent use that compose them, with no assessment being made of the stamp duty on the sum of the VPT assigned to the parts. Hence, for IMI purposes, no relevance is given to the global VPT.

The AT argues, however, that, in accordance with article 7, no. 2, letter b), of the CIMI, "«[…] each part is valued by application of the corresponding rules, and the value of the property is the sum of the values of its parts»".

However, it is not always the case that the CIMI makes the whole correspond to the sum of the parts. As indeed follows from the systematic nature of the same no. 2 of article 7 of the CIMI, whose letters a) and b) only apply in the determination of the tax property value "of urban properties with parts that can be classified in more than one of the classifications in no. 1 of the preceding article".

In accordance with no. 1 of article 6 of the CIMI, urban properties are divided into a) Residential; b) Commercial, industrial or for services; c) Land for construction; d) Others.

From the combination of the provisions of no. 2 of article 7 and article 6, no. 1, both of the CIMI, it follows that, if an urban property not constituted in horizontal property ownership comprises exclusively parts or units with housing allocation, the value of the property does not equal the sum of its parts. Which is to say that each of the parts is autonomous and that, regardless of the VPT that has been assigned to it, it is excluded from the incidence of stamp duty provided for in item 28 of the TGIS.

Having reached this point, the question arises whether a unit or part of independent use, with housing allocation, of a property not constituted in horizontal property ownership, in which units or parts of independent use are included that can be classified under another of the classifications in no. 1 of article 6 of the CIMI, for example, units intended for commerce, industry or services, is subject to tax.

Now, the answer must be in the negative, notwithstanding the provision of letter b) of no. 2 of article 7 of the CIMI, according to which the value of the property is the sum of the values of its parts or units of independent use, classifiable under more than one of the classifications in no. 1, article 6 of the same Code.

It is that here, note well, two legally distinct realities are not being compared, such as the parts or units of independent use of an urban property not constituted in horizontal property ownership with the autonomous fractions of properties submitted to that regime, which, for IMI purposes, are themselves properties.

Here, what is in confrontation are realities in every respect identical, that is, parts or units of independent use and housing allocation, integrated in urban properties not constituted in horizontal property ownership.

And the answer to the question must be in the negative, for nothing would justify that the legislator intended to tax parts or units of independent use and housing allocation of an urban property not constituted in horizontal property ownership, integrated by other parts or units of independent use intended for other purposes, and not tax parts or units of independent use and housing allocation of an urban property not constituted in horizontal property ownership, integrated exclusively by parts or units of independent use intended for housing. If the legislator intended to treat identically situated realities in an unequal manner, it would have to be concluded that there is a flagrant violation of the principle of equality.

As this does not appear to be the legislative intent, one cannot accept that the AT formulates a rule of incidence ex novo, different from that created by the legislator, intending to tax the "global VPT," corresponding to the sum of the parts that compose the properties in "total ownership," even though economically and functionally independent and, as such, separately registered in the matrix, which also discriminates the respective tax property value (cf. no. 3 of article 12 of the CIMI), as the law is clear in subjecting to stamp duty of item 28 of the TGIS, urban properties with housing allocation, whose VPT, for IMI purposes, is greater than € 1,000,000.00.

Different would be the case of a unit or part of independent use and housing allocation, inserted in an urban property not constituted in horizontal property ownership, but with a VPT, for IMI purposes, equal to or greater than € 1,000,000.00, bearing in mind the ratio legis of the rule of incidence.

Indeed, as the Claimant states in the I.P., citing the arbitration decision handed down in case no. 50/2013-T, "The ratio legis underlying the rule of item 28 of the TGIS, introduced by Law no. 55-A/2012 of 29 October, in obedience to article 9 of the Civil Code, according to which the interpretation of the legal provision should not be limited to the letter of the law, but reconstruct from the texts and the remaining elements of interpretation the legislative thinking, taking into account the unity of the legal system, the circumstances in which it was drafted and the specific conditions of the time in which it is applied.

The legislator, in introducing this legislative innovation, considered as the determining element of contributive capacity the urban properties, with housing allocation, of high value, more precisely, of value equal to or greater than € 1,000,000.00, on which it went on to impose a special rate of stamp duty, intending to introduce a principle of taxation on wealth externalized in the ownership, usufruct or surface right of urban properties of luxury with housing allocation. The criterion was the application of the new rate to urban properties with housing allocation, whose VPT is equal to or greater than €1,000,000.00.

Such logic seems to make sense when applied to 'housing', whether it be a 'house', 'autonomous fraction' or 'part of property with independent use' 'autonomous unit', because it presumes above-average contributive capacity and, in that measure, justifies the need for additional contribution efforts, it would make little sense to fail to take into account the individual calculations 'unit by unit' when only through the sum of the VPT of the same, because held by the same individual, would the million euros threshold be exceeded.

This is concluded from the analysis of the discussion of Bill no. 96/XII in the National Assembly, available for consultation in the Diary of the National Assembly, I series, no. 9/XII/2, of 11 October 2012.".

We thus have that, beyond the grammatical element of the interpretation of the rule of incidence contained in item 28 of the TGIS, also its rational or teleological element, the ratio legis or purpose pursued by the legislator in drafting that provision, points to the effect that taxation is charged on urban properties with housing allocation with VPT, for IMI purposes, exceeding € 1,000,000.00 and not on parts of urban properties not constituted in horizontal property ownership, even though such parts are susceptible of independent use and are intended for housing.

In light of the reasons stated, knowledge of the questions relating to the alleged unconstitutionality of the interpretations given by the Claimant and the Respondent to the provision of item 28.1 of the TGIS, by violation, inter alia, of the principles of legality and tax equality, is foreclosed, since this provision does not support the interpretation that the AT, in this case, made of it, when issuing the assessments that are the subject of the arbitration request.

Knowledge of the Claimant's right to compensatory interest is also foreclosed, as there is no indication in the proceedings that payment of the stamp duty assessments – Item 28 of the TGIS, that are the subject of the arbitration request, has been made.

IV – DECISION

Based on the reasons set out above and, in accordance with article 2 of the RJAT, it is decided:

− To declare the illegality of the stamp duty assessments contested, for errors in the legal grounds, determining their annulment;

− Not to condemn the AT to the payment of compensatory interest, as payment of the stamp duty assessments – Item 28 of the TGIS, that are the subject of the arbitration request has not been made.

PROCESS VALUE: In accordance with the provision of article 306, no. 2, of the CPC and 97-A, no. 1, letter a), of the CPPT and 3, no. 2, of the Regulation of Costs in Tax Arbitration Proceedings, the process is valued at € 12,341.90 (twelve thousand, three hundred and forty-one euros and ninety cents).

COSTS: Calculated in accordance with article 4 of the Regulation of Costs in Tax Arbitration Proceedings and Table I attached thereto, in the amount of € 918.00, to be borne by the AT.

Lisbon, 16 December 2014.

The Arbitrator,

/Mariana Vargas/

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

The drafting of this decision is governed by the 1991 spelling agreement.

[1] Cf. CANOTILHO, J.J. Gomes and MOREIRA, Vital "Constitution of the Portuguese Republic Annotated," 3rd revised edition, Coimbra Editora, 1993, p. 332.

[2] SOUSA, Jorge Lopes de, "Code of Tax Procedure and Process, annotated and commented" – 5th Edition, Volume I, Lisbon, Áreas Editors, 2006, pp. 881 et seq.

[3] Cf. the Author and Work cited in the previous note, idem.

[4] In this sense, cf. MACHADO, J. Baptista, "Introduction to Law and Legitimating Discourse," Almedina, Coimbra, 1995, pp. 182 to 185.

[5] Cf. the cited Author, op. and loc. cit.