Summary
Full Decision
ARBITRAL DECISION
REPORT
A - General
A…– INVESTMENT FUND MANAGEMENT COMPANY, S.A., with registered office at …, n.º…–…, … – … Lisbon, with share capital of €1,550,000.00, registered with the Commercial Registry Office of Lisbon under single registration and tax identification number … in the capacity of management company of the investment fund "B… – CLOSED REAL ESTATE INVESTMENT FUND FOR RESIDENTIAL RENTAL" registered with the Securities Market Commission, with tax identification number … (hereinafter referred to as "Claimant"), filed, on 03.10.2016, a request for constitution of a singular arbitral tribunal in tax matters, which was accepted, aiming at: (i) the declaration of nullity of the assessment acts of Municipal Property Transfer Tax ("IMT") and Stamp Duty ("IS") that were notified to it by documents n.º … and n.º …, respectively, both of 22.07.2016, (doc. n.º 1 attached to the proceedings with the request for arbitral pronouncement) and (ii) the condemnation of the Tax and Customs Administration to payment of compensatory interest for improper payment of tax obligations.
1.1. In accordance with the provisions of subparagraph a) of section 2 of article 6 and subparagraph b) of section 1 of article 11 of Decree-Law n.º 10/2011, of 20 January, in the wording given to it by article 228 of Law n.º 66-B/2012, of 31 December, the Deontological Council of the Administrative Arbitration Center (CAAD) appointed as arbitrator Nuno Pombo, and the parties, after being duly notified, did not express opposition to this appointment.
1.2. By order of 21.10.2016, the Tax and Customs Administration (hereinafter referred to as "Respondent") proceeded to appoint Ms. Dr. C… and Dr. D… to intervene in the present arbitral proceedings, in the name and representation of the Respondent.
1.3. In accordance with the provision of subparagraph c) of section 1 of article 11 of Decree-Law n.º 10/2011, of 20 January, in the wording given to it by article 228 of Law n.º 66-B/2012, of 31 December, the arbitral tribunal was constituted on 20.12.2016.
1.4. On 04.01.2017, the highest official of the Respondent's service was notified to, if desired, within a period of 30 days, submit a response and request additional evidence.
1.5. On 08.02.2017, the Respondent filed its response.
B – Position of the Claimant
1.6. The Claimant is the management company responsible for the management of the investment fund "B…– CLOSED REAL ESTATE INVESTMENT FUND FOR RESIDENTIAL RENTAL", which is a closed real estate investment fund for residential rental (hereinafter referred to as "FUND B…").
1.7. On the date of entry into force of Law n.º 83-C/2013, of 31 December (Budget Law for 2014), the FUND B… included the property registered in the urban real property matrix of the Parish of …–…, municipality of Sintra, under article…, fraction….
1.8. Based on the provisions added to article 8 (Tax Regime) of the legal regime applicable to Real Estate Investment Funds for Residential Rental (hereinafter "REIFHR"), and the transitional norm contained in article 236 of Law n.º 83-C/2013, of 31 December, the now Claimant requested from the Tax and Customs Authority the assessments of IMT and IS (hereinafter "Assessments"), which were paid by the Claimant on 25.07.2016.
1.9. The Claimant contends that the Assessments are affected by illegality due to violation of the provisions of section 3 of article 103 of the Constitution of the Portuguese Republic (hereinafter "CPR").
1.10. The IMT and IS, with respect to the factual circumstances of the proceedings, are taxes of single obligation, which means that at the moment when the property on which the Assessments were levied entered the patrimony of FUND B…, the exemptions provided for at that date were definitively crystallized in the legal-tax order of the REIFHR tax regime, given that they were not conditioned to the subsequent verification of any facts or circumstances nor subject to any regime of expiration.
1.11. Article 236 of Law n.º 83-C/2013, of 31 December, in extending the application of the current REIFHR tax regime "to properties that were acquired by REIFHRs before 1 January 2014, counting, in those cases, the period of three years provided for in section 14 as from 1 January 2014" – is directly and unequivocally violating the constitutionally enshrined principle of non-retroactivity of tax law.
1.12. Since the principle of non-retroactivity of tax law is of a fundamental right nature, the violation of that right effected by the Assessments entails its respective nullity, if not even its non-existence.
C – Position of the Respondent
1.13. The Respondent, in its response, defends itself, by way of exception, alleging the material incompetence of the arbitral tribunal to assess the abstract illegality of the Assessments, by alleged unconstitutionality of the legal norm that authorizes them and, consequently, the passive illegitimacy of the Respondent, arguing that it is impossible to set aside a legal norm on the grounds of its unconstitutionality, since the organs of public administration, unlike what occurs with courts, are not entrusted with the task of conducting concrete review of the constitutionality of laws, which results in the passive illegitimacy of the Respondent.
1.14. The Respondent does not accept the suggestion that the Assessments are based on legally unconstitutional norms.
1.15. The special regime applicable to REIFHRs, approved by articles 102 to 104 of Law n.º 64-A/2008, of 31 December (Budget Law for 2009), applied to funds established during the five years following entry into force of the said law and to properties acquired by them in the same period.
1.16. The tax regime then in force provided for exemption from IMT for "the acquisitions of urban properties or autonomous fractions of urban properties intended exclusively for rental as permanent housing, by the investment funds referred to in section 1", also providing for IS exemption with respect to "all acts performed, provided they are connected with the transmission of urban properties intended for permanent housing that occurs due to the conversion of the right of ownership of these properties into a rental right over them".
1.17. Now, it was required, as can be seen, that the acquisition of properties be intended exclusively for "rental as permanent housing", so that the assertion of the Claimant that the exemptions in question were not conditioned to the subsequent verification of any facts or circumstances is not accurate.
1.18. Section 14 of article 8 of the REIFHR tax regime came to clarify the meaning of the expression "urban properties intended exclusively for rental as permanent housing", considering that "urban properties are intended for rental as permanent housing whenever they are the subject of a rental contract for permanent housing within a period of three years counted from the moment when they became part of the fund's patrimony", a regime for cessation of the benefit now being provided for in the event that the legal requirement contained in section 14 is not observed.
1.19. The aforementioned section 14 of article 8 of the REIFHR tax regime did not alter the rationale of the exemptions enshrined. It merely served to clarify the concept, in non-innovative terms and establishing an adequately broad period so that the principles of legal certainty and protection of legitimate expectations were not violated.
1.20. In truth, the exemptions in question simply did not cease to apply: what happened was that criteria were established to implement a legal requirement provided for in indeterminate terms. Furthermore, in the concrete case, the cessation of the benefit could always occur if, following a tax inspection action, it was found that the prerequisites on which the law makes its granting dependent were not met.
1.21. It does not make sense, therefore, to speak of authentic or proper retroactivity, since the new law did not come to simply determine, without more, that previously acquired properties would be subject to taxation under IMT and IS.
1.22. For all the foregoing, nor should the Respondent be condemned to pay compensatory interest to the Claimant, since an error cannot be attributed to the Tax Authority's services that, in itself, determined the payment of a tax debt in an amount higher than legally due.
D – Conclusion of the Report and Sanation
1.23. By order of 03.05.2017, the arbitral tribunal dispensed with the meeting provided for in article 18 of the Legal Regime of Tax Arbitration (LRTA), since it was its understanding that the parties had introduced into the proceedings all the elements of fact necessary and sufficient for the pronouncement of the decision, and the parties were invited to submit their written arguments, which both did.
1.24. The parties enjoy legal personality and capacity and have legitimacy in accordance with article 4 and section 2 of article 10 of the LRTA, and article 1 of Ordinance n.º 112-A/2011, of 22 March.
1.25. The cumulation of claims made in the present request for arbitral pronouncement, in homage to the principle of procedural economy, is justified in that article 3 of the LRTA, in expressly admitting the possibility of "cumulation of claims even if relating to different acts", when the merit of the claims depends essentially on the assessment of the same circumstances of fact and on the interpretation and application of the same principles or rules of law, also accommodates, without hermeneutical abuse, the assessment of a claim that flows, in necessary terms, from the judgment that the arbitral tribunal holds regarding the validity of the assessments put in question.
1.26. The proceedings do not suffer from any nullity. However, the Respondent raised exceptions of material incompetence of the arbitral tribunal to assess the abstract illegality of the Assessments, by alleged unconstitutionality of the legal norm that authorizes them and, consequently, the passive illegitimacy of the Respondent, so it is necessary, from now on, to assess them.
Exceptions of Material Incompetence of the Arbitral Tribunal and Passive Illegitimacy of the Respondent
As stated, the Respondent expresses the understanding that the Claimant petitions for the assessment of the abstract illegality of the Assessments, by alleged unconstitutionality of the legal norm that authorizes them, arguing that the Constitutional Court is the competent forum to know both the illegality and the unconstitutionality of legal norms [arts. 280, section 2, subparagraphs a) and d) and 281, section 1, subparagraphs a) and b) and section 3 of the Constitution of the Portuguese Republic and arts. 6 and 66 of the Law of the Constitutional Court].
Unless better understood, the Respondent is not correct. What is requested of this arbitral tribunal is not that it declare the unconstitutionality of the norms that authorize the impugned assessment acts. What is at issue is whether the Assessments are, or are not, valid, that judgment depending on another that ascertains, in concreto, the harmony of those assessments with the legal order, taken as a whole. The reading that the Respondent makes of the claim is so reductive that it would seem to be impossible for any organ of a jurisdictional nature, as this arbitral tribunal is, to judge a legal norm as unconstitutional outside the process of abstract review of unconstitutionality. As is clear to see, that reading cannot prevail.
Thus, this arbitral tribunal considers itself materially competent to assess the claim, the question of the passive illegitimacy of the Respondent consequently not arising, since it is not materially within the scope of abstract review of unconstitutionality.
Factual Matters
3.1. Established Facts
The following facts are considered established:
3.1.1. On the date of entry into force of Law n.º 83-C/2013, of 31 December (Budget Law for 2014), the FUND B… included the property registered in the urban real property matrix of the Parish of …–…, municipality of Sintra, under article…, fraction… (the "Property"), which was subsequently alienated (consensus of the Parties).
3.1.2. The acquisition of the Property benefited from exemption from IMT and IS under subparagraph a) of section 7 and section 8 of article 8 (tax regime) of the legal regime of REIFHRs, respectively – (consensus of the Parties).
3.1.3. The Claimant requested from the Respondent the assessment of IMT and IS, which were notified to it by documents n.º…, in the amount of €569.07, and n.º and n.º…, in the amount of €455.26, respectively, both of 22.07.2016 (doc. n.º 1, attached with the request for arbitral pronouncement).
3.1.4. The Claimant proceeded to full payment of both assessments of IMT and IS better identified in 3.1.3 on 25.07.2016 (doc. n.º 2, attached with the request for arbitral pronouncement).
3.2. Unproven Facts
It was not proven that between the acquisition of the Property by the Claimant until its alienation it was the subject of any rental contract for permanent housing.
Matters of Law
4.1. Questions to be Decided
From what has been stated above, it follows that the questions to be assessed are, in essence:
a) Whether the acquisition of the Property, which occurred before 01.01.2014, can be taxed due to the fact that the Property was sold before the period of three years counted from 01.01.2014 had elapsed, without it ever having been the subject of a rental contract for permanent housing;
b) To clarify whether, in the event that the claim for declaration of illegality and consequent annulment of the Assessments is upheld, the Claimant, within the scope of the present arbitral proceedings, may obtain the condemnation of the Respondent to payment of compensatory interest.
4.2. The Applicable Law
Included in chapter X, dedicated to tax benefits, Law n.º 64-A/2008, of 31 December, by its articles 102 to 104, approved the special regime applicable to REIFHRs. Article 8 of that special regime established its respective tax regime, with section 7 and section 8 of that provision being dedicated to IMT and IS, respectively:
7 - The following are exempt from IMT:
a) The acquisitions of urban properties or autonomous fractions of urban properties intended exclusively for rental as permanent housing, by the investment funds referred to in section 1;
b) The acquisitions of urban properties or autonomous fractions of urban properties intended for permanent own housing, as a result of the exercise of the purchase option referred to in section 3 of article 5 by tenants of properties that form part of the patrimony of the investment funds referred to in section 1.
8 - The following are exempt from stamp duty all acts performed, provided they are connected with the transmission of urban properties intended for permanent housing that occurs due to the conversion of the right of ownership of these properties into a rental right over them, as well as with the exercise of the purchase option provided for in section 3 of article 5.
Article 235 of Law n.º 83-C/2013, of 31 December added to the REIFHR tax regime (article 8) sections 14 to 16:
14 - For the purposes of the provisions of sections 6 to 8, it is considered that urban properties are intended for rental as permanent housing whenever they are the subject of a rental contract for permanent housing within a period of three years counted from the moment when they became part of the fund's patrimony, and the taxpayer must communicate and provide proof to the Tax Authority of the respective effective rental, within 30 days following the end of the said period.
15 - When properties have not been the subject of a rental contract within the three-year period provided for in the previous number, the exemptions provided for in sections 6 to 8 cease to have effect, and in that case the taxpayer must request from the Tax Authority, within 30 days following the end of the said period, the assessment of the respective tax.
16 - If the properties are alienated, with the exception of cases provided for in article 5, or if the REIFHR is subject to liquidation, before the period provided for in section 14 has elapsed, the taxpayer must equally request from the Tax Authority, prior to the alienation of the property or the liquidation of the REIFHR, the assessment of the tax due in accordance with the previous number.
In turn, article 236 of Law n.º 83-C/2013, of 31 December established the following transitional regime within the scope of the special regime applicable to REIFHRs:
1 - The provisions of sections 14 to 16 of article 8 of the special regime applicable to REIFHRs and SIIFHRs, approved by articles 102 to 104 of Law n.º 64-A/2008, of 31 December, apply to properties that were acquired by REIFHRs as from 1 January 2014.
2 - Notwithstanding what is provided for in the previous number, the provisions of sections 14 to 16 of article 8 of the special regime applicable to REIFHRs and SIIFHRs, approved by articles 102 to 104 of Law n.º 64-A/2008, of 31 December, also apply to properties that were acquired by REIFHRs before 1 January 2014, counting, in those cases, the period of three years provided for in section 14 as from 1 January 2014.
4.3. The Exemptions from IMT and IS Provided for in Law n.º 64-A/2008, of 31 December
The Budget Law for 2009 enshrined a special regime applicable to REIFHRs. This legislative initiative was confessedly aimed at dynamizing the rental market for housing, requiring that at least 75% of the fund's assets consist of properties situated in Portugal and intended for rental as permanent housing, favoring these collective investment vehicles with the tax benefits contained in article 8 of their respective legal regime, those referring to IMT and IS being contained in sections 7 and 8 of that article.
It should be stressed that the special regime for REIFHRs and the tax benefits at its disposal assume the nature or vocation of true instruments of economic policy, placed at the service of a clear purpose: the promotion of the rental market for permanent housing. It is in light of this objective that the tax regime of REIFHRs must be read and understood.
Section 7 of the tax regime of REIFHRs establishes that acquisitions of urban properties or autonomous fractions of urban properties intended exclusively for rental as permanent housing are exempt from IMT.
It is stated in the Opinion attached to the proceedings with the Claimant's arguments (the "Opinion") that "nothing was provided regarding the need to maintain properties in the patrimony of REIFHRs for a certain period, or regarding the need to effectively conclude a rental contract also within a certain period"[1].
If we read that normative provision properly, we must conclude that IMT exemption did not depend solely on the identity of the acquirer of the properties in question. The law does not merely exempt (nor did it exempt at the time) the mere acquisition of properties by REIFHRs. It granted that exemption to REIFHRs, yes, but only insofar as the acquisition concerned urban properties or autonomous fractions of urban properties "intended exclusively for rental as permanent housing".
Now, as the distinguished authors of the Opinion rightly point out, the scope of the law is not (is not today as it was not then) the promotion of real estate speculation. However, it was also not, as can be read in it, the protection of the rental funds[2], pardon the apparent paradox. The law intended, rather, to stimulate the very rental market. This objective was pursued through various initiatives, including the establishment of a special regime, and an advantageous one, dedicated to REIFHRs, it being, however, premature to conclude that the legislator intended, without more, to support the said REIFHRs. To say what has just been said does not intend to signify more than this: it is reductive, and to that extent inaccurate, to claim that the exemption referred to in section 7 of article 8 (tax regime) of the special regime applicable to REIFHRs is satisfied with two prerequisites, namely, that of the identity of the acquirer and that of its declaration when acquiring the property that it is intended for rental as permanent housing.
The destination, indeed exclusive, to be given to properties acquired by REIFHRs should not be, by our reading of the norms, purely intentional or volitional. It is not enough that the REIFHR, when acquiring a property, to benefit from the exemption from IMT and IS, declares that it intends to give the said property the destination of rental as permanent housing. For that benefit to fulfill its purpose, for the tax expenditure associated with it to be economically and socially justified, that destination must be effective.
The postulate that has just been expressed has, however, a less comprehensive, less striking scope than it may at first suggest. For, in truth, the effectiveness of a given destination of a property can only be undermined, prejudiced, by the verification, also effective, of the attribution to that concrete property of a different destination.
4.4. The Applicability to the Concrete Case of the Changes to the Exemptions from IMT and IS Introduced by Law n.º 83-C/2013, of 31 December
The Budget Law for 2014 modified the tax regime of REIFHRs, adding, for what concerns us here, sections 14 to 16 to article 8.
Section 14 came to clarify what should be understood as a property intended for rental as permanent housing, imposing a period of three years, counted from the moment when the property becomes part of the REIFHR's patrimony, for that property to be the subject of a rental contract for permanent housing, under pain of the exemptions granted at the moment of its acquisition ceasing to have effect.
The new section 16, in turn, establishes the same sanction (the exemptions granted at the moment of acquisition ceasing to have effect) if the property in question is alienated[3] (except in the case of alienation to the former owner and tenant, in the exercise of purchase option) within the period of three years counted from the moment when it became part of the REIFHR's patrimony.
These rules do not suggest special precautions if applied to acquisitions of properties made by REIFHRs after their entry into force. The problem exists, however, when one seeks to apply them, as in the case before us, to situations in which the acquisition of the property took place before the effectiveness of these provisions.
Now, as seen, section 2 of article 236 of Law n.º 83-C/2013, of 31 December orders these rules to be applied "to properties that were acquired by REIFHRs before 1 January 2014, counting, in those cases, the period of three years provided for in section 14 as from 1 January 2014".
The question is, therefore, whether the assessment acts now impugned are valid, carried out by the Respondent in light of what is established, without hesitation, by the said transitional regime.
This exercise cannot be carried out outside the concrete assessment of the factual situation, which is this: FUND B… acquired the Property in December 2013, having benefited from the respective exemptions from IMT and IS, since the Claimant declared that the acquired property, the Property, was intended for rental as permanent housing. It happens that in 2016 FUND B… alienated the Property, and the Respondent considered, in accordance with the norms just visited, that the said exemptions ceased to have effect, and therefore proceeded, on the basis of an oral request by the Claimant, to the assessment of IMT and IS, that is, the Assessments.
It is true that, in the previous regime, applicable at the date of acquisition of the Property, nothing was expressly stated about the need to maintain properties in the patrimony of REIFHRs for a certain period. However, it also seems evident to us that the destination to be given to acquired properties was a requirement and that that destination cannot be merely "psychological" or intentional.
As we have seen, it is the law that expressly requires, and in exclusive terms, a certain destination to be given to properties acquired with the tax benefits that have been occupying us. The wording of the norm that enshrines IMT and IS exemptions would have been different if its attribution had remained in the exclusive dependence on the identity of the respective acquirer: being a REIFHR. The acquisition of properties by a REIFHR is a necessary condition, but cannot be viewed, in light of the norms in force in 2013, as a sufficient condition[4].
However, it must be recognized that it would not be reasonable to immediately impose the need to effectively allocate immovable property to rental as permanent housing. At first, at the moment of acquisition, what will matter is the intention declared by the acquirer that is a REIFHR. Upon acquisition, the REIFHR will have to manifest the intention to allocate the acquired property to this mode of rental, it being presumed that the acquirer cannot, without loss of benefits[5], allocate to properties acquired with these exemptions a destination different from that which it declared.
Let us agree that giving a destination other than rental as permanent housing to immovable property with IMT and IS exemptions cannot be understood as synonymous with the allocation to those properties of an effective rental as permanent housing. That is to say that the period elapsing between the acquisition by a REIFHR of a property for rental as permanent housing and the effective conclusion of a rental contract for permanent housing that has it as its subject, regardless of the duration of that period, is a time span that does not authorize the conclusion that the property in question has been given a destination other than rental as permanent housing. In truth, having a property on the rental market, available to be rented, is still a manifestation of that declared destination. It suffices, in our view, for that property to be susceptible to being the subject of a rental contract in which the REIFHR appears as lessor for the requirement of the destination to be given to the asset that, recall, was acquired with the tax benefits noted.
As we have already had the opportunity to say, the rules in force in 2013, the year in which the Property was acquired by FUND B… with the exemption from IMT and IS, did not establish, in temporally rigid terms, the need to effectively conclude a rental contract for permanent housing. However, in our view, the benefit of IMT and IS exemption – within the framework of the economic policy of which it is an instrument – is based on the need to give it that effective destination (regardless of knowing – that is another question – the period available to the REIFHR to give it that effective destination).
Now, the property is not given the effective destination of rental as permanent housing when the owner allocates it to a different purpose – for example, commercial rental – or when it ceases to be able to give it the desired destination of residential rental (because it alienates the asset, for example).
We do not believe that the problem can be analyzed from the perspective of risk, in terms of being able to sustain that the provided exemptions did not intend to place on REIFHRs the risk of not being able to rent the properties, or not being able to alienate them. It happens that REIFHRs, as collective investment organisms, are true economic agents and must weigh the risks arising from their own activity, which includes the duty to weigh the consequences of the non-allocation of a given asset to a certain destination.
It is stated in the Opinion that "the destination is compatible, particularly in periods of crisis in the rental market, with difficulties and delays in carrying out the rental", a statement that does not deserve dispute. What will not, however, enjoy unanimity is the conclusion that those difficulties and delays do not constitute an integral part of the risks associated with this specific economic activity. If the law enshrined incentives for the acquisition of properties with the objective that they be destined for rental as permanent housing, it is incumbent on the acquirer of those properties and beneficiary of those incentives to manage the risks of its business, which must include the consideration of the possibility that those properties will not arouse in the market the interest that the owner of them, the REIFHR, foresaw[6].
4.5. Conclusion
It seems to this arbitral tribunal that the need for a REIFHR to allocate to rental as permanent housing the property acquired with the benefit of IMT and IS exemption is not an innovation of the Budget Law for 2014, but is already a requirement of the previous normative, applicable in 2013.
It should be noted that, in the case sub judice, the contested assessments of IMT and IS are not based on the circumstance that the property acquired with tax benefits by FUND B…, the Property, remained in the fund's patrimony for a period equal to or exceeding 3 years, without it having been given the necessary allocation of rental as permanent housing. In the case in question, the Property was alienated without it having been allocated to permanent residential rental. Therefore, in the case before us, the problem is not connected with the period.
In conclusion, it does not appear that there is truly a question of retroactivity of law at issue, since the solution that the case calls for, in our view, is the same, applying the new law or making use of the old law, since neither one nor the other dispense that the acquisition of urban properties or autonomous fractions of urban properties by REIFHRs be effectively intended, and in exclusive terms, for rental as permanent housing.
Decision
On the grounds set forth above, the arbitral tribunal decides to maintain in the legal order the assessment acts of IMT and IS which are the subject of the claim filed by the Claimant, judging it wholly without merit.
Value of the Proceedings
In accordance with the provisions of section 2 of article 306 of the Code of Civil Procedure, subparagraph a) of section 1 of article 97-A of the Tax Procedure and Process Code and also section 2 of article 3 of the Regulations of Costs in Tax Arbitration Proceedings, the value of the proceedings is set at €1,024.33 (one thousand twenty-four euros and thirty-three cents).
Costs
For the purposes of the provisions of section 2 of article 12 and section 4 of article 22 of the LRTA and section 4 of article 4 of the Regulations of Costs in Tax Arbitration Proceedings, the amount of costs is set at €306.00 (three hundred six euros), in accordance with Table I annexed to the said Regulations, to be borne entirely by the Claimant.
Lisbon, 12 May 2017
The Arbitrator
(Nuno Pombo)
Text prepared by computer, in accordance with section 5 of article 131 of the Code of Civil Procedure, applicable by remission of subparagraph e) of section 1 of Decree-Law n.º 10/2011, of 20 January and with the spelling prior to the said Orthographic Agreement of 1990.
[1] Page 16 of the Opinion.
[2] Page 22 of the Opinion.
[3] Or in the case of the fund being liquidated within the same period.
[4] The Statute of Tax Benefits, in the wording of article 7 at the date of the facts, established subjection to inspection of all persons, singular or collective, of public or private law, to whom tax benefits were granted, automatic or dependent on recognition, for control of the verification of the prerequisites of the respective tax benefits. For its part, article 9 of the same instrument provided (as it also does today) that the holders of the right to tax benefits are obliged to declare, within 30 days, the cessation of the situation of fact or law on which the benefit was based.
[5] Attention is drawn to section 3 of article 14 of the Statute of Tax Benefits, which, under the heading "Extinction of tax benefits", provides: "When the tax benefit concerns the acquisition of assets intended for the direct realization of the purposes of the acquirers, it ceases to have effect if those assets are alienated or given another purpose without authorization of the Minister of Finance, without prejudice to other sanctions or different regimes established by law".
[6] Indeed, the aforementioned interest should not be limited to the properties objectively considered, to their physical characteristics, since the reaction of the market will not be indifferent to the conditions under which the owner of them proposes to rent them.
Frequently Asked Questions
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