Summary
Full Decision
ARBITRAL DECISION
I – Report
A.A…, registered at the Commercial Registry Office under no. …/NIPC and B… with NIPC…, both with registered office at Street …, Block … …-… Lisbon, jointly and severally in accordance with what is provided for in article 72º of the CPPT and article 11º of the RJAT, filed on 3 October 2016 a request for the constitution of a single Arbitral Tribunal, invoking the provisions of paragraph a) of no. 1 of article 10º of Decree-Law no. 10/2011 of 20 January, in which they submit a request for an arbitral pronouncement for the annulment of the decision dismissing the administrative appeal filed in Case no. …2016…, on 28 June 2016, which concerned the request for annulment of the stamp tax assessments item 28.1, for the year 2014, and they also challenge the aforementioned stamp tax assessments of item 28.1 of the General Table annexed to the Stamp Tax Code, in the amount of € 50,215.00, with reference to the real properties identified in Doc. 2, which consists of copies of property records.
1. The request for the constitution of the Arbitral Tribunal was accepted and notified to the Tax Authority in accordance with the provisions of article 11º of Decree-Law no. 10/2011 of 20 January, as amended by article 228º of Law no. 66-B/2012 of 31 December, the Ethics Board designated the undersigned single arbitrator and the parties were notified of the designation. The arbitral tribunal was constituted on 10 January 2017.
2. Given that the claimants presented sufficient documents to support the assessment of the request, which were not challenged, the holding of the meeting provided for in article 18º of the RJAT was dispensed with by Order of 20 February 2017, as only matters of law were at issue, although the parties were notified that they could, if they wished, submit written arguments, which they did within the fixed period. The deadline of 31 May was also set for the issuance of the arbitral decision and for payment of the subsequent court fee.
3. The Arbitral Tribunal is properly constituted and is substantively competent to assess and decide the object of the proceedings. The proceedings are free of defects and no issues have been raised that prevent the assessment of the merits of the case, and all conditions are met for a final decision to be rendered. The parties have legal personality and capacity and have standing in accordance with the provisions of articles 4º and 10º, no. 2 of the RJAT and article 1º of Ordinance no. 112-A/2011 of 22/03.
4. The present action was brought in a timely manner given that notification of the administrative appeal occurred on 08/07/2016 and the action was brought on 03/10/2016, that is, within the 90 days established in paragraph a) of no. 1 of article 10º of the RJAT.
5. The object of the request for arbitral pronouncement consists in the declaration of illegality of the aforementioned decision dismissing the administrative appeal and of the stamp tax assessment on the real property duly identified in the case file, contained in item no. 28 of the general table of stamp tax (TGIS), as effected by the AT.
II – Matters of Fact
The following elements regarding the matters of fact are highlighted as relevant for the assessment of the issues raised by the Claimants:
a) The claimants are usufructuaries of an urban real property intended for social housing, recorded in the respective property registry of the parish of…, municipality of Lisbon, under article…;
b) This real property is constituted under a regime of full or vertical ownership;
c) The real property consists of 99 units or fractions capable of independent use, of which only one is intended for services, as appears from the respective property record which constitutes Doc. no. 2 attached to the initial petition, the remainder being intended for housing;
d) The taxable property value of each fraction appearing in the property record was determined separately, in accordance with article 7º, no. 2, paragraph b), of the Municipal Property Tax Code (CIMI), the total taxable property value being € 5,109,610.00, as results from the verification of the same property record.
e) However, the total taxable property value of the fractions or units intended for housing amounts to € 5,021,780.00.
f) Since fractions intended for housing were involved and because the total taxable property value exceeded one million euros, the Tax Authority assessed the stamp tax of item 28.1 of the General Table annexed to the Code, at the rate of 1 per cent, on that value of € 5,021,780.00.
g) From these stamp tax assessments relating to the year 2014 resulted a total amount assessed of € 50,215.00 in Stamp Tax, the first instalment of which as of the date of the initial petition was paid.
h) The Tax Authority did not take into account the legal nature of the claimants in the assessment.
i) The claimants filed an administrative appeal against the aforementioned stamp tax assessments, which was rejected.
No other facts with relevance to the arbitral decision were proven.
III – Matters of Law
In support of their request for annulment of the decision dismissing the administrative appeal and the stamp tax assessments made for each of the fractions intended for housing, the petitioners state briefly:
"The claimants are housing cooperatives, their genesis being the pursuit of collective public interest objectives; they are legal entities of public interest as they pursue the interest and objectives of public interest such as the fact of providing housing to the most disadvantaged";
That, in turn, the Cooperative Code contained in Law no. 85/98 of 16/12, provides, in accordance with its article 10º, that "Cooperatives are exempt from transfer tax on the acquisition of any rights over real properties intended for their registered office or for the exercise of the activities that constitute their corporate purpose. Cooperatives are likewise exempt from the payment of IMI [Municipal Property Tax] levied on the taxable property value of the aforementioned real properties" (nos. 1 and 2);
And that, in accordance with article 14º, no. 1, "notwithstanding the provisions of article 10º of this statute, real property or parts of urban real property intended for housing, owned by a housing and construction cooperative and leased by them to their members under a regime of collective ownership, in whatever modality, provided that it is intended for their own permanent housing, in the terms and conditions provided for in article 50, no. 2º of the EBF."
On the other hand, Decree-Law 460/77 of 7 November establishes in no. 1 of its article 1º that "legal entities of public interest are associations or foundations that pursue objectives of general interest or of the national community or of any region or district cooperating with the central administration or local administration, in such terms as to merit the declaration of 'public interest' from the latter."
"There has always been the legislative concern and respect for the Constitutional requirement to create a tax exemption regime granted to cooperatives, a regime that is, in its entirety, applicable to the claimants", which is enshrined in article 64º-A of the Tax Benefits Statute [EBF].
6. Being the claimants legal entities of public interest, they benefit from the exemptions that emerge from that Decree-Law, in particular from what is established in article 6º, paragraph c) of the Stamp Tax Code, that is, from the stamp tax exemption, which states: "are exempt from stamp tax, when this constitutes a burden – paragraph c) legal entities of administrative public interest or of mere public interest.
7. They likewise benefit from the more favorable provisions that emanate from the Tax Benefits Statute applicable to cooperatives, in particular from what is provided in article 66º-A of the EBF,
8. That is, the claimants are legal entities that benefit from a certain legal status that grants them exemption from stamp tax and that the same was not recognized nor taken into account by the Tax Authority when in its name it assessed the stamp tax now challenged.
9. Furthermore, the claimants contend that the assessment is vitiated by illegality due to misinterpretation of the norms, because, in the taxation provided for in item 28.1 of the General Table of Stamp Tax "what is relevant is the TBV [Taxable Property Value] of each unit, of each unit, such that the autonomous parts of urban real properties assume full autonomy, in terms of evaluation, registration in the matrix and tax assessment (as is evident), and which is clearly verified by each document attached, such that to none individually is assigned (for the reasons that become clear and evident by what is alleged given the nature of the claimants) a value equal to or greater than €1,000,000.00, quite the contrary".
10. What is relevant for this taxation, as inscribed in the Law, is not the "total taxable property value" but only the taxable property value of urban real properties with housing allocation, in this case the individually taxed units in terms of eligible TBV.
11. Therefore, "the Tax Authority, by summing the many TBVs in order to achieve together a calculation exceeding €1,000,000.00, violates the law in an unequivocal and gross manner."
12. On the other hand, the assessment should always be annulled because when the fractions of a real property constituted under a horizontal ownership regime are not taxed and the fractions with an independent character of a real property constituted under a vertical ownership regime are taxed, the principle of tax equality is violated.
13. From all the above, "we verify and conclude that the tax was illegally applied by the Tax Authority to the claimants, the assessment of the tax being vitiated by the defect of violation of law, and even though in a specific way it violates the essential content of rights enshrined constitutionally, wherefore it should be declared null."
Notified of the action, the Tax Authority responded alleging that the request for annulment of the challenged assessments has no merit because:
On 30 March 2016, through Law no. 7-A/2016, a no. 14 was added to article 66º-A of the EBF, the content of which is as follows: "14 - Housing and construction cooperatives are exempt from stamp tax provided for in item 28.1 of the General Table of Stamp Tax. (Added by Law no. 7-A/2016 of 30 March)"
This means that an exemption from item 28.1 was created with reference to cooperatives, which cooperatives housing and construction would benefit from, but this exemption introduced by the OE/2016 [State Budget 2016], only comes into force concomitantly with the entry into force of the entire legal instrument, therefore it only applies to assessments for the year 2016.
Based on stamp tax assessments for the year 2014, the Tax Authority considers that housing cooperatives do not enjoy exemption from item 28.1, because the tax-triggering event of item 28.1 of the TG annexed to the Stamp Tax Code is not covered by the exemption norm of no. 12 of article 66º-A, a conclusion that is now strengthened by the introduction of the new no. 14 cited above, which is dedicated exclusively to housing cooperatives and that item.
The exemption norm relating to cooperatives and with respect to stamp tax is therefore contained exclusively in no. 12 of article 66º-A of the EBF, with the following wording: cooperatives are exempt from stamp tax on acts, contracts, documents, titles and other facts, including gratuitous transfers of property, when this tax constitutes their burden.
It can be stated that this provision unfolds in two parts, that is, there is exemption from stamp tax for acts, contracts, documents, titles and other facts, but also, and there is also exemption from stamp tax relating to gratuitous transfers of property, when this tax constitutes the burden of cooperatives.
Now, stamp tax of item 28.1 falls under item 28, according to which the tax is levied on the ownership, usufruct or right of superficies of urban real properties whose taxable property value recorded in the matrix, in accordance with the Municipal Property Tax Code (CIMI), when the TBV used for IMI purposes is equal to or greater than (euro) 1,000,000.
We must therefore conclude that, as the stamp tax of this item is levied on ownership and other divisible figures of the right of property, it is not and is not a matter of stamp tax on gratuitous transfers, even though of real property.
Furthermore and finally, and no less importantly, article 7º of the Stamp Tax Code, on other exemptions, clearly states: "6 - The exemptions provided for in article 44º of the Tax Benefits Statute are also applicable to the situations provided for in item no. 28 of the General Table.
Therefore, item 28 has only foreseen the exemption of article 44º of the EBF, being valid for the interpretation of this exemption rule, what has already been stated, that is, there is no place for analogical interpretation.
In conclusion, without the exemption of no. 12 of article 66º-A of the EBF extending to this item the exemption it provides for cooperatives, or without the provision of no. 6 of article 7º of the Stamp Tax Code allowing item 28 to carry any exemption other than that of article 44º of the EBF, the now claimant is a taxpayer of the stamp tax of item 28.1 of the table annexed to the Stamp Tax Code, until 2015;
But the claimants further contend that they are legal entities of public interest, in accordance with Decree-Law no. 460/77 of 7 November, thus enjoying the exemption from stamp tax provided for in article 6º, paragraph c) of the Stamp Tax Code, for these legal entities.
For the claimants to be able to enjoy the aforementioned stamp tax exemption, they would have to be declared as a legal entity of public interest, in accordance with the cited law, that is, by the presidency of the Council of Ministers, provided they meet the requirements set out in the law.
Now the claimants do not provide this proof, certainly because they were not so declared.
Given that the real property of which they are usufructuaries is in a regime of full ownership, the claimants do not own 99 autonomous fractions to which tax law attributes the qualification of real property, but rather a single real property.
As is well known, horizontal ownership is a specific legal regime of property provided for in article 1414º and subsequent articles of the Civil Code, the mode of constitution of which is provided for therein, as well as the other rules on the rights and obligations of co-owners.
The claim that the tax interpreter and enforcer apply, by analogy, to the regime of full ownership the regime of horizontal ownership is abusive and illegal.
These two property regimes are regimes of civil law, which were imported into tax law, in particular in accordance with the terms referred to in article 2º of the CIMI.
We cannot, therefore, accept that it be considered, for the purposes of item 28.1 of the General Table annexed to the Stamp Tax Code, that the parts capable of independent use have the same tax regime as the autonomous fractions of the horizontal ownership regime.
Given that the real property is subject to the regime of full ownership, but being physically constituted by parts capable of independent use, tax law attributed relevance to this materiality, evaluating these parts individually, in accordance with article 12º and consequently, in accordance with article 12º, no. 3 of the CIMI, each storey or part of real property capable of independent use is considered separately in matricial registration, proceeding to the assessment of IMI taking into account the taxable property value of each part.
The storeys or independent divisions, evaluated in accordance with article 12º, no. 3 of the CIMI, are considered separately in matricial registration, which also discriminates the respective taxable property value upon which IMI is assessed.
Such legal provision is not unprecedented, having correspondence in the body of article 232º, rule 1st, of the Code of Real Estate Contribution and the Tax on Agricultural Industry (CCIAA), which provided that each dwelling or part of real property be automatically taken for the purposes of determining the taxable income upon which the assessment should be levied.
The unit of the urban real property in vertical ownership composed of several storeys or divisions is not, however, affected by the fact that all or some of those storeys or divisions are capable of independent economic use.
Such real property does not cease to be a single one, and its parts are not thus, without prejudice to the regime of co-ownership, when applicable, and their ownership cannot be attributed to more than one owner.
The fact that IMI was calculated on the basis of the taxable property value of each part of real property with independent economic use does not likewise affect the application of item 28º, no. 1, of the General Table.
Any other interpretation would violate, indeed, 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 103º, no. 2, of the Constitution of the Portuguese Republic (CRP).
The matricial registration of each part capable of independent use is not autonomous, per matrix, but is part of a description in the matrix of the real property in its entirety.
And this interpretation of the stamp tax incidence rule results from the conjunction of the other IMI incidence rule which is article 1º, according to which IMI is levied on the taxable property value of urban real properties, taking into account the notion of real property in article 2º and of urban real property contained in article 4º and also the types of urban real properties described in article 6º.
In this line, the claimants' request does not succeed that the horizontal ownership regime be applied, by analogy, to their real property, considering that each of the fractions capable of independent use constitutes a real property, because that would not be to interpret the norms of the CIMI, and consequently of the Stamp Tax Code, that would be to subvert the entire regime established therein, with violations of the principles referred to above.
It is thus unconstitutional, as offensive to the principle of tax legality, the interpretation of item 28.1 of the General Table, in the sense that the taxable property value on which its incidence depends be calculated globally and not storey by storey or division by division.
Nor can one envisage, on the other hand, how the taxation in question could have violated the principle of equality.
31. In truth, horizontal and vertical ownership are differentiated legal institutes, but the legislator may, however, subject to a distinct legal tax framework, and therefore discriminatory, real properties in horizontal and vertical ownership regimes, in particular, benefiting the juridically more evolved institute of horizontal ownership, without such discrimination having to be considered necessarily arbitrary.
This discrimination may also be imposed by the need to impose coherence to the tax system.
The fact that the now claimants legitimately disagree with this discrimination does not imply the violation of any constitutional principle.
Finally, it should be noted that the matricial registration of each part capable of independent use is not autonomous, per matrix, but is part of a description in the matrix of the real property in its entirety - see the property record of this real property which represents the document of the owner containing the matricial elements of the real property.
What is intended to be concluded is that these procedural rules of evaluation, matricial registration and assessment of the parts capable of independent use do not allow one to affirm that there exists an equation of the real property in the regime of full ownership to the regime of vertical ownership, because, and as has already been stated, these civil-legal regimes are different, and tax law respects them.
The tax-triggering event of stamp tax of item 28.1, as it is levied on the ownership of urban real properties whose taxable property value recorded in the matrix, in accordance with the CIMI, is equal to or greater than € 1,000,000.00, the taxable property value relevant for the purposes of the incidence of the tax is, thus, the total taxable property value of the urban real property and not the taxable property value of each of the parts that compose it, even when capable of independent use.
All things considered, we must necessarily conclude that the tax acts in question did not violate, thus, any legal or constitutional provision, and should, thus, be maintained, as well as the decision of the administrative appeal".
The parties submitted arguments in which they reiterated the arguments they had already developed in the initial petition and in the response, therefore there is nothing further to consider that derives from such procedural documents, either with respect to matters of fact or with respect to matters of law. Thus it is appropriate to decide.
The essential question is to know, with reference to real properties not constituted under a regime of horizontal ownership, comprised of various storeys and divisions with independent use, of which some have housing allocation, what is the relevant TBV. That is, to know whether the relevant TBV as a criterion for the incidence of the tax is that corresponding to the sum of the taxable property value attributed to the different parts or storeys (total TBV) or, rather, the TBV attributed to each of the housing parts or storeys, in both cases compared with the minimum limit of one million euros established in item 28 of the TGIS.
The answer to this question imposes the analysis of the legal norms of reference in order to determine which interpretation is most in accordance with the Law and the Constitution with particular care as it is a matter of assessing a tax incidence requirement protected by the principle of tax legality resulting from the provisions of article 103º, no. 2 of the CRP.
The Claimants challenged the decision of the administrative appeal and the legality of the stamp tax assessments first because, as they consider themselves legal entities of public interest, they understand that they benefit from the exemptions that emerge from the Cooperative Code, in particular from what is established in article 6º, paragraph c) of the Stamp Tax Code, and they also take advantage of the more favorable provisions that emanate from the Tax Benefits Statute applicable to cooperatives, in particular from what is provided in no. 12 of article 66º-A of the EBF,
In our opinion, in this matter we follow the theses of the Tax Authority, and therefore we understand that no objective exemption of a subjective nature exists that the claimants can benefit from with respect to the stamp tax of item 28 of the TGIS. The status of legal entity of public interest is not acquired automatically by the fact that legal entities develop activities with objectives of public interest in accordance with the Cooperative Code. The legal entity of public interest is a legal entity with a legal framework that is perfectly defined in law, in which the requirements and prerequisites are established so that interested parties can acquire this status, that is, there is a fundamental requirement of prior declaration by the entity legally competent to do so, the Government, as the Tax Authority rightly emphasizes in its Response. It is not proven that any declaration of public interest was issued by that legally competent entity with respect to the claimants. In this way, we cannot confuse objectives of public interest with the legal status of legal entity of public interest.
On the other hand, although the various exemptions established and which were previously listed in the Cooperative Code, but which are now condensed in article 66º-A of the Tax Benefits Statute, we do not find listed the exemption from stamp tax established in item 28.1. Therefore, we also agree with the Tax Authority that the stamp tax in question here does not fall within no. 12 of article 66º-A of the EBF. The letter of the law states that Cooperatives are exempt from "stamp tax on acts, contracts, documents, titles and other facts, including gratuitous transfers of property when this tax constitutes their burden". However, relying on a simple literal interpretation of the norms, we will necessarily conclude that the exemption concerns acts, contracts and other documents, and titles and other facts (related with those, we would say), or transfers. That is, comparing these elements of both types of legal incidence, it is found that the nature of the definition of no. 12 of the EBF is not compatible with the legal type of tax provided for in item 28 of the Table, since the latter contemplates the right of property, usufruct and the right of superficies, relating to urban real properties allocated to housing, when they have a TBV exceeding 1,000,000.00€.
Therefore, the conclusion that follows from the law goes in the direction of non-verification of any subjective exemption that cooperatives such as the claimants can benefit from, in relation to the stamp tax provided for in item 28 of the TGIS, and therefore the challenge fails in this respect.
The Claimants also allege the existence of a defect of violation of law, namely by the non-verification of the objective requirements of article 28.1 of the TGIS in the challenged assessments.
As was stated, the assessments contained in the copies contained in Doc. "Item 28 _ November 2015" attached to the case file, relate to the application of the rate of 1% on the TBV of each of the independent and autonomous units that constitute fractions of the urban real property identified above, and regarding which it is verifiable from the elements attached that in no case does the amount of the respective TBV reach 1,000,000€. On the other hand, of the 99 fractions only one is not intended for housing. However, the Tax Authority, given that the sum of the TBVs of the aforementioned fractions exceeds one million euros, assessed the stamp tax on the aforementioned total TBV taking into account that, in its understanding, it is a single real property for the purposes of stamp tax, since they are not autonomous fractions of a real property constituted under horizontal ownership.
It is the assessment of the legality of this assessment that is the thema decidendum.
Both the jurisprudence of the CAAD and of the Tax Courts and even of the STA [Supreme Tax Court] has been practically uniform in the sense that for real properties constituted under vertical ownership there is only incidence of stamp tax of item 28.1 in cases in which the TBV of each fraction is greater than 1,000,000€, that is, the relevant value is the value of each unit with independent economic use and not the value of the sum of all such units.
In truth, the most controversial issues related to the rules of incidence and with the possible unconstitutionalities that the Tax Authority has been invoking in the interpretation of the law have already been dissected by the analysis of the learned known decisions, and with which we agree in full with respect to the final decision.
Even so, let us see what the law says on this matter.
Real properties with housing allocation began to be taxed in stamp tax with the addition of item 28 of the TGIS, effected by article 4º of Law 55-A/2012 of 29/10, with effects from 30 October 2012 which subjected the taxation to:
"28 – Ownership, usufruct or right of superficies of urban real properties whose taxable property value recorded in the matrix, in accordance with the Municipal Property Tax Code (CIMI), is equal to or greater than € 1,000,000.00 – on the taxable property value for the purposes of IMI:
28-1 – For real property with housing allocation – 1%
28.2 – For real property, when the taxpayers that are not natural persons are residents in a country, territory or region subject to a clearly more favorable tax regime, contained in the list approved by ordinance of the Minister of Finance – 7.5%."
In turn, article 6º of the transitional provisions established that the taxable property value to be used in the assessment of the tax corresponds to what results from the rules of the Municipal Property Tax Code. The regime covered urban real properties with housing allocation, provided that equal to or greater than €1,000,000.00. In addition, it should be mentioned that no. 2 was also added to article 67º of the Stamp Tax Code by the same Law, which determined that, "to matters not regulated in this code relating to item 28 of the General Table, the CIMI applies subsidiarily." The incidence rule refers, therefore, to urban real properties, the concept of which is what results from the provisions of article 2º of the CIMI, with the determination of TBV following the terms of the provisions of article 38º and following of the same code.
From the reading of that provision, the essential elements for the existence of taxation can be enumerated: taxed in stamp tax are the ownership, usufruct or right of superficies of (i) urban real properties, (ii) with housing allocation, (iii) whose taxable property value recorded in the matrix is equal to or greater than 1,000,000.00€, (iv) to be calculated on the same taxable property value that is used for the purposes of IMI.
In the application of this regime various doubts arose regarding the inclusion or not in the incidence rule of real properties that are in vertical ownership, but that are composed of various independent fractions and of autonomous use, with allocation to housing, and in which the taxable property value, in the sum of the fractions, is equal to or greater than one million euros, but in which none of them, separately considered, for the purposes of IMI, has value equal to or greater than that amount. What needs to be determined is whether a fraction of autonomous and independent use belonging to a real property in a regime of full or vertical ownership can be considered real property for the purposes of stamp tax of item 28 of the TGIS, even though it is not included in the definition of real property of no. 4 of article 2º of the CIMI, because it is not integrated in real property constituted under horizontal ownership.
Resorting to the historical element to arrive at the concept of real property for those purposes, we observe that in accordance with Law Proposal no. 98/XX in the Assembly of the Republic, contained in the DAR, I Series, no. 9/XX/2, of 11 October 2012, with the legislative amendment it was intended the creation of "a rate in the context of Stamp Tax levied on urban real properties with housing allocation whose taxable property value is equal to or greater than one million euros". "These measures are fundamental to strengthen the principle of social equity in austerity, ensuring an effective sharing of the necessary sacrifices to meet the adjustment program. The Government is firmly committed to ensuring that the sharing of these sacrifices will be made by all and not just by those who live from the income of their work. In accordance with that objective, this statute broadens the taxation of income from capital and property, equitably covering a broad set of sectors of Portuguese society". We see that with such formulation, alongside the creation of another revenue-generating mechanism, the need to accommodate the principles of social equity and fiscal justice was invoked so that individuals in particular who are holders of homes of value equal to or greater than € 1,000,000.00 would contribute, but nothing was said about the understanding of real property. We have, therefore, that we must follow another path to define real property for the purposes of this stamp tax that results from the incidence rule itself.
Because we embrace the theses defended by jurisprudence both judicial and arbitral, we permit ourselves to follow Judgment no. 47/15, of 09/09/2015, of the STA, which in turn cites other Judgments already rendered in the context of the CAAD (Case no. 48/2013-T; Case no. 132/-T and 724/2014-T, we recommend consulting the others that can be found on the CAAD Jurisprudence website) which: "Next, it is necessary to gather the conclusions that allow, without margin for doubt, to decide on the theme in discussion (that is, whether, for the purposes of the application of item no. 28 of the TGIS, in cases in which a real property with various autonomous fractions, capable of independent use, is not constituted under horizontal ownership, the relevant TBV is determined by the sum of the individual TBVs, or, alternatively, is individually considered). In this sense, it should first be noted that the present theme is, from the outset by force of article 67º, no. 2 of the Stamp Tax Code, subject to the norms of the Municipal Property Tax Code, "to matters not regulated in this code relating to item 28 of the General Table, the CIMI applies subsidiarily". As such, and as has been mentioned so many times, in the understanding of the present tribunal, the mechanism for determining the relevant TBV for the purposes of the aforementioned item, is that which is established in the Municipal Property Tax Code. Now, article 12º, no. 3 of the Municipal Property Tax Code establishes that "each storey or part of real property capable of independent use is considered separately in matricial registration, which also discriminates the respective taxable property value". Disvaluing the legislator, in accordance with the terms previously mentioned, any prior constitution of horizontal or vertical ownership. Indeed, for the legislator, what matters is the material truth underlying its existence as an urban real property and its use. It should be noted that the Tax Authority itself seems to agree with the criterion exposed, which is why the assessments that it itself issues are very clear in their essential elements, from which results the value of incidence being the corresponding to the TBV of each of the storeys and the individualized assessments. Therefore, if the legal criterion requires the issuance of individualized assessments for the autonomous parts of real properties in vertical ownership, in the same manner as it establishes for real properties in horizontal ownership, it clearly established the criterion, which must be unique and unequivocal, for the definition of the incidence rule of the new tax. Thus, there would only be incidence of stamp tax (within the scope of item no. 28 of the TGIS) if any of the parts, storeys or divisions with independent use presented a TBV exceeding € 1,000,000.00. The Tax Authority cannot consider as the reference value for the incidence of the new tax the total value of the real property, when the legislator itself established a different rule with respect to IMI (and, as previously mentioned, this is the code applicable to matters not regulated with respect to item no. 28 of the TGIS). In conclusion, the current legal regime does not impose the obligation of constitution of horizontal ownership, and therefore the performance of the Tax Authority translates into arbitrary and illegal discrimination. Indeed, the Tax Authority cannot distinguish where the legislator itself understood not to do so, under pain of violating the coherence of the tax system, as well as the principle of tax legality provided for in article 103º of the Constitution of the Portuguese Republic, and still the principles of justice, equality and proportionality of taxation."
In the case in question, the real property in question was at the relevant date of the facts constituted under full ownership, but had 98 fractions with independent use, allocated to housing, as results from the documents attached to the case file. Given that none of those fractions has taxable property value equal to or greater than € 1,000,000.00, it is concluded that the legal requirement for incidence is not met.
All things considered, it appears to violate the aforementioned norms the conduct followed for the assessment of stamp tax with reference to the real property of the case file, that is, real properties, although not possessing the status of horizontal ownership, composed of parts or fractions of independent use, with housing allocation, are only subject to stamp tax of item 28 with respect to units in which the respective taxable property value is equal to or greater than one million euros.
All 98 fractions intended for housing, in which each of them constitutes a real property within the meaning of stamp tax, have a determined TBV in accordance with the rules of IMI of less than 1,000,000 euros as is proven by the copies of the assessments themselves and the copy of the property record, from which it is concluded that the legal requirement for incidence of stamp tax provided for in item 28 of the TGIS is not met.
In this way it will be illegal and unconstitutional to consider as the relevant value the one corresponding to the sum of the TBV attributed to each part or division, first and foremost, because this would be a clear violation of the principle of equality and proportionality in fiscal matters. On the other hand, the tax legislator cannot treat equal situations differently. If the real property were in a horizontal ownership regime with the same TBVs for each of its fractions, none of them would be taxed. What also follows from article 12º, no. 3 of the CIMI when it states that "each storey or part of real property capable of independent use is considered separately in matricial registration which also discriminates the respective taxable property value." Moreover, as, indeed, the Tax Authority itself states in its response, the constitution of horizontal ownership implies merely a legal alteration of the real property in which no new evaluation is even required. Thus, material truth is what must be imposed as the determining criterion of contributory capacity and not the mere legal and formal reality of the real property. As is stated in the judgment cited above, the Tax Authority cannot distinguish where the legislator itself understood not to do so, under pain of violating the coherence of the tax system, as well as the principle of tax legality provided for in article 103º, no. 2 of the CRP, and still the principles of justice, equality and proportionality of taxation. Said this, in our opinion, the conclusion is that this interpretation of the provisions in question does not violate any provision of the constitution as the Tax Authority contends, wherefore we dispense with analyzing the constitutionality response as to this matter.
IV. Decision
In these terms and with the reasoning set out above, this arbitral tribunal decides to find the request for arbitral pronouncement well-founded, determining the annulment of the challenged assessment act with the legal consequences.
The value of the case is fixed at € 50,215.00.
Costs: pursuant to the provisions of article 22º, no. 4 of the RJAT and in accordance with Table I annexed to the Regulation of Costs in Tax Arbitration Proceedings, the respective amount is fixed at € 2,142, to be borne by the respondent Tax Authority.
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Lisbon, 2017/05/26
The Single Arbitrator
José Ramos Alexandre
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