Stamp Tax on Construction Land Under Verba 28.1 TGIS: CAAD Arbitration on Housing Classification

ARBITRAL DECISION

The arbitrator, Dr. Henrique Nogueira Nunes, designated by the Ethics Council of the Center for Administrative Arbitration ("CAAD") to form the Arbitral Tribunal, constituted on 30 November 2015, decides as follows:

1. REPORT

1.1

A..., LDA, with tax identification number ..., hereinafter referred to as the "Claimant", requested the constitution of the Arbitral Tribunal pursuant to Articles 2, No. 1, paragraph a) and 10 of Decree-Law No. 10/2011 of 20 January (hereinafter "RJAT").

1.2

The request for arbitral decision concerns the declaration of illegality of stamp tax assessment acts, better identified under the collection documents issued with numbers 2014..., in the amount of €7,774.82, 2014..., in the amount of €7,774.81, and 2014..., in the amount of €7,774.81, made pursuant to item 28.1 of the TGIS, relating to the year 2013. Additionally, the Claimant petitions for reimbursement of the allegedly wrongfully paid tax and payment of compensatory interest.

1.3

To substantiate its request, the Claimant alleges, in summary, the following defects:

(i) Stamp tax applies only to "ownership, usufruct or right of surface of urban real properties whose taxable property value recorded in the cadastre, pursuant to the Code of Municipal Property Tax (CIMI), is equal to or exceeding €1,000,000 on the taxable property value used for IMI purposes: per property with residential use".

(ii) It states that, as evidenced in the urban property certificate relating to the land described in the case file, this is a "parcel of land for construction" and not a property with residential use as dictated by law.

(iii) It refers that the stamp tax assessment in question can only be due to an error by the Tax Authority, being afflicted with illegality as it is not even admissible under the law.

(iv) It further states that the verification of the requirements upon which the exigibility of the tax in question depends was not proven in the case file, and therefore no tax event was constituted, making the payment of the required tax illegal and non-exigible.

(v) It concludes that the assessment act in question is thus null and void, as the amount demanded has no legal or factual foundation, and the quantification of the tax event in question raises well-founded doubts, whereby the stamp tax assessment act should be annulled.

(vi) It argues for reimbursement of the tax paid and that the right to compensatory interest be recognized.

1.4

The Tax and Customs Authority, hereinafter referred to as the "Respondent" or "TA", responded to the effect that the concept of real properties with "residential use", as worded at the date of the tax events, for the purposes of item 28 of the TGIS, encompasses lands for construction, as urban properties allocated to residential purposes, for which a license or authorization has been granted, prior notification admitted, or favorable prior information issued for a subdivision or construction operation, concluding for the maintenance of the assessment acts.

1.5

The Tribunal, pursuant to the Respondent's petition, decided to dispense with the holding of the first meeting of the Arbitral Tribunal, in accordance with Article 18 of the RJAT, which met with no opposition from either party. No exceptions or preliminary issues were identified, the presentation of arguments was waived, and a deadline for issuance of the arbitral decision was set until 15 February 2016.

1.6

The Tribunal was regularly constituted and is competent ratione materiae, in accordance with Article 2 of the RJAT.

The parties have legal personality and capacity, demonstrate themselves to be legitimate, and are regularly represented (cf. Articles 4 and 10, No. 2 of the RJAT and Article 1 of Order No. 112-A/2011 of 22 March).

No procedural defects were identified.

2. ISSUE FOR DECISION

The issue to be decided in this case is (strictly) a legal one: whether a parcel of land for construction may be qualified as a "property with residential use" and, if so, whether it falls within the scope of item 28.1 of the TGIS, added by Article 4 of Law No. 55-A/2012 of 29 October.

3. FACTUAL MATTERS

With relevance for the examination and decision on the merits, the following facts are established as proven:

A) The Claimant is the owner of a parcel of land for construction, registered in the urban property cadastre under article..., of the municipality and parish of ... (see Urban Property Certificate submitted by the Claimant as Document No. 1 attached with the request for arbitral decision).

B) The Claimant was notified of the stamp tax assessments No. 2014..., relating to the first installment, in the amount of €7,774.82 (seven thousand seven hundred and seventy-four euros and eighty-two cents), No. 2014..., relating to the 2nd installment, in the amount of €7,774.81 (seven thousand seven hundred and seventy-four euros and eighty-one cents), and No. 2014..., relating to the 3rd installment, in the amount of €7,774.81 (seven thousand seven hundred and seventy-four euros and eighty-one cents), all relating to the year 2013, totaling €23,324.44 (twenty-three thousand three hundred and twenty-four euros and forty-four cents) - (cf. Document No. 2 attached with the request for arbitral decision).

C) The Claimant proceeded to make payment of the aforementioned amounts, pursuant to the stamp tax assessments identified in the case file and described in the preceding point (cf. Document No. 3 attached with the request for arbitral decision).

D) The Claimant filed, on 30 April 2014, with the Loures Tax Office ..., an administrative review petition seeking the annulment of the stamp tax assessments now at issue (cf. Document No. 4 attached with the request for arbitral decision).

E) On 18 June 2015, the Claimant was notified, by official communication sent by the Loures Tax Office - ..., of the decision to dismiss the administrative review petition filed, which proceeded under number ...2014... (cf. Document No. 7 attached with the request for arbitral decision).

F) The identified urban real property, classified as land for construction, had no building or construction erected on its soil at the date of the facts (2013), and its respective taxable property value at the date of the facts exceeded €1,000,000.00, specifically amounting to:

– cf. the corresponding assessment acts attached to the request for arbitral decision and urban property certificate, respectively, Document No. 2 and Document No. 1).

G) The Tax and Customs Authority, considering the Taxable Property Value attributed to the land for construction aforementioned, understood that the objective requirements for the assessment of Stamp Tax were met, resulting from the amendment to the TGIS of item No. 28 provided for in Law No. 55-A/2012 of 29 October.

H) On 15 September 2015, the Claimant filed a request for constitution of the Arbitral Tribunal with the CAAD – cf. electronic submission in the CAAD system.

4. UNPROVEN FACTS

There are no facts with relevance for the decision on the merits that have not been established as proven.

5. REASONING ON THE FACTUAL MATTERS

As to the essential facts, the matter agreed upon is identically conformed by both parties, and the Tribunal's conviction was formed based on the documentary (official) evidence attached to the case and discriminated above, whose authenticity and veracity were not questioned by either party.

6. ON THE LAW

6.1 On the error in the factual and legal presuppositions: material scope of item 28.1 of the TGIS

The assessments constituting the immediate subject matter of this arbitral action originate from item 28.1 of the TGIS, added by Article 4 of Law No. 55-A/2012 of 29 October, having as an essential prerequisite that one is dealing with real properties that are classifiable within the concept of "properties with residential use".

Since in the situation under examination the real property in question is exclusively a parcel of land for construction, devoid of any building, it is necessary to determine the meaning of the expression "properties with residential use" in order to conclude whether it encompasses, or not, lands for construction.

The matter under examination has already been the subject of extensive arbitral tax jurisprudence. We refer, specifically, without concerns for exhaustiveness, to the decisions rendered in the following cases: 42/2013-T, of 18-10-2013; 48/2013-T, of 09-10-2013; 49/2013-T, of 18-09-2013; 53/2013-T, of 02-10-2013; 75/2013-T, of 01-11-2013; 144/2013-T, of 12-12-2013 and 158/2013-T, of 10-02-2014.

The Judicial Courts have also pronounced themselves on this same issue. We refer to the decisions rendered by the Supreme Administrative Court ("STA") in the following cases: 048/14, of 09-04-2014 and 0270/14, of 23-04-2014.

Both the arbitral jurisprudence cited and the judicial jurisprudence cited, which we follow, consider that lands for construction fall outside the scope of the provision of item 28.1 of the TGIS, in the wording in force at the date of the facts, as shall be explained below, beginning by analyzing the legislative context in which the amendment of item 28 to the TGIS occurred.

A. Context of the approval of item 28.1 of the TGIS and its respective regime

In the parliamentary discussion of Bill No. 96/XII (2nd), which gave rise to Law No. 55-A/2012, which added item 28 to the TGIS, the Secretary of State for Tax Affairs stated that:

"(...) For the fiscal system to promote more equality, it is fundamental that budgetary consolidation efforts be shared by all taxpayers and apply to all types of income, with special emphasis on capital income and high-value properties. This matter, it will be recalled, was extensively addressed in the decision of the Constitutional Court (...).

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

First, the Government proposes the creation of a special rate to tax high-value residential urban properties. It is the first time that Portugal has created special taxation on high-value properties intended for residential use. This rate will be 0.5% to 0.8% in 2012 and 1% in 2013, and will apply to houses valued at or above 1 million euros. With the creation of this additional rate, the tax burden required of these owners will be significantly increased in 2012 and 2013" (emphasis ours) – cf. Journal of the Republic Assembly, Series I, No. 9/XXII-2, of 11 October 2012, pp. 31-32.

Neither the houses nor the residential urban properties referred to here correspond to lands for construction. It is noted that residential urban properties are one of the classification concepts contained in Article 6 of the Code of the Municipal Property Tax clearly distinct from lands for construction. In effect, the cited No. 1 of Article 6 provides that:

"1 - Urban properties are divided into:

(i) Residential;

(ii) Commercial, industrial or service;

(iii) Lands for construction;

(iv) Others." (emphasis ours)

Thus, residential urban properties and lands for construction are, for the purposes of the Municipal Property Tax (whose applicability, by reference, to Stamp Tax is, as will be seen below, to be invoked), two distinct categories, with their own legal classifications and definitions contained in the mentioned Article 6 of the Code of the Municipal Property Tax[1].

In light of the foregoing and as emphasized in the arbitral decision in case No. 75/2013-T, of 1 November 2013, it appears clear that "in the spirit of the Bill that gave rise to Law No. 55-A/2012, the taxation of lands for construction was not intended, nor is there any evidence to the contrary from the Members of Parliament who approved the law".

Having fixed the context, it should be noted that the regime in question came to be approved by Law No. 55-A/2012 of 29 October, and, among several amendments it made to the Stamp Tax Code, added item 28 to the TGIS, with the following wording:

"28 – Ownership, usufruct or right of surface of urban properties whose taxable property value recorded in the cadastre, pursuant to the Code of Municipal Property Tax (CIMI), is equal to or exceeding €1,000,000 – on the taxable property value used for IMI purposes:

28.1 – Per property with residential use – 1%;

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

B. The concept of "property with residential use"

It is thus necessary to interpret the provision of item 28.1 of the TGIS and determine its meaning and scope, given the absence of a legal definition of the concept of property with residential use (a notion fundamental to the determination of the material scope), either in the Stamp Tax Code itself or in any other legal instrument, including the Code of the Municipal Property Tax applicable by reference.

Indeed, as emphasized in the Arbitral Decision relating to case No. 53/2013-T of 2 October 2013, the concept of "property with residential use" is not employed by other tax legislation, particularly, as relevant to the case, in the Stamp Tax Code and the Code of the Municipal Property Tax, the latter being of subsidiary application within item 28 of the TGIS, as provided for in Articles 2, No. 4; 3, No. 3, paragraph u); 5, paragraph u); 23, No. 7; 46, No. 5 and 67, No. 2, all of the Stamp Tax Code.

In the same sense, the Arbitral Decision in case No. 144/2013-T of 12 December 2013 refers that this concept used by item 28.1 (of property with residential use) "not only does not appear defined in any provision of the Stamp Tax Code, but nor is it used in the Code of the Municipal Property Tax, which statute Article 67, No. 2 of the STC expressly refers to when matters not regulated in the STC concerning item 28 are at issue."

Tax norms must be interpreted like any others, the conception that they would have exceptional character that was once attributed to them having been superseded.

It is worth noting in this respect that Article 9 of the Civil Code marks the prevalence of spirit over the letter of law, although it has expressly placed the letter as a limit to the search for meaning[2]. Article 9 of the Civil Code represents the emanation of a general hermeneutic principle, which has, for that reason, intrinsic validity. This provision states that:

"1. Interpretation shall not be confined to the letter of the law, but shall reconstruct from the texts the legislative thought, taking especially into account the unity of the legal system, the circumstances in which the law was elaborated and the specific conditions of the time in which it is applied.

1. However, the legislative thought that does not have in the letter of the law a minimum of verbal correspondence, even if imperfectly expressed, cannot be considered by the interpreter.

2. In fixing the meaning and scope of the law, the interpreter shall presume that the legislator adopted the most correct solutions and knew how to express his thought in adequate terms."

The General Tax Law (LGT), in its Article 11, came to enshrine, in the specific field of tax laws, a set of interpretation rules as follows:

"1. In determining the meaning of tax norms and in qualifying the facts to which they apply, the general rules and principles of interpretation and application of laws are observed.

1. Whenever tax norms employ terms peculiar to other branches of law, these shall be interpreted in the same sense as they have there, unless otherwise directly results from law.

2. Should doubt persist regarding the meaning of the applicable rules of material scope, account shall be taken of the economic substance of the tax events.

3. Gaps resulting from tax norms covered by the reservation of law of the Assembly of the Republic are not susceptible to analogical integration."

It appears that the text of the LGT adds nothing, referring to the general rules and principles, beyond incorporating distinct principles of difficult compatibility.

As seen above, the Code of the Municipal Property Tax uses (in its Article 6, No. 1) the notion of residential urban properties, which it enshrines as an autonomous category distinct from that of lands for construction, but does not provide for the concept of "property with residential use", whose interpretation is now required.

At this point, we again resort to arbitral jurisprudence and the Decision rendered in case No. 53/2013-T, referenced above, which we uphold and from which we transcribe the following excerpt:

"3.2.5. Concept of 'property with residential use' as referring to residential properties

The concept most closely resembling the literal tenor of this expression employed is manifestly that of 'residential properties', defined in No. 2 of Article 6 of the CIMI as encompassing 'buildings or constructions' licensed for residential purposes or, in the absence of a license, which have residential purposes as their normal destination.

To understand that the expression 'property with residential use' coincides with [that] of 'residential properties' would make it manifest that the assessments would be afflicted by error regarding the presuppositions of fact and law, as all properties for which Stamp Tax was assessed pursuant to the aforementioned item No. 28.1 are lands for construction, without any building or construction, required to meet that concept of 'residential properties'.

For this reason, should the interpretation be adopted that 'property with residential use' means 'residential property', the assessments whose declaration of illegality is sought would be illegal, as there would be no building or construction on any of the lands.

However, the non-coincidence of the terms of the expression used in item No. 28.1 of the TGIS with that derived from No. 2 of Article 6 of the CIMI suggests that it was not intended to use the same concept.

3.2.6. Concept of 'property with residential use' as a distinct concept from 'residential properties'

The word 'affectation', in this context of use of a property, has the meaning of 'the act of designating something for a determined use'.

'When, as is customary, norms (legislative formulas) bear more than one meaning, then the positive function of the text translates into giving stronger support to or more strongly suggesting one of the possible meanings. For among the possible meanings, some will correspond to the most natural and direct meaning of the expressions used, while others will only fit within the verbal framework of the norm in a forced, contrived manner. Now, lacking other elements that lead to the choice of the less immediate meaning of the text, the interpreter must in principle opt for that meaning which best and most immediately corresponds to the natural meaning of the verbal expressions employed, and in particular to their technical-legal meaning, in the (not always exact) assumption that the legislator knew how to express his thought correctly.'

The relevance of the text of law is especially emphasized in the matter of interpretation of the material scope norms of Stamp Tax, which boil down to an amalgamation, under a common denomination, of an incongruous set of taxes of completely distinct natures (on income, on expenditure, on property, on acts, etc.), which leaves no appreciable margin for application of the primary interpretation criterion, which is the unity of the legal system, which demands its overall coherence.

The recognized lack of coherence of Stamp Tax is particularly exuberant in the case of this item No. 28.1, hastily included at the margins of the General State Budget by a fiscal legislator without perceptible global fiscal orientation, who successively implements norms of fiscal burden increases as the budgetary execution setbacks, the impositions of international institutional creditors (represented by the 'troika'), and the scrutiny of the Constitutional Court change. (...)

In this context, lacking sure interpretive elements that permit detection of legislative coherence in the solution adopted in the aforementioned item No. 28.1 or the correctness or incorrectness of the solution adopted (relevant for interpretive purposes in light of No. 3 of Article 9 of the Civil Code), the text of the legal provision must be the primary element of interpretation, in conformity with the presumption, imposed by the same No. 3 of Article 9, that the legislator knew how to express his thought in adequate terms.

In light of those meanings of the words 'affectation' and 'affect', which are 'to give destination' or 'to apply', the formula used in that item No. 28.1 of the TGIS manifestly encompasses properties already applied to residential purposes, whereby it is necessary to inquire whether it will also encompass properties which, although not yet applied to residential purposes, are destined to these and those whose destination is unknown.

In light of the literal text of item No. 28.1, it is to be excluded from the material scope of Stamp Tax provided for therein the construction lands of some Claimants that do not yet have any use defined, as they are not yet applied nor destined to residential purposes. That is, construction lands that do not have defined use cannot be considered properties with residential use, as they do not yet have any affectation nor any destination other than construction of unknown type. An interpretation to the effect that item No. 28.1 refers to properties whose affectation is unknown does not have the minimum of verbal correspondence in the letter of that norm, so a hypothetical legislative thought of that type cannot be considered by the interpreter of the law, in light of the prohibition contained in No. 2 of Article 9 of the Civil Code.

But this is not sufficient to clarify the situation of those construction lands which, although not yet applied to residential purposes, already have a determined destination, specifically in the subdivision license (...).

For this reason, it is necessary to clarify when it can be understood that a property is affected for a residential purpose, specifically whether it is when that destination is fixed for it in a licensing act or similar, or only when the effective assignment of that destination is concretized.

From the outset, the comparison of item No. 28.1 of the TGIS with No. 2 of Article 6 of the CIMI, which defines the concept of residential properties, points manifestly to the necessity of an actual affectation.

Indeed, a building or construction licensed for residential purposes or, even without a license, but which has residential purposes as its normal destination, is, in light of No. 2 of that Article 6, a residential property.

For this reason, on the presupposition that the legislator of Law No. 55-A/2012 knew how to express his thought in adequate terms (as Article 9, No. 3 of the Civil Code imposes be presumed), if it intended to refer to those properties already licensed for residential purposes or which have residential purposes as their normal destination, it would certainly have used the concept of 'residential properties', which would express perfectly and clearly his thought, in light of the definition given by that No. 2 of Article 6 of the CIMI.

Consequently, it must be presumed that the use of a different expression is intended to refer to a distinct reality, so that, in good hermeneutics, 'property with residential use' cannot be a property merely licensed for residential purposes or destined for that purpose (that is, it will not suffice that it be a 'residential property'), but must be a property which already has actual affectation for that purpose.

That this is the meaning of the expression 'affectation', in the same context of classification of properties that the CIMI makes, is confirmed by Article 3 in which, regarding rustic properties, reference is made to those 'which are affected or, lacking concrete affectation, have as their normal destination a use generating agricultural income', which shows that affectation is concrete, actual. Indeed, as seen from the final part of this text, a property may have as its destination a given use and be or not be affected to it, which shows that affectation is, at the level of connection of a property to a determined use, something more intense than mere destination and which may or may not occur, downstream of this and not upstream of it.

Moreover, the text of the law by adopting the formula 'property with residential use', instead of 'urban properties with residential use', which appears in the aforementioned 'Explanatory Memorandum', points strongly to the effect that actual affectation to residential purposes must already be concretized, as only then will the property be with that affectation.

With respect to Article 45 of the CIMI, it has no relation whatsoever to the classification of properties, merely indicating the factors to be considered in the valuation of lands for construction. What is considered there, when reference is made to the 'building to be constructed', is the consideration of the destination of the land, which, as seen, is something that, in the context of the CIMI, does not imply affectation and occurs before this.

The correctness of this interpretation to the effect that only properties actually affected to residential purposes fall within the material scope of item No. 28.1 of the TGIS is also confirmed by the intelligible ratio legis of the restriction of the field of application of the norm to properties with residential use, in the context of the 'circumstances in which the law was elaborated and the specific conditions of the time in which it is applied', which Article 9, No. 1 of the Civil Code also elevates to interpretive elements.

From the outset, the limitation of taxation in Stamp Tax to 'properties with residential use' makes it clear that it was not intended to encompass within the material scope of the tax properties with affectation to services, industry or commerce, that is, properties affected to economic activity, which is understood in a context in which, as is notorious, the economy finds itself in a recessionary spiral, publicly proclaimed at the highest level, with unemployment rates reaching historically maximum levels, with an avalanche of business closures derived from economic unsustainability.

Bearing in mind this situation and it being well known and public that the revitalization of economic activity and the increase of exports are the paths out of the crisis, it is understood that legislative measures were not taken that would hinder economic activity, specifically the increase in the tax burden that hinders it and affects competitiveness in international terms.

For this reason, it is to be concluded that the available interpretive elements, including the 'circumstances in which the law was elaborated and the specific conditions of the time in which it is applied', point clearly to the effect that it was not intended to encompass within the material scope of item No. 28.1 the situations of properties not yet affected to residential purposes, namely construction lands held by companies."

In this context, for the reasons just exposed, the position advocated by the TA cannot stand, that the notion of affectation (residential) of an urban property should be sought in the property valuation regime contained in Article 45 of the Code of the Municipal Property Tax (which takes into account the affectation coefficient provided for in Article 41 of the same Code).

In fact, as the decision of arbitral case No. 144/2013-T aptly refers, "If the primary meaning of 'affectation', as we have stated, suggests an actual, direct destination given to a determined asset, we do not see how this understanding can be overturned by the finding that the legislator, within the framework of the valuation of construction lands, authorizes (assuming it authorizes) the use of the affectation coefficient, having in view what may come to be constructed on it.

C. The case sub judice

In accordance with the factual matters, which are consensual, the real property underlying the Stamp Tax assessments made, here impugned, constitutes a parcel of land for construction, devoid of any building.

Taking as correct and valid (as we do) the understanding that item 28.1 of the TGIS, as worded at the time of the tax event in question in the case file, requires an actual residential affectation of an urban property and not merely potential, a parcel of land for construction cannot be considered included in that item, as it does not allow, by its very nature, to have an actual and current residential affectation.

Thus, in the situation at hand we are not dealing with a property with current residential use, whereby Stamp Tax provided for in item 28.1 of the TGIS cannot apply to it, the disputed assessment being afflicted by error in the presuppositions, embodied in the violation of the aforementioned item 28.1, and must be annulled (cf. Article 163 of the Administrative Procedure Code, of subsidiary application ex vi Articles 2, paragraph d) of the Tax Procedure Code and 29, No. 1, paragraphs a) and d) of the RJAT).

It should be noted that the foregoing is in no way altered by virtue of the entry into force of Law No. 83-C/2013 of 31 December (Budget Act 2014) which amended item 28.1 of the TGIS, coming to tax construction lands, inasmuch as, as the TA properly points out in its Response, this law was not accorded an interpretative nature, which prevents its application to tax events occurring prior to its entry into force, as occurs in the case of the case file.

6.2 On the reimbursement of the amount paid and the claim for compensatory interest

The Claimant seeks reimbursement of the amount paid pursuant to the assessment acts at issue in the case file, in the total amount of €23,324.44, plus compensatory interest for the wrongful payment of this amount.

In the case at hand, it is manifest that, following from the illegality of the assessment acts, for the reasons more thoroughly explained in this decision, reimbursement of the tax paid by the Claimant is warranted, by force of the provisions of the aforementioned Articles 24, No. 1, paragraph b) of the RJAT and 100 of the LGT, as this is essential to "restore the situation that would exist if the tax act which is the subject of the arbitral decision had not been carried out".

As to compensatory interest, it is also clear in the case file that the illegality of the stamp tax assessment acts impugned is directly attributable to the Respondent, who, on its own initiative, carried them out without legal support, afflicted by an erroneous interpretation (and thus application) of the legal norms to the concrete case.

Consequently, the Claimant is entitled to receive compensatory interest, pursuant to the provisions of Articles 43, No. 1 of the LGT and 61 of the Tax Procedure Code.

The compensatory interest shall be paid to the Claimant from the date on which it made the respective payments of the stamp tax assessments at issue in the case file until the full reimbursement of the amounts paid, at the legal rate.

Wherefore the Claimant's petition is granted.

7. DECISION

In view of the foregoing, this Singular Arbitral Tribunal decides that:

• The petition for arbitral decision is granted and declares the annulment of the Stamp Tax assessments, better identified in the case file under numbers 2014..., 2014... and 2014..., in the total amount of €23,324.44, with the legal consequences thereof.

• The petition condemning the Respondent to reimburse the Claimant the amount paid as stamp tax, plus compensatory interest in accordance with legal provisions, from the date such payment was made until the date of full reimbursement thereof, is granted.

The value of the case is fixed at Euro 23,324.44, in accordance with the provisions of Articles 3, No. 2 of the Regulation of Costs in Tax Arbitration Proceedings (RCPAT), 97-A, No. 1, paragraph a) of the Tax Procedure Code and 306 of the Civil Procedure Code.

The amount of costs is fixed at Euro 1,224.00, pursuant to Article 22, No. 4 of the RJAT and Table I attached to the RCPAT, charged to the Respondent, in accordance with the provisions of Articles 12, No. 2 of the RJAT and 4, No. 4 of the RCPAT.

Let notice be given.

Lisbon, 1 February 2016.

The Arbitrator,

Dr. Henrique Nogueira Nunes

Text prepared by computer, pursuant to Article 131, No. 5 of the Civil Procedure Code, applicable by reference from Article 29, No. 1, paragraph e) of the RJAT.

The wording of the present arbitral decision is governed by the orthography prior to the Orthographic Agreement of 1990.

[1] Numbers 2 to 4 of Article 6 of the Code of the Municipal Property Tax define the concepts in question:

"2 – Residential, commercial, industrial or service buildings or constructions are those licensed for such purposes or, lacking a license, which have as their normal destination each of these purposes.

3 – Lands for construction are deemed to be lands situated within or outside an urban agglomeration, for which a license or authorization has been granted, prior notification admitted or favorable prior information issued for a subdivision or construction operation, and also those that have been thus declared in the title of acquisition, excepting lands in which the competent entities prohibit any of those operations, in particular those located in green areas, protected areas or which, in accordance with municipal land-use plans, are allocated to spaces, infrastructure or public equipment. (amended by Law No. 64-A/2008 of 31 December)

4 – Lands situated within an urban agglomeration that are not lands for construction nor are covered by the provision of No. 2 of Article 3 are encompassed in the provision of paragraph d) of No. 1, as well as buildings and constructions licensed or, lacking a license, which have as their normal destination purposes other than those referred to in No. 2 and also those of the exception of No. 3."

[2] See Oliveira Ascensão, "Interpretation of laws. Integration of gaps. Application of the principle of analogy", in Journal of the Order of Lawyers, Year 57 – III, Lisbon, December 1997, pp. 913-941.