Summary
Full Decision
ARBITRAL DECISION
The Arbitrator Alexandre Andrade, appointed by the Ethics Council of the Administrative Arbitration Centre (hereinafter referred to simply as CAAD) to form the Singular Arbitral Tribunal, constituted on 25 February 2019, decides as follows:
1. Report
A..., S.A. (hereinafter referred to simply as the Claimant), Legal Entity No. ..., with registered office in ..., ..., ...-... ..., filed a request for constitution of an Arbitral Tribunal, pursuant to Decree-Law No. 10/2011 of 20 January (Legal Regime of Arbitration in Tax Matters, hereinafter referred to simply as LRATM), in which the TAX AND CUSTOMS AUTHORITY (hereinafter referred to simply as the Respondent) is the respondent.
The Claimant sought, on the one hand, the annulment of the assessment of Additional Municipal Property Tax (AIMI) No. 2018..., dated 30 June 2018 (assessment date), relating to the year 2018, in the amount of €12,823.52, with reference to urban properties registered under articles ...º,...º,...º,...º,...º,...º,...º,...º,...º,...º,...º,...º,...º,...º,...º,...º and ...º, all in the Parish of ..., Municipality of Amarante, and, on the other hand, the reimbursement of the amount of tax paid, plus indemnitory interest at the legal rate, pursuant to article 43 of the General Tax Code (GTC).
In the Request for Arbitral Ruling, the Claimant finally requests that the request for arbitral ruling be judged well-founded and admissible, and consequently that the tax assessment act for the additional Municipal Property Tax be annulled. In the Arguments, the Claimant finally further requests that the Tax Authority be ordered to reimburse the Claimant for the amount of tax paid, in the sum of €12,823.52, relating to the assessment sub judice, and likewise be ordered to pay indemnitory interest, pursuant to article 43 of the GTC.
The Claimant states in the Request for Arbitral Ruling that the contested assessment refers to the real property listed in the assessment note and its attached list and, as will be demonstrated, the tax act that is the subject of this request for arbitral ruling is unlawful and therefore cannot produce effect in the Legal Order.
The Claimant continues in the Request for Arbitral Ruling, stating that this is an act vitiated by illegality, since the properties in question are not subject to taxation under the Additional Municipal Property Tax (AIMI).
The Claimant further states in the Request for Arbitral Ruling that taxation under AIMI, although apparently correct, did not take into account the spirit of the rule, nor the intention of the legislator when introducing the tax in question.
The Claimant invokes in the Request for Arbitral Ruling, on the one hand, (i) error as to factual and legal premises (the argumentative rhetoric seeks to demonstrate that the Tax Authority erred in considering that the properties in question met the prerequisites for taxation under AIMI, as provided for in articles 135-A to 135-M) and, on the other hand, (ii) unconstitutionality of AIMI.
In the words of the Respondent, in its Response to the request for arbitral ruling, the Claimant finally petitions: annulment of the AIMI assessment relating to the year 2018, in the amount of €12,823.52, with reference to urban properties registered under articles...º,...º,...º,...º, ...º,...º,...º,...º,...º,...º,...º,...º,...º,...º,...º,...º and ...º, all in the Parish of..., Municipality of Amarante, and reimbursement of the amount of tax paid, plus indemnitory interest at the legal rate, pursuant to article 43 of the GTC.
The Respondent further states in its Response, invoking in defence of its position: - error as to the factual and legal prerequisites (it argues that the properties in question do not meet the prerequisites for taxation under AIMI, as provided for in articles 135-A to 135-M); - And that the ownership of these properties does not constitute any kind of manifestation of wealth, representing the basis of its economic activity, and the properties in question are necessary or essential for the pursuit of its corporate purpose; - Unconstitutionality of AIMI, due to violation of the principle of equality in the aspect of contributive capacity.
The Respondent, in its Response, defended: Now, as will be demonstrated below, in light of the text of the law currently in force, which faithfully and accurately reflects the options of the legislator in a given historical context, which are properly documented in state budget reports, there is no foundation for the Claimant's claim.
The Respondent finally requests the following: This request for arbitral ruling should be judged inadmissible as not proven, and consequently the Respondent should be absolved of all requests, as petitioned above, Or, should that not be understood: It is requested, in appeal to the provisions of article 280, No. 3 of the CRP and article 72, No. 3 of the Constitutional Court Act, that notification be given to the Public Prosecutor's Office of the learned arbitral award. All with the due and legal consequences.
The request for constitution of the Arbitral Tribunal was accepted by the President of CAAD on 11 December 2018 and subsequently notified to the Respondent.
Pursuant to No. 1 of article 6 and subsection b) of No. 1 of article 11 of the LRATM, the Ethics Council of CAAD appointed the signatory as Arbitrator of the Singular Arbitral Tribunal, who communicated acceptance of the appointment within the applicable period.
On 4 February 2019, the Parties were duly notified of this appointment and did not express any wish to refuse the arbitrator's appointment, pursuant to the combined provisions of subsections a) and b) of No. 1 of article 11 of the LRATM and articles 6 and 7 of the CAAD Code of Ethics.
In accordance with the provision of subsection c) of No. 1 of article 11 of the LRATM, the Singular Arbitral Tribunal was constituted on 25 February 2019.
On 25 February 2019, the Singular Arbitral Tribunal issued the following Arbitral Order: The Arbitral Tribunal having been constituted, the highest official of the Tax Administration service shall be notified, pursuant to article 17 of Decree-Law No. 10/2011 of 20 January (LRATM), to submit a response within 30 (thirty) days and, if it wishes, to request the production of additional evidence, adding that a copy of the administrative file must be sent to the Arbitral Tribunal within the period for submitting the response, with the provision of No. 5 of article 110 of the Code of Tax Procedure and Process applying in the event of non-submission.
On 1 April 2019, the Respondent submitted its Response.
On 4 April 2019, the Singular Arbitral Tribunal issued the following Arbitral Order: The Claimant submitted its Request for Arbitral Ruling. The Respondent submitted its Response. Neither Party requested witness testimony. Apart from the documentary evidence already attached and incorporated in the Case File, no additional evidence has been requested by the Parties. There are no exceptional matters on which the Parties need to comment. There is no utility in holding the meeting provided for in article 18 of the Legal Regime of Tax Arbitration (LRATM), therefore, in accordance with the Principles of Autonomy of the Arbitral Tribunal in conducting proceedings, Expedience, Simplification and Procedural Informality (subsection c) of article 16, No. 2 of article 19, and No. 2 of article 29, all of the LRATM), the holding of the meeting provided for in article 18 of the LRATM is waived and it is determined that the case shall proceed with optional written arguments for a period of 10 (ten) days, commencing with the notification of this Arbitral Order the period for arguments by the Claimant and with the notification of the submission of the Claimant's arguments, or upon expiration of that period, should the Claimant fail to submit them, the period for arguments by the Respondent. 19 June 2019 is set as the deadline for issuance of the Arbitral Decision. Pursuant to No. 4 of article 4 of the Costs Regulation in Tax Arbitration Processes, the Claimant shall make payment of the subsequent arbitral fee, notifying CAAD of such payment. In the name of the Principle of Collaboration of the Parties, this Arbitral Tribunal requests the submission of procedural documents in Word format. Both Parties shall be notified of this Arbitral Order.
The Parties submitted arguments.
On 27 May 2019, the Respondent submitted a Request in the following terms: The Tax and Customs Authority, the Respondent entity in the proceedings referenced above, hereby, pursuant to the principle of collaboration of parties with the tribunal and considering it relevant for the analysis of the subject matter of the present proceedings, requests that the Award of the Constitutional Court No. 299/2019 of 21 May be attached to the case file, which decided: "b) Not to declare unconstitutional the norm extracted from article 135-B, No. 2, of the Property Tax Code, insofar as it includes, within the scope of application of the Additional Municipal Property Tax, 'construction land for purposes of commerce, industry, services or other'."
On 4 June 2019, the Singular Arbitral Tribunal issued the following Arbitral Order: The Respondent requested, pursuant to the Principle of Collaboration of Parties with the Tribunal and considering it relevant for the analysis of the subject matter in the Case File, that the Award of the Constitutional Court No. 299/2019 of 21 May be attached to the Case File, as a copy of the Award appears as an annex to the Respondent's request. In accordance with the Principle of Adversarial Proceedings, ensured in particular through the right granted to the Parties to comment on any questions of fact or law raised in the proceedings, and the Principle of Autonomy of the Arbitral Tribunal in Conducting the Proceedings, the Claimant shall be notified to submit its comments, if it so wishes, within 10 (ten) days. The deadline for issuance of the Arbitral Decision - 19 June 2019 - as indicated in this Tribunal's Order dated 4 April 2019 is hereby extended to 5 July 2019. Both Parties shall be notified of this Arbitral Order.
On 17 June 2019 (via email dated 14 June 2019), the Claimant responds to the Order of 4 June 2019 as follows: [...] notified of the order of 04/06/2019, hereby states it has nothing to add to the initial petition.
The Singular Arbitral Tribunal is competent and was duly constituted.
The Parties have legal personality and capacity, are legitimate, and are duly represented (article 4 and No. 2 of article 10, both of the LRATM, and article 1 of Order No. 112-A/2011 of 22 March).
The case is free from nullities, the claim was timely filed, and no exceptions were raised. There are no other circumstances preventing knowledge of the merits of the case.
2. Factual Matters
2.1 Proven Facts
Having examined the evidence produced in the course of this Proceeding, the Singular Arbitral Tribunal considers the following facts proven, relevant to this Arbitral Decision:
The Claimant is a company (A..., S.A.) engaged in the promotion and management of industrial parks.
The corporate purpose of the Claimant is limited to the conduct of operations related to the paid exploitation of real property, namely, operations of purchase and sale of real property and operations of transfer of space/lease and purchase and sale of real property.
The Claimant is the owner of the following urban properties: urban properties registered in the cadastre under articles ...º, ...º, ...º, ...º,...º,...º, ...º,...º,...º,...º,...º,...º,...º,...º,...º,...º and ...º, all in the Parish of ..., Municipality of Amarante.
The Claimant is the owner of the urban properties referred to in C. (2.1 Proven Facts), designating them for the pursuit of its economic activity.
The urban properties referred to in C. (2.1 Proven Facts) are not classified as "commercial, industrial or for services" and "other" (pursuant to No. 2 of article 135-B and subsections b) and d) of No. 1 of article 6, both of the Property Tax Code).
The Claimant was notified of the assessment of AIMI No. 2018..., dated 30 June 2018 (assessment date), in the amount of €12,823.52.
The AIMI assessment No. 2018..., dated 30 June 2018, in the amount of €12,823.52, refers to the urban properties mentioned in C. (2.1 Proven Facts).
The AIMI assessment No. 2018..., dated 30 June 2018, in the amount of €12,823.52, was paid by the Claimant.
2.2 Unproven Facts
There are no facts relevant to this Arbitral Decision that have not been proven.
2.3 Reasoning for the Determination of Factual Matters
The factual matters were determined by this Singular Arbitral Tribunal and its conviction was formed based on the procedural documents and requests submitted by the Parties and on the documents attached by the Parties to this Proceeding.
Regarding factual matters, the Tribunal has no duty to rule on all alleged matters, but rather the duty to select those relevant to the decision, taking into account the cause (or causes) of action underlying the claim filed by the plaintiff, pursuant to No. 1 of article 596 and Nos. 2 to 4 of article 607, both of the Civil Procedure Code (CPC), applicable by virtue of subsections a) and e) of the No. of article 29 of the LRATM, and to determine whether it considers them proven or unproven, pursuant to No. 2 of article 123 of the Code of Tax Procedure and Process (CTPP).
According to the principle of free assessment of evidence, the Tribunal bases its decision, with regard to evidence produced, on its intimate conviction, formed from the examination and evaluation it makes of the means of proof brought to the proceedings and in accordance with its life experience and knowledge of people, pursuant to No. 5 of article 607 of the CPC. Only when the probative force of certain means is pre-established by law (e.g., full probative force of authentic documents, pursuant to article 371 of the Civil Code) does the principle of free assessment not apply to the assessment of produced evidence.
Thus, taking into account the positions assumed by the parties and the documentary evidence attached to the case file, the facts listed above were considered proven, relevant to the decision.
3. Legal Matters (Reasoning)
The Claimant states in its Arguments: By applying the rules provided for in the Property Tax Code (PTC), the Tax Authority calculated the amount payable of €12,823.52, as AIMI. Nevertheless, as already alleged, the Tax Authority erred in considering that the properties in question met the prerequisites for taxation under AIMI, provided for in articles 135-A to 135-M of the PTC. Furthermore, the taxation under AIMI, at issue here, did not take into account the spirit of the rules, nor the intention of the legislator when introducing the tax in question, thereby violating the principle of equality, provided for in article 13 of the Constitution of the Portuguese Republic (CPR), and in parallel the principle of contributive capacity, enshrined in article 104, No. 3 of the same diploma.
The matter to be decided comes down to determining, on the one hand, (i) whether the urban properties in question (identified in C. of 2.1 Proven Facts) meet the prerequisites for taxation under AIMI (provided for in the Property Tax Code) and whether the dedication of the urban properties in question (identified in C. of 2.1 Proven Facts) to the pursuit of the corporate purpose/the Claimant's economic activities is relevant for AIMI purposes, and, on the other hand, (ii) whether the AIMI regime, applied to the case here under examination, violates the principle of equality and the principle of contributive capacity, both provided for in the Constitution of the Portuguese Republic (CPR).
Let us see,
The Claimant argues in the Request for Arbitral Ruling that by applying the rules provided for in the Property Tax Code, the amount of €12,823.52 was calculated as Additional Municipal Property Tax. Nevertheless, and as will become evident, the taxation under AIMI, although apparently correct, did not take into account the spirit of the rule, nor the intention of the legislator when introducing the tax in question.
That is, the Claimant considers, ab initio, that to the assessment here under examination the rules provided for in the Property Tax Code were applied (apparently correctly), but that assessment did not take into account the spirit of the rule, nor the intention of the legislator when introducing the tax in question.
The Respondent, in its Response, argues that in light of the text currently in force, which accurately and faithfully reflects the legislator's options in a given historical context, which are duly documented in state budget reports, there is no foundation for the Claimant's claim.
The Claimant continues in the Request for Arbitral Ruling, stating that through the introduction of the Additional Municipal Property Tax, the legislator's objective was to tax so-called great fortunes. AIMI is a personal tax that falls on urban real property wealth, that is, on the global taxable patrimonial value of urban properties dedicated to housing and construction land. AIMI falls on wealth materialized in the right of ownership, usufruct or surface rights over "certain" urban properties located in Portuguese territory.
In this regard, it is worth noting Arbitral Decision No. 420/2018-T, dated 15 January 2019, an Arbitral Decision whose panel was presided over by Counselor Jorge Lopes de Sousa, with the signatory Arbitrator as Associate Arbitrator, in which this Arbitral Decision states: Law No. 42/2016, of 28 December (State Budget for 2017), added to the PTC chapter XV, with articles 135-A to 135-K, which includes the regime of Additional Municipal Property Tax (AIMI). In the Report of that Budget, it states: Revenue increase measures, in addition to the updating of Real Estate Transfer Tax and Sales Tax by 3%, focus on the introduction of two new taxes: a progressive additional levy on the Property Tax and an expansion of the base of the Real Estate Acquisition Tax to soft drinks. Together, the two measures represent only about 0.5% of total tax revenue. In both cases revenue is earmarked. The allocation of progressive property taxation to the Financial Stabilization Fund of Social Security corresponds to the government program's objective of broadening the funding base of Social Security, while introducing a tax that falls on holders of larger real property portfolios, reinforcing the overall progressivity of the system. (...).
Arbitral Decision No. 420/2018-T continues, The additional municipal property tax introduces into real property taxation a progressive personal element, taxing larger portfolios at higher rates, with a marginal rate of 0.3% applied to portfolios exceeding €600,000 per taxpayer.
As José Maria Fernandes Pires teaches, in O Adicional ao IMI e a Tributação Pessoal do Património, Almedina, 2017, The additional Municipal Property Tax (AIMI) was created by the State Budget Law for 2017 [...]. AIMI intended to tax wealth progressively, above a certain value, when holders are natural persons, and all wealth of legal entities, regardless of value and at a proportional rate. AIMI is a personal tax on wealth, but of partial scope, because it falls only on the patrimonial value of urban properties and, among these, only on some.
Let us examine what the Property Tax Code (PTC) says.
Pursuant to No. 1 of article 135-A of the PTC, Passive subjects of the additional municipal property tax are natural or legal persons who are owners, usufructuaries or holders of surface rights over urban properties located in Portuguese territory.
No. 3 of the same article 135-A of the PTC completes, The status of passive subject is determined in accordance with the criteria established in article 8 of this Code, with the necessary adaptations, having as reference the date of 1 January of the year to which the additional municipal property tax pertains.
We have, therefore, subjective incidence.
Let us continue,
Pursuant to No. 1 of article 135-B of the PTC, The additional municipal property tax falls on the sum of the taxable patrimonial values of urban properties located in Portuguese territory of which the passive subject is the holder.
No. 2 of article 135-B of the PTC completes, Urban properties classified as "commercial, industrial or for services" and "other" are excluded from the additional municipal property tax, in accordance with subsections b) and d) of No. 1 of article 6 of this Code.
The Claimant likewise states this in the Request for Arbitral Ruling, by analysis of the wording of article 135-B of the PTC, only urban properties dedicated to housing purposes and construction land, as defined in article 6 of the PTC, are subsumed under the taxation rules of this Additional levy. Thus, the legislator excludes from taxation under AIMI, in accordance with the provision proposed in No. 2 of article 135-B of the Property Tax, "urban properties classified as 'commercial, industrial or for services' and 'other'" pursuant to subsections b) and d) of No. 1 of article 6 of this code.
As mentioned, José Maria Fernandes Pires teaches, in O Adicional ao IMI e a Tributação Pessoal do Património, Almedina, 2017, AIMI is a personal tax on wealth, but of partial scope, because it falls only on the patrimonial value of urban properties and, among these, only on some. [...] Thus, only properties dedicated to "housing" and "construction land" are generically subject to AIMI, as defined in article 6 of the PTC.
How are urban properties, then, defined/divided?
Pursuant to No. 1 of article 6 of the PTC, Urban properties are divided into: a) Residential; b) Commercial, industrial or for services; c) Construction land and d) Other.
No. 2 of article 6 of the PTC completes, residential, commercial, industrial or for services buildings or structures are those licensed for such purposes, or, lacking a license, that have as their normal purpose each of these ends.
No. 3 of article 6 of the PTC further completes, Construction land shall be understood as land situated within or outside an urban settlement, for which a license or authorization has been granted, prior notification admitted, or favorable preliminary information issued for subdivision or construction operation, and also those that have been declared as such in the acquisition title, except for land in relation to which competent entities prohibit any of those operations, namely those located in green zones, protected areas, or which, in accordance with municipal land-use plans, are dedicated to public spaces, infrastructure or equipment.
As José Maria Fernandes Pires teaches, in O Adicional ao IMI e a Tributação Pessoal do Património, Almedina, 2017, AIMI is applied on the basis of elements contained in the property cadastres.
The Claimant argues in the Request for Arbitral Ruling that the legislator intended not to impose excessive tax burden on passive subjects who, by reason of their economic activities, hold real property for the pursuit of their corporate purpose.
The Claimant further argues that, in the specific case, the passive subject, although holding title to said properties, these are not intended for its personal use, but rather for the pursuit of its economic activity, being a means of generating wealth and not wealth in itself.
The Claimant also states in the Arguments, given the activity it develops, it is necessarily the owner of multiple properties, since its corporate purpose is limited to the conduct of operations related to the paid exploitation of real property, namely, operations of purchase and sale of real property and operations of transfer of space/leases. Thus, the ownership of such properties does not represent an increased contributive capacity that could justify taxation under AIMI, as the Tax Authority intends, but rather, it effectively represents the substrate of all activity undertaken by the Claimant.
The Claimant concludes this reasoning with, it is evident that taxation under AIMI, [...], can never fall on the properties held by the Claimant in the course of its activities, because, [...], [...] taxing said properties would mean directly taxing an "economic activity," which the legislator expressly intended to avoid in creating AIMI.
As José Maria Fernandes Pires teaches, in O Adicional ao IMI e a Tributação Pessoal do Património, Almedina, 2017, In summary, the additional Property Tax constitutes an additional annual rate on the global taxable patrimonial value of urban properties dedicated to housing and construction land, of legal entities, as well as of natural persons when, in the latter case, that value exceeds €600,000. AIMI is applied on the basis of elements contained in property cadastres, being an annual tax and the tax obligation's taxable event occurs on 1 January of each year.
Further teaches José Maria Fernandes Pires, in O Adicional ao IMI e a Tributação Pessoal do Património, Almedina, 2017, Thus, only properties dedicated to "housing" and "construction land" are generically subject to AIMI, as defined in article 6 of the PTC.
See further what the Claimant states in the Request for Arbitral Ruling: Thus, the Claimant cannot accept and much less understand that the Tax Authority, through the assessment acts now contested, has considered, in calculating the taxable patrimonial values subject to AIMI, "construction land" whose potential use coincides with "commercial, industrial or services" purposes.
The Claimant argues in the Arguments presented, it should be concluded that construction land dedicated to those purposes do not cease to be intended for the future pursuit of the Claimant's economic activity, simply because they are "construction land."
That is, for the Claimant, it is evident that taxation under AIMI, [...], can never fall on the properties held by the Claimant in the course of its activities, because, [...], [...] taxing said properties would mean directly taxing an "economic activity," which the legislator expressly intended to avoid in creating AIMI.
On the other hand, the Respondent argues that it concludes unequivocally that the subjection of construction land and properties classified as residential to the norm of incidence of AIMI is effected independently of its potential dedication, as well as of the nature and specificities of its holder. [...] Thus, properties that form part of companies' assets classified as residential or construction land are not included in the negative provision by exclusion from the scope of application. That is, the legislator did not guarantee, nor did it intend to guarantee, in all and any cases, that real property dedicated to the exercise of any economic activity would not be affected.
In this regard, the aforementioned Arbitral Decision No. 420/2018-T states: To avoid the impact of this tax on economic activity, excluded from incidence are rural properties, mixed properties, industrial properties and those dedicated to tourist activity, and companies are also permitted exemption from properties dedicated to their productive activity up to €600,000.
Arbitral Decision No. 420/2018-T continues, The wording of article 135-B of the PTC that came to be approved does not preclude the incidence of AIMI on properties dedicated to housing and construction land used by legal entities in the course of their economic activity. The legislative concern of "avoiding the impact of this tax on economic activity" was announced in the Draft State Budget Law for 2017 and was implemented, to some extent, through the exclusion from the scope of incidence of "urban properties classified as 'industrial,' as well as urban properties licensed for tourist activity, the latter provided they are duly declared and their intended use is proven" and the deduction from the taxable amount of "€600,000, when the passive subject is a legal entity with agricultural, industrial or commercial activity, for properties directly dedicated to its operation."
However, Arbitral Decision No. 420/2018-T emphasizes, it was not on the basis of the activity to which the properties are dedicated that the exclusion of incidence came to be defined, because in the approved wording it was defined that there would be no incidence solely on the basis of the types of properties indicated in article 6 of the PTC, with no allusion to dedication to the operation of legal entities. These are distinct concepts: the dedication of a property, which presupposes use, and the purpose to which it is intended, the "normal destination," underlying the classification of properties, referred to in No. 2 of article 6 of the PTC. If the final wording of the Budget had maintained the legislative intention to preclude incidence on properties directly dedicated to the operation of legal entities, it would certainly have maintained the reference to this dedication that appeared in the proposal and that clearly expressed this legislative option.
In this regard, this Singular Arbitral Tribunal follows Arbitral Decision No. 420/2018-T when it states, Thus, having this reference to the dedication of properties been suppressed, there is no legal basis for concluding that residential properties and construction land dedicated to the activity of legal entities are not relevant for AIMI incidence. Therefore, it must be concluded that the dedication of properties to the economic activities of legal entities does not preclude AIMI taxation.
Arbitral Decision No. 420/2018-T further states, The ownership of real property of high value, independently of whether or not dedicated to economic activity, is tendentially revelatory of high contributive capacity, superior to that which is presumable to exist when lower-value property is owned or when none exists, therefore, in principle, there is justification for limiting taxation to the former situations. However, the reasons that would underlie the distinction, for AIMI taxation purposes, between the patrimonial values of properties classified as residential or construction land (irrespective of their actual dedication to those purposes) and those of urban properties with other classifications, do not explicitly result from the Report on the Budget for 2017 or its parliamentary discussion, from the perspective of article 6 of the PTC. Regarding properties classified as "other" from the perspective of article 6, Nos. 2, subsection d), and 4, of the PTC, a reason for distinction may be seen in the fact that these are essentially properties that do not have income-generating activities as their purpose, namely land situated in urban settlements that do not meet the requirements necessary for their classification as construction land nor are being used for agricultural or forestry purposes, and buildings intended for public spaces, infrastructure or equipment. As concerns the preclusion of taxation regarding properties intended for commerce, industry or services, an explanation may be glimpsed in the purpose invoked for the creation of this new tax, which is the financing of Social Security, ensured through the allocation of AIMI revenues to the Financial Stabilization Fund of Social Security, provided for in No. 2 of article 1 of the PTC, in the version of Law No. 42/2016, of 28 December. The intention is not to burden taxation of luxury properties, as was the primary aim with item 28.1 of the Tax System General Structure, because high-value real property can be constituted by a plurality of low-value properties, but rather to create another avenue for subsidizing the social security system, which is one of the constitutional functions of the State, provided for in article 63, No. 2, of the CPR. The sustainability and stability of Social Security, always in question, is a permanent concern that has justified many initiatives, well evidenced in the Major Policy Guidelines for 2017 (Law No. 41/2016, of 28 December) and for 2018 (Law No. 113/2017, of 29 December), among which is the diversification of funding sources, a principle long adopted in Social Security Framework Laws (article 78 of Law No. 17/2000, of 8 August, article 107 of Law No. 32/2002, of 20 December, and article 88 of Law No. 4/2007, of 16 January). The essence of the principle of diversification of Social Security funding sources consists in the expansion of the bases for obtaining financial resources, with a view, in particular, to reducing non-wage labor costs (article 79 of Law No. 17/2000, article 108 of Law No. 32/2002, and article 88 of Law No. 4/2007, of 16 January), which may explain why the new AIMI taxation is not applied to legal entities holding properties intended for commercial, industrial and services activities, as the ownership of properties of those types by legal entities is normally associated with the exercise of those activities, with corresponding payment of contributions to Social Security, as employer entities [article 92, subsection b), of Law No. 4/2007, and articles 3, subsection a), and 14, subsection a), of Decree-Law No. 367/2007, of 2 November]. From this perspective, in which the legislator, lacking funding for Social Security, privileges the role of tax collector over concern with balanced taxation of businesses, some justification may be glimpsed for distinguishing between ownership of real property by persons who, presumably, will pursue activities connected with Social Security financing (who will already be contributing to such financing) and the ownership of properties not intended for those activities, whose holders, tendentially, will not be associated in the same way with that financing, at least not with the same intensity. This Singular Arbitral Tribunal follows this understanding of Arbitral Decision No. 420/2018-T.
For the foregoing reasons, this Singular Arbitral Tribunal understands that, since the urban properties here in question (identified in C. of 2.1 Proven Facts) are not classified as "commercial, industrial or for services" and "other," as provided for in No. 2 of article 135-B and article 6, both of the PTC, the urban properties here in question (identified in C. of 2.1 Proven Facts) meet the prerequisites for taxation under AIMI.
It is also the understanding of this Singular Arbitral Tribunal that the dedication of the urban properties here in question (identified in C. of 2.1 Proven Facts) to the pursuit of the corporate purpose/the Claimant's economic activities does not preclude AIMI taxation. This Singular Arbitral Tribunal follows, as stated, Arbitral Decision No. 420/2018-T when it states, Thus, having this reference to the dedication of properties been suppressed, there is no legal basis for concluding that residential properties and construction land dedicated to the activity of legal entities are not relevant for AIMI incidence. Therefore, it must be concluded that the dedication of properties to the economic activities of legal entities does not preclude AIMI taxation.
Let us continue,
The Claimant argues in the Request for Arbitral Ruling, The Claimant here is a commercial company whose purpose is the management of industrial parks, which embodies activities of purchase, sale and lease of real property for commercial and industrial purposes. Consequently, it would constitute a violation of the principle of equality in the aspect of contributive capacity to tax the real property held by the Claimant here.
Let us begin by examining the provisions of the Constitution of the Portuguese Republic (CPR).
Pursuant to No. 1 of article 13 of the CPR, All citizens have equal social dignity and are equal before the law.
Pursuant to No. 2 of article 13 of the CPR, No one may be privileged, favored, prejudiced, deprived of any right or exempted from any duty by reason of ancestry, sex, race, language, territory of origin, religion, political or ideological beliefs, education, economic situation, social condition or sexual orientation.
Pursuant to No. 3 of article 104 of the CPR, Taxation of property must contribute to equality among citizens.
The Claimant argues in the Request for Arbitral Ruling, the properties in question could not be subject to AIMI since they are intended for commercial, industrial or services purposes. Therefore, the taxation under AIMI of the properties constitutes discriminatory treatment, devoid of legal basis, generating disproportionate and inadequate differentiations, which constitutes its unconstitutionality.
The Claimant further states: To treat them equally would constitute a gross violation of the principles of equality and contributive capacity. The properties in question are an integral part of the Claimant's commercial activity. It would be a violation of the principle of equality to impose AIMI on such properties. In comparison with other entities, non-real-property entities, owners of real property.
The Claimant further argues in the Arguments: It is unequivocal that companies engaged in the commercialization of construction land are subject to a significant additional burden compared to the generality of companies, based on a hypothetical index of contributive capacity that does not necessarily correspond to reality. Also, in the case at hand, there is an unjustified negative discrimination, because taxation under this new tax of construction land owned by a company whose economic activity is precisely the purchase and sale of real property lacks a rational foundation, and therefore are manifestly bound to a commercial purpose, when, simultaneously, the law excludes from taxation real property intended for commerce, industry or services. In view of the foregoing, it is concluded that article 135-B of the PTC is materially unconstitutional, insofar as it subjects to AIMI taxation the ownership of construction land belonging to companies whose purpose is the commercialization of real property.
The Claimant also states, in the Arguments, Alternatively, and without prejudice to what we have just alleged, it must nonetheless be concluded that the legal regime of AIMI, in particular its article 135-B of the PTC, - when interpreted to include in the scope of AIMI application "construction land" for purposes of commerce, industry, services or other - is manifestly contrary to the principle of equality, enshrined in article 13 of the Constitution of the Portuguese Republic and, in parallel, contrary to the principle of fiscal equality and contributive capacity [...]. In the first place, such taxation manifestly violates the principle of contributive capacity insofar as companies engaged in real property activity and derive profit from it, with payment of the corresponding Corporate Income Tax, are burdened with a tax that, without sufficient material reason, taxes them exclusively on the basis of that activity. In this way, there is no fair distribution of the tax burden among legal entities, that is, among those engaged in real property activity and the rest. [...] Consequently, it would constitute a violation of the principle of equality, in the aspect of contributive capacity, to tax the real property held by the Claimant which, as mentioned, is not intended for its personal use, but rather for the pursuit of its activity, being a means of generating wealth and not wealth in itself.
The Claimant repeats, states in the Arguments, Also, in the case at hand, there is an unjustified negative discrimination, because the taxation under this new tax of construction land owned by a company whose economic activity is precisely the purchase and sale of real property lacks a rational foundation, and therefore are manifestly bound to a commercial purpose, when, simultaneously, the law excludes from taxation real property intended for commerce, industry and services.
The Claimant further argues that there also lacks rational foundation the discrimination between companies with the same corporate purpose that commercialize construction land and those that commercialize other types of properties not subject to the tax, taxing the former and not the latter.
Concluding, in this part, the Claimant in the Arguments, in view of the foregoing, it is concluded that article 135-B of the PTC is materially unconstitutional, insofar as it subjects to AIMI taxation the ownership of construction land belonging to companies whose purpose is the commercialization of real property.
The Respondent argues in its Response: It is necessary, therefore, to analyze, on the one hand, whether the legal regime of AIMI, in particular its article 135-B of the Property Tax Code - when interpreted to include in the scope of AIMI application "construction land" for purposes of "commerce, industry, services" or "other" - is manifestly contrary to the constitutionally enshrined principle of equality, and also whether the application of the AIMI regime, when interpreted to encompass entities that develop economic activity, promotes differentiated treatment and unjustified inequality among taxpayers, in manifest violation of the principle of equality enshrined in article 13 of the CPR and the principle of fiscal equality and contributive capacity enshrined in article 104, No. 3 of the same diploma, and should be disapplied pursuant to article 204 of the CPR.
The Respondent continues in its Response, having arrived here, it is important to emphasize that truly, construction land are not merely instrumental to the exercise of economic activity; on the contrary, they form part of the very core of economic activity, with intrinsic economic value and, normally, a quotation in the real property market, i.e., they can be sold, exchanged, pledged as security for obligations, and obviously evidence a certain economic capacity. In effect, taxation embodied in AIMI translates into a specific imposition on property and not on income.
The Respondent therefore argues in its Arguments, And, in accordance with recent jurisprudence of the Constitutional Court, in a sense contrary to the Claimant's claim, it is fully demonstrated that the application of AIMI to "construction land" of an entity that promotes economic activities does not violate the principle of fiscal equality and contributive capacity enshrined in articles 13 and 104, No. 3 of the CPR.
The Respondent attached to the Case File a copy of the Award of the Constitutional Court No. 299/2019, of 21 May, which decided: Not to declare unconstitutional the norm extracted from No. 2 of article 135-B of the Property Tax Code, insofar as it includes, in the scope of application of Additional Municipal Property Tax, "construction land for purposes of commerce, industry, services or other."
The aforementioned Award of the Constitutional Court No. 299/2019, of 21 May, states, with relevance to this Decision, [...] secondly, subsidiarily, it questions the norm extracted from article 135-B of the Property Tax Code, "insofar as it includes, in the scope of application of this Additional Municipal Property Tax, 'construction land' for purposes of commerce, industry, services or other" [...] alleging infraction of the principle of equality. The normative sense impugned is inscribed in the regime of Additional Municipal Property Tax, a tax introduced by Law No. 42/2016, of 28 December, State Budget Law for 2017. Pursuant to article 219 of the budgetary diploma, chapter XV was added to the Property Tax Code, comprised of articles 135-A to 135-K. Particularly relevant to this proceeding is what is provided for in articles 6 and 135-B of the Property Tax Code, since the second expressly refers to the normative typology of urban properties established in the first.
The Award of the Constitutional Court No. 299/2019, of 21 May, continues, The wording of No. 2 of article 135-B of AIMI that came to be approved - as well as of article 135-C, with elimination of the rules referred to - resulted from the voting of the Proposal for Substitution No. 402-C2, presented by the Parliamentary Group of the Socialist Party during the discussion in the Parliamentary Commission on Budget, Finance and Administrative Modernization. Under the heading "Statement of Reasons," it is read in the said substitution proposal that through the same it was sought to introduce "Amendments to the Additional Property Tax resulting from public debate since the presentation of the proposal, ensuring the absence of impact on economic activity, greater progressivity of the tax and strengthening of taxation of real property portfolios held by entities resident in tax havens." In its final formulation, and focusing attention on the taxation of collective entities, AIMI came to tax all the real property portfolio of the passive subject, without deduction, while the rule of No. 2 of the provision came to attend only to the classification of the property in accordance with article 6 of the Property Tax Code, without consideration of the sector of activity or actual destination. This meant the elimination of the element of personal-basis progressivity in the taxation of legal entities or equivalent entities contained in Draft Law No. 37/XIII, compensated to some extent by the reduction in the scope of objective incidence of the tax, which came to subject to the tax only those classes of urban properties not comprehended in the provision of No. 2 of article 135-B, or, in accordance with the division carried out by article 6, No. 1, of the Property Tax Code, urban properties "residential" and "construction land."
The aforementioned Award of the Constitutional Court No. 299/2019, of 21 May, further states, with relevance to this Arbitral Decision, In the terms referred to, the appellant begins by contesting the interference in the patrimonial sphere of the taxpayer effected by the norm subject to attack at the level of the very selection of the taxable fact, which it understands is incapable of revealing the economic force of passive subjects dedicated by statutory requirement to real property activities, among which it is found. It argues that the ownership of rights over residential urban properties and construction land does not per se constitute indices of contributive capacity, and that this status should be refused whenever there corresponds to them the nature of a factor of production of wealth. In that view, when held by passive subjects whose statutory nature involves the development of real property activities - as in the case of real property investment funds - the real property portfolio that is bound to them constitutes the "patrimonial substrate and essential means for the pursuit of such activities," incapable of having patrimonial-type taxation imposed on it. There would be, only, room for taxation of the real income thereby produced (and when produced). The argument does not merit acceptance. From the outset, taxation of property cannot be viewed as mere alternative or substitute for income taxation, as it constitutes an autonomous purpose of the fiscal system, to which the ordering plan of the Fundamental Law attributes, alongside the general financial function, a specific redistributive function (articles 103, No. 1, and 104, No. 3 of the Constitution). Now, it is not seen that the statutory pursuit of activities of promotion or exploitation of real property permits precluding, as regards all subjects whose activity in that area implies the ownership of rights over real property, taxation of the real property wealth of which they are holders. [...] On the other hand, the understanding advocated by the appellant is based on the premise that the legislator intends, through AIMI, to tax the income generated by real property (product-income), when such is not the case. As stated, the political-legislative option of taxation falls on wealth directly revealed by ownership itself of a patrimonial value - in this instance, wealth resulting from the ownership of rights over urban real property of a certain typology. The objective cutting resulting from the reference to certain categories normatively provided for in article 6 of the Property Tax Code does not change the essence of AIMI, as a static and analytical tax on urban real property, without regard to the returns that this economic asset may generate. In truth, the choice of the taxable fact of AIMI falls on an economically relevant reality, because ownership of an urban real property constitutes, in itself, a manifestation of wealth - and a determinable wealth, by reason of the social and legal assignment of a market value - revealing a special economic vigor, superior to that of the generality of citizens, which strengthens negotiating position in legal commerce in general, in particular the capacity to raise means of financing. It expresses affluence, which in no way appears to be invalidated by the manner in which it was obtained (it remains unchanged if ownership of rights over urban properties is acquired by onerous or gratuitous act), or by its dedication to an economic activity, which may or may not generate profit: as SÉRGIO VASQUES emphasizes, "when the substance of property is taxed, one is not taxing income a second time; one is taxing something different."
The aforementioned Award of the Constitutional Court No. 299/2019, of 21 May, further states, In a second line of argument, the critique of unconstitutionality is directed at the objective scope of the tax relief introduced by the provision of No. 2 of 135-B of the PTC. Without disputing the constitutional legitimacy of the non-incidence of AIMI on the classes of urban properties referred to therein, the appellant impugns the fact that the negative delimitation of the constitutive fact of the tax does not cover all urban properties, whatever their typology, as all can be referenced to an economic activity. For the appellant, the tax relief of AIMI must extend also to residential urban properties and construction land of buildings for commercial, industrial or services purposes, as they constitute the substrate of its economic activity. Otherwise, it argues, the legislative purpose of not burdening economic activities equipped with assets of that nature will be thwarted and discriminatory treatment created "between urban properties in the same legally and constitutionally relevant situation — i.e., potentially dedicated to the exercise of economic activities." Let us see. Effectively, No. 2 of article 135-B of the PTC contains a norm of non-subjection to tax (or of tax relief strictly speaking), in the modality of tax exclusion, a species recognized in No. 2 of article 4 of the Tax Benefits Statute (Decree-Law No. 215/89, of 1 July, last amended by Law No. 71/2018, of 31 December), and defined as a structural measure of normative character that establishes explicit negative delimitations of incidence. By virtue of that rule, excluded from the objective scope of incidence of AIMI - the sum of the taxable patrimonial values of the urban properties of which the passive subject is a holder - are urban properties classified by tax law as "commercial, industrial or for services" and "other," which introduces, as is proper of normative typology, unequal treatment among taxpayers of the tax: while holders of residential urban properties and construction land (referred to in subsections a) and c) of article 6 of the PTC) are obliged to AIMI, holders of properties with commercial, industrial, services or other purposes, whose normal destination is not housing or construction (referred to in subsections b) and d) of article 6 of the PTC), are not obliged to such additional levy. It can be said that, as exceptions to the general rule of incidence of the corresponding tax, such rules live "in permanent tension with the principle of distribution of tax burdens according to the principle of contributive capacity," which binds them to special legitimation: "the attainment of a certain economic objective of special importance." [...] In the final wording, criteria based on the taxpayer's economic activity were replaced by reference to the classes of urban properties established in article 6 of the Property Tax Code, thus invoking in the sphere of AIMI the same criteria and justifications on which the basis of objective incidence of the Property Tax rests, while simultaneously the solution of exemption up to €600,000 was precluded, eliminating the progressive element of personal basis from the taxation of legal entities and equivalent entities. In that configuration, the scope of objective incidence of the tax was significantly reduced, as incidence was precluded with respect to all properties with commercial and services dedication (even those held by companies whose corporate purpose is the purchase and sale of real property), in addition to the class "other," and that is the legislator's option to mitigate the impact of the tax on the business fabric and preserve its competitiveness, particularly in international markets (in that sense, JOSÉ PIRES, O Adicional ao IMI..., p. 50). Then, and as the contested decision states, the rationale for delimitation of the incidence of the tax at issue does not derive from the economic activity exercised by the passive subject, but rather, as in the Property Tax, from the social dedication of the urban property. Effectively, from the provision of No. 1 of article 6 of the Property Tax Code results a division of urban properties, which, pursuant to No. 2 of the same provision, makes its classification dependent, for the purpose of qualifying properties as residential, commercial, industrial or for services, first on the use assigned by licensing and, failing a license, on the criterion of normal dedication. Contrary to what is argued, this is not a mere formal classification, but rather the expression of material difference between the patrimonial realities considered.
The aforementioned Award of the Constitutional Court No. 299/2019, of 21 May, continues, Rather, the legislator mobilized the same objective normative criteria on which the classification of an urban property in any of the classes provided for in article 6 of the Property Tax Code depends, for which it is irrelevant whether the holder of the property utilizes in all its extent, or does not utilize at all — for reasons of opportunity or other - the aptitude of the same for the purpose for which it is licensed or to which it is normally intended.
The aforementioned Award of the Constitutional Court No. 299/2019, of 21 May, concludes, Thus, neither the term chosen to compare the legal-subjective situations - the potential utilization of urban properties - bears relevance in the core problematic situation in question, nor the holders of the two typologies of urban properties put in comparison - construction land for purposes of commerce, industry, services or similar, on the one hand, and constructed properties classified, in accordance with article 6 of the Property Tax Code, as "commercial, industrial or for services" or "other," on the other - are in comparable position, in accordance with the taxable fact and the structure of objective incidence of AIMI, therefore, neither is there, also in this point, basis to support a judgment of unconstitutionality of the norm questioned, in the specific hypothesis under examination. For the foregoing, taxation under AIMI does not merit censure in light of the principles of equality, proportionality and contributive capacity (articles 13, 18, No. 2, and 104, No. 3, of the Constitution).
Once more, this Tribunal Arbitral calls to its reasoning Arbitral Decision No. 420/2018-T. In it, it is stated: Article 13 of the Constitution of the Portuguese Republic proclaims the principle of equality of citizens before the law. As has been consistently understood by the Constitutional Court, the principle of equality, as a limit on legislative discretion, does not require equal treatment of all situations, but rather implies that those in equal situations be treated equally and those in unequal situations be treated unequally, in such a way as not to create arbitrary and unreasonable discriminations, because they lack sufficient material foundation. The principle of equality does not prohibit distinctions being made, but rather arbitrary distinctions, devoid of objective and rational justification. Therefore, creation of a special taxation of high-value property intended to ensure the financing of Social Security limited to real property that will not tend to be already connected with such financing will not be completely devoid of objective and rational explanation. On the other hand, the creation of AIMI, as a complementary tax on real property, which aimed to introduce into taxation "a progressive personal element, taxing higher portfolios at higher rates" (Budget Report for 2017, page 60), is compatible with the objective that taxation of property should contribute to equality among citizens, stated in No. 3 of article 104 of the CPR, because progressivity has as its corollary, tendentially, imposing greater taxation on those with greater contributive capacity.
Arbitral Decision No. 420/2018-T continues, The contributive capacity of business legal entities, relevant to assessing the application of the principle of fiscal equality, is not evidenced solely by income, designedly by the results of the activity to which the properties are dedicated. In truth, "property provides its holder with special contributive capacity, advantages that by their nature escape income taxation on personal income: thus, ownership of property facilitates raising credit, reinforces the negotiating position of its holder in the conclusion of various contracts, makes it easier to multiply wealth allowing him to risk where in principle he would not. In this light, tax on property is viewed as something more than an extension of income taxation - it is not a matter of overloading here income already subject to it but of reaching manifestations of contributive capacity that in truth escape it" (...) Taxes on property can be justified by permitting resources to be transferred for the benefit of the working class, instituting a "qualitative progressivity" complementary to the progressivity in quantity of personal income taxes."
But, the Arbitral Decision No. 420/2018-T also states, On the other hand, if it is true that the different destinations of properties do not necessarily imply distinction in the level of contributive capacity, exclusion from taxation of properties specially vocational for productive activity, designedly the "commercial, industrial or for services" ones, will find other justification (besides the already-referred presumable greater contribution of these activities to Social Security through contributions), as it amounts, ultimately, to favor these activities, which is in harmony with (and therefore will have constitutionally acceptable foundation) the obligation of the State to promote increase of economic well-being, which presupposes good functioning of wealth-creating activities and constitutes one of its priority functions within the economic field [article 81, subsection a), of the CPR]. Being this a function constitutionally considered a priority, the first listed in this rule, certainly it will not be incompatible with the CPR to give it preferential protection when confronted with the constitutional duties of the State in housing matters indicated in article 65 of the CPR, which obviously are also protected through the good functioning of wealth-creating activities.
Arbitral Decision No. 420/2018-T further states, Thus, if it is true that the AIMI regime creates situations of discrimination in taxation of companies with the same contributive capacity evidenced by property, on the assumption that there is a need for money and new forms of raising it must be found (as is stated in the Budget Report for 2017), there will be some justification for taxation being imposed on some companies and not others with the same or greater intrinsic contributive capacity in property, especially in light of the majority constitutional jurisprudence cited by the Tax Authority, which reveals that it is constitutionally tolerable that the interests of the State as tax collector (in this case, the sustainability of Social Security, claimed by the principles of trust and security) be superimposed on strict respect for the principle of equality. On the other hand, it not being a legislative objective to tax luxury housing but rather to obtain another means of financing Social Security, in line with the political option of diversification, through "a tax that falls on holders of larger real property portfolios, reinforcing the overall progressivity of the system" (page 57 of the State Budget Report for 2017), it is in function of these objectives that whether there is a violation of the principle of proportionality must be assessed. From this perspective, it appears that this new taxation is not incompatible with the principle of proportionality, as it is suitable for the intended purpose (it contributes to the increase in revenues that is intended to be obtained), is necessary (in light of the legislative option to increase Social Security revenues with diversification of sources) and is not an unreasonable measure, in particular regarding legal entities, as the rates of the new tax are not high (and are lower for legal entities than for natural persons, pursuant to article 135-F), the tax paid is deductible from the taxable base of Corporate Income Tax (article 135-J), considerable amounts are deducted from the taxable value (article 135-C), and it is neither demonstrated nor is there reason to believe that the amounts collected exceed what is necessary for the purpose of reinforcing the sustainability and stability of Social Security. Therefore, it appears that it is not demonstrated that the principle of proportionality is violated. For the foregoing, taxation under AIMI is not incompatible with the principles of equality, proportionality and contributive capacity invoked by the Claimants, based on articles 13, 18 and 104, No. 3, of the CPR.
This Singular Arbitral Tribunal follows the understanding of Arbitral Decision No. 420/2018-T.
For the foregoing reasons, it is the understanding of this Singular Arbitral Tribunal that AIMI taxation, in this case, is not incompatible with the principles of equality and contributive capacity invoked by the Claimant, based on articles 13 and 104, both of the Constitution of the Portuguese Republic (CPR).
Accordingly,
This Singular Arbitral Tribunal understands that, since the urban properties here in question (identified in C. of 2.1 Proven Facts) are not classified as "commercial, industrial or for services" and "other," as provided for in No. 2 of article 135-B and article 6, both of the PTC, the urban properties here in question (identified in C. of 2.1 Proven Facts) meet the prerequisites for AIMI taxation. It is also the understanding of this Singular Arbitral Tribunal that the dedication of the urban properties here in question (identified in C. of 2.1 Proven Facts) to the pursuit of the corporate purpose/the Claimant's economic activities does not preclude AIMI taxation. In these terms, the AIMI assessment No. 2018..., dated 30 June 2018 (assessment date), relating to the year 2018, in the amount of €12,823.52, with reference to urban properties registered under articles ...º,...º,...º,...º,...º,...º,...º,...º, ...º, ...º, ...º,...º,...º,...º,...º,...º and ...º, all in the Parish of..., Municipality of Amarante, does not suffer from a defect of illegality and therefore does not violate the law, for which reason this Singular Arbitral Tribunal understands it should not be annulled.
This Singular Arbitral Tribunal further understands that AIMI taxation, in this case, is not incompatible with the principles of equality and contributive capacity invoked by the Claimant, based on articles 13 and 104, both of the CPR.
4. Request for Restitution of Amounts Paid and Indemnitory Interest
The Claimant makes a request for restitution of the amounts collected by the Tax and Customs Authority, as well as for payment of indemnitory interest.
As the request for arbitral ruling is not to be adjudged well-founded, it cannot be concluded that there are unduly paid amounts and, consequently, neither the annulment of the AIMI assessment is justified, nor the restitution of the amount paid by the Claimant, nor the payment of indemnitory interest, pursuant to No. 1 of article 43 of the GTC.
5. Arbitral Decision
In these terms, this Singular Arbitral Tribunal decides:
To judge the Request for Arbitral Ruling presented by the Claimant inadmissible;
To absolve the Tax and Customs Authority, the Respondent entity herein, of all requests.
6. Value of Proceeding
Pursuant to No. 2 of article 306 of the CPC, subsection a) of No. 1 of article 97-A of the CTPP, and No. 2 of article 3 of the Costs Regulation in Tax Arbitration Processes, the value of the proceeding is set at €12,823.52.
7. Costs
This Singular Arbitral Tribunal understands that the value to be considered for purposes of determining costs in this Request for Arbitral Ruling is the value that motivated the constitution of this Singular Arbitral Tribunal, i.e., the amount of €12,823.52, corresponding to the value of the contested assessment and initially indicated by the Claimant in the Request for Arbitral Ruling.
Pursuant to No. 2 of article 12 and No. 4 of article 22, both of the LRATM, the amount of costs is set at €918.00, in accordance with Table I attached to the Costs Regulation in Tax Arbitration Processes, to be borne by the Claimant.
Notification is hereby given.
Lisbon, 1 July 2019
Singular Arbitral Tribunal
The Arbitrator,
(Alexandre Andrade)
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