Process: 643/2016-T

Date: March 30, 2017

Tax Type: Selo

Source: Original CAAD Decision

Summary

CAAD arbitral process 643/2016-T examines the application of Stamp Tax under item 28.1 of the Tabela Geral do Imposto de Selo (TGIS) to construction land valued above €1,000,000. The claimant company challenged stamp duty assessments totaling €11,581.00 for the year 2014, arguing that the tax provision applies exclusively to land designated for residential construction purposes. The central legal dispute concerns the interpretation of 'terrenos para construção' (construction land) under item 28 of TGIS, as amended by Law 83-C/2013 of 31 December. The claimant contended that three cumulative requirements must be satisfied for stamp tax liability: taxable property value equal to or exceeding €1,000,000, classification as construction land under IMI Code provisions, and authorized or envisaged building exclusively for residential purposes. While acknowledging the first two requirements were met, the claimant asserted the third was not satisfied because the building permit authorized mixed-use development combining collective housing and commercial space. The taxpayer argued that in the absence of exclusive residential allocation, the stamp duty assessment was illegal due to erroneous legal interpretation. Additionally, the claimant raised constitutional objections, alleging violation of the principles of contributory capacity and tax equality, asserting that applying the 1% annual stamp duty rate regardless of the taxpayer's actual ability to pay constitutes discriminatory treatment. The Tax Authority responded that the assessment correctly applied item 28.1 of TGIS, considering the relevant development permits and taxpayer declarations. The case highlights critical interpretive questions regarding the scope of stamp tax on high-value construction land, particularly whether mixed-use properties fall within the residential construction category for TGIS purposes, and the constitutional limits of wealth-based taxation on undeveloped land holdings.

Full Decision

ARBITRAL DECISION

I – REPORT

A – PARTIES

A…, S.A., with registered office at Rua …, …, Maia, bearing the tax identification number for collective persons …, hereinafter referred to as Claimant or taxable person.

TAX AND CUSTOMS AUTHORITY (which succeeded the Directorate-General for Taxation, by means of Decree-Law No. 118/2011 of 15 December) hereinafter referred to as Respondent or AT.

The request for constitution of the arbitral tribunal was accepted by the President of CAAD, and the Arbitral Tribunal was duly constituted on 12-01-2017, to examine and decide the subject matter of the present proceedings, and was automatically notified to the Tax and Customs Authority on 12-01-2017.

The Claimant did not proceed to appoint an arbitrator, whereby, pursuant to the provisions of article 6, item 1 and article 11, item 1, point b) of Decree-Law No. 10/2011 of 20 January, as amended by article 228 of Law No. 66-B/2012 of 31 December, the Ethics Council designated Paulo Ferreira Alves as arbitrator, with the appointment having been accepted in accordance with legal requirements.

On 28-12-2016 the parties were duly notified of such designation, and did not manifest any intention to challenge the designation of the arbitrators, pursuant to article 11, item 1, points a) and b), of the RJAT (Regime Jurídico da Arbitragem Tributária) and articles 6 and 7 of the Ethics Code.

In compliance with the provision in article 11, item 1, point c) of Decree-Law No. 10/2011 of 20 January, as amended by article 228 of Law No. 66-B/2012 of 31 December, the single arbitral tribunal is duly constituted on 12-01-2017.

Both parties agreed to the waiver of the hearing meeting provided for in article 18 of the RJAT, but submitted written submissions.

The arbitral tribunal is duly constituted. It has material jurisdiction, pursuant to articles 2, item 1, point a), and 30, item 1, of Decree-Law No. 10/2011 of 20 January.

The parties have legal personality and capacity, are legitimate and are legally represented (articles 4 and 10, item 2, of the same decree and article 1 of Ordinance No. 112-A/2011 of 22 March).

The proceedings do not suffer from any defects that would invalidate them.

B – CLAIM

The Claimant now seeks the declaration of illegality of the Stamp Duty Assessment (item 28.1 of TGIS), relating to the year 2014, which set a total tax collection due of € 11,581.00 (eleven thousand five hundred and eighty-one euros), concerning acts No. 2015…, 2015…, 2015….

C – CAUSE OF ACTION

To support its request for arbitral ruling, the Claimant alleged, with a view to the declaration of illegality of the tax assessment acts in the field of Stamp Duty, already described in section 1 of this Decision, in summary, the following:

The Claimant considers that the said assessment and subsequent acts suffer cumulatively from the following defects: illegality arising from the erroneous interpretation of item 28.1, insofar as it applies only to land for construction with exclusive allocation to residential purposes; and further illegality arising from error on the legal prerequisites resulting from the application of a materially unconstitutional norm, on the grounds of violation of the Principles of Contributory Capacity and Equality.

The Claimant alleges that Law No. 83-C/2013 of 31 December results in item 28 of the TGIS, combined with article 1, item 1 of the Stamp Duty Tax Code, which establishes that the taxable event, for land for construction, restricts the event generator to land for construction whose authorized or envisaged building is (exclusively) for residential purposes.

The Claimant contends that in the absence of a definition of "land for construction" in the Stamp Duty Tax Code, one should therefore assess the concept of land for construction as provided for in article 6, item 3 of the Tax Code for Municipal Property Tax on Real Estate (hereinafter "IMI"), applicable by virtue of article 67, item 2 of the Stamp Duty Tax Code.

Indeed, the concept of land for construction, for tax purposes, is not a formal concept, but rather a material concept, aimed at the realities for which it was formulated, translating, in this case, the potential allocation to construction.

The Claimant alleges that ownership of a right of property over land for construction, even though of value exceeding EUR 1,000,000, on which no building has been erected, nor has been authorized or envisaged, cannot be considered as a manifestation of wealth subsumable to item 28.1 of the TGIS.

Accordingly, land for construction is not and cannot be considered as real property allocated exclusively to residential use.

In reality, the land may never be built upon; it may be built exclusively for commercial purposes; it may even be built simultaneously for commercial and residential purposes or for collective housing.

In the present case the Claimant considers that, save for better opinion, it cannot be concluded from the analysis of the Permit that the land will be allocated exclusively to residential use.

Since the authorized construction also provides that buildings may have use for collective housing and, similarly, for commerce.

The Claimant contends that the subjection to the 1% rate provided for in item 28.1 of the TGIS is dependent on the cumulative satisfaction of the following requirements: the TPV (Valor Patrimonial Tributário – Taxable Property Value) contained in the assessment roll, under the terms of the IMI Code, being equal to or exceeding EUR; being land for construction; and the authorized and envisaged building for the same being exclusively for residential purposes, under the terms of the IMI Code.

The Claimant alleges that the first two requirements are satisfied, whereas the third is not satisfied.

Indeed, as results from the Permit, the property in question is not intended solely for residential purposes, but has mixed allocation: collective housing and commerce.

The Claimant contends that it is evident that the third requirement contained in the taxable event provision of the Tax is not satisfied, since the land does not have a building, authorization or envisaged use exclusively allocated to residential purposes.

It is thus demonstrated, in the present case, that the cumulative requirements upon which the taxable event provision of item 28.1 of the TGIS makes its application dependent are not satisfied, whereby there is a defect of violation of law and, consequently, the taxation in question should be considered as undue, and the stamp duty assessment acts in question should be annulled due to the illegality from which they suffer.

The Claimant additionally contends for the unconstitutionality of the norm due to violation of the principles of Contributory Capacity and Equality.

The Claimant considers that when this norm applies to taxpayers, regardless of their contributory capacity, as in the present case, the Claimant, this norm is simply discriminatory and violative of the Principle of Equality.

Reason for which the impugned assessment (and the impugned acts sustaining it) suffer from the defect of violation of law, by embodying errors on the legal prerequisites through the application of a materially unconstitutional norm, and for this reason also should be annulled.

D – RESPONSE OF RESPONDENT

  1. The Respondent, duly notified for that purpose, submitted its response in a timely manner in which, in abbreviated summary, it alleged the following:

  2. The impugned assessment fully respects the letter and the spirit of the law, which is why it should be maintained.

  3. The Respondent contends that the assessment took into account the provision of item 28.1 of the TGIS, in the wording of Law 83-C/2013 of 31 December, as well as the Amendment to the Development Permit No. …/08 and the Amendment to the Subdivision Permit No. …/91, and respected the declaration mod. 1 No. … submitted by the Claimant on 30.11.2012.

  4. In the absence of any definition regarding the concepts of urban property, land for construction and residential allocation in the field of Stamp Duty, recourse must be had to the CIMI (Código do Imposto Municipal sobre Imóveis) to seek a definition that allows assessment of possible subjection to Stamp Duty, in accordance with article 67, item 2 of the Stamp Duty Tax Code, as amended by Law No. 55-A/2012 of 29 October.

  5. Under the terms of the said legal provision, to matters not regulated in the Code relating to item 28.1 of the TGIS the provisions of the CIMI apply subsidiarily.

  6. With this legislative amendment, Stamp Duty would now also apply to the ownership, usufruct or right of surface of urban properties whose taxable property value contained in the assessment roll, under the terms of the Tax Code for Municipal Property Tax on Real Estate (CIMI), is equal to or exceeding €1,000,000.00.

  7. The Respondent alleges that the determination of the TPV (Taxable Property Value) of land for construction has as a prerequisite the determination of the value of authorized or envisaged buildings, for which purpose, under the terms provided in article 38 of the CIMI, regard must be had to the allocation of such buildings.

  8. It further states that in the case of the present proceedings, it results from the above-mentioned valuation rules that the TPV was determined based on the area of construction allocated to each one, and in the case of land for construction whose building, authorized or envisaged, has various allocations, the respective total TPV is therefore the corresponding to the sum of the values attributed to different areas, without prejudice to the rule of rounding of values established in article 38, item 2 of the CIMI.

  9. Therefore, according to the documents brought to the proceedings, the authorized building on the land is predominantly intended for residential use, as considered in the valuation carried out on the land to which the total TPV of € 1,158,100.00 was assigned, resulting from the sum of the value attributed to the areas of different allocations.

  10. The Respondent alleges that whereas the Claimant refers to the Development Permit No. …/91, as amended by the Amendment to the Permit No. …/08, in which buildings intended for residential use but also for commerce are envisaged, it is manifest, both considering each of the lots subject to licensing per se, and considering the entirety of the gross area of all lots, that the predominant area is allocated to the residential zone.

  11. To that extent, contrary to what the Claimant seeks, the subdivision permit of the lots clearly evidences that all buildings to be constructed will probably be intended for residential purposes, whereby the property is covered by the concept of land for construction provided for in item 28.1 of the TGIS.

  12. On the alleged violation of the principle of equality - in the aspect of contributory capacity, the Respondent contends that the conformity of item 28.1 with the principle of equality and the principle of contributory capacity can be verified.

  13. It contends that the provision of item 28.1 of the TGIS does not infringe the principle of contributory capacity nor does it contain arbitrary and unjustified legislative definitions of taxes.

  14. Therefore, item 28.1 of the TGIS does not incur in any arbitrariness or in any way violates the principle of equality in tax matters in the aspect of contributory capacity, contrary to what is alleged by the Claimant.

  15. The Respondent concludes, taking into account the ratio of item 28.1 of the TGIS, the nature and structure of the tax, as well as the manifestation of wealth or income that the legislator intended to capture, the assessment impugned in the present proceedings does not incur the alleged illegality due to error on the factual and legal prerequisites, nor does it constitute a violation of the principle of equality set out in article 13 of the Portuguese Constitution in all its aspects.

E – FACTUAL FINDINGS

  1. Before entering into an examination of these issues, it is necessary to present the factual matter relevant to its understanding and decision, which was conducted on the basis of documentary evidence, and taking into account the facts alleged.

  2. On relevant matters of fact, this tribunal finds the following facts to be established:

  3. The Claimant is the owner of land for construction located at Place …, …-… Maia, district: … - porto municipality: …- maia parish: …- city of maia, with the property registration number: …; described in the Property Registration Office of: maia under registration number: … to …, registered in the respective urban assessment roll under article …, with the taxable property value of 1,158,100.00€ (one million one hundred and fifty-eight thousand one hundred euros) for purposes of Stamp Duty taxation.

  4. The Claimant was notified of the Stamp Duty assessment acts, which set a total tax (collection) due of € 11,581.00 (eleven thousand five hundred and eighty-one euros).

  5. The Claimant was notified of the stamp duty assessments:

a) No. 2015…, relating to the first installment, in the amount of € 3,860.34;

b) No. 2015…, relating to the second installment, in the amount of €3,860.33;

c) No. 2015…, relating to the third installment, in the amount of €3,860.33.

The property has a subdivision permit, number …, intended for construction of a building for collective housing and commerce.

The Claimant submitted on 29.03.2016 a gracious objection against the tax acts No. 2015…, No. 2015…, No. 2015….

On 29.07.2016, in the absence of a response from the Respondent (AT) to the gracious objection, an implied dismissal thereof is presumed, under the terms of article 57, item 1 and 5 of the LGT (Lei Geral Tributária) and article 102, item 1, point d) of the CPPT (Código de Procedimento Perante a Administração Tributária).

F – UNPROVEN FACTS

  1. Of the facts with interest for the decision of the case, contained in the challenge, all of those subject to concrete analysis not mentioned in the above factual account were not proven.

G – ISSUES TO BE DECIDED

  1. Given the positions assumed by the parties in the arguments presented, the central issue to be resolved is the following, which must therefore be examined and decided:

(a) The alleged by the Claimant, declaration of illegality of the tax assessment acts for Stamp Duty No. 2015…, 2015…, 2015…, which set a tax collection due of € 11,581.00 (eleven thousand five hundred and eighty-one euros).

(b) Payment of compensatory interest for overpayment of the tax.

H – MATTERS OF LAW

  1. Given the positions assumed by the parties in the written submissions presented, the central issue to be resolved by this arbitral tribunal consists in deciding whether the stamp tax assessment acts No. 2015…, 2015…, 2015…, which set a collection in the amount of €11,581.00, relating to the lot of land for construction located at Place … …-… Maia, suffer from formal defects, specifically that raised by the Claimant regarding the lack of reasoning and violation of law, through the erroneous interpretation and application of item 28.1 of the TGIS.

  2. The position of the Claimant is subsumed, in summary, that item 28.1 of the TGIS applies only to land for construction intended exclusively for residential purposes.

  3. The Respondent, on its part, understands that the authorized building on the land is predominantly intended for residential use, as considered in the valuation carried out on the land to which the total TPV of € 1,158,100.00 was assigned, resulting from the sum of the value attributed to the areas of different allocations. And the predominant area is allocated to the residential zone.

  4. The factual matter is fixed and proven, which is why we now determine the applicable law to the disputed facts.

  5. Regarding the issue raised on defects of law due to error on the legal prerequisites of the assessment, concerning the issue of the classification of land for construction within the scope of the taxable event of article 28, item 1 of the TGIS, introduced by the Regime of Law No. 55-A/2012 of 29 October, as amended by Law No. 83-C/2013 of 31 December, let us examine the following:

  6. The recent amendment to item 28 of the General Table of Stamp Duty, made by article 4 of Law 55-A/2012 of 29/10, and amended by Law No. 83-C/2013 of 31 December, began to classify the following taxable events, through the following wording:

"28 – Ownership, usufruct or right of surface of urban properties whose taxable property value contained in the assessment roll, under the terms of the Tax Code for Municipal Property Tax on Real Estate (CIMI), is equal to or exceeding € 1,000,000 – on the taxable property value used for purposes of IMI:

28.1 – For residential real property or for land for construction whose authorized or envisaged building is for residential use, in accordance with the provisions of the IMI Code – 1%;

28.2 – For real property, when the taxable persons who are not natural persons are residents in a country, territory or region subject to a clearly more favorable tax regime, contained in the list approved by ordinance of the Minister of Finance – 7.5%."

  1. With the legislative amendment imposed by Law No. 83-C/2013 of 31 December, item 28.1 began to clearly apply to "land for construction whose authorized or envisaged building is for residential use."

  2. In these terms it is incumbent upon this tribunal to decide whether the property on which the assessments now impugned are based is covered by the said legal norm.

  3. It results from the very wording of item 28.1 of the TGIS the necessity to resort to the concepts used in the CIMI regarding the concept of "properties" and "land for construction".

  4. In the CIMI the species of properties are enumerated in articles 2 to 6, which is transcribed:

Article 2 Concept of Property

  1. For purposes of this Code, property is any part of territory, encompassing waters, plantations, buildings and constructions of any nature incorporated in or resting on it, with a character of permanence, provided that it is part of the patrimony of a natural or collective person and, under normal circumstances, has economic value, as well as waters, plantations, buildings or constructions, in the preceding circumstances, endowed with economic autonomy in relation to the land where they are located, although situated in a part of territory that constitutes an integral part of diverse patrimony or does not have a patrimonial nature.

  2. Buildings or constructions, even though mobile by nature, are deemed to have a character of permanence when allocated to non-transitory purposes.

  3. The character of permanence is presumed when buildings or constructions have been located in the same place for a period exceeding one year.

  4. For purposes of this tax, each autonomous unit, under the regime of horizontal property, is deemed to constitute a property.

Article 3 Rural Properties

1 – Rural properties are lands situated outside an urban agglomeration that are not to be classified as land for construction, under the terms of item 3 of article 6, provided that:

They are allocated to or, in the absence of concrete allocation, have as normal destination a use generating agricultural income, such as are considered for purposes of the tax on income of natural persons (IRS);

Not having the allocation indicated in the previous point, they are not constructed or have only buildings or constructions of an accessory character, without economic autonomy and of reduced value.

2 – Rural properties also are lands situated within an urban agglomeration, provided that, by force of a legally approved provision, they cannot have a use generating any income or can only have a use generating agricultural income and are in fact having this allocation.

3 – Rural properties also are:

Buildings and constructions directly allocated to the production of agricultural income, when located in the lands referred to in the preceding items;

Waters and plantations in the situations referred to in item 1 of article 2.

4 – For purposes of this Code, urban agglomerations are considered, in addition to those located within legally fixed perimeters, nuclei with a minimum of 10 housing units served by public-use streets, with their perimeter delimited by points spaced 50 m from the axis of the streets, in the transversal sense, and 20 m from the last building, in the direction of the streets.

Article 4 Urban Properties

Urban properties are all those that should not be classified as rural, without prejudice to the provision of the following article.

Article 5 Mixed Properties

1 – Whenever a property has rural and urban parts it is classified, in its entirety, in accordance with the main part.

2 – If neither of the parts can be classified as main, the property is deemed to be mixed.

Article 6 Species of Urban Properties

1 – Urban properties are divided into:

Residential;

Commercial, industrial or for services;

Land for construction;

Other.

2 – Residential, commercial, industrial or for services are buildings or constructions licensed for such purposes or, in the absence of a license, that have as normal destination each of these purposes.

3 – Land for construction shall be considered as lands situated inside or outside an urban agglomeration, for which a license or authorization has been granted, a prior communication admitted or a favorable prior information issued of a subdivision or construction operation, and also those which have been so declared in the acquisitive title, excepting lands in which the competent entities forbid any of those operations, namely those located in green zones, protected areas or that, in accordance with municipal territorial planning plans, are allocated to spaces, infrastructure or public facilities. (Wording of Law No. 64-A/08 of 31-12)

4 – Those falling under the provision of point d) of item 1 are lands situated within an urban agglomeration that are not land for construction nor are covered by the provision of item 2 of article 3, and also buildings and constructions licensed or, in the absence of a license, that have as normal destination purposes other than those referred to in item 2 and also those of the exception of item 3.

In accordance with the legal regime, article 6, item 3 tells us expressly what is considered as land for construction.

  1. According to the documentation attached to the proceedings, which confirms the duly licensed subdivision and urbanization works, it clearly results that the property in question is land for construction, under the terms of article 6, item 3.

  2. It is concluded that the property is covered by the scope of the concept provided for in item 28.1 of the TGIS, provided that its respective TPV is equal to or exceeding € 1,000,000.

  3. It now falls to determine whether the property satisfies the requirement of item 28.1, relating to the value of 1,000,000.00 € so as to be covered by it.

  4. Considering the scope of application of the norm to land for construction of buildings, taxation falls on values corresponding to properties to be constructed which, according to their respective authorization or envisaged use, are intended to have an allocation for residential purposes, even if this is found present therein jointly with others.

  5. Under the terms of article 45 of the CIMI, the taxable property value of land for construction is calculated as follows:

"1 - The taxable property value of land for construction is the sum of the value of the implantation area of the building to be constructed, which is that situated within the perimeter of fixation of the building to the ground, measured by the outer part, added to the value of the land adjacent to the implantation.

2 - The value of the implantation area varies between 15% and 45% of the value of authorized or envisaged buildings.

3 - In determining the percentage of the value of the implantation land consideration is given to the characteristics referred to in item 3 of article 42.

4 - The value of the area adjacent to the construction is calculated under the terms of item 4 of article 40.

5 - When the document evidencing constructive viability referred to in article 37 only makes reference to the indices of the Master Plan, the evaluating experts must estimate, with reasoning, the respective construction area, taking into consideration, in particular, the average construction areas of the surrounding area."

Complementarily, in the valuation of land for construction, the area adjustment coefficient provided for in article 40-A of the same Code applies.

From the valuation rules referred to it results, for the situation in question, that the TPV is determined based on the area of construction allocated to each one, and in the case of land for construction whose building, authorized or envisaged, has various allocations, the respective total TPV is therefore that resulting from the sum of the values attributed to different areas, without prejudice to the rule of rounding of values established in article 38, item 2, of the CIMI.

As proven by the elements attached to the proceedings, the authorized building on the identified land is intended for residential purposes, considered in the valuation carried out on the land to which the total TPV of € 1,374,680.00€ was assigned, resulting from the sum of the value attributed to the areas of different allocations: € 1,374,680.00.

  1. The assessment in question in the present proceedings was issued during the validity of item 28.1 of the General Table of Stamp Duty, in the wording given by Law No. 83-C/2013, its application in accordance with the above-cited norms is unequivocal, the scope of application of the norm extends to land for construction "whose authorized or envisaged building is for residential use", and its respective TPV is greater than € 1,000,000.00.

In light of the foregoing, it is clear that the property here in question is covered by item No. 28.1 of the TGIS.

As to the defect of illegality arising from error on the legal prerequisites of the assessment resulting from the application of a materially unconstitutional norm, on the grounds of violation of the Principles of Contributory Capacity and Equality, requested by the Claimant, reference is made to the Decisions of the Constitutional Court No. 590/2015, No. 83/2016, No. 247/2016 and No. 568/2016, which decided "Not to declare unconstitutional the provision of item 28 of the General Table of Stamp Duty, in the wording introduced by Law No. 55-A/2012 of 29 October, and amended by Law No. 83-C/2013 of 31 December, which imposes annual taxation on the ownership of residential property or land for construction whose authorized or envisaged building is for residential purposes, whose taxable property value is equal to or exceeding € 1,000,000.00;"

Verified that the Constitutional Court considered that the provision of item No. 28.1 of the TGIS is not unconstitutional, and as such does not violate the principle of tax equality and of Contributory Capacity, it is concluded that there is no defect of illegality of the acts here impugned.

In these terms, the provision of item No. 28.1 of the TGIS is applicable to the urban land in question, whereby the tax acts here impugned do not suffer from any defect, and it is decided to declare the request for arbitral ruling unfounded, absolving the AT of the claim.

Regarding Compensatory Interest

Regarding the Claimant's request for payment of compensatory interest, as the Claimant's claim is unfounded and there was no error attributable to the services, it is concluded by the unfoundedness of the claim for payment of compensatory interest to the Claimant.

I – DECISION

Therefore, given all of the foregoing, the present Arbitral Tribunal decides:

  1. To declare unfounded the claim for declaration of illegality of the tax assessment acts in the field of Stamp Duty No. 2015…, 2015…, 2015…, which set a collection due of € 11,581.00 (eleven thousand five hundred and eighty-one euros), and the consequent absolution of the AT of the claim.

  2. To declare unfounded the claim for recognition of the right to compensatory interest in favor of the Claimant.

The value of the case is set at € 11,581.00 (eleven thousand five hundred and eighty-one euros), based on the value of the assessment taking into account the economic value of the case as assessed by the value of the tax assessments impugned, and accordingly the costs are set, in the respective amount of 918.00€ (nine hundred and eighteen euros), to be borne by the Claimant in accordance with article 12, item 2 of the Tax Arbitration Regime, article 4 of the RCPAT and Table I attached thereto. – item 10 of article 35, and item 1, 4 and 5 of article 43 of the LGT, articles 5, item 1, point a) of the RCPT, 97-A, item 1, point a) of the CPPT and 559 of the CPC).

Notify.

Lisbon, 30 March 2017

The Arbitrator

Paulo Ferreira Alves

Frequently Asked Questions

Automatically Created

Is Stamp Tax (Imposto de Selo) under Verba 28.1 of TGIS applicable to construction land (terrenos para construção)?
Yes, Stamp Tax under item 28.1 of TGIS applies to construction land (terrenos para construção) with taxable property value equal to or exceeding €1,000,000, subject to an annual 1% rate. However, the precise scope depends on whether the authorized or envisaged construction is exclusively residential. The legal interpretation centers on whether mixed-use properties combining residential and commercial elements fall within this provision, as introduced by Law 83-C/2013.
What was the legal basis for challenging the Stamp Tax liquidation in CAAD process 643/2016-T?
The legal basis for challenging the stamp duty assessment included: (1) erroneous interpretation of item 28.1 of TGIS, arguing it applies only to land exclusively allocated to residential construction, not mixed-use properties; (2) error on legal prerequisites due to the property's building permit authorizing both collective housing and commerce; and (3) material unconstitutionality of the norm for violating the constitutional principles of contributory capacity (capacidade contributiva) and equality (igualdade), as the tax applies regardless of the taxpayer's ability to pay.
How does the CAAD arbitral tribunal interpret the scope of Verba 28 of the Tabela Geral do Imposto de Selo for land classification?
The CAAD arbitral tribunal applies article 67, paragraph 2 of the Stamp Duty Code, which references the IMI Code definition of construction land under article 6, paragraph 3. The tribunal examines whether 'terrenos para construção' is a formal or material concept, focusing on the potential allocation to construction. The interpretation requires analyzing whether the authorized or envisaged building is exclusively for residential purposes under IMI Code terms, or whether mixed-use properties with commercial and residential components fall outside item 28.1 scope.
What is the procedure for requesting arbitral review of Stamp Tax assessments before the CAAD?
Property owners can contest stamp tax assessments by filing an arbitration request with CAAD (Centro de Arbitragem Administrativa) under article 2, paragraph 1, point a) and article 30, paragraph 1 of Decree-Law 10/2011. The process involves: formal submission of the arbitration request, acceptance by the CAAD President, constitution of the arbitral tribunal (single arbitrator or panel), notification to the Tax Authority, optional hearing or written submissions under article 18 of RJAT, and issuance of the arbitral decision. The arbitral tribunal must verify material jurisdiction, party legitimacy, and legal representation.
Can property owners contest Imposto de Selo liquidations on terrenos para construção valued above the TGIS threshold?
Yes, property owners can contest Imposto de Selo liquidations on terrenos para construção valued above €1,000,000 by filing arbitration proceedings with CAAD. Grounds for challenge include: arguing the property does not meet the exclusive residential allocation requirement if the building permit includes commercial or mixed-use authorization; invoking material unconstitutionality for violation of contributory capacity and equality principles; or demonstrating errors in property valuation or land classification. Success depends on proving the cumulative requirements of item 28.1 TGIS are not satisfied or that constitutional guarantees are violated.