Summary
Full Decision
ARBITRAL DECISION
The arbitrators Fernanda Maçãs (presiding arbitrator), Miguel Carrasqueira Baptista and Rita Guerra Alves (panel arbitrators) appointed by the Deontological Council of the Centre for Administrative Arbitration to form the Arbitral Tribunal, agree as follows:
I - REPORT
- The Claimant, A..., SA, with registered office at ..., ..., ..., ...-... ..., holding the corporate tax identification number (NIPC)..., hereinafter referred to as the Claimant or taxpayer, presented the petition for constitution of an Arbitral Tribunal in tax matters and petition for arbitral pronouncement, under the terms of article 2(1)(a) and article 10(1)(a), both of Decree-Law no. 10/2011, of 20 January (Legal Regime for Arbitration in Tax Matters, hereinafter abbreviated as RJAT).
The Claimant seeks a declaration of illegality of the tax assessment act for Municipal Tax on Real Estate (IMI) no. 2017... of 2017, which fixed a tax payable of € 124,286.12 (one hundred and twenty-four thousand, two hundred and eighty-six euros and twelve cents) as well as the respective compensatory interest.
The petition for constitution of the Arbitral Tribunal was accepted by the President of CAAD, in accordance with article 11(1)(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 Claimant did not proceed to appoint an arbitrator, wherefore, under article 6(1) and article 11(1)(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 Deontological Council appointed Counsellor Maria Fernanda dos Santos Maçãs as Presiding Arbitrator, and Dr. Miguel Carrasqueira Baptista and Dr. Rita Guerra Alves as panel arbitrators, whose appointment was accepted in accordance with legal terms.
On 2018-02-14, the parties were duly notified and did not express any intention to challenge the appointment of the arbitrators, under article 11(1)(a) and (b) of the RJAT and articles 6 and 7 of the Deontological Code.
The Collective Arbitral Tribunal was regularly constituted on 2018-03-06, to assess and decide on the subject matter of the present dispute.
By order of 13 May, the holding of the meeting provided for in article 18 of the RJAT was dispensed with, and 6 September was set as the deadline for delivery of the arbitral decision.
The parties submitted no pleadings.
- In support of its petition for arbitral pronouncement, the Claimant alleged, with a view to the declaration of illegality of the tax assessment acts in respect of the Additional IMI, the following:
The Claimant was notified of the tax assessment act for Additional IMI (AIMI), relating to the year 2017, concerning the real property held by it, over the urban property with registration number ..., in the parish of ..., municipality of Lisbon, registered in the matrix as "land for construction" with a potential future allocation of "services"; and the urban property with registration number ..., in the parish of ..., municipality of Lisbon, registered in the matrix as "land for construction" with a potential future allocation of "housing".
The Claimant contends that the creation of AIMI was intended to require a greater fiscal burden on taxpayers who allegedly reveal higher levels of wealth, thus constituting a tax of a personal nature that affects urban real estate wealth.
In this context, and without prejudice to better opinion, the Claimant considers that the AIMI assessment under analysis suffers from a defect of violation of law, due to errors in the factual and legal assumptions and, as such, should be annulled with all legal effects.
The Claimant sustains that the legislative purpose (ratio legis) that lay behind the rule excluding objective scope of application, enshrined in article 135-B(2) of the IMI Code, was essentially based on the intention not to increase the tax burden on taxpayers who, by virtue of their economic activities, hold real estate for the pursuit of their corporate purpose.
The Claimant contends that the holding of these real estate properties effectively constitutes the substrate of all activity developed by it and is limited to operations related to real estate.
The Claimant further maintains that these real estate properties embody true elements of the productive process of the Claimant's activity, whether as rental properties or as true inventories intended for future transformation, intended exclusively for the pursuit of its respective activity and never being comparable to elements demonstrating its wealth.
It alleges that the holding of real estate by a real estate company such as the Claimant here – even if in large numbers – does not represent an (increased) tax capacity that could legitimize the application of AIMI.
Consequently, it is evident that AIMI – as provided for in articles 135-A and following of the IMI Code – could never apply to real estate held by the Claimant in the course of its activity, since the principles underlying the taxation under analysis are not verified.
In fact, taxing these real estate would mean directly taxing an "economic activity" – something that the legislator expressly intended to avoid when creating AIMI.
The Claimant argues that the taxation of land for construction with commercial, industrial or service purposes is illegal.
The Claimant contends that it is evident that, in instituting AIMI, the legislator intended to tax properties with housing purposes, as actual manifestations of wealth. Thus, it was clear the legislator's intention to exclude from the scope of application of AIMI all properties devoted to economic activities.
Therefore, regarding the taxation of "land for construction", it should be understood that all "land for construction" devoted to economic activities is also necessarily excluded from this taxation, i.e. all "land for construction" having a (potential) allocation to "commerce, industry, services" or "other".
The Claimant alleges, in the alternative, the unconstitutionality of the AIMI legal regime, as being contrary to the fundamental principle of equality, enshrined in article 13 of the Constitution and, in parallel, contrary to the principle of fiscal equality and tax capacity enshrined in article 104(3) of the same instrument.
The legal regime of AIMI, specifically articles 135(2)-A and 135(2)-B thereof, both of the IMI Code, and the resulting taxation, promote differentiated treatment and unjustified inequality between taxpayers, in manifest violation of the principle of equality enshrined in article 13(2) of the Constitution.
The Claimant concludes by requesting the annulment of the AIMI Assessment under consideration (sub judice), as it suffers from a defect of violation of law, by embodying an error concerning the legal assumptions for application of a materially unconstitutional norm.
The Respondent, duly notified for this purpose, timely submitted its response in which, in abbreviated summary, it alleged the following:
The Tax Authority could not/cannot refuse the application of a norm or fail to comply with the law by invoking or questioning its constitutionality, as it is subject to the principle of legality, as established in articles 266(2) of the Constitution, 3(1) of the Code of Administrative Procedure and 55 of the General Tax Law (LGT).
The Respondent argues that AIMI, as it affects urban properties of which legal persons and equivalent structures are owners, usufructuaries or surface rights holders (article 135-A(2) of the IMI Code), assumes the nature of a real tax, in that the determination of the amount payable abstracts from the economic dimension of the entities, namely the classification as a small, medium or large enterprise, and does not affect the entirety of the net assets of the entities.
In this way, with respect to legal persons and equivalent structures, AIMI has the nature of taxation of a real nature, thus reflecting the idea that elements of the real estate assets held by these entities perform, as a rule, an economic function, thus not representing a mere accumulation of wealth.
Like any tax on property, AIMI is dissociated from any eventual realization of profit with the sale of real estate, as well as from the existence or otherwise of a negative or positive net position, being relevant, for the purposes of the tax, only the patrimonial value of the land.
The Respondent alleges that the fact that the properties are investment assets, devoted to real estate operations habitually developed by the owner, not affecting the revealed tax capacity, would determine that taxation in AIMI is susceptible to some attenuation within the business context, because it constitutes a cost of the activity, due to the possibility of passing through (in prices) which, to a greater or lesser degree, always exists even in taxes on business income.
The Respondent contends that AIMI is, furthermore, a deductible expense, negatively influencing the taxable profit of the fiscal year, or is deductible from the Corporate Income Tax collection when the properties in the taxable matter include income generated by real estate subject to it, within the scope of rental or hospitality activity (articles 135-J(1) and (2) of the IMI Code).
Consequently, the AIMI borne in each year alleviates the amount of Corporate Income Tax assessed and paid.
The Respondent further contends that as regards the fact that AIMI affects all land for construction, even if classified as commercial, industrial and services, the judgment of unconstitutionality in the face of an alleged, but non-existent, violation of the principle of equality is based on the difference that will exist compared to natural persons.
The Respondent contends that by virtue of the exclusion of taxation provided for in article 135-B(2) of the IMI Code, the assessment should be made, as results therefrom, in accordance with the typology provided for in article 6 of the IMI Code.
This does not in itself imply discrimination of land for construction, precisely because these are urban properties with specific normative treatment, as evidenced by the rules themselves on assessment (cf. articles 38 and following, and specifically for land for construction article 45 of the IMI Code), whereby the presence of normative circumstances and factors specific to each type of urban property should be recognized, which justify the distinctions in regime.
Therefore, it is neither pertinent nor in accordance with the principle of equality to make relevant, for purposes of an assessment of constitutional conformity of AIMI, the eventual component of future construction on the land for construction in question.
Since the only tax patrimonial value (VPT) contained in the matrix under the Municipal Tax on Real Estate Code on which the annual taxation in AIMI is assessed is the VPT of the land for construction itself existing.
In this way, on the date of taxation in AIMI of land for construction, it is only appropriate to consider the actual reality of the land, as it is legally characterized, and taking into account the VPT contained in the matrix.
Not a future construction, with the consequent type of urban property that may subsequently arise, including the autonomous units or floors susceptible to independent use that may exist, which truly are mere virtual abstractions of situations neither constituted in legal nor factual terms.
This would mean, in short, that taxation would be determined, instead of current and effective tax capacity, in terms of a future and eventual tax capacity.
The Respondent concludes by arguing, in summary, that the contested assessment deserving no censure, the arbitral petition should be judged as having no basis in fact and law, with the other legal consequences.
II. SANITATION
3.1. The Respondent raises the exception of incompetence of the Tribunal because, as the Administration is subject to the principle of legality (article 262(2) of the Constitution and article 55 of the LGT), it cannot refuse the application of a norm or fail to comply with the law by invoking or questioning its constitutionality.
It is true that the Respondent is directly subordinated to the law and must act in accordance with it. This fact does not prejudice, however, the right of individuals to raise, in disputes specifically submitted for judgment to courts, the unconstitutionality of certain norms, nor can it prevent courts, including arbitral courts, from assessing the questions of unconstitutionality that are placed before them, applying or disapplying the norms in question, in the exercise of the powers constitutionally conferred (see articles 204, 209 and 280 of the Constitution).
Regarding an identical question, we follow the arbitral decision of 04-05-2018, rendered in Case no. 675/2017-T of CAAD, in the part in which it refers:
"There will certainly be some misunderstanding, as in a State of Law, it is to the Courts and not to any other bodies, namely those having legislative and executive functions, that the administration of justice falls to, «ensuring the defense of the rights and legally protected interests of citizens, repressing the violation of democratic legality and settling conflicts of public and private interests» (articles 202(1) and (2) of the Constitution), for which they must interpret and apply the laws to settle disputes between citizens and the Administration.
And it is also to the Courts that the Constitution attributes the power to control the constitutionality of laws, issued by bodies with legislative power (article 204 of the Constitution).
This decision is rendered by a Court, whereby it has a jurisdictional character, and in the exercise of its jurisdictional power it falls to it to apply the law, according to its interpretation, being only subject to the law, as it interprets it, not being obliged to follow the interpretation adopted by the Tax and Customs Authority or that hypothetically would be adopted by bodies with legislative power if they were assigned the competence to apply the law to disputes pending in Courts.
On the other hand, in the exercise of its interpretative activity the Arbitral Court is not limited by the letter of the law, and should follow all the criteria of interpretation provided for in the law, in particular those indicated in article 9 of the Civil Code and article 11 of the LGT: «interpretation must not be limited to the letter of the law, but must reconstruct from the texts the legislative thought, taking especially into account the unity of the legal system, the circumstances in which the law was drafted and the specific conditions of the time in which it is applied», being able only to refrain from considering «the legislative thought that does not have in the letter of the law a minimum of verbal correspondence», which may even be «imperfectly expressed»".
In summary, it is not asked of the Respondent that it proceed with the application or non-application of norms due to unconstitutionality. That petition is directed at courts in general, including arbitral courts, in cases submitted for judgment.
Whereby the alleged exception is without basis.
3.2. The Parties have legal personality and capacity, appear to be legitimate and are regularly represented (articles 4 and 10(2) of the RJAT and article 1 of Ordinance no. 112-A/2011, of 22 March).
3.3. The proceedings do not suffer from nullities.
3.4. The Arbitral Tribunal is regularly constituted and is materially competent to know and decide on the petition [see article 2(1)(a) of the RJAT].
3.5. There are no other circumstances that prevent the substantive examination of the case.
III. THE MERITS
III-1 - FACTUAL MATTER
The relevant facts for the decision of the case taken as established are the following:
The Claimant is a joint-stock company with the corporate purpose of buying and selling real estate and resale of properties acquired for that purpose, exchange and rental of real estate. Remodeling and real estate promotion. Provision of services related to the activity.
The Claimant is the owner of the urban property with registration number ..., in the parish of ..., municipality of Lisbon, registered in the matrix as "land for construction" with potential future allocation of "services"; with a VPT of 23,662,720.00€.
The Claimant is the owner of the urban property with registration number ..., in the parish of ..., municipality of Lisbon, registered in the matrix as "land for construction" with potential future allocation of "housing", with a VPT of 7,408,810.05€.
The Claimant proceeded with full and timely payment of the tax act that embodied the AIMI assessment (doc. no. 3 attached by the Claimant with the Petition).
5 - UNPROVEN FACTS
There are no other facts relevant to the assessment of the merits of the case that have not been proven.
6 - SUBSTANTIATION OF FACTUAL MATTERS
The proven facts were based on the position assumed by each of the parties and not contradicted by the opposing party, the critical analysis of documents attached to the record, whose authenticity and truthfulness were not challenged.
The Tax and Customs Authority did not attach administrative proceedings and does not dispute what is stated by the Claimant regarding the nature of the properties referred to in items (b) and (c) of the factual basis, whereby it is considered established that these are land for construction for the purposes indicated therein.
III-2 - ON THE LAW
As we have seen, in summary terms, the Claimant considers that the AIMI assessment under analysis suffers from a defect of violation of law, due to errors in the factual and legal assumptions and, as such, should be annulled with all legal effects. Specifically, for the Claimant, the interpretation of the norms in question carried out by the Respondent is contrary to the legislative purpose (ratio legis) that lay behind the rule excluding objective scope of application, enshrined in article 135-B(2) of the IMI Code, which was essentially based on the intention not to increase the tax burden on taxpayers who, by virtue of their economic activities, hold real estate for the pursuit of their corporate purpose.
The Claimant, a real estate company whose corporate purpose comprises the buying, selling and leasing of real estate, contends that the properties in question are directly devoted to the economic activity (real estate sector) that it develops, and therefore are not covered by the scope of application of the additional IMI created by Law no. 42/2016, of 28 December, through the amendment of articles 135-A and following to the IMI Code. In fact, taxing these real estate would mean, according to the Claimant, directly taxing an "economic activity" - "something that the legislator expressly intended to avoid when creating AIMI".
On another level of analysis, the Claimant also considers illegal the taxation of land for construction that has potential allocation to "commerce, industry, services" or "other", and should be considered covered by the exclusion clause of article 135-B(2) of the IMI Code.
Let us examine this.
III-2-A) Regarding the illegality of the assessment due to error in interpretation of applicable norms
A)1 - Regarding land for construction with potential allocation to housing
The additional IMI was established by Law no. 42/2016, of 28 December (State Budget Law for 2017), which added to the IMI Code Chapter XV comprised of articles 135-A to 135-K.
Article 135-A defines the subjective scope of the tax, establishing that "the passive subjects of the additional municipal tax on real estate are natural or legal persons who are owners, usufructuaries or surface rights holders of urban properties situated in Portuguese territory", and "any structures or centers of collective interests without legal personality that appear in the matrices as passive subjects of the municipal tax on real estate shall be treated as equivalent to legal persons".
In turn, article 135-B defines the objective scope of application, establishing the following:
Article 135-B
Objective scope of application
1 - The additional municipal tax on real estate applies to the sum of the tax patrimonial values of urban properties situated in Portuguese territory of which the passive subject is a holder.
2 - Excluded from the additional municipal tax on real estate are urban properties classified as «commercial, industrial or for services» and «other» in accordance with items (b) and (d) of article 6(1) of this Code.
The reference made in article 135-B(2) to article 6 of the IMI Code is intended to characterize what is understood as urban properties «commercial, industrial or for services» and «other» for purposes of the exclusion from the scope of application of the additional tax.
Thus, the municipal tax on real estate (IMI) affects the tax patrimonial value of rural and urban properties situated in Portuguese territory, as results from article 1 of the IMI Code, and the subsequent articles define, for purposes of the tax, the concepts of property, of rural properties, of urban properties and of mixed properties (articles 2 to 5).
In turn, article 6 establishes the types of urban properties, establishing the following:
"1 - Urban properties are divided into:
a) Residential;
b) Commercial, industrial or for services;
c) Land for construction;
d) 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 their normal purpose each of these uses.
3 - Land for construction is considered to be land situated within or outside an urban agglomeration, for which a license or authorization for operation of subdivision or construction has been granted, prior notification has been admitted or favorable prior information has been issued on operation of subdivision or construction, and also those that have thus been declared in the acquisition title, with the exception of land on which the competent entities prohibit any of those operations, in particular those located in green areas, protected areas or which, in accordance with the municipal land use plans, are devoted to public spaces, infrastructure or equipment.
4 - Included in the provision of item (d) of (1) are land situated within an urban agglomeration that are not land for construction nor are covered by the provision of article 3(2) and also buildings and constructions licensed or, in the absence of a license, that have as their normal purpose other uses than those referred to in (2) and also those in the exception of (3)."
Given the foregoing and regarding the first question, it should be said from the outset that the literal language of articles 135-A(1) and 135-B(1) and (2) of the IMI Code is clear and does not lend itself to any interpretative doubt. Since the letter of the law, or grammatical element, is the first element to be invoked in legal hermeneutics, and as it must be presumed that the legislator knew how to express his thought in adequate terms (article 9(3) of the Civil Code), it will not be necessary to invoke other elements from among those available in the array of hermeneutical tools.
In fact, it appears clear that the legislator, in defining the negative delimitation of the scope of the tax by reference to urban properties classified as «commercial, industrial or for services» and «other» in accordance with items (b) and (d) of article 6(1) of the IMI Code, is precisely intended to refer to this type of property in accordance with the characterization that the Code itself attributes to it.
It is true that the legislative concern to «avoid the impact of this tax on economic activity» was announced in the Bill for the State Budget for 2017 and was materialized through the exclusion from the scope of application of «urban properties classified as the type "industrial", as well as urban properties licensed for tourist activity, the latter as long as their intended use is duly declared and proven» and the deduction from the taxable value of the amount of «€600,000.00, when the passive subject is a legal person with agricultural, industrial or commercial activity, for real estate directly devoted to its functioning».
However, it was not on the basis of the activity to which the real estate was devoted that the exclusion of scope of application came to be defined, for in the wording that came to be approved, the non-application was defined solely on the basis of the types of properties indicated in article 6 of the IMI Code, without any reference to the allocation or not to the functioning of legal persons.
Thus, as was recorded in Arbitral Decision no. 675/2017-T, "if the final version of the Budget had maintained the legislative intention to remove the scope of application from real estate directly devoted to the functioning of legal persons, the reference to this allocation that appeared in the proposal and that clearly expressed this legislative option would certainly have been maintained.
"(...), having suppressed this reference to the allocation of real estate, there is no legal basis to conclude that residential properties and land for construction devoted to the functioning of legal persons are not relevant for the scope of application of AIMI.
"In the absence of other elements that induce the election of the less immediate meaning of the text, the interpreter should opt in principle for that meaning which better and more immediately corresponds to the natural meaning of the verbal expressions used, and in particular to their technical-legal meaning, on the assumption (not always exact) that the legislator knew how to express correctly his thought. [1]
"In the case at hand, in light of the departure from the proposed wording in which relevance was given to the allocation of real estate, there is no reason to conclude that the legislator did not know how to express his thought in adequate terms, as must be presumed, by virtue of article 9(3) of the Civil Code."
The Claimant is thus without basis when it argues that it must have been the legislator's intention to intend to exclude from the scope of application of the tax properties that constitute the substrate of the economic activity of real estate companies, under the pretext that the objective pursued would be not to increase the tax burden on taxpayers who hold real estate by reason of their corporate purpose, so as not to affect the economic activity developed by them.
In fact, such interpretation has no support in the letter of the law nor does it follow from the rational and systematic element. It is clear from the reading and interpretation of the norms in question that the legislator's option was not in the direction advocated by the Claimant.
Accordingly, the fact that the Claimant holds the real estate referred to in the record as the substrate of its economic activity does not exclude the scope of application of AIMI.
A)2 - Regarding land for construction with potential allocation to "services"
Regarding the Claimant's petition regarding the illegality of taxation of land for construction having potential allocation to "commerce, industry, services" or "other", as it considers they are covered by the exclusion clause of article 135-B(2) of the IMI Code, because that was the clear intention of the legislator, we follow the jurisprudence of CAAD set forth in cases no. 668/2017-T, 675/2017-T, 681/2017-T, 688/2017-T, 677/2017-T.
Given what has been stated above regarding the legal regime of AIMI, specifically regarding its objective and subjective scope of application, let us then examine whether the urban property with registration number ..., in the parish of ..., municipality of Lisbon, registered in the matrix as "land for construction" with potential future allocation of "services", is or is not covered by the Additional Municipal Tax on Real Estate (AIMI).
It is worth emphasizing that there is no challenge to its allocation to services or to the activity of the company, as it has been proven that the land subject to the assessment is intended for land for construction with potential future allocation of "services".
As stated, regarding this question, several pronouncements have been rendered by CAAD, specifically in the following cases 668/2017-T, 675/2017-T, 681/2017-T, 688/2017-T, 677/2017-T, jurisprudence with which we agree, in which it was decided in the sense that land for construction with commercial, industrial or services allocation is not covered by article 135-A, and consequently is not subject to AIMI.
Following the above-cited jurisprudence, we reiterate the purpose of the creation of AIMI, as a complementary tax on real estate assets, which aimed to introduce in taxation «a progressive element of personal basis, taxing more highly the larger patrimonies» (State Budget Report for 2017, page 60), and therefore it is compatible with the objective that the taxation of property should contribute to equality among citizens, as provided for in article 104(3) of the Constitution. Progressivity has as a corollary the tendency to impose greater taxation on those with greater tax capacity.
On the other hand, the exclusion from taxation of properties specially intended for productive activity, namely «commercial, industrial or for services», finds constitutionally acceptable foundation in the obligation of the State to promote the increase of economic well-being, which presupposes the proper functioning of productive activities and constitutes one of its priority obligations in the economic field [article 81(a) of the Constitution].
And in line with what was understood in the arbitral award of 17-03-2016, rendered in case no. 507/2015-T, while the ownership of real estate property intended for housing of high value is a tendency-reliable index of economic prosperity superior to that of the majority of citizens, one cannot consider that there is a reliable index of superior tax capacity when confronted with the ownership of rights over real estate intended for the exercise of economic activities (commercial, industrial, provision of services or similar), as these must be adequate to the functioning of their respective businesses, their dimension and correlative value not being an index of prosperity.
Equally, it has been the understanding of the Constitutional Court that the principle of equality, as a limit to legislative discretion, does not require equal treatment of all situations, but rather implies that those in equal situations are treated equally and those in unequal situations are treated unequally, in a manner that does not create arbitrary and unreasonable discriminations, because they lack sufficient material foundation. The principle of equality does not prohibit distinctions, but rather distinctions devoid of objective and rational justification. [2]
Indeed, the restriction of the scope of AIMI to residential properties and land for construction of residential properties, which came to be enshrined in the wording of article 135-B(2) of the IMI Code, in the interpretation adopted above, would have constitutionally acceptable foundation.
Given that the chosen tax fact as an index of tax capacity is the ownership of real estate property of a value considered high, it would not be coherent not to apply the tax to buildings intended for services [3] and to apply it to the land intended for their construction, whose value is incorporated into the value of the buildings.
Thus, in a perspective having in mind the unity of the legal system (article 9(1) of the Civil Code), of decisive interpretative value, imposed by the principle of coherence of values or axiological coherence of the legal order, [4] the exclusion provided for in article 135-B(2) of the IMI Code relating to urban properties classified as «for services» should be interpreted broadly as expressing a legislative intention to also exclude from taxation the land intended for the construction of such properties.
In any case, should a literal interpretation of this norm be adopted, with the meaning that all land for construction is covered by the scope of application of AIMI, it would be materially unconstitutional, being incompatible with the principle of equality (article 13 of the Constitution), as it considers as a tax fact the ownership of land for construction of properties intended for services and not the ownership of the properties constructed thereon, because it constitutes underprivileged treatment of taxpayers in the first situation without material justification, as the tax capacity indicated by real estate property in that situation will necessarily be less, which must be present, and increased, in the second.
In situations of unjustified discriminatory treatment, translated into the imposition of a duty or burden in violation of the principle of equality, what is illegitimate is, in principle, the act of imposing the duty only on some of the taxpayers, and the inequality should be resolved by elimination of duties or burdens for those who were discriminatorily burdened with them. [5]
Based on the foregoing, the AIMI assessment contested suffers from a defect of violation of law, due to error concerning the legal assumptions, embodied in the erroneous interpretation and application of article 135-B(2) of the IMI Code, in the part in which it includes in the taxable value the tax patrimonial value of the urban property with registration number ..., in the parish of ..., municipality of Lisbon, registered in the matrix as "land for construction" with potential future allocation of "services"; with a VPT of 23,662,720.00€.
The Claimant is thus correct in this respect, and the corresponding petition should succeed.
III-2-B) Regarding the constitutional questions
Finally, the Claimant also raises the unconstitutionality of the legal provision of article 135-B(2) of the IMI Code, due to violation of the principle of fiscal equality and the principle of tax capacity, when interpreted in the dual sense that the scope of application of the additional tax encompasses the ownership of real estate property when these correspond to the substrate of the economic activity itself developed by it, and that the exclusion from the scope of application covers urban properties classified as commercial, industrial or for services and not land for construction intended for these same purposes.
The Claimant thus argues that the legal regime of AIMI, specifically articles 135(2)-A and 135(2)-B thereof, both of the IMI Code, and the resulting taxation, promote differentiated treatment and unjustified inequality among taxpayers, in manifest violation of the principle of equality enshrined in article 13(2) of the Constitution.
As set forth in the Arbitral Decisions that we have been following, "the Constitutional Court has underlined that one of the essential constitutionally defined objectives of the tax system, alongside the satisfaction of the financial needs of the State and other public entities, is that of fair distribution of income and wealth, as can be inferred from article 103(1) of the Constitution.
"It is this binding of the tax system to the idea of social justice and the reduction of inequality in the social distribution of income and wealth that requires it to be progressive. This requirement is expressly enshrined within the scope of personal income taxation: according to article 104(1), the personal income tax aims at «the reduction of inequalities and shall be single and progressive, taking into account the needs and income of the household unit».
"Fiscal progressivity requires that the relationship between the tax paid and the level of income be more than proportional, which can only be achieved by applying to taxpayers with higher income a higher tax rate. In other words, there is progressivity when the value of tax increases in proportion greater than the increase in the taxable matter.
"Consequently, the Constitution requires a progressivity with the intrinsic potential to contribute to a reduction of inequality in income (on all these aspects, the decision of the Constitutional Court no. 187/13, nos. 97, 98 and 99).
"Fiscal progressivity is also a requirement of the principle of material equality.
"As Casalta Nabais states, the principle of fiscal equality has embedded within it especially «the idea of generality or universality, whereby all citizens are bound by the duty to pay taxes, and uniformity, requiring that such duty be assessed by the same criterion - the criterion of tax capacity. This thus implies equal tax for those with equal tax capacity (horizontal equality) and different tax (in qualitative or quantitative terms) for those with different tax capacity in proportion to this difference (vertical equality)» (Fiscal Law, 5th edition, Coimbra, 2009, pp. 151-152).
"Configuring the general principle of equality as a material equality, the principle of tax capacity – according to the same author - as the tertium comparationis of equality in the field of taxes, does not require a specific and direct constitutional provision. Its constitutional foundation is the principle of equality articulated with the other principles and provisions of the respective "tax constitution" and, in particular, those that already flow from the structural principles of the tax system contained in articles 103 and 104 of the Constitution (op. cit., p. 152).
"As a presupposition and criterion of taxation, the principle of tax capacity – within the same line of understanding - «removes the tax legislator from arbitrariness, obligating him to maintain, in the selection and articulation of tax facts, to revelations of tax capacity, that is, erect as object and taxable matter of each tax a certain economic presupposition that is a manifestation of this capacity and is present in the various legal hypotheses of the respective tax» (op. cit., p. 154).
"Also the Constitutional Court, more recently, has analyzed the principle of fiscal equality through the prism of tax capacity, as can be seen in particular in decision no. 142/2004, where it is stated that «[t]he principle of tax capacity expresses and concretizes the principle of fiscal or tax equality in its aspect of uniformity – the duty of all to pay taxes according to the same criterion – with tax capacity filling the unitary criterion of taxation».
"The recognition of the principle of tax capacity as a criterion intended to assess the constitutional inadmissibility of certain solutions adopted by the tax legislator has also led to the idea, expressed for example in Constitutional Court decision no. 348/97, that taxation in accordance with the principle of tax capacity will imply «the existence and maintenance of an effective connection between the tax obligation and the economic presupposition selected as the object of the tax, requiring, therefore, a minimum of logical coherence of the various concrete hypotheses of tax provided for in law with the corresponding object thereof».
"The Constitutional Court has thus tended to move away from merely negative control of tax equality, adopting the principle of tax capacity as an adequate criterion for the distribution of taxes; but it does not cease to accept the prohibition of arbitrariness as an adjuvant element in the verification of the constitutional validity of normative solutions in the tax field, particularly when these are dictated by considerations of legislative policy related to the rationalization of the system.
"In summary, the principle of tax equality can be concretized through different aspects: a first is in the generality of the tax law, in its application to all without exception; a second, in the uniformity of the tax law, in treating equally taxpayers in equal situations and differently those in different situations, to the extent of the difference, as assessed by tax capacity; a last, is in the prohibition of arbitrariness, in preventing the introduction of discriminations among taxpayers that are devoid of rational foundation (see Constitutional Court decisions no. 306/2010 and 695/2014)".
Applying the above to the case under analysis, what stands out is, first, as can be read in the State Budget Report for 2017 (p. 60), that the creation of the additional IMI, as a complementary tax on real estate property, was intended to introduce in taxation "a progressive element of personal basis, taxing more highly the larger patrimonies", and, in that sense, it is compatible with the principle of tax progressivity to which article 104(3) of the Constitution refers, which has as a corollary the imposition tending toward greater taxation on those with greater tax capacity.
According to the doctrine it has also been understood that the taxation of property, alongside the taxation of income, constitutes a projection of tax capacity, functioning as an extension of personal income tax and as reinforcement of qualitative discrimination (Sérgio Vasques, "Tax capacity, income and property", Fiscality – Journal of Tax Law and Management, no. 23, Coimbra, 2005, pp. 33 and 36).
Now, in this context, it is not seen that the taxation of the real estate property of the Claimant offends the principle of tax equality and tax capacity simply because the ownership of real estate constitutes the very object of its economic activity.
In fact, the real estate held by it will be devoted to activities freely accessible to the generality of real estate owners and any other entities, even if of an entrepreneurial nature, that engage in real estate promotion.
As can be read in the Arbitral Award rendered in case no. 664/2017-T, "The ownership of a real estate property, for purposes of sale and transformation, with a view to obtaining economic results, does not cease to constitute an asset property that reveals an increased tax capacity, which goes beyond the tax that affects the taxable profit on account of the economic activity developed. What is at stake, therefore, is not the taxation of actual income earned by such entities through the activity developed, but the complementary tax capacity that stems from the ownership of property and which by itself can facilitate the raising of credit or the strengthening of its negotiating position in the celebration of contracts (...)". In the same sense, see the Arbitral Decision rendered in case no. 676/2017-T.
Also as was recorded in the Arbitral Decision rendered in case no. 675/2017-T, "The specific situation of entities that develop credit granting activity in the real estate field does not appear to deserve special treatment compared to the generality of citizens as regards the ownership of real estate intended for housing.
"In truth, the ownership of a real estate property of high value evidences, as in relation to any owner of real estate intended for housing, special economic capacity to be able to contribute additionally to the Financial Stabilization Fund of Social Security, to which the revenue of AIMI is assigned, and which «corresponds to the objective of the government's program to broaden the financing base of Social Security» (State Budget Report for 2017, page 57).
"Therefore, the imposition on the generality of those holding residential real estate or land for construction of residential properties does not appear materially unconstitutional, in light of the principles of equality and tax capacity."
Furthermore, in line with what was understood in the Arbitral Award of 17 March 2016, rendered in case no. 507/2015-T, "a distinction must be made between the ownership of real estate property intended for housing which constitutes, in itself, a tendency-reliable index of economic prosperity superior to that of the generality of citizens, and the ownership of rights over real estate intended for the exercise of commercial, industrial, provision of services or similar activities which may be recognized as factors of production and whose dimension and patrimonial value constitutes, not so much a manifestation of wealth, but a standard of adequacy to the functioning of the company.
"It thus appears there is constitutionally acceptable foundation for the restriction of the scope of the additional tax to residential properties by comparison with properties classified as commercial, industrial or for provision of services, with the invoked unconstitutionality based on violation of the principles of equality and tax capacity being ruled out."
The Claimant further alleges the unconstitutionality resulting from the discrimination operated by the provision of article 135-B(2) of the IMI Code, regarding land for construction, by disregard of the potential allocation of that land to the purposes of commerce, industry or services, taking as a point of reference the properties classified as commercial, industrial or for services that are excluded from taxation by force of that provision.
This is, however, a question that was already assessed in the previous section, wherefore we refer to what was stated therein.
Whereby, based on the foregoing, the Claimant's petition is partially successful, and it is successful regarding the question of the application of AIMI to the value of the land for construction with registration number ..., in the parish of ..., municipality of Lisbon, registered in the matrix as "land for construction" with potential future allocation of "services"; with a VPT of 23,662,720.00€.
III-2-C) Right to reimbursement and indemnizatory interest
The Claimant makes a request for restitution of the tax paid, as well as payment of indemnizatory interest.
The Respondent came to argue, in summary, that «in its capacity as a body of the Public Administration, it does not have the competence to decide on the non-application of norms regarding which doubts about constitutionality are raised» and «consequently, the services of the Tax Authority cannot be attributed any error of fact or law, given the obedience to law that informs all of its activity».
In accordance with item (b) of article 24 of the RJAT, the arbitral decision on the merits of the claim to which no appeal or challenge may be made binds the Tax Authority from the expiration of the period provided for appeal or challenge, and the Authority must, in the exact terms of the success of the arbitral decision in favor of the passive subject and until the expiration of the period provided for spontaneous execution of the decisions of tax courts, «restore the situation that would exist if the tax act subject to the arbitral decision had not been taken, adopting the necessary acts and operations for this purpose», which is in harmony with what is provided for in article 100 of the LGT [applicable by virtue of item (a) of article 29(1) of the RJAT] which establishes that «the tax administration is obliged, in case of total or partial success of a complaint, judicial challenge or appeal in favor of the passive subject, to the immediate and complete restoration of the legality of the act or situation subject to the dispute, comprising the payment of indemnizatory interest, if applicable, from the expiration of the period of execution of the decision».
As was recorded, among others, in the Arbitral Award rendered in case no. 686/2017-T, "Although article 2(1), items (a) and (b), of the RJAT uses the expression «declaration of illegality» to define the competence of the arbitral courts that function at CAAD, without reference to condemning decisions, it should be understood that the competences of such courts comprise the powers that in judicial challenge proceedings are attributed to tax courts, being this the interpretation that is in harmony with the sense of the legislative authorization on which the Government based itself to approve the RJAT, in which it proclaims, as a first guideline, that «the tax arbitral process must constitute an alternative procedural means to judicial challenge proceedings and to the action for recognition of a right or legitimate interest in tax matters».
"The judicial challenge process, despite being essentially a process of annulment of tax acts, admits condemnation of the Tax Authority in the payment of indemnizatory interest, as can be inferred from article 43(1) of the LGT, in which it is established that «indemnizatory interest is due when it is determined, in gracious complaint or judicial challenge, that there was error attributable to the services from which results payment of the tax debt in an amount greater than that legally due» and article 61(4) of the Code of Tax Procedure and Process (in the wording given by Law no. 55-A/2010, of 31 December, which corresponds to (2) in the original wording), which «if the decision recognizing the right to indemnizatory interest is judicial, the period for payment is counted from the beginning of the period of its spontaneous execution».
"Thus, article 24(5) of the RJAT, in saying that «payment of interest, regardless of its nature, is due in accordance with what is provided for in the general tax law and in the Code of Tax Procedure and Process», should be understood as allowing recognition of the right to indemnizatory interest in the arbitral process.
"On the other hand, as the right to indemnizatory interest depends on the right to reimbursement of sums paid wrongfully, which are its basis for calculation, it is inherent in the possibility of recognition of the right to indemnizatory interest the possibility of assessment of the right to reimbursement of such sums."
It is thus necessary to assess the request for reimbursement of the amounts wrongfully paid and payment of indemnizatory interest.
As has been stated, the petition is only partially successful regarding the AIMI relating to the value of the land for construction with registration number ..., in the parish of ..., municipality of Lisbon, registered in the matrix as "land for construction" with potential future allocation of "services"; with a VPT of 23,662,720.00€.
Therefore, the Claimant has the right to be reimbursed of the sum wrongfully paid, by force of articles 24(1)(b) of the RJAT and 100 of the LGT, as this is essential to «restore the situation that would exist if the tax act subject to the arbitral decision had not been taken».
The illegality of the assessment does not result from unconstitutionality, but rather from the interpretation that should be made of article 135-B(2) and article 135-C(3) of the IMI Code.
Thus, the jurisprudence invoked by the Tax and Customs Authority regarding the non-existence of right to indemnizatory interest in cases in which the illegality of the assessment derives from unconstitutionality does not apply here.
The illegality of this assessment is attributable to the Tax and Customs Authority, as it issued it on its own initiative, with erroneous interpretation of the law.
Consequently, the Claimant has the right to indemnizatory interest, under articles 43(1) of the LGT and 61 of the Code of Tax Procedure and Process, regarding the amount to be reimbursed.
Indemnizatory interest shall be paid from the date on which the Claimant effected the wrongful payment until full payment of the amount to be reimbursed, at the legal supplementary rate, under articles 43(4) and 35(10) of the LGT, article 61 of the Code of Tax Procedure and Process, article 559 of the Civil Code and Ordinance no. 291/2003, of 8 April.
Whereby, based on the foregoing, the petition for reimbursement of the sum of tax wrongfully paid succeeds, as well as the one relating to the respective payment of indemnizatory interest.
The Claimant thus has the right to reimbursement of the share of tax wrongfully paid in the amount of €94,650.88, see doc 1, and respective indemnizatory interest.
IV. DECISION
Whereby this Arbitral Tribunal agrees to:
Adjudge the exception raised by the Respondent without basis;
Adjudge the petition for arbitral pronouncement as partially successful, as the assessment of Additional Municipal Tax on Real Estate no. 2017..., relating to the year 2017, is successful only regarding the question of the application of AIMI to the value of the land for construction with registration number ..., in the parish of ..., municipality of Lisbon, registered in the matrix as "land for construction" with potential future allocation of "services"; with a VPT of 23,662,720.00€, and
In this sequence, partially annul the said assessment in the amount of 94,650.88€;
With the consequent maintenance in the legal order of the assessment in the part relating to the registration number ..., registered in the matrix as "land for construction" with potential future allocation of "housing", with a VPT of 7,408,810.05€.
Condemn the Respondent to reimburse the Claimant of the amount of tax wrongfully paid in the amount of €94,650.88, as well as the respective indemnizatory interest.
V. CASE VALUE
The case value is set at €124,286.12 (one hundred and twenty-four thousand, two hundred and eighty-six euros and twelve cents), corresponding to the value of the assessments to which it was sought to object, in accordance with article 305(2) of the Code of Civil Procedure and article 97-A(1)(a) of the Code of Tax Procedure and Process and article 3(2) of the Regulation of Costs in Tax Arbitration Proceedings.
VI. COSTS
Under article 22(4) of the RJAT, the amount of costs is set at €3,060.00 (three thousand and sixty euros), under the terms of Table I annexed to the Regulation of Costs in Tax Arbitration Proceedings, to be borne by the Claimant and the Respondent in the percentages of 24% and 76%, respectively.
Notify.
Lisbon, 19 September 2018.
Arbitrators
Fernanda Maçãs (Presiding Arbitrator)
(Dissenting as to item (d) of the decision, under the terms of the dissenting opinion annexed).
Miguel Carrasqueira Baptista (panel arbitrator)
(Dissenting, under the terms of the statement annexed)
Rita Guerra Alves (panel arbitrator)
DISSENTING OPINION
I would adjudge the petition as wholly without basis in fact and law, in accordance with the jurisprudence followed in the Arbitral Award rendered in case no. 676/2017-T, the jurisprudence of which we shall follow closely.
I thus do not concur with the present award as to the success of the petition regarding the urban property with registration number ..., in the parish of ..., municipality of Lisbon, registered in the matrix as "land for construction" with potential future allocation of "services"; with a VPT of 23,662,720.00€.
The beginning is based on an erroneous presupposition as to the meaning and scope of the provision of article 135-B(2) of AIMI, which is limited to excluding from the additional tax urban properties classified as «commercial, industrial or for services» and «other», referring to the characterization that is made in article 6 of that Code regarding these types of urban properties.
As we have seen, that provision distinguishes, in its (1), between properties that are "residential", "commercial, industrial or for services", "land for construction" and "other" and defines in subsequent numbers the normative criteria on which depends the classification of an urban property in any of these types. Land for construction are, as results from article 6(3) of that article, lands that have been covered by operation of subdivision or construction license and are not intended for other purposes of an urban nature, and are not confused with properties classified as "commercial, industrial or for services", which are those found to be licensed for these purposes or, in the absence of a license, have as their normal purpose each of these purposes.
As was recorded in the Awards rendered in Cases nos. 664/2017-T and 676/2017-T, "Having the legislator defined an exclusion clause by express and precise reference to certain types of urban properties, which are immediately identifiable in the context of the law, it is not possible to effect a broad interpretation so as to include therein other typologies which the legislator manifestly did not wish to consider. It is not even possible to reach this interpretative result based on mere considerations of a pragmatic order or of teleological identity.
"Although it might be justified, in a perspective of fiscal policy, to confer on land for construction intended for buildings for commercial, industrial or services purposes the same status that came to be attributed to properties classified as "commercial, industrial or for services", the fact is that this was not the legislative option, which was limited to excluding from the scope of application of the tax these types of properties and not those others which potentially could be used for those same purposes."
Finally, this interpretation does not constitute any discriminatory treatment and violation of the principle of equality since we are talking about diverse realities, not least because land for construction is not assimilable to already built urban properties.
Resuming what was recorded in the Arbitral Award rendered in case no. 664/2017-T, "one must take into account that we are faced with diverse tax facts. In one case, the law subjects to taxation urbanizable lands that constitute an economic asset by effect of their fitness for construction. In another case, the law excludes from the tax the built patrimony that performs an instrumental function in relation to productive activity.
"There is not a necessary connection between these two realities. The land for construction has its own patrimonial value which constitutes, in itself, an indicator of tax capacity that is susceptible to being the object of an autonomous tax on patrimony, independent of its eventual and future utilization through the implantation of a building for commercial, industrial or services purposes. The property already built that is found to be classified as a commercial, industrial or services real estate has already a function instrumental to a certain productive activity which the legislator, within his margin of free discretion, may intend to safeguard in the context of his incumbencies for the increase of economic and social development, which have constitutional basis (article 81 of the Fundamental Law)."
In this context, it would make no sense to be exempting land for construction, while such, which enjoy merely potential constructive capacity of the type of property to be built (for commerce, industry or services), as this would be the legislator encouraging its non-construction and effective use in a productive activity.
In summary, it is possible to discern a sufficient material foundation for distinguishing between these different tax facts for purposes of the taxation of patrimony.
Fernanda Maçãs
STATEMENT OF DISSENT
I voted in dissent regarding the non-annulment of the assessment subject of the petition in the part relating to the urban property with registration number ..., in the parish of ..., as I consider that the norm censured – translated in article 135-B of the IMI Code, in that it imposes taxation in Additional IMI exclusively to the holding of residential urban properties or land situated in Portuguese territory – is susceptible to constitutional censure, due to violation of the principles of equality and tax capacity.
In general terms, it is important to keep in mind that, according to article 103(4) of the Constitution, "Taxation of property must contribute to equality among citizens". Given the nature of the Additional of this taxation introduced with the State Budget Law for 2017, a more pronounced measure of equality would always have to be required, which does not happen in the case of Additional IMI. Namely in that this tax excludes from taxation essential vectors of the patrimony of citizens and companies such as rural lands. Even considering the feasibility of the collection of the revenue, a factor several times defended by Doctrine and Jurisprudence as being inherent to any tax, properties subject to registration could easily be taxed in this tax, such as pleasure aircraft or recreational boats, being already susceptible to indicating unjustified manifestations of fortune under the terms of article 89-A of the General Tax Law.
In particular, taking into account that the foundation of this tax, as demonstrated by its respective "allocation" made in the cited State Budget Report for 2017, is to fund retirement pensions. That is, as the collection of revenue is not motivated by any State expenditure associated with the holding of real estate, as it could not be, otherwise the nature of tax would be lost, it is not possible to understand why the natural person holding real estate for housing of a value exceeding €600,000 or the legal person holding any real estate for housing should be contributing to the financing of Social Security, while the owner of private jets or recreational boats (or of other properties subject to registration and thus easily controllable in terms of taxation) should not.
Not affecting the additional IMI these manifestations of tax capacity, as well as arbitrarily taxing citizens and companies based on the choice of the allocation of their patrimony, as will be demonstrated below, violates article 135-B of the IMI Code what is provided for in articles 3, 13, 103 and 104 of the Constitution.
In assessing the constitutionality of this additional IMI, and reporting to the concrete case, the absence of progressivity in the taxation of legal persons will equally be incomprehensible. Specifically, throughout the State Budget Report for 2017, Additional IMI is presented as a progressive tax of personal basis, a measure that would contribute to the reinforcement of the progressivity of the tax system and to the progressivity of the taxation of property.
"The extra-fiscal objectives will be important for the definition of taxation. Among all these measures (…) stand out those that promote a more progressive taxation, with the tax on property;" (p. 14 of the cited Report).
"The allocation of progressive taxation of real estate property to the Financial Stabilization Fund of Social Security corresponds to the objective of the government's program to broaden the financing base of Social Security, while introducing a tax that falls on those holding larger real estate patrimonies, reinforcing the global progressivity of the system." (p. 57 of the same document).
According to what is cited in the Decision above, in accordance with the Constitutional Court (see Decision no. 187/13), "Fiscal progressivity requires that the relationship between the tax paid and the level of income be more than proportional, which can only be achieved by applying to taxpayers with higher income a higher tax rate. In other words, there is progressivity when the value of tax increases in proportion greater than the increase in the taxable matter."
Although the Bill for the State Budget for 2017 provided also for companies a deduction of €600,000 from the taxable matter (which would make the tax somewhat progressive), this deduction was suppressed in the final wording, eliminating any progressivity of AIMI in the scope of company taxation. Making Additional IMI, for companies, merely proportional. And thus effectively violating the principle of equality in that the differentiation in the taxation of property held by natural persons and property held by legal persons is merely arbitrary.
It is also important to keep in mind the express intention of the legislator, see State Budget Report for 2017, of the taxation of larger real estate patrimonies, without causing negative impacts on economic activity. For this purpose, the legislator excluded from the objective scope of the tax urban properties for industrial, commercial, services purposes and others. However, the fact of maintaining the taxation, in companies, of residential urban properties and land for construction introduces manifest inequalities regarding companies whose patrimony is exclusively composed of industrial, commercial, services properties or others.
In fact, it is not certain that the holding of residential real estate patrimony and land for construction by a company constitutes a tendency-reliable index of economic prosperity, as the holding of these real estate by companies will, in principle, have as purpose the pursuit of its respective economic activity, whether it be purchase for resale, exchange, rental, construction and real estate promotion, it not being within the scope of Additional IMI to question the economic decision of holding this type of real estate.
The substrate of taxation in Additional IMI will be the exceptional tax capacity manifested by the holding of a certain type of real estate (residential and land for construction), this not being assessable, in the case of companies, by the typology of the real estate acquired as, whatever they may be, they can always constitute the object of the exercise of their economic activity. In fact, the legislator himself already foresaw, indicatively, the situation of non-allocation of the real estate to the economic activity of the companies when he introduced a different taxation of residential real estate held by legal persons devoted to personal use of the holders of the respective capital, members of corporate bodies or of any bodies of administration, management, direction, management or inspection or of their respective spouses, ascendants and descendants (see article 135-F(3) of the IMI Code).
By which, there is an effective negative discrimination of companies holding residential urban properties and/or land for construction compared to companies that hold only real estate excluded from the scope of Additional IMI.
Finally, and although giving success to the petition regarding the annulment of the assessment in question in the part relating to the real estate with registration number ..., in the parish of ..., my decision is based on unconstitutionality, as stated above, and not on its illegality. In line with the Doctrine which, with more development, is drawn from "Constitutional Justice", by Carlos Blanco de Morais and "The decision of unconstitutionality" by Rui Medeiros, interpretation in conformity with the Constitution can only occur when there are several possible interpretations for the same norm (polysemy of meanings of the norm). Which, absent better opinion, is not the case of the present provision. In item (b) of article 6(1) of the IMI Code, in light of what is provided for in (2) of the same article, there is no room for the inclusion of any other type of property than a building or construction, so that a land could never be included in it. It would be necessary to argue that the legislator did not know how to express itself for this to be possible, which is not equally provided for in the interpretative criteria provided for in article 9 of the Civil Code, in particular its (2) according to which "However, the interpreter cannot consider the legislative thought that does not have in the letter of the law a minimum of verbal correspondence, even if imperfectly expressed."
Miguel Carrasqueira Baptista
[1] BAPTISTA MACHADO, Introduction to Law and Discourse Legitimization, page 182.
[2] Essentially in this sense, the following Constitutional Court decisions can be seen, among others:
– no. 143/88, of 16-6-1988, rendered in case no. 319/87, published in the Bulletin of the Ministry of Justice no. 378, page 183;
– no. 149/88, of 29-6-1988, rendered in case no. 282/86, published in the Bulletin of the Ministry of Justice no. 378, page 192;
– no. 118/90, of 18-4-90, rendered in case no. 613/88, published in the Bulletin of the Ministry of Justice no. 396, page 123;
– no. 169/90, and 30-5-1990, rendered in case no. 1/89, published in the Bulletin of the Ministry of Justice no. 397, page 90;
– no. 186/90, of 6-6-1990, rendered in case no. 533/88, published in the Bulletin of the Ministry of Justice no. 398, page 81;
– no. 155/92, of 23-4-1992, rendered in case no. 204/90, published in the Bulletin of the Ministry of Justice no. 416, page 295;
– no. 335/94, of 20-4-1994, rendered in case no. 61/93, published in the Bulletin of the Ministry of Justice no. 436, page 129;
– no. 468/96, of 14-3-1996, rendered in case no. 87/95, published in the Bulletin of the Ministry of Justice no. 455, page 152;
– no. 1057/96, of 16-10-1996, rendered in case no. 347/91, published in the Bulletin of the Ministry of Justice no. 460, page 284;
– no. 128/99, of 3-3-1999, rendered in case no. 140/97, published in the Bulletin of the Ministry of Justice no. 485, page 26.
[3] In the case at hand, the question arises only in relation to land for construction of a building or buildings intended for services.
[4] BAPTISTA MACHADO, Introduction to Law and Discourse Legitimization, page 191.
[5] Essentially in this sense, GOMES CANOTILHO and VITAL MOREIRA, Constitution of the Portuguese Republic Annotated, volume I, 4th edition, 2007, page 344.
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