AIMI on Construction Land: Objective Incidence Rules for Building Plots (CAAD 688/2017-T)

ARBITRAL DECISION

I. REPORT

1. On 28 December 2017, the commercial entity A..., S.A., NIPC..., with registered office at Rua ..., ..., Lisbon (hereinafter, the Claimant), filed a request for the constitution of an arbitral tribunal, under the combined provisions of Articles 2, No. 1, paragraph a), and 10, Nos. 1, paragraph a), and 2, of Decree-Law No. 10/2011 of 20 January, which approved the Legal Framework for Arbitration in Tax Matters, as amended by Article 228 of Law No. 66-B/2012 of 31 December (hereinafter, abbreviated as RJAT), seeking the declaration of partial illegality of the assessment of the Additional Municipal Real Estate Tax (hereinafter, AIMI) with No. 2017..., issued by the Tax and Customs Authority with reference to the year 2017, in the total amount of €11,196.54.

The Claimant attached 4 (four) documents and did not request the production of any other evidence.

The Respondent is AT – Tax and Customs Authority (hereinafter, Respondent or AT).

1.1. In essence and in brief summary, the Claimant alleged the following:

It is the owner of a property registered in the urban property register as a building plot.

In January 1984, it entered into a loan agreement with another commercial entity for that entity to "build and install" on that land "an industrial foundry unit" for the purposes of developing the latter's "industrial project."

Following this, the said commercial entity promoted a construction project on that land which culminated in the erection of the said industrial installation necessary for the pursuit of its industrial activity.

In view of the erection of that industrial installation, the aforementioned commercial entity promoted the property registration of the building constructed at its expense, in its name, to which the Tax and Customs Authority assigned an autonomous property article, having classified the said property as a "property in full ownership without floors or divisions capable of independent use," assigning it a classification of "warehouses and industrial activity" given the characteristics and purpose to which it was destined within the scope of the activity developed by the said company.

Consequently, the said company began to be annually notified by AT to make payment of the IMI owed on that property in full ownership, while, in parallel, the Claimant continued to be annually notified by AT to make payment of that same tax, assessed in accordance with the valuation rules established for a property of the type "building plot."

The Claimant was notified to make payment of the disputed AIMI assessment, in the total amount of €11,196.54, calculated with reference to the real estate property held by it in the year 2017, with part of that amount, specifically the amount of €10,786.27, corresponding to the AIMI allegedly owed by the Claimant for holding the aforementioned building plot.

Despite having timely paid in full that AIMI assessment, the Claimant does not agree (partially) with the tax calculation carried out by AT, namely in the part in which the tax value of €2,696,567.68 of the said building plot is included in the calculation of this additional tax.

Although the Claimant is (by oversight) still registered in the property register as owner of a property of the type "building plot," it should be noted that, at the time of the disputed AIMI assessment, the factual situation existing there already comprised an autonomous and constructed urban property, intended for industrial purposes and which, for that reason, did not constitute, in itself, a relevant fact for AIMI taxation purposes.

In this manner, since that factual reality did not meet the necessary requirements to continue to be subsumed under the fiscal concept of "building plot," as provided for in Article 6 of the IMI Code, the Claimant considers that the tax assessment act for the disputed AIMI suffers from manifest error in the factual and legal presuppositions and should be declared illegal.

The Claimant argues that the ratio legis underlying the rule excluding objective scope of application, enshrined in No. 2 of Article 135-B of the IMI Code, was essentially based on the intention not to place an excessive fiscal burden on taxpayers who, by virtue of their economic activities, hold real estate for the pursuit of their corporate purpose. Indeed, the Claimant states, the legislator intended to ensure that urban properties devoted to economic activities would not be subject to AIMI taxation, recognizing that the mere holding of such properties does not constitute (and cannot constitute) a factor demonstrating wealth, nor a sufficient indicator of the contributory capacity of the holders of such properties.

Therefore, the Claimant does not accept that AT, through the disputed assessment act, has applied AIMI to the property in question, intended for the economic activity of the aforementioned commercial entity, nor can it accept that AT has considered, in determining the tax value subject to AIMI, a "building plot" whose potential use coincides with purposes of "commercial, industrial or service" nature.

On the other hand, the Claimant states that, given that what is at issue here is a clear situation of duplication of records for the same factual reality, it must be determined which of the property articles should prevail in this case in order to make a judgment of (il)legality of the tax assessment act for the disputed AIMI.

Without prejudice to the necessary regularization of the property register for the said property, what is at issue here is a clear situation of coexistence of two distinct property realities for the same factual situation, both capable of being subsumed under the IMI Code's taxation rules, which appears inadmissible in the legal order.

Since a building was erected on that building plot, not provided for but actually completed, the Claimant considers that the element that constitutes the touchstone for the classification of the said property held by it as a "building plot" was no longer present, that is, the mere legal expectation embodied in a right to build on that parcel of land a property with certain characteristics and a certain value, there being already an actual materialized reality.

Therefore, the Claimant concludes, since it is not the owner, as of 1 January 2017, of a property of the species "building plot" or intended for residential purposes located in Portuguese territory, there exists no taxable event that constitutes a sine qua non condition for fixing the taxable matter and assessing AIMI, from which it is evident that the tax assessment act for the disputed AIMI is affected by manifest error of fact and law and should be declared partially illegal and annulled for all purposes.

The Claimant concludes its initial pleading by petitioning as follows:

"We therefore request of Your Excellency that the present petition for arbitral decision be considered entirely meritorious and, in consequence:

• The illegality of the disputed AIMI tax assessment act, issued by the Tax and Customs Authority, under No. 1 of Article 135-F of the IMI Code, be declared, proceeding consequently to the annulment of the same, as it suffers from error in the factual and legal presuppositions;

• The Tax and Customs Authority be ordered to partially reimburse the Claimant for the amount of AIMI paid relating to the disputed assessment, in the amount of €10,786.27;

• The Tax and Customs Authority be ordered to pay indemnifying interest, at the legal rate, until full reimbursement of the amount owed and calculated on the tax."

1. The request for the constitution of an arbitral tribunal was accepted and automatically notified to AT on 29 December 2017.

2. The Claimant did not proceed to appoint an arbitrator, so, under the provisions of No. 1 of Article 6 and paragraph a) of No. 1 of Article 11 of the RJAT, the President of the CAAD Deontological Council appointed the undersigned as arbitrator of the singular Arbitral Tribunal, who communicated acceptance of the appointment within the applicable period.

3. On 14 February 2018, the parties were duly notified of this appointment and expressed no intention to refuse the appointment of the arbitrator, under the combined terms of Article 11, No. 1, paragraphs b) and c), of the RJAT and Articles 6 and 7 of the CAAD Deontological Code.

4. Thus, in accordance with the provisions of paragraph c) of No. 1 of Article 11 of the RJAT, the singular Arbitral Tribunal was constituted on 6 March 2018.

5. On 17 April 2018, the Respondent, duly notified to that effect, presented its Response in which it specifically contested the arguments raised by the Claimant and concluded by arguing for the dismissal of the present action, with its consequent absolution from the claim.

The Respondent attached no documents, requested the production of no other evidence, and did not attach the administrative proceedings file, as it did not exist.

6.1. In essence and also briefly, it is important to extract the most relevant arguments on which the Respondent based its Response:

AT is subject to the principle of legality, as established in Articles 266, No. 2, of the CRP, 3, No. 1, of the CPA and 55 of the LGT, so its actions could not be different.

With regard to legal entities and equivalent structures, AIMI assumes the nature of a real tax, since the calculation of the amount to be paid disregards the economic dimension of the entities, namely the qualification as small, medium or large enterprise, and does not affect the totality of the net assets of the entities; thus, it reflects the idea that the elements comprising the real estate property held by these entities perform, as a rule, an economic function, not representing, therefore, a mere accumulation of wealth.

AIMI primarily aims to reach a portion of the property of the taxpayers of the tax, applying to real estate properties that constitute the property of a given entity (singular or collective), recognized legally as capital of a given entity, independent of whether it is devoted to any productive process or income-generating activity; the Respondent understands this to be the purpose of No. 1 of Article 135-B of the IMI Code.

However, according to the Respondent, the legislator opted in No. 2 of that same provision for a negative delimitation of scope, excluding from AIMI real estate properties which, by their potential use, can be economically recognized as factors of production, in the form of capital, that is, as intermediate goods which, combined with other factors of production, produce new utilities.

To that end, the Respondent argues, the legislator had recourse to a criterion that invokes the structure of urban property typologies provided for in Article 6 of the IMI Code and which operates through the subtraction from AIMI of urban properties which, as a result of the usage licensing declared by municipalities or, in its absence, their normal purpose, are classified under the typologies of paragraphs b) and d) of No. 1 of that same legal provision.

Thus, the universe of urban properties subject to AIMI is determined by recourse to the remaining two typologies contained in No. 1 of the cited Article 6: residential urban properties and building plots.

On the other hand, the Respondent states that building plots are not merely instrumental to the exercise of the activity; on the contrary, they form part of the very core of economic activity, are the object of commerce or industry, as they are intended for resale or transformation if buildings are erected on them for subsequent sale.

Building plots do not reduce to mere construction rights, being autonomous goods which, especially due to their natural scarcity, always have intrinsic economic value and quotation in the real estate market; by contrast, the real estate properties excluded from subjection to AIMI, under the terms of No. 2 of Article 135-B of the IMI Code, do perform a function instrumental to industrial, commercial or service economic activities, in that they constitute buildings that serve as a support for the functioning of said activities and are not by themselves generators of income. And even if building plots may prove instrumental to the activity of the company, they are suitable to indicate that that legal entity is the holder of goods which, in themselves, evidence a specific level of affluence compared to other real estate owners.

According to the Respondent, it would only be possible to adopt a different interpretation if the specific quality of the taxpayer and/or its nature were projected in the normative criterion under examination, which is not the case.

In another order of consideration, the Respondent sustains that on the date of taxation in AIMI of building plots, only attention should be paid to the building plot itself, as it is legally characterized and taking into account the VPT contained in the register, not to a future building, with the consequent species of urban property that may subsequently arise, including the autonomous fractions or floors capable of independent use that may exist. It being certain that after such building, we will have a new taxable event, a new VPT and a new legal-tax reality which shall, at the moment of verification of the new taxable event, have its treatment in the context of taxation carried out in accordance with that new reality.

Regarding the payment of indemnifying interest, the Respondent understands that since the disputed assessment act does not suffer from a defect that should dictate its annulment/declaration of nullity, such interest is not due.

Moreover, AT, as an organ of the Public Administration, does not have competence to decide on the non-application of norms regarding which doubts about constitutionality are raised, so that the AT services cannot be imputed, in this specific case, any error of fact or law, given compliance with the law that informs all of its activities and, therefore, it was not within its discretion to decide differently from the way it decided; which determines that there is no legal support for the request for indemnifying interest.

The Respondent thus concludes its pleading:

"In these terms, and in other matters of law, and with the learned support of Your Excellency:

(i) The present petition for arbitral decision should be judged meritless for lack of proof, and, consequently, the Respondent absolved of all claims, in the terms petitioned above, all with the due and legal consequences."

1. On 18 April 2018, an order was issued dispensing with the holding of the meeting referred to in Article 18 of the RJAT, granting a deadline for the presentation of written submissions and setting 31 July 2018 as the deadline for the rendering of the arbitral decision.

7.1. Neither party presented written submissions.

II. PRELIMINARY RULINGS

The Arbitral Tribunal was regularly constituted and is competent.

The proceedings do not suffer from any nullities.

The parties have legal personality and capacity, are duly represented and are legitimate.

There are no exceptions or preliminary issues that obstruct knowledge of the merits and that need to be known.

III. GROUNDS

III.1. FACTS

§1. PROVEN FACTS

The following facts are considered proven:

a) The Claimant is the owner of a property which, on 1 January 2017, was registered in the respective urban property register in its name, with the following identifying, descriptive and valuation data [cf. document No. 2 with the PI]:

[Table showing property identification details]

b) In January 1984, the Claimant entered into a so-called "Loan Agreement and Right of First Refusal Pact" – attached as document No. 3 to the petition for arbitral decision and whose contents are here fully reproduced – which had as its object the building plot mentioned in the previous proven fact and which was intended for the borrower to "build and install on it an industrial foundry unit in execution of its industrial project," with the other terms being established between the parties as set forth therein and which is here reproduced.

c) Following this, B..., S.A. promoted a construction project on that same land, which culminated in the erection of an industrial installation necessary for the pursuit of this company's industrial activity.

d) By virtue of the erection of that industrial installation, B..., S.A. promoted the property registration of the property constructed at its expense, in its name, to which the Tax and Customs Authority assigned an autonomous property article, specifically No. ... of the parish of ..., municipality and district of Aveiro, corresponding to a property in full ownership without floors or divisions capable of independent use, with a tax value of €4,409,190.00, with the classification "Warehouses and industrial activity" and with the "Location coefficient type: Industry." [cf. document No. 4 with the PI]

e) B..., S.A. began to be annually notified by AT to proceed with the payment of IMI relating to the property mentioned in the previous proven fact and, in parallel, the Claimant continued to be annually notified by AT to proceed with the payment of IMI relating to the property mentioned in proven fact a).

f) The Claimant was notified of the AIMI assessment No. 2017..., issued by the Tax and Customs Authority with reference to the year 2017, in the total amount of €11,196.54, with payment deadline in the month of September 2018. [cf. document No. 1 with the PI]

g) In the aforementioned assessment, a total taxable value of €2,799,134.66 was considered, corresponding to the sum of the tax values of the following urban properties [cf. document No. 1 with the PI]:

[Table showing property identification and VPT values]

h) The Claimant made timely payment in full of the said amount of AIMI assessed.

i) On 28 December 2017, the Claimant filed the petition for the constitution of an arbitral tribunal that gave rise to the present proceedings. [cf. CAAD case management information system]

§2. UNPROVEN FACTS

With relevance to the consideration and decision of the case, there are no facts that have not been proven.

§3. MOTIVATION AS TO MATTERS OF FACT

With regard to proven matters of fact, the conviction of the Tribunal was based on the facts alleged by the Parties, whose adherence to reality was not contested, and on the documents attached to the proceedings.

III.2. LAW

§1. SCOPE OF APPLICATION OF AIMI

The Additional Municipal Real Estate Tax (AIMI) was created by Article 219 of Law No. 42/2016 of 28 December, which approved the State Budget for 2017, by adding to the IMI Code Articles 135-A to 135-K, which establish its legal framework, becoming Chapter XV of that legal compendium.

In Article 135-A of the IMI Code, the subjective scope of AIMI is defined as follows:

Article 135-A

Subjective scope

1 - The taxpayers of the additional municipal real estate tax are natural or legal persons who are owners, usufructuaries or surface holders of urban properties located in Portuguese territory.

2 - For the purposes of No. 1, any structures or centers of collective interests without legal personality that appear in the registers as taxpayers of municipal real estate tax are treated as legal persons.

3 - The status of taxpayer is determined in accordance with the criteria established in Article 8 of this Code, with the necessary adaptations, with reference to the date of 1 January of the year to which the additional municipal real estate tax relates.

4 - Municipal companies are not taxpayers of the additional municipal real estate tax.

Article 135-B defines the objective scope of AIMI, stating as follows:

Article 135-B

Objective scope

1 - The additional municipal real estate tax applies to the sum of the tax values of urban properties located in Portuguese territory of which the taxpayer is the owner.

2 - The additional municipal real estate tax excludes urban properties classified as "commercial, industrial or for services" and "other" under paragraphs b) and d) of No. 1 of Article 6 of this Code.

This regime excludes from the scope of AIMI "urban properties classified as 'commercial, industrial or for services' and 'other' under paragraphs b) and d) of No. 1 of Article 6" of the Municipal Real Estate Tax Code (CIMI), so that only urban properties for residential purposes and building plots are covered, as defined in that Article 6.

Article 6 of the IMI Code establishes the following:

Article 6

Species of urban properties

1 - Urban properties are divided into:

a) Residential;

b) Commercial, industrial or for services;

c) Building plots;

d) Other.

2 - Residential, commercial, industrial or for services are buildings or constructions licensed for such purposes or, in the absence of a license, which have as their normal purpose each of these uses.

3 - Building plots are considered those lands situated within or outside an urban agglomeration for which construction or subdivision license or authorization has been granted, prior notification has been admitted, or favorable prior information on subdivision or construction operations has been issued, and also those declared as such in the acquisition document, excepting those lands in which the competent authorities prohibit any of such operations, namely those located in green areas, protected areas or which, in accordance with municipal land use planning documents, are destined for public spaces, infrastructure or facilities.

4 - Those lands situated within an urban agglomeration that are not building plots and are not covered by the provisions of No. 2 of Article 3, and also buildings and constructions licensed or, in the absence of a license, which have as their normal purpose other uses than those referred to in No. 2, and also those of the exception of No. 3, fall within the provision of paragraph d) of No. 1.

From this negative delimitation of scope, the Claimant extracts the conclusion that it was intended to create a tax on real estate wealth, in which urban properties devoted to economic activities will not be subject to AIMI taxation.

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 implemented through the exclusion from the scope of application of "urban properties classified as the species 'industrial,' as well as urban properties licensed for tourism activity, the latter provided that their use is duly declared and proven" and the deduction from the taxable value of the amount of "€600,000.00, when the taxpayer is a legal entity with agricultural, industrial or commercial activity, for real estate directly devoted to its operation."

However, the exclusion from scope was not based on the activity to which the properties are devoted, since in the approved version, non-application was defined only on the basis of the types of properties indicated in Article 6 of the IMI Code, without any reference to whether or not they are devoted to the operation of legal entities.

If the final version of the Budget had maintained the legislative intention to exclude application to real estate directly devoted to the operation of legal entities, it would certainly have maintained the reference to this dedication that was in the proposal and which clearly expressed that legislative choice.

Thus, since that reference to the dedication of the properties was removed, there is no legal support to conclude that residential properties and building plots devoted to the operation of legal entities do not affect AIMI taxation.

Indeed, given the rejection of the proposed version in which relevance was given to the dedication of the properties, there is no reason to conclude that the legislator did not know how to express its intention in adequate terms, as must be presumed, by virtue of the provisions of Article 9, No. 3, of the Civil Code.

§2. THE SPECIFIC CASE

The Claimant begins by alleging that it is not acceptable, nor even comprehensible, that AT, through the disputed assessment act, "has considered, in determining the tax value subject to AIMI, a 'building plot' whose potential use coincides with purposes of 'commercial, industrial or services'."

The Claimant thus begins by arguing that the value of the building plot with property article No. 4158, which is indicated in the property register and which was determined on the basis of the "Location coefficient type: Industry," should not be relevant for determining the taxable value of AIMI.

If we understand correctly the Claimant's position, we believe it is based on the understanding that Article 135-B of the IMI Code should be interpreted to the effect that the taxable value of building plots not intended for housing does not affect AIMI, in accordance with the legislative choice to exclude from scope properties classified as "commercial, industrial or for services."

It is not contested that the aforementioned land is intended for construction of a property for "industry," as the type of location coefficient used immediately suggests.

If the taxable event chosen as an index of contributory capacity is ownership of real estate property of value considered high, it would not be coherent not to apply the tax to buildings intended for industry and to apply it to the land intended for their construction, whose value is incorporated in the value of the buildings.

Thus, from a perspective that keeps in mind the unity of the legal system (Article 9, No. 1, of the Civil Code), which has decisive interpretive value, imposed by the principle of coherence of values or axiological consistency of the legal order, the exclusion provided for in No. 2 of Article 135-B of the IMI Code, relating to urban properties classified as "industry," should be interpreted broadly as expressing a legislative intention to exclude from taxation also the land intended for the construction of such properties.

Moreover, if a literal interpretation of this rule were adopted, to the effect that all building plots are covered by the scope of AIMI, it would then be materially unconstitutional, as it is incompatible with the principle of equality (cf. Article 13 of the CRP), by treating as a taxable event the ownership of land for construction of properties intended for industry and not the ownership of the properties built on them, as it embodies unfavorable treatment of taxpayers in the first situation, without material justification, since the contributory capacity necessarily evidenced by real estate property in that situation must necessarily be less, and with increase, in the second.

In situations of unjustified discriminatory treatment, manifested in 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, the inequality being resolved by elimination of the duties or burdens for those who were discriminatorily burdened by them.

For the foregoing reasons, the disputed AIMI assessment suffers from the defect of violation of law, due to error in the legal presuppositions, embodied in the erroneous interpretation and application of the provisions of Article 135-B, No. 2, of the IMI Code, in the part in which it includes in the taxable value the tax value of the building plot with property article No. 4158, so its annulment is justified, in the respective part, in accordance with the provisions of Article 163, No. 1, of the Code of Administrative Procedure, subsidiarily applicable under the terms of Article 2, paragraph c), of the LGT.

In these terms, the petition for arbitral decision succeeds on the basis of the indicated defect of violation of law, so the consideration of the other questions raised by the Claimant is prejudiced, as being unnecessary.

§3. REIMBURSEMENT OF AMOUNTS PAID AND PAYMENT OF INDEMNIFYING INTEREST

The Claimant further petitions for the condemnation of AT to reimburse the tax paid unduly, in the amount of €10,786.27, plus the respective indemnifying interest.

Article 24, No. 1, paragraph b), of the RJAT provides that the arbitral decision on the merits of a claim for which there is no appeal or challenge binds the tax administration from the end of the period provided for appeal or challenge, and this must, in the exact terms of the success of the arbitral decision in favor of the taxpayer and until the end of the period provided for the voluntary execution of sentences of tax courts, restore the situation that would have existed if the tax act subject to the arbitral decision had not been carried out, adopting the acts and operations necessary to that effect, which is in line with the provisions of Article 100 of the LGT (applicable under the terms of the provisions in paragraph a) of No. 1 of Article 29 of the RJAT) which establishes that "the tax administration is obliged, in case of total or partial success of a gracious claim, judicial challenge or appeal in favor of the taxpayer, to immediately and fully restore the legality of the act or situation subject to the dispute, including the payment of indemnifying interest, if applicable, from the end of the period of execution of the decision."

Although Article 2, No. 1, paragraphs a) and b), of the RJAT uses the expression "declaration of illegality" to define the competence of arbitral tribunals functioning in CAAD, not referring to condemnatory decisions, it should be understood that the powers granted to tax courts in judicial challenge proceedings are included in its competencies, this being the interpretation that is in line with the meaning of the legislative authorization on which the Government based itself to approve the RJAT, in which it is proclaimed, as the first guideline, that "the tax arbitral process must constitute an alternative procedural means to judicial challenge proceedings and to action for the recognition of a right or legitimate interest in tax matters."

The judicial challenge process, although essentially a process of annulment of tax acts, admits the condemnation of the Tax Administration to the payment of indemnifying interest, as is apparent from the provisions of Article 43, No. 1, of the LGT and Article 61, No. 4, of the CPPT.

Thus, No. 5 of Article 24 of the RJAT, when it says that "payment of interest is due, regardless of its nature, in the terms provided for in general tax law and in the Code of Tax Procedure and Process," should be understood as allowing recognition of the right to indemnifying interest in the arbitral process.

On the other hand, since the right to indemnifying interest depends on the right to reimbursement of amounts paid unduly, which are its calculation basis, the possibility of recognizing the right to indemnifying interest is inherent the possibility of examining the right to reimbursement of those amounts.

It is thus necessary to examine the claim for reimbursement of the amount paid unduly and payment of indemnifying interest.

§3.1. RIGHT TO REIMBURSEMENT OF AMOUNT PAID

Following the partial illegality of the disputed assessment act, reimbursement of the illegally paid tax is required, under the provisions of Article 24, No. 1, paragraph b), of the RJAT and Article 100 of the LGT, as this is essential to restore the situation that would have existed if the tax act subject to the arbitral decision had not been carried out.

Thus, the claim for reimbursement of the amount of €10,786.27 is successful.

§3.2. PAYMENT OF INDEMNIFYING INTEREST

Article 43, No. 1, of the LGT provides that "indemnifying interest is due when it is determined, in a gracious claim or judicial challenge, that there was error attributable to the services resulting in payment of the tax debt in an amount higher than that legally owed," establishing No. 5 of Article 61 of the CPPT that "interest is counted from the date of unduly paid tax until the date of processing of the respective credit note, in which they are included."

In the specific case, the Claimant paid the assessed amount of AIMI and is entitled to reimbursement of the amount of €10,786.27.

Moreover, it is verified that the partial illegality of the disputed AIMI assessment is attributable to AT for, in that assessment, having proceeded to the erroneous interpretation and application of the provisions of Article 135-B, No. 2, of the IMI Code, so the Claimant is entitled to indemnifying interest, under the terms of Articles 43, No. 1, of the LGT and 61 of the CPPT, regarding the amount to be reimbursed, calculated from the date on which it made the payment until the date of processing of the respective credit note, in which they are included, at the legal rate, under the terms established in Articles 43, No. 4 and 35, No. 10, of the LGT, 61 of the CPPT and 559 of the Civil Code and of Ordinance No. 291/2003 of 8 April.

IV. DECISION

In the terms set out above, this Arbitral Tribunal decides to judge the petition for arbitral decision to be wholly successful and, consequently:

• The assessment of the Additional Municipal Real Estate Tax with No. 2017...:

• is declared illegal in the part in which it applies AIMI to the tax value of the building plot with property article No. ... of the parish of ... of the municipality and district of Aveiro;

• is partially annulled, as to the amount of €10,786.27;

• The Tax and Customs Authority is condemned:

• to reimburse the Claimant the AIMI unduly paid, in the amount of €10,786.27;

• to pay indemnifying interest to the Claimant, calculated on the amount of €10,786.27, from the date of payment until the date of processing of the respective credit note, in which they are included;

• to pay the costs of the proceedings.

VALUE OF THE PROCEEDINGS

In accordance with the provisions of Articles 306, No. 2, of the CPC, 97-A, No. 1, paragraph a), of the CPPT and 3, No. 2, of the Regulation of Costs in Tax Arbitration Proceedings, the value of the proceedings is fixed at €10,786.27 (ten thousand seven hundred eighty-six euros and twenty-seven cents).

COSTS

Under Article 22, No. 4, of the RJAT, the amount of costs is fixed at €918.00 (nine hundred eighteen euros), in accordance with Table I attached to the Regulation of Costs in Tax Arbitration Proceedings, to be borne by the Tax and Customs Authority.

Lisbon, 1 June 2018.

The Arbitrator,

(Ricardo Rodrigues Pereira)