Summary
Full Decision
ARBITRAL DECISION
Report
A – General
A..., S.A., with registered office at ..., no. ...–..., ...– ... Lisbon, registered with the Commercial Registry Office under single registration and tax identification number ... in its capacity as managing company and in representation of "B... – CLOSED REAL ESTATE INVESTMENT FUND", with tax identification number ... (hereinafter referred to as "Claimant" and the latter as "Fund"), submitted, on 29.12.2017, a request for constitution of a single arbitral tribunal in tax matters, which was accepted, seeking, on the one hand, the annulment of the assessment act for the Additional Tax on Municipal Property Tax (hereinafter "AIMI"), for the year 2017, identified with number 2017 ..., in the amount of € 6,194.36 (six thousand one hundred and ninety-four euros and thirty-six cents), or subsidiarily the non-application to the concrete case, on grounds of unconstitutionality, of articles 135-A et seq. of the Municipal Property Tax Code (hereinafter "CIMI") and, on the other hand, the recognition of the right to compensatory interest for the payment of tax obligations unduly required.
Pursuant to the provisions of subparagraph a) of article 6(2) and subparagraph b) of article 11(1) of Decree-Law no. 10/2011, of 20 January, as amended by article 228 of Law no. 66-B/2012, of 31 December, the Ethics Council of the Centre for Administrative Arbitration (CAAD) designated the undersigned as arbitrator, and the Parties, after being duly notified, raised no objection to such designation.
By order of 05.01.2018, the Tax and Customs Administration (hereinafter referred to as "Respondent") designated Ms. C... and Ms. D... to intervene in the present arbitral proceedings, in the name and representation of the Respondent.
In accordance with the provisions of subparagraph c) of article 11(1) of Decree-Law no. 10/2011, of 20 January, as amended by article 228 of Law no. 66-B/2012, of 31 December, the Arbitral Tribunal was constituted on 06.03.2018.
On the same day 06.03.2018, the highest ranking official of the Respondent's service was notified to, if it so wished, within a period of 30 days, submit a response, request the production of additional evidence and attach to the case file a copy of the administrative file.
On 18.04.2018, the Respondent submitted its Response.
B – Position of the Claimant
The Fund managed by the Claimant is the owner of various properties and was notified of the AIMI 2017 assessment act ..., in the amount of € 6,194.36 (six thousand one hundred and ninety-four euros and thirty-six cents).
The Claimant, on 28.09.2018, proceeded to payment of the amount demanded of it, albeit in disagreement.
The AIMI is progressive, applying to the sum of the taxable property values of urban properties devoted to residential purposes and land for construction situated in Portuguese territory of which the taxpayer is the owner, having as its intended purpose the requirement of a greater fiscal burden on taxpayers who display higher indices of wealth.
The legislator further intended to ensure that urban properties devoted to economic activities are not subject to AIMI, recognizing that the mere holding of such properties does not constitute a factor demonstrating wealth, nor a sufficient indicator of the contributory capacity of the holders of such properties, it making no sense to impose additional fiscal burden on taxpayers who, by virtue of their economic activities, hold properties for the pursuit of their respective corporate purpose.
Thus, the Claimant does not accept nor understands how the AIMI can apply to the assets held by a real estate investment fund (such as the Fund) and, much less, how it can apply to construction land whose potential use coincides with commercial, industrial or service purposes.
The Fund "is intended to promote and develop, in Portugal, real estate projects for subdivision and construction on its own land with clear suitability for such purpose (…) whether for housing, whether for commerce or services, as well as to acquire properties that may be intended for lease or subsequent sale", being therefore the holding of immovable assets the substrate of all its activity (extensively regulated).
The mere holding of properties does not represent an increased contributory capacity that could legitimize the application of AIMI.
Taxing the properties held by the Fund means directly taxing an economic activity, which the legislator expressly intended to avoid by creating the AIMI, and the assessment now contested is manifestly illegal, due to errors in factual and legal assumptions.
The Claimant further considers that the AIMI taxation regime is contrary to the principles of equality, fiscal equality and contributory capacity enshrined, respectively, in articles 13 and 104(3) of the Constitution of the Portuguese Republic (hereinafter "CRP"), with clear manifestations in articles 5 and 55 of the General Tax Law (hereinafter "LGT").
The legal regime of AIMI promotes differentiated treatment and unjustified inequality between taxpayers, in manifest violation of the principle of equality.
It is evident that, in establishing the AIMI, the legislator intended to tax properties for residential purposes, as effective manifestations of wealth, and to exclude from the scope of this taxation all properties devoted to economic activities, and it should be concluded that all construction land devoted to economic activities (those with potential allocation to commerce, industry, services or others) are also excluded from taxation under AIMI.
In seeking to tax construction land for purposes of commerce, industry, services or others and not to tax a built property with the same use, the Tax and Customs Administration promotes discriminatory treatment, devoid of legal basis and generating disproportionate and inadequate differentiations, in violation of the constitutional principle of equality, and should consequently be disapplied the rule that allegedly authorizes such arbitrary discrimination, pursuant to the provisions of article 204 of the CRP.
Furthermore, the application of AIMI to immovable assets held by entities dedicated to real estate exploitation penalizes this sector of activity in an unjustifiably aggravated manner to the detriment of the remaining sectors.
The Claimant further draws attention to constitutional case law concerning the repealed item 28 of the General Table of Stamp Tax, which it considers applicable to the case sub judice, namely Constitutional Court Decision 250/2017, where it distinguishes what are manifestations of wealth (object of taxation under that item of the General Table) and the factors of production of such wealth, with the necessary requirement for the application of the tax not being verified (both in item 28 of the General Table of Stamp Tax and in the AIMI regime): the contributory capacity.
It concludes that the application of AIMI to construction land of entities that promote economic activities, such as investment funds, establishes differentiated treatment and unjustified inequality among taxpayers, in clear violation of the principles of fiscal equality and contributory capacity.
Since the assessment now contested is illegal, the Fund should be reimbursed for the tax obligation unduly required and paid, plus the corresponding compensatory interest.
C – Position of the Respondent
The Respondent begins by emphasizing that the AIMI is in the nature of a real tax, in that the determination of the amount to be paid abstracts from the economic dimension of the respective taxpayers.
As the Claimant acknowledges, the AIMI applies only to urban properties devoted to residential purposes and construction land, as defined in article 6 of the IMI Code, and it was precisely in these terms that the Respondent proceeded to the AIMI assessment now contested.
Not even through interpretative means is achieved what the Claimant proposes, it being evident that what it seeks is merely abrogating interpretation of the law, attributing to it a sense that was not established by the legislator in its respective wording, albeit imperfectly expressed, thereby expanding the scope of the exclusion from taxation to encompass the totality of properties held by investment funds.
It is clear that the ratio legis that underlay the exclusion from the objective scope of AIMI sought to remove from subjection to the tax properties that support the development of economic activities, that is, which are held for use or supply of goods or services or for administrative purposes, and thus does not, in general, "avoid imposing additional fiscal burden on taxpayers who, by virtue of their economic activities, hold properties for the pursuit of their respective corporate purpose", as the Claimant seeks.
The properties excluded from subjection to AIMI, pursuant to article 135-B(2) of the CIMI, are those that perform an instrumental function in relation to industrial, commercial or service economic activities, in that they constitute buildings that serve as support for the functioning of such activities, and are not themselves generators of income.
The Respondent reminds that investment funds, such as the Fund, are structures for the collective investment of capital obtained from investors, and that the paradigm underlying the fiscal regime applied to them has been guided by the principle of neutrality, which consists in attempting to ensure that their taxation be conducted, insofar as possible, in the same manner as the said investors would be taxed.
Granting investment funds, in this particular aspect, a regime of exception would be privileging indirect investment in immovable assets through the use of this financial product and would open the door to tax avoidance behaviors.
As to the alleged unconstitutionality of the rule on which the contested assessment is based, it should be noted that courts may not scrutinize the merits of any legislative measures and their scope, and the analysis should be limited to their conformity with the constitutional text and the principles enshrined therein, verifying only whether they present themselves as absolutely intolerable or inadmissible, from a constitutional-legal perspective, for which no intelligible foundation can be found.
It is not the circumstance that other taxpayers holding equally valuable immovable assets remain exempt from the tax that would justify a specific constitutional challenge to the rule under scrutiny, since what is at issue with AIMI is not a global taxation of assets, nor even of immovable assets.
The Respondent further emphasizes that the properties held by investment funds are not merely instrumental to the exercise of their activity, but rather integrate the very core of their respective economic activity, being the object of the very business or industry itself, unlike the properties excluded from subjection to AIMI, pursuant to article 135-B(2) of the CIMI, which, those indeed, perform a merely instrumental function in relation to industrial, commercial or service economic activities of their owners, in that they constitute buildings that serve as support for the functioning of such activities, and are not themselves generators of income.
The Respondent argues that the circumstance that AIMI applies to all construction land, even if the potential allocation is commerce, industry or service, does not imply a violation of the principle of equality, nor should such question be examined by the arbitral tribunal, because it is unrelated to the factual circumstances sub judice.
Finally, the Respondent contends that compensatory interest is not due, both because the contested assessment does not suffer from any defect and because it is clear that the Tax and Customs Administration cannot be imputed any error of fact or law, since its action, as it could not be otherwise, scrupulously respected the applicable legislation.
D – Conclusion of Report and Procedural Clarification
By order of 16.08.2018, the Arbitral Tribunal dispensed with the meeting provided for in article 18 of the Regulatory Framework for Arbitration in Tax Matters (RJAT), considering that the Parties had already provided to the proceedings the necessary and sufficient factual elements for the rendering of the decision, which was foreseen could take place by 06.09.2018.
The Arbitral Tribunal has material jurisdiction, pursuant to the provisions of article 2(1)(a) of the RJAT.
The Parties have legal personality and capacity and have standing pursuant to article 4 and article 10(2) of the RJAT, and article 1 of Order no. 112-A/2011, of 22 March.
The joinder of claims (declaration of illegality of an assessment act, on the one hand, and recognition of the right to compensatory interest, on the other) effected in the present request for arbitral determination, in deference to the principle of procedural economy, is justified once article 3 of the RJAT, expressly admitting the possibility of "joinder of claims even if relating to different acts", accommodates, without hermeneutical abuse, the examination of a claim that arises, in necessary terms, from the judgment that the Arbitral Tribunal reaches regarding the validity of the assessment contested.
The proceedings are not affected by any nullity.
Matter of Fact
2.1. Proven Facts
The Fund is the owner of the properties listed in the document referenced 2017 ... attached to the request for arbitral determination as document no. 1, by which the Respondent made known that, on 30.06.2017, it proceeded to the AIMI assessment referred to in 1.1.
The properties referred to in 2.1.1 are all urban properties devoted to residential purposes and none of them is construction land (agreement of the Parties).
The Claimant, on 28.09.2017, proceeded to payment of € 6,194.36 (six thousand one hundred and ninety-four euros and thirty-six cents), the amount that was demanded of it as AIMI, as appears from document no. 3 attached to the request for arbitral determination.
2.2. Unproven Facts
There are no facts relevant to the examination of the merits of the case that have been designated as unproven.
2.3. Grounds for the Fixation of the Matter of Fact
The facts were designated as proven based on the documents attached to the proceedings by the Parties and on the positions assumed by them in the pleadings presented.
Matter of Law
3.1. Questions to be Decided
From what has been stated above, it follows that the questions to be examined are, fundamentally, the following:
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Whether the Fund, whose activity (extensively regulated) centers exclusively on operations related to properties, these being the substrate and the very object of its economic activity, falls within the scope of application of AIMI;
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Whether the rule on which the contested assessment is based is affected by unconstitutionality, due to violation of the principle of fiscal equality and the principle of contributory capacity, when interpreted in the dual sense that the scope of application of AIMI encompasses the ownership of properties when these correspond to the substrate of the very economic activity developed by real estate investment funds, and that the exclusion from the scope of application covers urban properties classified as commercial, industrial or for services and not already construction land intended for these same purposes; and
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Finally, whether, should the request for annulment of the contested assessment act be judged to be well-founded, the Claimant, in the scope of the present arbitral proceedings, may obtain the condemnation of the Respondent to payment of compensatory interest concerning the amount it delivered to satisfy the tax obligation illegally required of it.
3.2. The Additional IMI – Subjective and Objective Scope
The AIMI was created by Law no. 42/2016, of 28 December (Budget Law of the State for 2017), which added to the CIMI chapter XV comprised of articles 135-A to 135-K.
In article 135-A, the subjective scope of AIMI is defined. At the date to which the facts refer, its wording was as follows:
Article 135-A
Subjective scope
1 - Taxpayers of the additional tax on municipal property tax are natural or legal persons who are owners, usufructuaries or superficiaries of urban properties situated in Portuguese territory.
2 - For the purposes of no. 1, any structures or centers of collective interests without legal personality that appear in the tax rolls as taxpayers of municipal property tax are assimilated to legal persons, as well as undivided succession represented by the head of household.
3 - The quality of taxpayer is determined in accordance with the criteria established in article 8 of this Code, with the necessary adaptations, with reference to 1 January of the year to which the additional municipal property tax relates.
4 - Municipal enterprises are not taxpayers of the additional municipal property tax.
Therefore, taxpayers of the AIMI are natural or legal persons who are owners, usufructuaries or superficiaries of urban properties situated in Portuguese territory, it being important to emphasize that any structures or centers of collective interests without legal personality that appear in the tax rolls as taxpayers of municipal property tax are assimilated to legal persons[1]. Thus, it is clear that, from the subjective perspective, real estate investment funds, such as the Fund, are taxpayers of AIMI.
The objective scope of this additional tax is defined as follows:
Article 135-B
Objective scope
1 - The additional municipal property tax applies to the sum of the taxable property values of urban properties situated in Portuguese territory of which the taxpayer is the owner.
2 - Excluded from the additional municipal property tax are urban properties classified as "commercial, industrial or for services" and "others" according to subparagraphs b) and d) of article 6(1) of this Code.
The AIMI applies, therefore, to the sum of the taxable property values of urban properties situated in Portuguese territory of which the taxpayer is the owner, with reference to 1 January, excluding urban properties classified as "commercial, industrial or for services" and "others", making reference to subparagraphs b) and d) of article 6(1) of the CIMI. The reference to article 6 of the CIMI has as its sole objective to clarify what is understood by urban properties "commercial, industrial or for services" and "others", for purposes of exclusion from the objective scope of AIMI.
The provision of article 6 of the CIMI is as follows:
Article 6
Species of urban properties
1 - Urban properties are divided into:
a) Residential;
b) Commercial, industrial or for services;
c) Construction land;
d) Others.
2 - Residential, commercial, industrial or for services are buildings or constructions licensed for such purpose or, lacking a license, that have as their normal destination each of these purposes.
3 - Construction land is understood to be land situated within or outside an urban agglomeration for which a license or authorization has been granted, prior notification admitted or favorable prior information issued for a subdivision or construction operation, and also those which have been declared as such in the title of acquisition, except for land which the competent entities forbid any of such operations, namely those located in green zones, protected areas or which, in accordance with municipal territorial planning plans, are devoted to spaces, infrastructure or public facilities.
4 - Falling within the provision of subparagraph d) of no. 1 are lands situated within an urban agglomeration which are not construction land nor are covered by the provision of article 3(2) and also buildings and constructions licensed or, lacking a license, that have as their normal destination other purposes than those referred to in no. 2 and also those in the exception of no. 3.
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 "others" according to subparagraphs b) and d) of article 6(1) of the CIMI, is precisely making reference to this typology of properties in accordance with the very characterization that the Code attributes to it.
The exclusion from the tax covers, therefore, properties classified as commercial, industrial or for services, understood as buildings or constructions licensed for these purposes or that have as their normal destination each of these purposes. The said exclusion includes, furthermore, the residual species referred to in subparagraph d) of no. 1 of this article 6, including therein lands situated within or outside an urban agglomeration which are not construction land nor are rural properties and also buildings and constructions that do not fit within any of the previous classifications.
The scope of objective application, by effect of the express reference to that article 6, was thus defined not only by reference to a certain species of urban property, but also by reference to the administrative procedure through which the classification was effected or, lacking a license, to the normal destination of such properties for commercial, industrial, services or other purposes.
From the wording of article 135-B of the CIMI, it follows that the legislator chose to formulate the negative delimitation of the objective scope exclusively by reference to the classification of properties, there being nothing in the letter of the law that suggests that the intended exclusion may expand, namely to properties not included therein when they constitute the substrate of a particular economic activity of the tax payer. In fact, it appears crystalline that there is no support in the letter of the law nor in any other hermeneutical element for the understanding that the legislator intended to exclude from the scope of application of the tax properties devoted to economic activities, for not wishing to impose additional fiscal burden on taxpayers who possess properties by effect of their corporate purpose. Nor is there any reason suggesting that the legislator did not know how to express his thinking in adequate terms, as must be presumed, pursuant to article 9(3) of the Civil Code.
It is to be believed that had that been the legislator's intention, instead of delimiting the scope of application through characterized types of properties, as was done, surely an approach would have been chosen involving case-by-case evaluation depending on the allocation of the property, in practical, effective terms, to an economic activity or to the functioning of a legal person.
Having the law delineated the scope of application of the tax as it did, using technical legal concepts utilized elsewhere in the system, for which it expressly makes reference, it is surely in that sense that the scope of application of this legal provision must be understood. Rules sometimes admit more than one meaning and then the positive function of the text translates into giving stronger support or more strongly suggesting one of the possible meanings. However, if the legislator resorted to a special, clear technical-legal language, to express his thinking with greater precision, it is incumbent upon the interpreter to make use of the technical-legal meaning of the expressions used, dispensing with the use of circumstantial elements that could only lead to an interpretative result foreign to the legislator's intent.
As it must be concluded, the intended extension of the legislative formula used to properties devoted to the company's economic activity, regardless of the specific characterization as commercial, industrial or service properties, has no place in light of the general criteria of legal hermeneutics.
The Claimant further seeks to have excluded from the scope of application of AIMI construction land whose potential use coincides with "commercial, industrial or services" purposes for it having been the legislator's intention to subtract from taxation properties devoted to economic activities. Interesting and even important as that question may be, the fact is that the assessment now contested does not apply to any construction land, being therefore, in the scope of this proceeding, its analysis out of place.
3.3. The Unconstitutionality of AIMI
The Claimant contends that articles 135-A et seq. of the CIMI should be disapplied, pursuant to the provisions of article 204 of the CRP, in that they are affected by unconstitutionality, due to violation of the constitutional principle of equality.
The Claimant argues that the AIMI promotes differentiated treatment and unjustified inequality among taxpayers, in violation of the principle of fiscal equality, in that the ownership of properties constitutes the very patrimonial substrate of the economic activity itself, constituting an essential means of pursuit of its corporate purpose, such that the ownership of such properties cannot be understood as an indicator of increased contributory capacity or a manifestation of wealth.
To respond to this question, it must be started with, albeit briefly, a characterization of the constitutional principles of progressivity, fiscal equality and contributory capacity.
As the Constitutional Court has repeatedly stated, one of the constitutionally defined essential objectives of the fiscal system, alongside the satisfaction of the financial needs of the State and other public entities, is the fair distribution of income and wealth, as is apparent from article 103(1) of the Constitution. It is in this linkage of the fiscal system to the idea of social justice and to the reduction of inequality in the social distribution of income and wealth that the basis of tax progressivity is found.
This progressivity is expressly enshrined in the taxation of personal income. According to article 104(1) of the CRP, the personal income tax seeks "the reduction of inequalities and shall be unique 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 greater income a higher tax rate.
The Constitution requires progressivity with the intrinsic virtue of contributing to a reduction in income inequality[2].
Tax progressivity is also a requirement of the principle of material equality. The principle of fiscal equality has inherent especially "the idea of generality or universality, according to which all citizens are bound by the duty to pay taxes, and of uniformity, requiring that such duty be assessed by the same criterion - the criterion of contributory capacity. This thus implies equal tax for those who have equal contributory capacity (horizontal equality) and different tax (in qualitative or quantitative terms) for those who have different contributory capacity in proportion to this difference (vertical equality)"[3].
Configuring the general principle of equality as a material equality, the principle of contributory capacity as the tertium comparationis of equality in the domain 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 so-called "fiscal constitution" and, in particular, those that already derive from the structural principles of the fiscal system that appear in articles 103 and 104 of the Constitution[4].
As a presupposition and criterion of taxation, the principle of contributory capacity "removes the tax legislator from arbitrariness, obligating him that in the selection and articulation of the facts subject to taxation, he adheres to revelations of contributory capacity, that is, erects into the object and taxable matter of each tax a certain economic presupposition that is a manifestation of such capacity and is present in the various legal hypotheses of the respective tax"[5].
The principle of tax equality may be concretized through various facets: 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 the equal treatment of taxpayers who find themselves in equal situations and different from those who find themselves in different situations, to the extent of the difference, to be assessed by contributory capacity; a last, is in the prohibition of arbitrariness, in precluding the introduction of discriminations among taxpayers that are devoid of rational foundation[6].
The AIMI, as a complementary tax on a portion of immovable property, did not completely ignore the element of progressivity in taxation, taxing at a higher rate estates of greater value to which it applies.
It has been similarly understood that the taxation of assets, alongside the taxation of income, constitutes a projection of contributory capacity, functioning as an extension of personal income tax and as reinforcement of qualitative discrimination[7].
It is not seen, in this context, that the taxation of the assets of real estate investment funds under AIMI violates the principle of tax equality and contributory capacity merely because the ownership of immovable assets constitutes the very object of their economic activity.
Pursuant to articles 210(1) and 210(2) of the General Regulation of Collective Investment Organisms, approved by Law no. 16/2015, of 24 February, real estate investment funds may develop activities related to the acquisition of properties for leasing or intended for other forms of paid exploitation, acquisition of properties for resale, acquisition of other rights over properties with a view to their economic exploitation and carrying out works of improvement, expansion and requalification of properties, as well as the development of projects for the construction and rehabilitation of properties.
These are, however, activities freely accessible to all property owners in general and any other entities, even of a business nature, that dedicate themselves to real estate promotion.
The ownership of a portfolio of immovable assets, for purposes of sale and transformation, with a view to obtaining economic results, does not cease to constitute an asset that reveals an increased contributory capacity, which goes beyond the tax that applies to the taxable profit by reason of the economic activity developed. Furthermore. The law allows the deduction of AIMI from the IRC tax liability, this deduction being limited to the portion corresponding to income generated by properties and subject to IRC, in the context of rental or hospitality activities, or alternatively, the burden of AIMI payment may be considered as a fiscally accepted expense for purposes of determining taxable profit[8].
What is at issue, therefore, is not the taxation of the actual income earned by such entities through the activity developed, but the additional contributory capacity resulting from the mere ownership of an asset and which, in itself, may facilitate the obtaining of credit or the reinforcement of its negotiating position in the celebration of contracts.
The specific circumstance that funds center their activity on the performance of operations on properties and find themselves subject to investment limits as to the composition of their assets does not distinguish them from any other taxpayer who, individually or at the business level, dedicates himself to the acquisition and commercialization of properties.
And permit an additional comment in this regard. Regardless of the regime that may be associated with each of the situations, the same or another, it cannot fail to be underscored that the pursuit of real estate activities do not appear to be conceptually identical through a real estate investment fund or by means of a commercial company, a legal person distinct from its partners. For funds are merely structures for the collective investment of capital obtained from investors. If the legislator had granted them, under AIMI, a regime of exception, it would be privileging, without apparent reason, indirect investment in immovable assets through the recourse to these collective organisms.
Furthermore, it does not appear arbitrary, in terms of legislative policy, the different taxation, namely under AIMI, of immovable assets intended for housing (and even construction land) and properties intended, themselves, for the exercise of commercial, industrial activities, provision of services or similar[9]. One and the other do not perform identical functions within the economic framework and there may well reside in that difference the diversity of taxation.
It thus appears that there exists constitutionally acceptable grounds for the restriction of the application of AIMI to residential properties as compared to properties classified as commercial, industrial or for provision of services, with the invoked unconstitutionality on the grounds of violation of the principles of equality and contributory capacity being ruled out.
3.4. Moot Questions
Prejudiced, as unnecessary, are the examination of the remaining arguments used by the Respondent to sustain the legality of the AIMI assessment act contested and the examination of the question concerning compensatory interest.
Decision
Pursuant to the terms and on the grounds set forth above, the Arbitral Tribunal decides:
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To judge totally unfounded the request for arbitral determination, absolving the Respondent; and
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To condemn the Claimant to the costs of the proceedings.
Value of the Case
When an assessment act is contested, the value of the case is that of the amount whose annulment is sought, which corresponds to the economic utility of the claim. Thus, in accordance with the provisions of article 306(2) of the CPC, article 97-A of the CPPT and also of article 3(2) of the Regulation of Costs in Tax Arbitration Proceedings, the value of € 6,194.36 (six thousand one hundred and ninety-four euros and thirty-six cents) is fixed for the case.
Costs
For the purposes of the provisions of article 12(2) and article 22(4) of the RJAT and article 4(4) of the Regulation of Costs in Tax Arbitration Proceedings, the amount of costs is fixed at € 612.00 (six hundred and twelve euros), in accordance with Table I attached to the said Regulation, to be borne entirely by the Claimant.
Notification to the Public Prosecutor
The Respondent requested, by appeal to the provisions of article 280(3) of the CRP and article 72(3) of the Law of the Constitutional Court, the notification of this arbitral decision to the Public Prosecutor.
Since the Public Prosecutor does not have special representation before the arbitral tribunals functioning under the CAAD (article 4(1) of the Statute of the Public Prosecutor), this decision shall be communicated to the Office of the Attorney General, for due purposes.
Lisbon, 3 September 2018
The Arbitrator
(Nuno Pombo)
Text prepared by computer, pursuant to article 131(5) of the CPC, applicable by reference of article 29(1)(e) of Decree-Law no. 10/2011, of 20 January and with the spelling prior to the said Orthographic Agreement of 1990.
[1] We follow closely the sense of the Arbitral Decision issued in proceedings no. 664/2017-T, which took place at the CAAD, in which we participated, also accompanying the respective grounds.
[2] See Constitutional Court Decision no. 187/13, particularly nos. 97 to 99.
[3] JOSÉ CASALTA NABAIS, Direito Fiscal, 5th edition, Coimbra, 2009, pages 151-152.
[4] Idem, ibidem, page 152.
[5] Idem, ibidem, page 154.
[6] See, among others, Constitutional Court Decisions no. 306/2010 and no. 695/2014.
[7] SÉRGIO VASQUES, Capacidade contributiva, rendimento e património, in Fiscalidade – Revista de Direito e Gestão Fiscal, no. 23, Coimbra, 2005, pages 33 and 36.
[8] Cfr. article 135-J of the CIMI.
[9] See, for example, section 5.1 of the Arbitral Decision rendered in proceedings no. 696/2017-T.
Frequently Asked Questions
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