Process: 754/2014-T

Date: June 9, 2015

Tax Type: Valor do pedido:

Source: Original CAAD Decision

Summary

Process 754/2014-T addresses the application of Verba 28.1 of the General Stamp Duty Table (TGIS) to a vertical property building with multiple independent units. The claimant, Civil Partnership A..., challenged stamp duty assessments totaling €10,181.92 for 2013, arguing that the tax should apply to each independent unit individually rather than to the aggregate patrimonial value of the entire property. The central legal question concerns whether a property under vertical ownership (propriedade vertical) with independent residential units should be treated similarly to horizontal property (propriedade horizontal) for stamp duty purposes. The claimant argued that since each unit is treated independently for Municipal Property Tax (IMI) purposes under CIMI, the same treatment should apply under Verba 28.1 TGIS, meaning only units exceeding €1,000,000 would qualify as luxury properties subject to the tax. The Tax Authority (AT) contended that vertical property constitutes a single property for tax purposes, not autonomous fractions, and therefore the aggregate patrimonial value should be considered when determining applicability of the luxury property stamp duty. The case highlights the distinction between horizontal and vertical property regimes in Portuguese tax law and the limits of analogical interpretation. The arbitration followed RJAT procedures, with the tribunal waiving the oral hearing and allowing written submissions. The dispute raised fundamental questions about tax equality, legality, and proportionality principles when different property regimes receive different tax treatment despite functional similarities in how independent units are used and valued.

Full Decision

CASE NUMBER 754/2014-T

ARBITRAL DECISION

  1. REPORT

1.1. Civil Partnership A..., Ltd., taxpayer no. ..., having been notified of the stamp duty assessments for the year 2013, filed on 30/10/2014 a request for arbitral pronouncement, in which it petitions for a declaration of illegality of the assessments of such tax, in the total amount of € 10,181.92.

1.2. The Honorable President of the Deontological Council of the Administrative Arbitration Center (CAAD) appointed, on 19/12/2014, Francisco Nicolau Domingos as arbitrator.

1.3. On 15/01/2015 the tribunal was constituted.

1.4. In compliance with the provision of article 17, paragraph 1 of Decree-Law no. 10/2011, of 20 January (RJAT), the Respondent was, on 27/01/2015, notified to submit, if it wished, a response and request the production of additional evidence.

1.5. On 23/02/2015 the Respondent submitted its response and therein requested the waiver of the arbitral meeting provided for in article 18 of the RJAT, as well as the submission of final arguments.

1.6. On 04/05/2015 the tribunal ordered the notification of the Claimant to state whether it intended the holding of the meeting referred to in article 18 of the RJAT.

1.7. On 13/05/2015 the Claimant submitted a motion in which it argued that it has no objection to the waiver of the aforementioned meeting.

1.8. On 26/05/2015 the tribunal decided to waive the holding of the meeting referred to in article 18, paragraph 1 of the RJAT, granted the parties a period to, if they wished, submit final arguments, and scheduled the date of 09/06/2015 for the pronouncement of the final decision, based on the principle of autonomy of the arbitral tribunal in the conduct of the proceedings and in the determination of the rules to be observed in order to obtain, within a reasonable time, a pronouncement on the merits of the claims filed, cf. article 16, subparagraph c) of the RJAT.

  1. SANITATION OF CLAIMS

The cumulation of claims underlying the request for arbitral pronouncement is admissible, in as much as it concerns assessments of the same tax, stamp duty. Likewise, there is identity between the material facts and because the success of the claim depends on the interpretation of the same principles and rules of law, cf. article 3, paragraph 1 of the RJAT.

The proceedings do not suffer from nullities, no issues have been raised that impede the examination of the merits of the case, the arbitral tribunal is regularly constituted and is materially competent to know and decide the claim, thus verifying the conditions for the final decision to be rendered.

  1. POSITIONS OF THE PARTIES

There are two positions in confrontation, that of the Claimant, set forth in the request for arbitral pronouncement, and that of the Respondent in its response.

Summarizing, the Claimant understands that:

a) The Claimant does not agree: "...with the application of such tax acts...";

b) "...it is urgent to decode the scope of application of item 28 of the TGIS, in the terms described above.";

c) "In essence, it is necessary to ascertain whether the residential use of a property that is not constituted under the horizontal property regime should apply a patrimonial value to each of the independent units, or whether, conversely, the patrimonial value should be assessed on the whole of the property, that is, through the sum of the patrimonial value of all independent units.";

d) "As is known, there is no legal definition of urban property with residential use, either in the Stamp Duty Code (CIS), or in the General Table of Stamp Duty (TGIS) (...) therefore, the most correct interpretation of the above-mentioned expression should be sought.";

e) "Thus, in the search for the most correct interpretation of the above-mentioned expression, we are obliged to resort to article 67, paragraph 2 of the CIS and to apply subsidiarily the Code of Municipal Property Tax (hereinafter CIMI), in all that refers to item 28 of the TGIS.";

f) "...it is possible to conclude that the assessments in question here are not at all due, since they were applied to the total patrimonial value of the property, under the terms inscribed in item 28.1 of the TGIS...";

g) "In reality they should have been applied to each of the units of the same property, although...";

h) "...all the units are independent and with independent use, therefore it should be the value of each unit that is applicable.";

i) "The Claimant notes that it is on all matters related to the present proceedings, understands that its property, being constituted by independent units, should enjoy the same regime as horizontal property, that is...";

j) "That each fraction counts for itself, and never for the set of various fractions of a property.";

k) "In essence, the Claimant understands that these present tax acts would only be applicable if each independent unit had a value exceeding € 1,000,000.00 (one million euros), which, as is easily seen, does not happen in any of the identified units.";

l) "If that were the case, then we would be in the presence of a property classified as a luxury property and consequently subject to the application of item 28.1 of the TGIS.";

m) "Moreover, any independent unit is, for the purposes of Municipal Property Tax (hereinafter IMI), treated as any autonomous fraction...";

n) "Having its own patrimonial value...";

o) "Having autonomous assessments...";

p) "And further autonomous evaluations...";

q) "Now, given this factuality easily identifiable by the documentation attached to this request, why does the AT consider, for the purpose of IMI, that the Claimant's property is composed of independent units and for the purpose of the application of item 28.1 of the TGIS does not resort to the same criterion?";

r) "It cannot fail to note that, for the purposes of the application of the principles of tax legality, equality, justice and proportionality, the corresponding value should be applied and the economic autonomy of each unit should be taken into consideration and never the patrimonial value of the property.";

s) "In conclusion, for the purposes of taxation under IMI, independently of the existence of a property, each independent unit of it must be evaluated separately from the others, having its own patrimonial value and its own taxation.";

t) "The tax acts in question in these proceedings violate the most elementary principles of reasonableness, legality and common sense, imperatives of a Rule of Law.".

On the other hand, the Respondent argues that:

a) "The situation of the Claimant's property falls literally within the provision of item 28.1 of the TGIS...";

b) "The Claimant is, therefore, the owner of a property under a regime of full or vertical property, therefore there are no autonomous fractions to which tax law can attribute the qualification of property.";

c) "This follows from the notion of article 2 of the CIMI, according to which only the autonomous fractions of property under the horizontal property regime are considered properties - paragraph 4 of the aforementioned article 2 of the CIMI.";

d) "Thus, the now Claimant, for the purposes of IMI and stamp duty, by virtue of the wording of the aforementioned item, is not the owner of 12 autonomous fractions, but rather of a single property.";

e) "Having taken this as established, what the Claimant would claim is that the AT considers, for the purposes of assessment of this tax, that there is analogy between the regime of full property and that of horizontal property, because it is illegal for there to exist discrimination in the legal-tax treatment of the two property regimes.";

f) "...to claim that the interpreter and applicator of tax law apply, by analogy, to the regime of full property, the regime of horizontal property will be, at the very least, abusive and illegal.";

g) "The interpreter of tax law is prevented from equating the two property regimes, in accordance with the rule according to which the concepts of other branches of law have the meaning in tax law that is given to them in those branches of law, or as referred to in article 11, paragraph 2 of the LGT...";

h) "On the other hand, in light of the fact that in determining the meaning of tax norms and in qualifying the facts to which they apply, the general rules and principles of interpretation and application of laws are observed, as provided in article 11, paragraph 1 of the LGT, which refers to the Civil Code which, in article 10 on the application of analogy, determines that it will only be applicable in case of lacunae in the law.";

i) "Tax law contains no lacuna whatsoever.";

j) "The CIMI determines, to which item 28.1 of the TGIS refers, that, in the horizontal property regime, fractions constitute properties. Not being the property subject to this regime, juridically the fractions are parts susceptible of independent use, without common parts.";

k) "It cannot be accepted that it be considered, for the purposes of item 28.1 of the General Table annexed to the CIS, that parts susceptible of independent use have the same tax regime as autonomous fractions of the horizontal property regime, under penalty of open violation of the principle of legality.";

l) "Where the property is subject to the regime of full property, but being physically constituted by parts susceptible of independent use, tax law attributed relevance to such materiality, evaluating individually, in the terms of article 12, paragraph 3, of the CIMI, each floor or part of property susceptible of independent use – considered separately in the property registration, but integrating the same matrix – proceeding to the assessment of the IMI taking into account the patrimonial value for tax purposes of each part.";

m) "The floors or independent divisions, evaluated in the terms of article 12, paragraph 3 of the CIMI, are considered separately in the property registration, which equally discriminates the respective patrimonial value for tax purposes on which the IMI is assessed.";

n) "Such legal norm is relevant, in this manner, for the purposes of registration in the property matrix, the autonomy that, within the same property, can be attributed to each of its parts, economically and functionally independent.";

o) "The unity of the urban property in vertical property composed of various floors or divisions is not, however, affected by the fact that all or some of those floors or divisions are susceptible of independent economic use.";

p) "Such a property does not cease to be one only, thus not being its distinct parts juridically equated with autonomous fractions under the horizontal property regime";

q) "The fact that IMI was computed based on the patrimonial value for tax purposes of each part of property with independent economic use does not equally affect the application of item 28, paragraph 1, of the General Table.";

r) "This is what results from the fact that the determining factor for the application of that item of the General Table is the total patrimonial value of the property and not separately that of each of its parcels.";

s) The Respondent further argues that another interpretation would be unconstitutional because: "...it would violate (...) the letter and spirit of item 28.1 of the General Table and the principle of legality of the essential elements of the tax provided in article 103, paragraph 2, of the Constitution of the Portuguese Republic (CRP).";

t) "A scope of incidence according to which the patrimonial value for tax purposes of urban properties on which the application of item 28.1 of the General Table depends is the patrimonial value of each floor or division susceptible of independent use and not the total patrimonial value for tax purposes of the urban property with residential use certainly has no expression in law.";

u) "It is, therefore, unconstitutional, as offensive to the principle of tax legality, the interpretation of item 28.1 of the General Table, to the effect that the patrimonial value on which its incidence depends is determined floor by floor or division by division, and not globally.";

v) "In truth, horizontal property and vertical property are differentiated legal institutions.";

w) "The constitution of horizontal property implies, it is fact, a mere legal alteration of the property, with no new evaluation...";

x) "The legislator can, however, subject to a distinct legal-tax framework, and therefore discriminatory, properties in horizontal and vertical property regimes, in particular, benefiting the legally more evolved institution of horizontal property, without that discrimination necessarily having to be considered arbitrary.";

y) "That discrimination can also be imposed by the need to impose coherence to the tax system.";

z) "The fact that the now claimant legitimately disagrees with that discrimination does not imply the violation of any constitutional principle.";

aa) "The tax fact of stamp duty of item 28.1 as consisting in the ownership of urban properties whose patrimonial value for tax purposes recorded in the matrix, in the terms of the CIMI, is equal to or greater than € 1,000,000.00, the patrimonial value relevant for the purposes of the incidence of the tax is, therefore, the total patrimonial value of the urban property and not the patrimonial value of each of the parts that compose it, even when susceptible of independent use.".

  1. MATTER OF FACT

4.1. FACTS CONSIDERED PROVEN

4.1.1. The Claimant is the owner of the property to which the registration ... corresponds, Urban, ... (...), Lisbon.

4.1.2. Such property comprises 12 floors with independent use, registered in the urban property matrix of the parish of ... (...) in the following manner:

a) RC A, with a VPT of € 85,208.32, residential;

b) RC B, with a VPT of € 83,055.51, residential;

c) RC C, with a VPT of € 85,208.32, residential;

d) RC D, with a VPT of € 83,055.51, residential;

e) 1 A, with a VPT of € 85,208.32, residential;

f) 1 B, with a VPT of € 85,208.32, residential;

g) 1 C, with a VPT of € 85,208.32, residential;

h) 1 D, with a VPT of € 85,208.32, residential;

i) 2 A, with a VPT of € 85,208.32, residential;

j) 2 B, with a VPT of € 85,208.32, residential;

l) 2 C, with a VPT of € 85,208.32, residential;

m) 2 D, with a VPT of € 85,208.32, residential.

4.1.3. The Claimant was notified of the stamp duty assessments for the year 2013, in relation to each of such property registrations, in the global amount of € 10,181.92 and which break down in the following manner:

a) RC A, document 2014..., in the amount of € 852.08;

b) RC B, document 2014..., in the amount of € 830.56;

c) RC C, document 2014..., in the amount of € 852.08;

d) RC D, document 2014..., in the amount of € 830.56;

e) 1 A, document 2014..., in the amount of € 852.08;

f) 1 B, document 2014..., in the amount of € 852.08;

g) 1 C, document 2014..., in the amount of € 852.08;

h) 1 D, document 2014..., in the amount of € 852.08;

i) 2 A, document 2014..., in the amount of € 852.08;

j) 2 B, document 2014..., in the amount of € 852.08;

l) 2 C, document 2014..., in the amount of € 852.08;

m) 2 D, document 2014..., in the amount of € 852.08.

4.1.4. The property identified in 4.1.1 was not constituted under the regime of horizontal property on 31 December 2013.

4.1.5. The Claimant voluntarily paid € 3,394.12, the amount corresponding to the first installment and which is structured in the following manner:

a) RC A, document 2014..., € 284.04;

b) RC B, document 2014..., € 276.86;

c) RC C, document 2014..., € 284.04;

d) RC D, document 2014..., € 276.86;

e) 1 A, document 2014..., € 284.04;

f) 1 B, document 2014..., € 284.04;

g) 1 C, document 2014..., € 284.04;

h) 1 D, document 2014..., € 284.04;

i) 2 A, document 2014..., € 284.04;

j) 2 B, document 2014..., € 284.04;

l) 2 C, document 2014..., € 284.04;

m) 2 D, document 2014..., € 284.04.

4.1.6. The Claimant voluntarily paid € 3,393.90, the amount corresponding to the second installment and which breaks down as follows:

a) RC A, document 2014..., € 284.02;

b) RC B, document 2014..., € 276.85;

c) RC C, document 2014..., € 284.02;

d) RC D, document 2014..., € 276.85;

e) 1 A, document 2014..., € 284.02;

f) 1 B, document 2014..., € 284.02;

g) 1 C, document 2014..., € 284.02;

h) 1 D, document 2014..., € 284.02;

i) 2 A, document 2014..., € 284.02;

j) 2 B, document 2014..., € 284.02;

l) 2 C, document 2014..., € 284.02;

m) 2 D, document 2014..., € 284.02.

4.2. FACTS NOT CONSIDERED PROVEN

There are no facts of relevance to the arbitral decision that have not been deemed proven.

4.3. SUBSTANTIATION OF THE MATTER OF FACT CONSIDERED PROVEN

The matter of fact deemed proven has its genesis in the documents used for each of the alleged facts and whose authenticity was not called into question. Likewise, facts not contested were also taken as established.

  1. THE LAW

5.1. ILLEGALITY OF THE ASSESSMENT ACTS IN QUESTION

First and foremost, there are two questions that the tribunal must decide: to ascertain whether subjection to the rule of incidence of item 28 of the TGIS should be materialized by the VPT corresponding to each of the parts, floors or divisions susceptible of independent use, or whether, conversely, it should be by the sum of the VPT of each of such parts. And, secondly, to determine whether the interpretation that concludes that Stamp Duty is only incurred when the VPT of each of the divisions susceptible of independent use exceeds € 1,000,000 violates the principle of legality of the essential elements of the tax, provided in article 103, paragraph 2 of the CRP.

To accomplish such a task, it is necessary from the outset to seek the norm on the interpretation of which the parties disagree.

Thus, article 1, paragraph 1 of the Stamp Duty Code (CIS) and item 28 of the General Table of Stamp Duty (TGIS) provide that the following are subject to taxation: "Ownership, usufruct or surface rights of urban properties whose patrimonial value for tax purposes recorded in the matrix, in the terms of the Code of Municipal Property Tax (CIMI), is equal to or greater than € 1,000,000 – on the patrimonial value for tax purposes used for the purpose of IMI:

28.1 - For property with residential use - 1%..."[1].

First, it is necessary to scrutinize the concept of "property with residential use" to which the norm under interpretation alludes and that of "patrimonial value for tax purposes used for the purpose of IMI". Now, since it is not possible to resolve the question by resort to the CIS, it is by virtue of the provision of article 67, paragraph 2 of the CIS necessary to apply the norms of the Code of Municipal Property Tax (CIMI).

Consequently, article 2 of the CIMI provides on the concept of property:

"1 - For the purposes of this Code, property is every fraction of territory, including waters, plantations, buildings and constructions of any nature incorporated therein or set thereon, with a character of permanence, provided that it forms part of the patrimony of a natural or legal person and, in normal circumstances, has economic value, as well as waters, plantations, buildings or constructions, in the circumstances above, endowed with economic autonomy in relation to the land where they are located, although situated in a fraction of territory that constitutes an integral part of a diverse patrimony or does not have a patrimonial nature.

2 - Buildings or constructions, even if moveable by nature, are deemed to have a character of permanence when devoted to non-transitory purposes.

3 - The character of permanence is presumed when buildings or constructions are set in the same location for a period exceeding one year.

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

Now, the concept of property for purposes of IMI is, as we know, endowed with greater breadth in relation to that set forth in article 204, paragraph 2 of the Civil Code (CC) and encompasses three elements, more specifically, one of a physical nature, the second of a legal character and the last of an economic nature, J. SILVÉRIO MATEUS/L. CORVELO DE FREITAS, Os impostos sobre o património imobiliário. O imposto do selo., Engisco, 2005, p. 101 to 103 and JOSÉ MARTINS ALFARO, Código do Imposto Municipal sobre Imóveis – Comentado e Anotado, Áreas Editora, 2004, p. 118 to 123. The first requires reference to a fraction of territory, including, namely, buildings and constructions incorporated therein with a character of permanence. The element of a legal character requires that the thing, moveable or immoveable, belong to the patrimony of a natural or legal person. Third, the element of an economic nature requires that the thing have an economic value.

With regard to the concept of urban property, article 6 of the CIMI describes its various categories, and it is fundamental for the subsumption of each of them, the nature of its use, that is, the purpose to which it is devoted. And nothing in the economy of article 6, paragraph 1, subparagraph a) of the CIMI prevents the classification of the parts of a property in vertical property, with divisions or floors susceptible of independent use, with residential use, as "property with residential use". Relevant is, it is repeated, its use. And a different conclusion is not possible to reach from the interpretation of article 2, paragraph 4 of the CIMI, which elevates each autonomous fraction in horizontal property to the category of property. In truth, neither in that latter norm can any basis be found to discriminate between properties in horizontal property and properties in vertical property, with floors or divisions susceptible of independent use, as to their subsumption as urban and residential properties, in accordance with the entire economy of item 28 of the TGIS. In other words, if the legislator did not treat properties in vertical property differently from those constituted in horizontal property, the interpreter should not do so[2].

Quite the contrary, property registration and the determination of VPT clearly demonstrate the similarity of legislative treatment. Indeed, the parts endowed with economic independence must, each one, be the object of separate property registration and, consequently, the respective VPT should likewise appear autonomously, cf. article 2, paragraph 4, article 7, paragraph 2, subparagraph b) and article 12, paragraph 3 all of the CIMI. This has refraction in the context of assessment, in that there will be one for each part, division or floor subject to separate use.

Reverting such interpretation to the present case, there are 12 floors/divisions of the property with independent residential use which, on the date of the tax fact, 31 December 2013, was still not constituted in horizontal property and, consequently, from the outset, there is no doubt that they must be classified as "property with residential use" of an urban nature.

It is also important to clarify the other graphic segment of the item of CIS under interpretation, that is, the "patrimonial value for tax purposes used for the purpose of IMI".

In this regard, as already described above, the CIMI provides for the autonomization of the parts of urban property susceptible of independent use as to property registration and the specification of the respective VPT. Such observation is equally valid regarding the consequent assessment, as provided in article 113, paragraph 1 and article 119, paragraph 1, both of the last cited statute. Indeed, if the tax is assessed "...based on the patrimonial values for tax purposes of the properties (our emphasis) and in relation to the taxpayers appearing in the matrices (our emphasis)..." and the assessment document must contain the "...discrimination of properties, their parts susceptible of independent use, respective patrimonial value for tax purposes and the tax amount...", this means that not only is the VPT for purposes of application of item 28.1 of the TGIS to be considered that which is the object of separate property registration, but also nothing prevents the qualification as "property with residential use" of parts, floors or divisions with independent use.

Now, if none of the Claimant's floors with residential use exceeded the VPT of € 1,000,000, the norm of incidence in question cannot be applied to the case sub judice, under penalty of illegality.

The AT further argues that it would be unconstitutional, by violation of the principle of legality of the essential elements of the tax, the interpretation of item 28.1 of the TGIS different from that which concludes that the VPT relevant to such rule of incidence must be the total patrimonial value for tax purposes of the property and not that of each of its independent parts. If that were so, the express reference to "patrimonial value for tax purposes used for the purpose of IMI" would not be understood. And that, there is no doubt, is the object of autonomization in relation to each of the parts susceptible of independent use. Likewise, neither would we find an argument for the issuance of autonomous assessment notices. In addition, in light of the express referral of article 67, paragraph 2 of the CIS to the CIMI, as to matters not regulated, the parts, floors or divisions with autonomy are capable of being classified among properties classified as urban and residential, cf. article 2, 3 and 6, all of the CIMI. In this manner, it is understood that the said interpretation does not suffer from unconstitutionality.

5.2. INDEMNITY INTEREST

Article 43, paragraph 1 of the LGT provides that: "Indemnity interest is due when it is determined, in administrative recourse or judicial challenge, that there was an error attributable to the services resulting in payment of the tax debt in an amount greater than that legally due". In other words, there are three requirements for the right to the said interest: i) Existence of an error in an assessment act attributable to the services; ii) Determination of such error in a process of administrative recourse or judicial challenge; and iii) Payment of a tax debt in an amount greater than that legally due.

In this manner, it is immediately possible to formulate a question: is it admissible to determine the payment of indemnity interest in a tax arbitral process? The answer to the question is affirmative. Indeed, article 24, paragraph 5 of the RJAT provides that: "Interest is due, regardless of its nature, in the terms provided in the General Tax Law and in the Tax Procedure and Process Code".

With knowledge of the question, the illegality of the assessments is attributable to the Respondent, in light of the lack of normative basis at the time of their practice. Consequently, the request for indemnity interest proceeds, calculated at the rate determined, in accordance with the provision of article 43, paragraph 4 of the LGT, between the date on which the improper payment was made and until full reimbursement.

  1. DECISION

On these grounds and with the substantiation described above, it is decided that the arbitral claim is well-founded, with the consequent annulment of the acts subject to pronouncement, with all legal consequences, including the reimbursement of the 1st and 2nd installment of stamp duty for the year 2013, in the amount of € 6,788.02.

  1. VALUE OF THE CASE

The value of the case is fixed at € 10,181.92 (corresponding to the sum of the assessments subject to pronouncement) in the terms of article 97-A of the CPPT, applicable by virtue of the provision of article 29, paragraph 1, subparagraphs a) and b) of the RJAT and article 3, paragraph 2 of the Regulation of Costs in Tax Arbitration Proceedings (RCPAT).

  1. COSTS

Costs charged to the AT, in the amount of € 918, cf. article 22, paragraph 4 of the RJAT and Table I annexed to the Regulation of Costs in Tax Arbitration Proceedings.

Notify.

Lisbon, 9 June 2015

The Arbitrator,

Francisco Nicolau Domingos

[1] In the wording in force as of the date of the tax fact.

[2] See in this sense the arbitral decision rendered in case no. 50/2013-T, of 29/10/2013.

Frequently Asked Questions

Automatically Created

Does Verba 28.1 of the TGIS apply Stamp Tax to vertical property buildings (propriedade vertical)?
Yes, Verba 28.1 of the TGIS applies stamp tax to vertical property buildings (propriedade vertical) when the aggregate patrimonial value exceeds €1,000,000. According to the Tax Authority's position in Process 754/2014-T, a property under vertical or full property regime is treated as a single property for stamp duty purposes, not as separate autonomous fractions. Under Article 2 of the CIMI, only autonomous fractions under the horizontal property regime are considered separate properties. Therefore, for vertical property, the total patrimonial value of all independent units combined is considered when determining whether the €1,000,000 threshold for luxury property taxation is met, even if individual units have separate assessments for IMI purposes.
Can a taxpayer challenge Stamp Tax (Imposto do Selo) liquidations through CAAD tax arbitration?
Yes, taxpayers can challenge Stamp Tax (Imposto do Selo) liquidations through CAAD (Centro de Arbitragem Administrativa) tax arbitration under the RJAT (Regime Jurídico da Arbitragem em Matéria Tributária). Process 754/2014-T demonstrates this procedure: the claimant filed a request for arbitral pronouncement after being notified of stamp duty assessments. The CAAD President appoints an arbitrator, the tribunal is constituted, and the Tax Authority is notified to submit a response. Parties may waive the oral hearing under Article 18 of RJAT and submit written arguments. The arbitration provides an alternative to judicial tax courts for resolving stamp duty disputes, offering a faster resolution process while maintaining full competence to declare tax assessments illegal.
How is the residential use of a building determined for Stamp Tax purposes under Verba 28 TGIS?
The residential use of a building for Stamp Tax purposes under Verba 28 TGIS is determined by applying Article 67(2) of the Stamp Duty Code (CIS), which establishes subsidiary application of the Municipal Property Tax Code (CIMI). In Process 754/2014-T, the dispute centered on whether independent residential units within a vertical property should be evaluated separately or collectively. The Tax Authority's position relies on CIMI Article 2, which defines properties and distinguishes between horizontal property autonomous fractions (treated as separate properties) and vertical property (treated as a single property). For stamp duty purposes, the classification follows the property's legal regime rather than the functional independence of units, meaning the aggregate patrimonial value determines tax applicability unless the property is formally constituted under horizontal property regime.
What are the grounds for declaring the illegality of Stamp Tax assessments on high-value properties in Portugal?
Grounds for declaring the illegality of Stamp Tax assessments on high-value properties in Portugal include violations of tax legality, equality, justice, and proportionality principles. In Process 754/2014-T, the claimant argued that applying Verba 28.1 TGIS based on aggregate property value rather than individual unit values violated these constitutional principles because functionally independent units receive different tax treatment under vertical versus horizontal property regimes. Additional grounds include incorrect interpretation of applicable law (particularly CIMI Article 2 and its relationship to stamp duty), improper calculation of patrimonial value, and discriminatory treatment when independent units are assessed separately for IMI but aggregated for stamp duty. However, the Tax Authority countered that analogical interpretation between property regimes is prohibited in tax law, limiting challenges based solely on perceived inequity between legal regimes.
What procedural steps apply when requesting arbitration at CAAD under Decreto-Lei 10/2011 (RJAT)?
Procedural steps for requesting arbitration at CAAD under Decreto-Lei 10/2011 (RJAT) include: (1) Filing a request for arbitral pronouncement after notification of the tax assessment (as demonstrated in Process 754/2014-T filed on 30/10/2014); (2) The CAAD Deontological Council President appoints an arbitrator; (3) The arbitral tribunal is constituted; (4) Under Article 17(1) RJAT, the Tax Authority is notified to submit a response and request additional evidence; (5) Either party may request waiver of the oral meeting under Article 18 RJAT; (6) If both parties agree, the tribunal may waive the hearing and allow submission of written final arguments; (7) The tribunal schedules the final decision date based on Article 16(c) RJAT, which grants autonomy in conducting proceedings to obtain timely resolution. The process includes sanitation of claims to verify tribunal competence and admissibility before examining the merits.