Stamp Duty on Building Land: CAAD Rules Land Plots Are Not Residential Property Under TGIS 28.1

Case 778/2014-T

THE PARTIES

Claimant - A..., Lda., Tax ID PT …, with registered office at Rua …, nº …, ground floor …, … – ….

Respondent - Tax and Customs Authority (AT).

DECISION

REPORT

a) On 20-11-2014, the company A..., Lda., Tax ID PT …, filed a request for constitution of a Singular Arbitral Tribunal (TAS), pursuant to the combined provisions of Articles 2 and 10 of Decree-Law No. 10/2011, of 20 January (Legal Regime for Tax Arbitration), hereinafter referred to as RJAT.

b) The request was filed by a lawyer whose power of attorney was attached.

THE REQUEST

c) The Claimant petitions for the annulment of the Stamp Duty (IS) assessment under item 28.1 of the General Stamp Duty Table (TGIS), with reference to the year 2012, with document identification 2011 …, dated 07.11.2012 (identification of the 2012 settlement … dated 26.11.2012), generating a total tax of €15,969.40 (TPV of €3,193,880.00 x 0.5% = €15,969.40), relating to the urban property of which the Claimant is full owner, classified as "land for construction", registered in the urban property register of the parish and municipality of … (Faro district) under article ….

d) Disagreeing with the tax act, the Claimant expressly states: "… the assessment in question cannot fail to be considered illegal, since, among other aspects, it seeks to treat as a property with residential use a "land for construction" that is neither designed nor can be used for residential purposes". And adds: "if the "property with residential use" is nothing more than a building constructed for residential use, the "land for construction" is an unbuilt property intended for construction, independently of the intended use of the building to be constructed thereon".

e) In support of its interpretation of the law, it cites the following passage from the Arbitral Decision adopted in CAAD Case No. 42/2013-T: "… it does not appear to us to be sufficient for classification under the objective scope of application of the rule in question that there be the expectation of an urban property coming to have residential use, or to have the potential to have residential use. And in lands for construction there is nothing more than the expectation, or potential, of an urban property being able, after construction, to come to have "residential use", but only when the "residential use" is realized, and never before its construction, can we consider that the urban property falls within the scope of the objective tax base rule in question".

f) It also invokes another arbitral decision (CAAD Case 49/2013-T) and 5 decisions of the Administrative Supreme Court (STA) (STA Decision in case 676/14, of 9 July 2014, available at www.dgsi.pt; STA Decision in case 270/14, of 23 April 2014, available at www.dgsi.pt; STA Decision in case 0272/14, of 23 April 2014, available at www.dgsi.pt; STA Decision in case 048/14, of 9 April 2014, available at www.dgsi.pt; and STA Decision in case 01870/13, of 9 April 2014, available at www.dgsi.pt), all supporting the thesis advanced in this request for a decision.

g) That is, it advocates for the following interpretation of items 28 and 28.1 of the TGIS: "… the classification of an urban property as a "property with residential use", for purposes of taxation under Stamp Duty, depends on its classification as a "residential urban property", that is, it must be a built property ("building or construction") intended for residential use, either as a result of the issuance of a usage license for that purpose, or because that is its normal intended use (cf. Article 6, Nos. 1, subparagraph a), and 3 of the IMI Code)".

h) It concludes by requesting the annulment of the assessment indicated above, since "… the assessment now contested suffers from error concerning the factual and legal assumptions".

i) It further requests the annulment of the decision of tacit dismissal of the ex officio review request presented against the stamp duty assessment No. 2011 …, and recognition of the right to reimbursement of the amounts unduly paid, plus compensatory interest.

OF THE SINGULAR ARBITRAL TRIBUNAL (TAS)

j) The request for arbitral decision was accepted by the President of CAAD and immediately notified to the AT on 24.11.2014.

k) The Deontological Council of CAAD appointed the undersigned as arbitrator, and the parties were notified thereof on 15.01.2015.

l) Therefore, the Singular Arbitral Tribunal (TAS) has been duly constituted since 30.01.2015 to consider and decide the subject matter of this dispute.

m) All these acts are documented in the communication of constitution of the TAS dated 30.01.2015, which is hereby reproduced.

n) Following the request made by AT in its submission of 09.03.2015 and given that issues identical to those already raised in many other cases already decided at CAAD are raised in this case, the TAS, by order of 09.03.2015, decided to dispense with the meeting of parties referred to in Article 18 of the RJAT and likewise with the presentation of arguments, unless the Claimant objected within 5 days, which did not occur.

o) Therefore, both the Claimant and AT gave their express or tacit consent to the non-holding of the meeting of parties referred to in Article 18 of the RJAT and likewise, as to the unnecessary presentation of arguments.

p) Accordingly, the meeting of parties provided for in Article 18 of the RJAT was not held, nor were arguments presented.

q) It is noted that on 09.03.2015 the TAS obtained directly from the AT's website the urban property register of the real property referred to in section c) of this Report in order to ascertain the concrete elements of the urban property, noting that the TPV (Tax Patrimonial Value) relevant here is that contained in the second page of Document No. 2 attached with the request for decision, that is, that which was in effect on the date of the assessment now challenged (€3,193,880.00).

PROCEDURAL REQUIREMENTS

r) Capacity, legitimacy and representation - the parties have legal personality and capacity, are legitimate and are duly represented.

s) Contradiction - the AT filed its response to the request for decision presented by the Claimant on 09.03.2015. All orders of the TAS and all submissions and documents filed by the parties were duly notified to the respective counterpart.

t) Dilatory exceptions - the case does not suffer from nullities and the request for arbitral decision is timely since it was filed within the prescribed period in subparagraph a) of No. 1 of Article 10 of the RJAT.

It is noted that the TAS considers the timeliness of the request for decision to be established since:

the Claimant invoked at the outset of the request for decision and in its articles 1 to 12, that the timeliness of this request for decision, delivered to CAAD on 20.11.2014, resulted from the fact that it had presented to AT on 09.06.2014 a request for ex officio review of the tax act now under discussion;

a request for ex officio review which, due to omission of response within the 4-month period, the Claimant considered, by tacit act of 09.10.2014, to be dismissed;

this being further supported by the tacit acceptance of this factual situation in AT's response, as it did not advocate for a different interpretation.

Indeed, the request for ex officio review of the assessment (dated 07.11.2012) was submitted after the expiration of the periods for appeal and judicial challenge, on 09.06.2014, which was permitted to the Claimant under Article 78 of the General Tax Code (LGT). It was therefore the responsibility of AT to consider that request under Article 57-1 of the LGT. Having failed to do so, its dismissal is presumed under Article 57-5 of the LGT and because this is a decision subject to judicial review, the Claimant submitted the present request to the TAS in the event that the substantive request (annulment of the assessment) should succeed.

Naturally, the fate of the "decision of tacit dismissal" depends on the merits of the request for annulment of the assessment now in question, so if this request succeeds, the request for annulment of the tacit act will also succeed.

SUMMARY OF THE CLAIMANT'S POSITION

Regarding the illegality embodied in a possible erroneous interpretation of item 28.1 of the TGIS

u) The Claimant invokes in support of its position decisions adopted at CAAD on the same substantive matter and 5 decisions of the STA.

v) And along these lines of argument, as already stated above, it states that the tax assessment: "… cannot fail to be considered illegal, since, among other aspects, it seeks to treat as a property with residential use a "land for construction" that is neither designed nor can be used for residential purposes". And adds: "if the "property with residential use" is nothing more than a building constructed for residential use, the "land for construction" is an unbuilt property intended for construction, independently of the intended use of the building to be constructed thereon".

w) It concludes that the tax act under scrutiny suffers from illegality embodied in an erroneous interpretation of item 28.1 of the TGIS, arguing that "… the concept of property with residential use is what literally results from Articles 60, Nos. 1 and 2 of the IMI Code and, as such, "Residential Use" requires that the property generating the stamp duty of Item 28 be licensed for residential purposes or have as its normal intended use "residential", with this category encompassing properties that by their physical configuration — regardless of municipal licensing — can effectively be used for residential purposes".

SUMMARY OF THE TAX AUTHORITY'S POSITION

Regarding the illegality embodied in a possible erroneous interpretation of item 28.1 of the TGIS

x) AT argues that "the notion of the property's designation is found in the part relating to property valuation, which makes sense because the valuation of the property (purpose) incorporates value to the property, constituting a determining fact of distinction (coefficient) for purposes of valuation".

y) "As results from the expression "value of authorized buildings", contained in Article 45-2 of the IMI Code, the legislator opted to apply the methodology of valuation of properties in general to the valuation of lands for construction, therefore being applicable to them the designation coefficient provided for in Article 41 of the IMI Code".

z) And argues that "for purposes of determining the tax patrimonial value of lands for construction, the application of the designation coefficient in the context of valuation is clear, so its consideration for purposes of applying item 28-1 of the TGIS cannot be ignored".

aa) It clarifies that "the designation of the property (aptitude or purpose) is a coefficient that contributes to the valuation of the property, in the determination of tax patrimonial value, applicable to lands for construction".

bb) Summarizing its reasoning, it expresses that "Item 28 of the TGIS itself refers to the expression "properties with residential use", calling for a classification that overlays the types provided for in No. 1 of Article 6 of the IMI Code."

cc) AT understands that "the concept of "properties with residential use", for purposes of the provision of item 28 of the TGIS, comprises both built properties and lands for construction, particularly given the literal element of the rule", since "the legislator does not refer to "properties intended for residential use", having opted for the notion of "residential use", an expression that is different and broader whose meaning must be found in the need to integrate other realities beyond those identified in Article 6-1, subparagraph a) of the IMI Code".

dd) It concludes with the legality of the assessment act against the CIS and the CRP, so it should remain in the legal order because it constitutes a correct application of law to facts.

II - QUESTIONS FOR THE TRIBUNAL TO RESOLVE

The questions that arise for the Tribunal are only concerning the interpretation and application of rules of law.

On this matter, in particular, CAAD has already pronounced itself in several decisions in which the substantive issue is the same, as has the STA itself, that is, the discussion concerns the scope of the provision of the tax base of items 28 and 28-1 of the TGIS.

The limit of interpretation is the letter, the text of the rule. What follows is the "task of interconnection and appraisal that escapes the literal domain".

Starting from the principle that every rule has a provision and a disposition, the question that arises here is to determine, by delimiting, whether the tax base rule, as written – in its provision - (urban properties … with residential use), encompasses or not the legal-fiscal reality defined in the law as "lands for construction".

Accordingly, it appears to the TAS that the question it must resolve is the following:

Does the tax assessment act of IS now challenged suffer from any non-conformity with the law, namely "error in qualification of the tax fact" (or error in the factual assumptions) that affects its maintenance in the tax legal order?

Reference was made above, regarding the procedural requirement of timeliness of submission of the request for arbitral decision under consideration, that, having the Claimant submitted a request for ex officio review to the Finance Office of Lisbon - 2 on 9 June 2014, it is concluded that on 9 October 2014, the presumption of tacit dismissal was formed, therefore it is understood that the submission of the request to CAAD is timely. This matter did not even merit controversy between the parties.

III. PROVEN AND UNPROVEN FACTS. GROUNDS

Of relevance to the decision to be adopted, these are the facts considered proven, indicating the respective documents and/or the articles of the Claimant's request and AT's response regarding facts admitted by agreement, as grounds:

Proven Facts

1. The Claimant is registered as the full owner of the urban property of the type "land for construction", registered in the urban property register of the parish and municipality of …, municipality of Faro under article …º - As per the urban property register obtained directly by the TAS from the AT's website and attached to this decision.

2. The description of the urban property is made as follows: "Type of property: land for construction". – As per the urban property register.

3. In the urban property register, under "valuation data" it states: "type of location coefficient: residential" and contains a box indicating: "Ca – 1.00".

4. The urban property in question had, on the date of assessment, a tax patrimonial value (IMI Code): of €3,193,880.00 - As per page 2 of Document No. 2 attached with the request for decision (certificate issued by the Finance Office of Lisbon-2 on 24.04.2013).

5. And such tax patrimonial value resulted from "IMI Form 1 No. … delivered on 2008.01.10, valuation sheet …, valued on 2008.05.08 – As per the urban property register.

6. The Claimant was sent notification by ordinary mail on 26-11-2012, having been notified on an unascertained date, of the Stamp Duty (IS) assessment under item 28.1 of the TGIS, identified in section c) of the Report of this decision, generating a total tax of €15,969.40 – As per first paragraph of page 50 of the Case File and Article 1 of the request for decision.

7. The Claimant submitted to AT on 9 June 2014 a request for ex officio review against the said tax act, requesting its annulment, a request that received no response until the date of submission of the request for arbitral decision – Articles 2 and 3 of the request for decision.

8. Stamp Duty assessed at the rate of 0.5%, based on a tax fact of 31-10-2012, solely on the basis of item 28 of the TGIS, as amended by Law 55-A/2012, of 29 October - As per page 2 of Document No. 2 attached with the request for decision (certificate issued by the Finance Office of Lisbon-2 on 24.04.2013).

9. The Claimant proceeded to pay coercively the tax that was assessed to it in the fiscal execution proceedings …2013… in 8 installments – as per documents Nos. 3, 5 and 6 attached with the request for decision.

Unproven Facts

There is no other alleged facts that are relevant for the correct resolution of the procedural matter. The evidentiary assessment of the documents attached to the case by the Claimant and the Respondent (in the Case File) was not called into question.

As stated, given the direct obtaining of the real property register, the TAS obtained it and it is attached to this decision.

IV. CONSIDERATION OF THE QUESTIONS FOR THE TAS TO RESOLVE

It appears to us that with the creation of a new item in the TGIS, item 28, (by Article 4 of Law 55-A/2012, of 29.10), in essence creating a new "fact or legal situation" subject to tax, was only intended to extend the incidence of stamp duty to a new legal-factual reality, but without altering the division of the various types of urban properties in existence.

It was not intended, as it appears to us, to create a new classification of urban properties overlaying the types provided for in No. 1 of Article 6 of the IMI Code.

The tax act in question occurred under the previous version of item 28.1 of the TGIS, so the current version given to it by Article 194 of Law No. 83-C/2013, of 31 December (State Budget for 2014) is not applicable here, since it only takes effect from 1 January 2014.

We are thus, as stated above, solely and only within the scope of the activity of interpretation and application of rules, that is, in the task of delimiting the legal-factual situations that must be considered as encompassed in the tax base rule of this new tax and which results from the combination of items 28 and 28-1 of the TGIS.

Nevertheless, the law, in its literal element which is always the limit of any interpretation, in item 28-1 TGIS, refers to "… by property with residential use".

That is, this concrete tax base rule should not then be interpreted, delimited, as if it had the literal meaning of "residential urban properties", because the interpreter, in respect of the command of No. 3 of Article 9 of the Civil Code, cannot proceed from the assumption that the legislator was not aware of the exact terms of No. 1 of Article 6 of the IMI Code which makes the division of the various types of urban properties.

But it also does not appear that one can understand that the tax base rule automatically encompasses, beyond the type of urban properties "residential", the type "lands for construction".

It appears to us, therefore, that given the literal element of the tax base rule (revealing the legislator's intent) chosen by the legislator: "urban properties … with residential use" it was intended to reach other types of urban properties, beyond "residential urban properties …" according to the division of No. 1 of Article 6 of the IMI Code.

We do not, however, wish to suggest by this that the type of urban properties "lands for construction" (or any other type of urban property) is clearly and without more (that is, "ope legis"), encompassed in the tax base rule of item 28-1 of the TGIS.

For this purpose, we transcribe, aiming at simplification and uniformity, what is stated in the arbitral decision CAAD Case 48/2013-T (as an example), in the part to which we adhere:

"The subjection to stamp duty of properties with residential use resulted from the addition of item 28 to the General Stamp Duty Table, made by Article 4 of Law 55-A/2012, of 29/10, which typified the following tax facts:

28 – Ownership, usufruct or right of superficies of urban properties whose tax patrimonial value recorded in the register, under the terms of the IMI Code, is equal to or greater than € 1,000,000 – on the tax patrimonial value used for IMI purposes:

28-1 – By property with residential use - 1%;

28-2 – By property, when the taxpayers who are not natural persons are residents in a country, territory or region subject to a clearly more favorable tax regime, contained in the list approved by order of the Minister of Finance – 7.5%.

...

With regard to the situations typified in item 28.1, only properties with residential use are subject.

Law No. 55-A/2012, of 29 October, does not clarify anywhere what properties with residential use are. However, in No. 2 of Article 67 of the Stamp Duty Code, added by the said law, it was stipulated that "to matters not regulated in this Code concerning item 28 of the General Table, the IMI Code applies, subsidiarily".

The IMI Code also does not clarify what properties with residential use are, but only what the various types of properties are, qualifying No. 2 of Article 6 as "residential, commercial, industrial or for services buildings as such licensed or, in the absence of a license, that have as their normal intended use each of these purposes".

That is, for the IMI Code, both properties licensed for residential use are residential, even if they are not currently being used for that purpose, as, in the case of absence of a license, those that have as their normal intended use that purpose.

As for lands for construction, which are of interest in the present case, given the assessment made and challenged regarding land for construction, the IMI Code, in No. 3 of Article 6, tells us that "they are located within or outside an urban settlement, for which a license or authorization for subdivision operation or construction has been granted, and also those that have been so declared in the acquisition title, excepting those lands in which the competent entities prohibit any of those operations, namely those located in green areas, protected areas or that, in accordance with municipal land use plans, are intended for public spaces, infrastructure or equipment".

From the two rules transcribed above it is not possible to extract what the legislator intended to say when referring to properties with residential use.

Law No. 55-A/2012, of 29/10, has no preamble, so it is not possible to extract the legislator's intent from it.

This law of the National Assembly originated from bill No. 96/XII (2nd), which, in its explanatory statement, speaks of the introduction of tax measures inserted in a broader set of measures to combat the budget deficit.

In the explanatory statement of the said bill, it is said that, "these measures are fundamental to reinforce the principle of social equity in austerity, ensuring an effective distribution of the necessary sacrifices to comply with the adjustment program. The Government is strongly committed to ensuring that the distribution of these sacrifices will be made by all and not only by those who live from their work income. In accordance with this objective, this law broadens the taxation of capital and property, equitably covering a broad set of sectors of Portuguese society".

In that explanatory statement it is also said that, in addition to the increase in taxation of capital income and capital gains, a tax rate is created under stamp duty applicable to urban properties of residential use whose tax patrimonial value is equal to or greater than one million euros.

That is, in such an explanatory statement, it is also not clarified what is understood by urban properties with residential use.

...

In his intervention in the National Assembly, in the presentation and discussion of the said bill, the State Secretary for Tax Affairs made the following statement: "The Government has chosen as the priority principle of its tax policy social equity. This is even more important in times of rigor as a way to ensure fair distribution of the tax burden.

In the demanding period the country is going through, during which it is obliged to comply with the program of economic and financial assistance, it becomes even more urgent to assert the principle of equity. It cannot always be the same - employees and pensioners, bearing the tax burden.

For the tax system to be fairer, it is crucial to promote the expansion of the tax base requiring additional effort from taxpayers with higher incomes and protecting Portuguese families with lower incomes in this way.

For the tax system to promote more equality, it is fundamental that the effort of budget consolidation be shared by all types of income including with special emphasis capital income and properties of high value. This matter, it is recalled, was extensively addressed in the Constitutional Court decision.

Finally, for the tax system to be more equitable, it is crucial that all are called upon to contribute according to their ability to contribute, giving the tax administration enhanced powers to control and supervise situations of fraud and tax evasion.

In this sense, the Government presents today a set of measures that effectively reinforce a fair and equitable distribution of the adjustment effort by a broad and comprehensive set of sectors of Portuguese society.

This proposal has three essential pillars: the creation of special taxation on urban properties valued above 1 million euros; the increase in taxation on capital income and capital gains and the strengthening of rules against fraud and tax evasion.

First, the Government proposes the creation of a special tax on residential urban properties of highest value. This is the first time in Portugal that special taxation is created on high-value properties intended for residential use. This tax will be 0.5% to 0.8% in 2012, and 1% in 2013, and will apply to homes valued at equal to or greater than 1 million euros. With the creation of this additional tax, the tax burden required from these owners will be significantly increased in 2012 and 2013".

"In their interventions in the discussion of this bill, deputies Pedro Filipe Soares, of BE, and Paulo Sá, of the PCP, spoke of the taxation of high-value real estate property, with allusions being made to previous bills on the same subject that were not approved."

First, it must be noted that there is no doubt that the type of urban properties considered "residential" (subparagraph a) of No. 1 of Article 6 of the IMI Code) which are "… buildings or constructions as such licensed or, in the absence of a license, that have as their normal intended use that purpose", automatically fall within the provision of the tax base rule of items 28 and 28-1 of the TGIS.

But from the simple consideration of the literal element of the law it will follow that it was intended to encompass more than this legal-fiscal reality encompasses.

Since, as already stated, by virtue of the command of No. 3 of Article 9 of the Civil Code, it does not appear possible for the interpreter to understand that the expression "urban properties … with residential use" has the same practical scope (field of application) as if it said "residential urban properties", proceeding from the assumption that it was intended to encompass more than would be encompassed through this latter literal element.

In the case at hand, AT argues that "the notion of the property's designation is found in the part relating to property valuation, which makes sense because the valuation of the property (purpose) incorporates value to the property, constituting a determining fact of distinction (coefficient) for purposes of valuation" and therefore one should resort to Article 41 (designation coefficient) of the IMI Code.

And it further states: "the tax law considers as an element for purposes of valuation of lands for construction the value of the building footprint area, which varies between 15% and 45% of the value of authorized or planned buildings based on the urbanization and construction project."

But then does the expression "urban properties … with residential use" encompass or can it encompass "lands for construction" as unbuilt urban properties but with construction capacity for residential properties?

Now, only with the elements contained in the property register, as is the case, in which a mere constructive or building potential is demonstrated, it appears to us that without additional substantiation of the tax act, without demonstration that the type of urban property "land for construction" already has some economic utility at the level of residential use, it will not be possible to consider it encompassed in the tax base rule of items 28 and 28-1 of the TGIS.

Does this mean that the expression "urban properties … with residential use" cannot encompass "lands for construction" as unbuilt urban properties but with construction capacity for residential properties?

It appears to us that situations may occur in the immense complexity of the economy, of economic utility, even informal, situations of subjection, given the commands placed on the interpreter contained in No. 3 of Article 9 of the Civil Code and No. 3 of Article 11 of the LGT.

But as for "lands for construction" as unbuilt urban properties but with construction capacity for residential properties, it appears to us that it is not sufficient to demonstrate "residential use" the elements contained in the register. Additional substantiation will be necessary, other factual material, beyond what is contained in the register, that evidences the economic utility with that specific purpose.

It does not appear to us possible through extensive interpretation, using reasoning by analogy with buildings considered residential urban properties, to conclude, without more, that the type of urban properties considered "lands for construction" fall "ope legis" within the tax base rule, sufficing to allege the legal-formal qualification and the elements of the register, since, it must be noted, it will be necessary to demonstrate its "residential use" concretely.

The Claimant alleges the non-conformity of the tax act with the law of erroneous qualification of the tax fact, in addition to lack of substantiation (even if implicitly, arguing that lands for construction can never be encompassed in the tax base rule, insofar as the stamp duty assessment act is only supported by the elements of the property register).

In truth, even if one understands, as it appears we should understand, in general and abstract terms, that a "land for construction" as indeed any other urban property beyond the type of urban properties "residential" (because these always have residential use by definition) can have, in terms of practical, economic and functional utility, a "residential use" concretely (even in the informal economy), the truth is that its consideration "ope legis" as having "residential use" based only on the elements of the register and on the fact that its valuation is made with reference to the coefficients applicable to residential urban properties, constitutes non-conformity with the tax base rule of items 28 and 28-1 of the TGIS, with illegality occurring as provided in subparagraph a) of Article 99 of the Tax Procedural Code (CPPT) and the illegality provided for in subparagraph c) of Article 99 of the CPPT also occurs due to an absence of substantiation that the law, in the interpretation expressed above, requires.

The challenged act contains no substantiation in the sense referred to above, beyond the consideration that it is an urban property of the type "land for construction" "with construction capacity for residential properties" in hypothetical terms, which is configured to be insufficient.

Request for Interest

In the legislative authorization in which the Government based itself to approve the RJAT, granted by Article 124 of Law No. 3-B/2010, it is stated that "the tax arbitration process should constitute an alternative procedural means to the judicial challenge process and to the action for recognition of a right or legitimate interest in tax matters".

Although subparagraphs a) and b) of No. 1 of Article 2 of the RJAT use the expression "declaration of illegality" to define the competence of arbitral tribunals functioning at CAAD and do not make reference to constitutive (annulling) and condemning decisions, it should be understood, in harmony with the said legislative authorization, that their competences include the powers that in judicial challenge proceedings are attributed to tax tribunals with respect to acts whose appraisal of legality falls within their competences.

Therefore, condemnation of the tax administration to pay compensatory interest can be issued here.

Article 43 of the LGT "does nothing more than establish a swift and, so to speak, automatic means of indemnifying the injured party. Regardless of any allegation and proof of the damages suffered, he has the right to the indemnification therein established, translated into compensatory interest in the cases included in the provision (…)" STA Decision of 2-11-2006, case 604/06, available at www.dgsi.pt"

In the case at hand, it was proven that the Claimant paid the total value of the assessments that were notified to it in fiscal execution proceedings (in eight installments, as per section 9 of Part III of this decision), so it has the right to compensatory interest counted from the date of payment, in whole or in part, of the stamp duty assessments now annulled until the date of issuance of the respective credit notes, counting the period for such payment from the beginning of the period for spontaneous execution of this decision (Article 61, Nos. 2 to 5, of the CPPT), at the rate determined in accordance with Article 43, No. 4 of the LGT.

As a consequence of the above, the requests made by the Claimant must be judged as granted, since the Stamp Duty assessment carried out by AT is not in conformity with the law.

V. DECISION

On the grounds and with the foundations set out above, it is ruled:

1. Granted the Claimant's request for annulment of the Stamp Duty (IS) assessment under item 28.1 of the TGIS, with reference to the year 2012, with document identification 2011 …, dated 07.11.2012 (identification of the 2012 settlement … dated 26.11.2012), generating a total tax of €15,969.40 (TPV of €3,193,880.00 x 0.5% = €15,969.40), relating to the urban property of which the Claimant is full owner, classified as "land for construction", registered in the urban property register of the parish and municipality of … (Faro district) under article …, annulling the assessment.

2. Granted the request for annulment of the tacit act dismissing the ex officio review request presented by the Claimant to AT on 9 June 2014, whose presumption was formed on 09 October 2014.

3. Granted the request for condemnation of AT to pay compensatory interest to the Claimant, counted from the date of payment of the Stamp Duty tax installments, in whole or in part, until the date of issuance of the respective credit note, counting the period for such payment from the beginning of the period for spontaneous execution of this decision (Article 61, Nos. 2 to 5, of the CPPT), at the rate determined in accordance with Article 43, No. 4 of the LGT.

It is further noted that the Claimant's right to obtain reimbursement of all amounts delivered to AT is a legal consequence of the annulment of the assessment act that was at the origin, in this case, of the coercive procedure.

Value of the case: in accordance with the provision of Article 3, No. 2, of the Regulation of Costs in Tax Arbitration Proceedings (and subparagraph a) of No. 1 of Article 97-A of the CPPT), the value of the case is set at €15,969.40.

Costs: pursuant to Article 22, No. 4 of the RJAT, the amount of costs is set at €918.00, according to Table I attached to the Regulation of Costs in Tax Arbitration Proceedings, to be borne by the Respondent.

Notify.

Lisbon, 17 March 2015

Singular Arbitral Tribunal (TAS)

Augusto Vieira

Text prepared by computer in accordance with Article 131, No. 5, of the Code of Civil Procedure, applicable by reference of Article 29 of the RJAT.

The drafting of this decision is governed by the orthography prior to the Orthographic Agreement of 1990.