Process: 803/2014-T

Date: June 15, 2015

Tax Type: Selo

Source: Original CAAD Decision

Summary

Process 803/2014-T addresses whether Stamp Tax under Verba 28 of the TGIS applies to undeveloped building land (terrenos para construção) valued over €1,000,000. A company challenged stamp tax assessments totaling €45,468.61 (2012-2013) on a Porto construction plot with no buildings, arguing that vacant land cannot constitute residential property subject to Verba 28 taxation. The taxpayer contended that Law 55-A/2012 intended to tax only actual residential immovable property with constructed housing, not bare land, and filed an official review request under Article 78 LGT claiming error attributable to tax services. The Tax Authority raised preliminary exceptions regarding timeliness and impropriety of the review request, citing Article 56 LGT which prohibits duplicate gracious proceedings within two years. On the merits, AT argued that building plots qualify as residential property because their Taxable Patrimonial Value (VPT) calculation incorporates the residential use coefficient under Article 41 CIMI. The Authority maintained that 'residential use' under Verba 28 encompasses broader realities beyond completed dwellings defined in Article 6(1)(a) CIMI, citing TCA South Decision 04950/11. The case involved tacit rejection after no response to the review request within statutory deadlines, triggering CAAD arbitration rights. The tribunal must resolve: (1) whether procedural exceptions bar consideration of the merits, and (2) whether undeveloped construction land falls within Verba 28's scope based on its legal classification and VPT calculation methodology. This decision impacts interpretation of residential property taxation for high-value development land across Portugal.

Full Decision

I – REPORT

  1. A…, SA, with registered office at Avenue … no. …, 1st floor, municipality of Braga with Tax Identification Number (NIF) … submitted a request for arbitral pronouncement, under the provisions of paragraph a) of no. 1 of article 2, of no. 1 of article 3 and of paragraph a) of no. 1 of article 10, all of the RJAT, requesting the AT, with a view to the annulment of a tax act of collection of stamp tax on the ownership of an immovable property registered in the cadastre under urban article no. … of the parish of …., municipality of Porto, concerning a plot of land for construction, according to collection documents 2012 …, 2013 …, 2013 … and 2013 … in the total amount of € 45,468.61, taking into account that, on 7 May 2014, it submitted a request for official review, in accordance with no. 1 of article 78 of the LGT, with the Finance Service of Braga ..., on the grounds of error attributable to the services, which was forwarded by this office to the Finance Service of Porto ... as the competent authority for its review, according to communication of 13 May 2014.

  2. Since, up to the date of submission of this request (09/12/2014) it did not receive any notification of a decision on the review request, it considered that the presumption of tacit rejection referred to in nos. 1 and 5 of article 57 of the LGT had been established.

  3. This request was made without exercising the option to designate an arbitrator, and was accepted by His Excellency the President of CAAD and automatically notified to the AT on 11/12/2014.

  4. In accordance with the provisions of no. 2 of article 6 of the RJAT, by decision of His Excellency the President of the Deontological Council, duly communicated to the parties within legally applicable deadlines, an arbitrator of the tribunal was designated on 15/01/2015, Arlindo José Francisco, who communicated acceptance of the assignment within the legally stipulated deadline.

  5. The tribunal was constituted on 12/02/2015 in accordance with the provisions contained in paragraph c) of no. 1 of article 11 of the RJAT, as amended by article 228 of Law no. 66-B/2012, of 31 December.

  6. With its request, the applicant seeks to obtain the annulment of the collections in question and of the interest and other expenses collected in connection with the same taxes, on the grounds of error attributable to the services.

  7. It supports its position, in summary, on the understanding that plots of land for construction in no way can be considered as immovable property with residential use, where no building has yet been constructed that may be considered to have such use, and that the legislator only intended to impose a tax on residential immovable property with a TPA (Taxable Patrimonial Value) equal to or greater than €1,000,000.00 as determined by item 28 of the TGIS, as amended by Law 55-A/2012 of 29 October, and that moreover the 2012 collection … lacks budgetary authorization for its collection.

  8. In its response, the respondent invokes as a preliminary matter the timeliness of the request, while at the same time considers the request for official review, submitted in May 2014, to be improper, taking into account the provisions of no. 2 of article 56 of the LGT, given that two gracious complaint proceedings concerning the same subject matter have been pending for less than 2 years, a decision could not be made on the request for ordinary complaint of May 2014.

  9. From the perspective of the AT, presuming tacit rejection, its basis would be the preliminary issue of non-verification of the requirements for issuing a decision on the matter, taking into account the provisions contained in article 56 of the LGT, article 9 and paragraph d) of article 83, both of the CPA, does not deny the existence of a duty to pronounce which cannot be confused with the duty to decide which it considers non-existent regarding the request in question.

  10. It further states that the act to be fictitiously deemed would be that of rejection by verification of a preliminary issue, whose contentious review would be by administrative special action and not by judicial review or request for arbitral pronouncement, and the tribunal should therefore recognize this fact and refrain from ruling on the merits of the applicant's claim.

  11. Should the tribunal not consider the exceptions raised to be verified and proceed to issue a decision on the merits of the matter, it is certain that it should recognize the non-existence of the duty to decide on the request for official review and absolve the respondent of the claim.

  12. Concluding that, in the event the tribunal should take a different view, it maintains that item 28 of the TGIS, as amended by Law 55-A/2012, determines the taxation of plots of land for construction, since these have the legal nature of immovable property with residential use given that, in determining its TPA, account is taken of the residential use coefficient provided for in article 41 of the CIMI, citing Court of Appeal Decision no. 04950/11 of 14/02/2012 of the TCA of the South.

  13. That the legislator does not speak of immovable property intended for housing, but of residential use, an expression much broader in scope, aimed at integrating other realities beyond those identified in article 6, no. 1, paragraph a) of the CIMI.

  14. In this view, the tax acts in question should be upheld as they constitute a correct interpretation and application of law to the facts, and are not violators of the Law, whether of the CRP or of the CIS, and therefore the applicant's claim should be judged unfounded and the respondent should be absolved of the claim.

II - CASE MANAGEMENT

The tribunal was regularly constituted and is competent ratione materiae, in accordance with article 2 of the RJAT.

The parties have judicial personality and capacity, are shown to be legitimate and are regularly represented in accordance with articles 4 and 10, no. 2 of the RJAT and article 1 of Administrative Order no. 112-A/2011, of 22 March.

On 20/04/2015 the meeting referred to in article 18 of the RJAT took place without the presence of the respondent, despite being properly summoned, which, by telephone, informed CAAD of the impossibility of being present without objecting to the holding of the meeting. At that meeting the applicant declared that it was waiving the examination of the witnesses it had listed, filed a motion to exercise its right to present its case in relation to the exceptions raised by the respondent, and the tribunal granted a period of 10 days for the respondent to comment, which did nothing.

The applicant, at the aforesaid meeting, further requested the submission of the property record card, and the tribunal granted a period of 5 days for this purpose, notifying the respondent to, within the same period counting from notification of the submission of the property record card, present its comments.

At the same meeting the tribunal notified the applicant and the respondent, in this order successively and after the expiration of the viewing periods to present, if they so wished, written submissions within 10 days, with the respondent's period beginning to count from notification of the submission of the applicant's submissions.

It is verified that the applicant did not submit the property record card nor produced written submissions, facts which do not prevent the tribunal from issuing a decision on the scheduled date, since the questions submitted for consideration are strictly legal, with the file containing sufficient elements for this purpose.

III - LEGAL BASIS AND REASONING

1 – The questions to be resolved with interest for the case are as follows:

a) To consider the exceptions invoked by the AT (timeliness of the request and procedural error) which, if verified, prevent consideration of the merits of the case.

b) Should the same be declared unfounded, whether plots of land for construction, to which the residential use coefficient was applied in determining its TPA and a value equal to or greater than €1,000,000.00 was determined, fall within the scope of the subject matter of the Stamp Tax foreseen in item 28 of the TGIS, as added by Law no. 55-A/2012, of 29 October.

c) If in the negative, whether the Stamp Tax collections in question in the present case should be annulled as being unlawful and, consequently, all interest and further expenses collected inherent to the collections including representation expenses should be annulled.

2 – Factual Basis

The factual basis considered relevant and proven on the basis of the elements attached to the file is as follows:

a) The applicant is the owner of a plot of land for construction registered in the urban property cadastre under article … of the parish of … municipality of Porto.

b) It was notified to proceed with payment of Stamp Tax according to collection notices 2012 …, 2013 …, 2013 … and 2013 ….

c) Against such collections it presented on 07 May 2014 at the Finance Service of Braga ... a request for official review on the grounds of error attributable to the services, which was forwarded, on 13 of the same month, to the Finance Service of Porto ... as the competent authority for review of the request.

d) Against such collections the applicant had already presented gracious complaints … 2013 … and … 2013…, the first with express rejection on 15/04/2013 against which a hierarchical appeal was filed which awaits decision and the second also rejected according to notification of 17 October 2014, with unknown whether a gracious or contentious complaint request was made against the same.

e) Payment of the aforesaid collection notices is not proven in the file.

3 – Legal Basis

3.1 - Regarding the exceptions raised by the AT

a) On the timeliness of the filing of this action

The AT argues that the request for official review was filed on 7 May 2014, with the presumption of tacit rejection being established on 08 September 2014, as article 10, no. 1, paragraph a) of the RJAT sets the deadline of 90 days for filing the arbitral request, the last day for its performance would be 7 December 2014 which, being a Sunday, would be extended to 8 of the same month and year, and as it was only filed on 9, concludes that the same is untimely and the respondent should be absolved.

In response, the applicant, relying on the provisions of no. 5 of article 57 of the LGT, argues that the period for establishment of the presumption of tacit rejection could not commence on 7 May, but at best on 13 May, the date on which its request was sent by the Finance Services of Braga ... to the Finance Service of Porto ..., but even if this is not the understanding, 8 December is the Feast of the Immaculate Conception, a national holiday, and as such not a business day, concluding that the request is timely.

DECIDING

8 December is a compulsory holiday in accordance with no. 1 of article 234 of the Labour Code.

The courts are closed on Saturdays, Sundays and public holidays.

No. 1 of article 137 of the CPC states: "Without prejudice to acts carried out automatically, procedural acts are not performed on days when the courts are closed, nor during the period of judicial holidays". No. 3 of the same article states: "Acts of the parties that involve the reception by the judicial offices of any pleadings, requests or documents must be performed during the business hours of the services". The provision of no. 4 states: "Parties may perform procedural acts by electronic data transmission or by facsimile, on any day and regardless of the opening and closing hours of the courts".

In light of this legal provision, we must conclude that the request is timely, despite the content of no. 4 which admits the possibility of transmission via electronic means on any day, it is merely a possibility and not an obligation. The law says "may…"

Furthermore, in accordance with the provisions of no. 5 of article 57 of the LGT, it is the date of entry of the request at the competent service of the AT that counts for the presumption of rejection for purposes of hierarchical appeal, contentious appeal or judicial challenge, and as was seen it was only on 13 May 2014 that the Finance Service of Braga ... forwarded the request to the Finance Service of Porto ..., the competent one for its review.

Therefore, this request filed on 9 December must be considered timely whether analyzed from one perspective or another, and therefore the exception of timeliness raised by the respondent is declared unfounded.

b) On procedural error

The AT argues that against the collections here in question the applicant had already presented gracious complaints, in this way, taking into account the provisions of no. 2 of article 56 of the LGT, the request for official review would be manifestly improper, given that gracious complaint proceedings addressing the same matter are pending, therefore a decision could never be made on it. Presuming tacit rejection, this would be grounded in the preliminary issue of non-verification of the requirements for issuing a decision on the matter, in the terms referred to in article 56 of the LGT, article 9 and paragraph d) of article 83, both of the CPA, concluding that there is no duty to decide on the request in question and that the act to be fictitiously deemed would only be the act of rejection by verification of a preliminary issue (timeliness of the request) whose contentious review would be through administrative special action and not by request for arbitral pronouncement, and the tribunal should recognize this fact and absolve the respondent.

The applicant stated that both the subject matter and the grounds of the request for official review are substantially different from those provided for in the gracious complaint.

On the date when the presumption of tacit rejection was established (07/09/2014) there was no express pronouncement by the AT, which only occurred and only regarding the 2013 collection … on 17/10/2014, concluding that the exception alleged by the AT is unfounded.

DECIDING

No. 2 of article 56 of the LGT states: "There is no duty to decide when: a) The tax authority has pronounced itself less than two years ago on a request from the same applicant with identical subject matter and grounds; b) The legal deadline for review of the tax act has been exceeded"

The file proves that at the time of the request for official review the AT had not pronounced itself, as the Law requires, there were only two gracious complaint proceedings, one in hierarchical appeal and another still without any decision. In fact there was no pronouncement/decision by the administration in either case. The Law requires that there be one and, it is not sufficient, as the respondent intends, the mere existence of proceedings questioning the case. Nor had the legal deadline for review of the tax acts been exceeded, and therefore the tribunal understands that there was a duty to decide on the matter raised in the request for official review and therefore declares this exception also unfounded.

Once the exceptions raised by the AT have been declared unfounded, nothing prevents consideration of the merits of the request.

3.2 – Regarding taxation in Stamp Tax of plots of land for construction (item 28 of the TGIS as amended by Law 55-A/2012).

a) The applicant argues that plots of land for construction cannot be considered as immovable property with residential use, relying on the respective tax provision (item 28 of the TGIS), as amended by Law 55-A/2012, already mentioned.

b) The fact that on a given plot of land for construction the construction of property intended for housing is authorized does not determine, fiscally, any change to its intended use.

c) It refers to decisions already issued both by arbitral tribunals formed and by the STA, to conclude, as in the corresponding learned decisions, that plots of land for construction cannot be considered as urban immovable property with residential use.

d) In turn, the respondent understands that plots of land for construction have the legal nature of immovable property with "residential use" since in determining its TPA account is taken of the residential use coefficient provided for in article 41 of the CIMI and cites, in this sense, Court of Appeal Decision 04950/11 of 14/02/2012 of the TCA South which considers that the regime for evaluating the taxable patrimonial value of plots of land for construction is enshrined in article 45 of the CIMI, being equal to that of constructed buildings, although starting from the building to be constructed, based on the project.

e) It understands that the expression "residential use" of item 28 of the TGIS calls for a classification that overlays the species of urban immovable property foreseen in no. 1 of article 6 of the CIMI and that the legislator in using it intended to integrate other realities beyond those mentioned in the CIMI provision, concluding that the collections in question should be upheld and the AT should be absolved.

f) Having summarized the positions of the applicant and the respondent, we shall proceed below to an analysis of the tax provision of Stamp Tax on urban immovable property with residential use.

g) Item 28 of the TGIS, as added by Law no. 55-A/2012, subjects to Stamp Tax urban immovable property with residential use whose TPA, determined in accordance with the CIMI, is equal to or greater than €1,000,000.00.

h) The CIS refers to the CIMI for regulation of the concept of immovable property and matters not regulated regarding item 28 of the TGIS (see no. 6 of article 1 and no. 2 of article 67, both of the CIS).

i) If we pay attention to article 6 of the CIMI, it establishes that urban immovable property is divided into residential, commercial, industrial or service-related, plots of land for construction and others.

j) From its no. 2 it follows that urban residential immovable property "are buildings or constructions licensed for such or in the absence of a license, which have as their intended use such purpose" and its no. 3 tells us that plots of land for construction "are those situated within or outside an urban agglomeration, for which a license or authorization for subdivision or construction has been granted, and also those that have been declared as such in the acquisition deed…".

k) From these concepts we can already conclude that there is autonomy between urban immovable property "residential" and urban immovable property "plots of land for construction".

l) The legislator of the Stamp Tax, in establishing the taxation of urban immovable property "with residential use", did not concretize the concept, and therefore, by force of the referral, we must turn to the CIMI and this, as has been seen, gives autonomy to them with respect to plots of land for construction.

m) The expression "with residential use" is in no way evident in plots of land for construction, nor can it, as the respondent intends, be understood as an integrating expression of other realities.

n) We support the position advocated in case 49/2013 which is transcribed: "The expression 'with residential use' imparts, on a simple reading, an idea of actual and present functionality. It is not possible to extract from the norm in question, by interpretation, that, as is asserted in the respondent's response, the legislator's choice of that expression is intended to integrate 'other realities beyond those identified in article 6, no. 1, paragraph a), of the CIMI.' Such interpretation has no legal support in light of the principles contained in articles 9 of the Civil Code and 11 of the General Tax Law. In fact, if the legislator intended to encompass within the scope of tax incidence other realities than those resulting from the classification governed by article 6 of the CIMI, it would have said so expressly. But it does not, rather referring, in block, to the concepts and procedures provided for in that Code. Furthermore, the respondent's understanding cannot be accepted to the effect that the concept of 'residential use' derives from the provision of article 45 of the CIMI. This article refers to the rules applicable in determining the taxable patrimonial value of plots of land for construction establishing that this is what results from the value of the area of implantation of the building to be constructed added to the land adjacent to the implantation. In fixing the value of that area, a percentage is considered varying between 15% and 45% of the value of the authorized or foreseen buildings. According to the respondent, in fixing the value of the authorized or foreseen buildings on the land to be evaluated, the coefficients applicable in determining the taxable patrimonial value are used, namely the residential use coefficient provided for in article 1 of that Code. Concluding from this that the consideration of such a coefficient, dependent on the type of use foreseen for the immovable property to be built on the land, would be determinative for purposes of application of Item 28 of the TGIS. This conclusion is supported on the assumption that the expression 'immovable property with residential use' calls for a classification that overlays the species foreseen in no. 1 of article 6 of the CIMI. It is not possible, however, to support such conclusion. [...]. In these terms, resulting from article 6 of the CIMI a clear distinction between urban immovable property "residential" and "plots of land for construction", these cannot be considered, for purposes of the incidence of stamp tax, as 'immovable property with residential use'."

o) The legislator, in seeking to impose Stamp Tax on plots of land for construction, revisited item 28 of the TGIS, through Law no. 83-C/2013, of 31 December, and introduced them there, which proves that in the formulation of Law no. 55-A/2012, plots of land for construction were excluded from Stamp Tax taxation by item 28 of the TGIS and now, through Law no. 83-C/2013, they have come to be taxed, which suggests to us that the legislator considers that the expression "residential use" did not include plots of land for construction.

p) Nor should it be said that the fact that article 45 of the CIMI provides for the application of a residential use coefficient in determining the TPA of plots of land for construction, will be a sufficient condition, by itself, to allow their inclusion in the tax provision of item 28 as amended by Law no. 55-A/2012, nor alter their nature as plots of land for construction, given that what is at issue here is solely to determine the TPA which will be influenced by the type of buildings to be carried out (which, it must be said, are not always materialized).

q) Court of Appeal Decision 04950/11 of 14/02/2012 of the TCA South cited by the AT which considers that the regime for evaluating the taxable patrimonial value of plots of land for construction is enshrined in article 45 of the CIMI, being equal to that of constructed buildings, although starting from the building to be constructed, based on the project, is a statement which is limited to the determination of TPA and nothing more.

r) Now, as has been seen, it results from article 6 of the CIMI a clear distinction between residential immovable property and plots of land for construction, which prevents the latter from being taxed in Stamp Tax under the terms intended by the respondent.

s) In this sense several arbitral decisions have already been issued, namely, cases 42, 48, 49 and 75, all of 2013 and by the STA.

3.3 – Regarding the annulment of the collections here in question and of the interest and further expenses inherent to them, including representation expenses

a) As has been seen, the tax acts here in question only occurred due to error attributable to the services of the AT, since item 28 of the TGIS, as amended by Law 55-A/2012, did not permit Stamp Tax taxation of plots of land for construction, and therefore the collections supported by the collection notices 2012 …, 2013 …, 2013 … and 2013 … must be annulled, as unlawful, with all the legal consequences arising therefrom.

b) Being declared the unlawfulness of the debt and the consequent annulment, the AT is obliged to restore the situation that would have existed if the annulled act had not been performed, in accordance with the provisions contained in article 100 of the LGT.

c) In this sense, Diogo Leite Campos/Benjamin Silva Rodrigues/Jorge Lopes de Sousa pronounce themselves in annotation to the aforesaid article 100 of the LGT 2nd edition.

d) In this way, verifying the unlawfulness of the Stamp Tax collection acts attributable to the AT, having performed them without the adequate legal support, the interest and further expenses collected by reason of the aforesaid collections must be annulled.

e) As for representation expenses, the same were not quantified by the applicant, and moreover, the tribunal understands that this matter does not fall within, or rather, is outside the boundaries established in article 2 of the RJAT, and therefore declines jurisdiction over it.

IV – DECISION

In view of the foregoing, the tribunal decides as follows:

a) To declare the exceptions raised by the respondent unfounded.

b) To declare that plots of land for construction are excluded from Stamp Tax taxation foreseen in item 28.1 of the TGIS, as amended by Law 55-A/2012 of 29 October.

c) Consequently, to declare the arbitral pronouncement request founded, due to error attributable to the services, annulling the collection acts supported by the collection notices 2012 …, 2013 …, 2013 … and 2013 … of Stamp Tax for the years 2012 and 2013, with all the legal consequences arising therefrom, since the collection in question manifestly violates the aforesaid tax provision.

d) To declare the obligation of the AT to proceed with the annulment of the interest and further expenses collected by reason of the Stamp Tax here in question.

e) To decline jurisdiction over the request for payment of representation expenses presented by the applicant.

f) To set the value of the case at €45,468.61 in accordance with the provisions contained in article 299, no. 1, of the CPC, article 97-A of the CPPT, and article 3, no. 2, of the RCPAT.

g) To set the costs, pursuant to no. 4 of article 22 of the RJAT, in the amount of €2,142.00 in accordance with the provisions in Table I referred to in article 4 of the RCPAT, which are charged to the respondent.

Notify.

Lisbon, 15 June 2015

Text prepared by computer, in accordance with article 131, no. 5 of the CPC, applicable by referral of article 29, no. 1, paragraph e) of the RJAT, with blank verses and revised by the tribunal.

The drafting of this decision is governed by the spelling prior to the orthographic agreement.

The arbitrator

Arlindo José Francisco

Frequently Asked Questions

Automatically Created

Does Stamp Tax (Imposto do Selo) under Verba 28 of the TGIS apply to building land (terrenos para construção) in Portugal?
Yes, according to the Tax Authority's position in Process 803/2014-T, Stamp Tax under Verba 28 of the TGIS applies to building land (terrenos para construção) with a Taxable Patrimonial Value (VPT) equal to or exceeding €1,000,000. The AT argues that construction plots have the legal nature of residential property because their VPT calculation uses the residential use coefficient provided in Article 41 of the CIMI (Código do IMI). However, taxpayers have contested this interpretation, arguing that Verba 28 should only apply to immovable property with actual constructed residential buildings, not vacant development land. Law 55-A/2012 of 29 October amended Verba 28 to impose this tax on high-value properties.
Can a building plot without any constructed housing be classified as a residential property for Stamp Tax purposes?
This is the central dispute in Process 803/2014-T. The Tax Authority maintains that building plots without constructed housing can be classified as residential property for Stamp Tax purposes under Verba 28 TGIS. Their argument rests on two pillars: (1) the VPT calculation for construction land incorporates the residential use coefficient under Article 41 CIMI, giving it residential property character, and (2) the legal term 'residential use' (afetação habitacional) is broader than 'intended for housing' and encompasses realities beyond completed dwellings under Article 6(1)(a) CIMI. The taxpayer strongly contests this, arguing that vacant land without any residential building cannot have residential use and that the legislator intended to tax only actual residential immovable property. The TCA South Decision 04950/11 from 14/02/2012 is cited by AT supporting this broader interpretation.
What is the procedure for challenging a Stamp Tax assessment through CAAD arbitration after tacit rejection of a review request?
The procedure follows these steps: (1) Submit a request for official review (revisão oficiosa) under Article 78 LGT to the competent Finance Service based on error attributable to tax services; (2) If no decision is notified within the statutory deadline, tacit rejection is presumed under Articles 57(1) and 57(5) LGT; (3) Submit a request for arbitral pronouncement to CAAD under Article 2(1)(a), Article 3(1), and Article 10(1)(a) of the RJAT seeking annulment of the tax collection acts; (4) The request is accepted and the Tax Authority is notified; (5) An arbitrator is designated by the President of the Deontological Council; (6) The arbitral tribunal is constituted and proceedings follow RJAT rules including meetings under Article 18. In Process 803/2014-T, the taxpayer submitted the review request on 7 May 2014, received no response by 9 December 2014 (submission date), triggering tacit rejection and enabling CAAD arbitration.
What is the VPT threshold of €1,000,000 under Verba 28 of the TGIS and which properties does it cover?
Verba 28 of the TGIS, as amended by Law 55-A/2012 of 29 October, establishes an annual Stamp Tax on ownership of immovable property with residential use (imóveis de afetação habitacional) with a Taxable Patrimonial Value (VPT/Valor Patrimonial Tributável) equal to or greater than €1,000,000. The tax applies progressively: properties valued €1,000,000-€2,000,000 face one rate, while those exceeding €2,000,000 face higher rates. The threshold controversy centers on which properties qualify as having 'residential use.' The Tax Authority interprets this broadly to include construction plots whose VPT calculations use residential coefficients under Article 41 CIMI, even without constructed buildings. Taxpayers argue the threshold should only apply to immovable property with actual residential buildings, not vacant development land. The €1,000,000 threshold ensures only high-value properties are subject to this wealth-type tax on property ownership.
Can taxpayers request an official review (revisão oficiosa) under Article 78 of the LGT for Stamp Tax errors attributable to the tax authority?
Yes, taxpayers can request an official review (revisão oficiosa) under Article 78 of the LGT for Stamp Tax errors attributable to the tax authority. In Process 803/2014-T, the company submitted such a request on 7 May 2014 to the Braga Finance Service, which forwarded it to the Porto Finance Service as the competent authority. Article 78 LGT allows taxpayers to request administrative review when there are errors imputable to tax services. However, the Tax Authority raised Article 56 LGT as a barrier, arguing that when two gracious complaint proceedings concerning the same matter are pending for less than two years, no decision can be made on subsequent review requests. The AT contended there was no 'duty to decide' on the May 2014 review request, only a 'duty to pronounce,' and that tacit rejection would be based on preliminary issues (non-verification of decision requirements), not merits. This procedural complexity demonstrates that while official review rights exist, their exercise may be limited by pending parallel proceedings.