Process: 91/2016-T

Date: July 14, 2016

Tax Type: Selo

Source: Original CAAD Decision

Summary

Arbitral Process 91/2016-T addressed whether Verba 28.1 of the General Stamp Tax Table (TGIS) applies to building land (terrenos para construção). The claimant company challenged Stamp Duty assessments totaling €21,202.00 for 2012-2013, arguing the property was classified as urban construction land rather than residential urban property. The core legal question centered on interpreting 'urban property with residential designation' under Verba 28.1, which imposed 1% Stamp Tax on properties with tax values exceeding €1,000,000. The claimant argued that according to Article 6(2) of the Municipal Property Tax Code (CIMI), residential urban property encompasses only buildings or constructions licensed for residential purposes, not undeveloped building plots. The taxpayer also challenged the assessment acts for lacking proper legal substantiation (violation of the duty of motivation) and failing to provide prior notification under Article 60 of the General Tax Law. The claimant noted that subsequent legislative amendments through Law 83-C/2013 expanded Verba 28.1's scope, suggesting the original version excluded building land. The case proceeded through the CAAD arbitration system, with the Tax Authority submitting a defense and both parties presenting written submissions without oral hearing, demonstrating the efficiency of Portugal's administrative arbitration procedures for resolving tax disputes.

Full Decision

ARBITRAL DECISION

  1.  REPORT

1.1. A… – …, S.A. (Claimant), with registered office at Building …, Avenue of …, …, in …, registered at the Commercial Registry Office of … with the unique registration and identification number for legal entity …, filed on 17/02/2016 a request for arbitral ruling, in which it petitions for the declaration of illegality of the decisions dismissing the administrative appeals Nos. …2015… and …2015… and, likewise, of the Stamp Duty assessment acts for the years 2012 and 2013, to which correspond the documents numbered 2015 … and 2015 …, both of 03/01/2015, in the amounts of € 10,601.00 and € 10,601.00, respectively.

1.2. His Excellency the President of the Ethics Council of the Centre for Administrative Arbitration (CAAD) appointed, on 11/03/2016, as sole arbitrator the undersigned signatory of this decision.

1.3. On 29/04/2016 the arbitral tribunal was constituted.

1.4. In compliance with the provision of paragraph 1 of article 17 of the Legal Regime of Tax Arbitration (RJAT), the Tax and Customs Authority (AT) was notified on 02/05/2016 to, if it wished, submit a reply and request the production of additional evidence.

1.5. On 06/06/2016 the AT submitted a reply, further requesting the waiver of holding the meeting referred to in article 18 of the RJAT.

1.6. The arbitral tribunal on 09/06/2016 decided to waive holding the meeting referred to in paragraph 1 of article 18 of the RJAT, based on the principle of autonomy of the arbitral tribunal in conducting the proceedings, inviting both parties to, if they wished, submit optional written submissions and scheduled the date for issuance of the final decision.

1.7. On 21/06/2016 the Claimant submitted optional written submissions.

1.8. On 22/06/2016 the AT submitted optional written submissions.

  1.  PROCEDURAL EXAMINATION

The arbitral tribunal was regularly constituted.

The parties have legal standing and capacity and are entitled to be parties, with no defects in representation.

The proceedings are not affected by defects that compromise its validity.

Consequently, the conditions are met for the issuance of the final decision.

  1.  POSITIONS OF THE PARTIES

There are two positions in dispute, that of the Claimant, set forth in the request for arbitral ruling and in the subsequent written submissions, and that of the AT in its reply and in the subsequent written submissions.

To substantiate its request the Claimant alleges, in summary:

a) "(…) are not explained, nor even explained, in the assessment (…) the reasons of factual and legal order that determined its respective issuance, namely the nature and purpose of the properties therein better identified and the reason for their subsumption to item 28.1 of the General Table attached to the Stamp Duty Code." [emphasis and underlined by the Claimant];

b) "The duty of motivation or substantiation of any administrative or tax act has associated with it two purposes: (i) on the one hand, to inform the respective recipient of the reasons or motives that led to the decision being made in a certain direction; and (ii) on the other hand, to allow control over the legality of the decision and over the validity of the motives underlying a given concrete decision.";

c) "If the factual and legal grounds underlying the tax act in question are not explained, it must be concluded that its substantiation is neither clear nor sufficient:

· it is not clear in that it does not allow, through its terms, that the facts and the law on which one decided and acted are understood with clarity and precision;

· nor sufficient, in that it does not provide the taxpayer with concrete and unequivocal knowledge of the motivation of the act, that is, the factual and legal reasons that determined the authority or agent to act as it did.";

d) "The Claimant, objectively not knowing (…) the entirety of the grounds underlying the tax assessments that constitute the object of the present request for arbitral ruling, because the same do not appear in the acts themselves, nor is express reference made in the same to any document contemporary with or prior to these same acts, and the Claimant not having been notified in the terms provided in paragraph a), of paragraph 1 of article 60 of the General Tax Law to pronounce itself on the missing elements, as a precautionary measure, hereby additionally invokes, for all legal purposes, the violation of the cited legal provision, which imposes the participation of the taxpayer before the assessment of tax, which, by itself, shall imply the annulment of the Stamp Duty assessment acts sub judice, for omission of an essential legal formality (…)" [underlined by us];

e) "(…) the Claimant was notified of the Stamp Duty assessment acts assessment acts issued under item 28.1 of the General Table attached to the Stamp Duty Code (…)";

f) "Item 28.1 of the General Table attached to the Stamp Duty Code, in the wording in force in the years 2012 and 2013, to which the assessment acts in question refer, determined that those holding rights of «Ownership, usufruct or right of superficies of properties whose tax property value contained in the register, according to the Code of Municipal Property Tax (CIMI), be equal to or exceeding € 1,000,000 – on the tax property value used for the purposes of IMI - 28.1 - Per property with residential designation» were subject to payment of stamp duty at the rate of 1% on the TVC.";

g) The Claimant further alleges that "In the absence of a legal definition of «urban property with residential designation» for the purposes of Item 28.1 of the General Table attached to the Stamp Duty Code, at the relevant date, it is important to bring to the fore articles 1, paragraph 6 and 67, paragraph 2 of the Stamp Duty Code, by virtue of which it is determined that the concept of property - including, of course, the determination of its nature and designation - should be understood in light of the provisions of the Municipal Property Tax Code.";

h) "In light of the Municipal Property Tax Code, the concept of «urban property with residential designation» is integrated in the definition of «residential urban property» contained in article 6, paragraph 2 of the said legal instrument, which encompasses solely «buildings or constructions licensed for such purpose or, in the absence of a license, that have as their normal destination each of these purposes»". [emphasis and underlined by the Claimant];

i) "From which it follows that all urban properties that are not constructions or, if they are, have a designation different from residential use are excluded from the scope of the tax provided in Item 28.1 of the General Table attached to the Stamp Duty Code, in force at the date of the tax facts in question.";

j) "Now it is that in accordance with the Stamp Duty assessment acts notified to the Claimant, the tax was assessed by reference to the situation of the property held by the Claimant, on 31 December 2012 and 31 December 2013, registered in the urban property register U-… of the parish of ….";

k) "As results from the respective urban property register, the said property does not constitute «residential urban properties», but rather a plot of land (so-called) for urban construction and in this measure such urban property was always excluded from the scope of item 28.1 of the General Table attached to the Stamp Duty Code, for the years 2012 and 2013.";

l) In conclusion, "Moreover, the lack of application of Stamp Duty to construction land, with reference to the years 2012 and 2013 is all the more evident if we consider that the legislator found it necessary to alter the rule of incidence of Item 28.1 of the General Table of Stamp Duty through article 194 of Law No. 83-C/2013, of 31-12, with that item now providing for taxation at the rate of 1% «Per residential property or per construction land whose construction, authorized or envisaged, is for residential purposes (...)» we cannot fail to conclude that we are not dealing with an interpretative law, but with an innovative law, applicable only for the future.".

On the other hand, the AT, defending itself through challenge, sustains, in summary, the following:

a) "Law No. 55-A/2012, of 29/10/2012 came to amend article 1 of the Stamp Duty Code, and add item 28 to the GTIS.";

b) "With this legislative amendment, Stamp Duty would now also apply to ownership, usufruct or right of superficies of urban properties whose tax property value contained in the register, according to the Municipal Property Tax Code (CIMI) be equal to or exceeding € 1,000,000.00.";

c) "The notion of designation of urban property will be found in the part relating to the valuation of properties, since the designation of the property (purpose) will incorporate value to the property, constituting a determinative factor of distinction (coefficient) for the purposes of valuation.";

d) "As results from the expression «...value of authorized buildings», contained in article 45, paragraph 2 of the CIMI, the legislator chose to determine the application of the methodology of valuation of properties in general, to the valuation of construction land, being therefore applicable thereto the designation coefficient provided for in article 41 of the CIMI.";

e) "Contrary to what is advocated by the Claimant, the AT understands that the concept of «properties with residential designation», for the purposes of item 28 of the GTIS, comprises both built properties and construction land, foremost in light of the literal element of the rule.";

f) "Note that the legislator does not refer to «properties intended for residential use», having chosen the notion «residential designation» - an expression different and broader whose meaning must be found in the need to integrate other realities beyond those identified in article 6, paragraph 1 letter a) of the CIMI.";

g) According to the AT, "(…) the part of the land where the building to be constructed will be located is considered, and on the other the area of free land. Once the amount of the first part is calculated, the determined value is reduced to a percentage between 15% and 45% (…) because the construction has not yet been carried out.";

h) "In these terms, well before the actual construction of the property, it is possible to calculate and determine the designation of the construction land.";

i) "Item 28 of the GTIS applies to the ownership, usufruct or right of superficies of urban properties with residential designation, whose tax property value contained in the register, according to the CIMI, be equal to or exceeding € 1,000,000.00, that is, it applies to the value of the property.";

j) "This is a general and abstract rule, applicable indiscriminately to all cases in which the factual and legal requirements are met.";

k) "It is also important to note that taxation under stamp duty follows criteria of appropriateness, being applied indiscriminately to all holders of properties with residential designation of value exceeding € 1,000,000.00, applying to the wealth embodied and manifested in the value of properties.";

l) "For all the above stated, the assessment in question constitutes a correct interpretation and application of the law to the facts, not suffering from a defect of violation of law, whether of the CRP or of the CIS, and should, in consequence, be judged to lack merit in the claim made and the Respondent Entity should be absolved of the petition.".

  1.  FACTS

4.1. FACTS THAT ARE CONSIDERED PROVEN

In light of the documents submitted to the proceedings, it is established as proven that:

4.1.1. The Claimant is the owner of the urban property of the type "construction land" registered in the urban property register of the parish of …, in Ponta Delgada, under article U-….

4.1.2. At the date of the said assessments, the tax property value (TVC) of the urban property in question amounted to € 1,060,100.00.

4.1.3. The deadline for voluntary payment of the Stamp Duty assessment of 2012 (document No. 2015 …), in the amount of € 10,601.00, ended on 30/04/2015.

4.1.4. The Claimant proceeded to voluntary payment of the Stamp Duty assessment of 2012 (document No. 2015 …) on 09/04/2015.

4.1.5. The deadline for voluntary payment of the Stamp Duty assessment of 2013 (document No. 2015 …), in the amount of € 10,601.00, ended on 30/04/2015.

4.1.6. The Claimant proceeded to voluntary payment of the Stamp Duty assessment of 2013 (document No. 2015 …) on 09/04/2015.

4.1.7. Not being in agreement with the contents of the assessment acts, the Claimant filed, on 31/08/2015, administrative appeals against the Stamp Duty assessment acts Nos. 2015 … and 2015 …, requesting the annulment thereof, due to the "(…) erroneous application of the law by the Tax Authority, regarding the subjection to Stamp Duty (under item 28.1 of the General Table) of the property – construction land – held by the Claimant (…) and registered in the property register of the parish of ….".

4.1.8. On 12/10/2015, the Claimant was notified to, if it wished, pronounce itself on the proposed decisions dismissing the administrative appeals filed, having chosen not to exercise the corresponding right of prior hearing.

4.1.9. On 19/11/2015, the Claimant was notified of the decision(s) dismissing the administrative appeals identified in 4.1.7.

4.1.10. Not being in agreement with the decision dismissing the administrative appeals filed, the Claimant filed, on 17/02/2016, the request for arbitral ruling in question.

4.2. FACTS THAT ARE NOT CONSIDERED PROVEN

There are no facts relevant to the decision that have not been established as proven.

  1.  THE LAW

5.1. ON THE ILLEGALITY OF THE STAMP DUTY ASSESSMENTS OF 2012 AND 2013

In the case at issue, the fundamental question under review by the arbitral tribunal consists in determining whether, within the scope of application of Item No. 28 of the General Table, in its wording at the date of the tax facts, construction land is, or is not, included. That is, for such purpose, are lands of this type, or are they not, susceptible of being considered "urban properties with residential designation"?

On this matter there is already abundant jurisprudence from the Supreme Administrative Court (STA) and arbitral jurisprudence in the contrary sense. [1] [2]

This is jurisprudence that is also accepted here, as we continue to agree with it entirely, for which reason we shall limit ourselves to reproducing what was said on the question in the said Judgment of the STA, of 9 April 2014, issued in Case No. 1870/13 [3], as follows:

"The concept of «property (urban) with residential designation» was not defined by the legislator. Neither in Law No. 55-A/2012, which introduced it, nor in the Municipal Property Tax Code, to which paragraph 2 of article 67 of the Stamp Duty Code (equally introduced by that Law), refers on a subsidiary basis. And it is a concept that, probably due to its imprecision – a fact all the more serious given that it is in function of it that the scope of objective incidence of the new taxation is determined –, had a short life, as it was abandoned upon the entry into force of the State Budget Law for 2014 (Law No. 83-C/2013, of 31 December), which gave new wording to that item No. 28 of the General Table, and which now determines its scope of objective incidence through the use of concepts that are legally defined in article 6 of the Municipal Property Tax Code." [underlined by us].

"This amendment – to which the legislator did not attribute an interpretative character, nor does it seem to us that it did –, merely makes it unequivocal for the future that construction land whose construction, authorized or envisaged, is for residential purposes are encompassed within the scope of item 28.1 of the General Table of Stamp Duty (provided that its respective tax property value be equal to or exceeding 1 million euros), but nothing clarifies, however, regarding past situations (…), such as that which is at issue in the present proceedings." [underlined by us].

"Now, as regards these, it does not seem possible to adopt the interpretation of the (…)" AT "(…), since it does not follow unequivocally either from the letter or from the spirit of the law that the intention thereof has been, ab initio, to encompass within its scope of objective incidence construction land for which the construction of residential buildings has been authorized or envisaged, as results today unequivocally from item 28.1 of the General Table of Stamp Duty.

In fact, "From the letter of the law nothing unequivocal follows, indeed, as the law itself upon using a concept that it did not define and that was also not defined in the legal instrument to which it referred on a subsidiary basis, lent itself, unnecessarily, to ambiguities, in a matter – of tax incidence – in which certainty and legal security should also be paramount concerns of the legislator." [underlined by us].

"And from its "spirit", ascertainable in the preamble of the legislative proposal that gave rise to Law No. 55-A/2012 (Legislative Proposal No. 96/XII – 2ª, Journal of the Assembly of the Republic, series A, No. 3, 21/09/2012, p. 44, available at www.parlamento.pt) nothing else follows than the concern of garnering new tax revenues, from sources of wealth "more spared" in the past from the voracity of the Tax Authority than labor income, in particular capital income, moveable capital gains and property, reasons these which bring no relevant contribution to the clarification of the concept of "properties (urban) with residential designation", as they take it as established, without any concern for clarifying it. Such clarification would, however, have emerged - as reported in the Arbitral Decision issued on 12 December 2013, in case No. 144/2013-T, available in the CAAD database –, at the time of presentation and discussion in the Assembly of the Republic of that legislative proposal, in the words of the Secretary of State for Tax Affairs, who is reported to have stated expressly, as gathered from the Journal of the Assembly of the Republic (DAR I Series No. 9/XII – 2, of 11 October, p. 32) that: «The Government proposes the creation of a special tax on high-value residential urban properties. This is the first time in Portugal that a special taxation on high-value properties intended for residential use has been created. This rate shall be 0.5% to 0.8% in 2012 and 1% in 2013, and shall apply to houses valued at equal to or exceeding 1 million euros" (underlined by us), from which it is gathered that the reality to be taxed that was envisaged is, after all, and notwithstanding the terminological imprecision of the law, "the properties (urban) residential", in common parlance "houses", and not other realities.". [4]

"The fact that it may be considered that in the determination of the tax property value of urban properties classified as construction land one should take into account the designation that the construction authorized or envisaged for it shall have for the determination of the respective value of the area of implantation (see articles 1 and 2 of article 45 of the CIMI), does not determine that construction land can be classified as "properties with residential designation", since "residential designation" is always in the Municipal Property Tax Code referred to "buildings" or "constructions", existing, authorized or envisaged, since only these can be inhabited, which is not the case for construction land, which does not have, in itself, conditions for such, not being susceptible of being used for residential purposes unless and until a construction authorized and envisaged for it is built thereon (but in that case they will no longer be "construction land" but another species of urban property – "residential", "commercial, industrial or for services" or "other" – article 6 of the CIMI).".

"It would be strange, indeed, that the determination of the scope of the rule of tax incidence of item No. 28 of the General Table of Stamp Duty were found, in the end, in the rules of determination of the tax property value of the Municipal Property Tax Code, and that the terminological imprecision of the legislator in the drafting of that rule were, after all, elucidated and finally clarified by way of an indirect and ambiguous reference, to the designation coefficient established by the legislator in relation to built properties (article 41 of the Municipal Property Tax Code).".

In this measure, "(…) given that construction land – whatever the type and purpose of the construction that will or may be erected thereon – does not satisfy, by itself, any condition for as such to be licensed or for residential use to be defined as its normal destination, and the rule of incidence of stamp duty refers to urban properties with "residential designation", without there being established any specific concept for such purpose, cannot from it be extracted that it contains a future potentiality, inherent to a distinct property that may eventually be built on the land." [underlined by us].

"It is concluded therefore, in accordance with what was decided in the judgment under appeal, that, resulting from article 6 of the Municipal Property Tax Code a clear distinction between urban properties "residential" and "construction land", these cannot be considered as "properties with residential designation" for the purposes of item No. 28.1 of the General Table of Stamp Duty, in the original wording that was given to it by Law No. 55-A/2012, of 29 October.".

It is worth noting also the Judgment of the STA, of 25 November 2015, issued in Case No. 01338/15 [5], the summary of which is transcribed:

"Having the legislator not defined the concept of properties (urban) with residential designation, but resulting from article 6 of the CIMI (subsidiarily applicable to the Stamp Duty provided for in the new item No. 28 of the General Table) a clear distinction between residential urban properties and construction land, these cannot be considered, for the purposes of application of Stamp Duty (Item 28.1 of the GTIS, in the wording of Law No. 55-A/2012, of 29/10), as urban properties with residential designation." [underlined by us].

On the other hand, the Judgment of the Central Administrative Court of the South (TCAS), of 19 May 2016, issued in Case No. 09509/16 [6] concludes that:

"Within the scope of the M.I.C. (see article 6 of the M.I.C.) a property with a given designation (residential, commercial and industrial) presupposes the existence of a building fit to be used for a given purpose, which does not occur in construction land, in which we are dealing with only «buildings authorized or envisaged» with possible designation for residential use or other. It is true that the new wording of item No. 28.1 of the General Table of Stamp Duty, introduced by Law 83-C/2013, of 31/12, comes to apply taxation to "residential property or construction land whose construction, authorized or envisaged, is for residential purposes", but this rule does not have an interpretative character, rather it is innovative. It seems to us, therefore, that Law 55-A/2012, of 29/10, when adding to the General Table of Stamp Duty the «Item No. 28», subjecting to stamp duty urban properties «with residential designation», whose tax property value contained in the register, according to the M.I.C., be equal to or exceeding € 1,000,000.00, does not encompass in its provision plots of land for construction, since that expression presupposes the existence of a building fit to be used for residential purposes, requirements that plots of land do not possess. This only came to occur with the amendment to the said item introduced by the said Law 83-C/2013, of 31/12, effective from 1 January 2014, which came to encompass «residential property or construction land whose construction, authorized or envisaged, is for residential purposes»"." [underlined by us].

The jurisprudential line is reiterated once more.

For all the foregoing, considering that the property of the Claimant was registered matricially as "construction land" at the date of the tax fact(s) relating to the year(s) 2012 and 2013, the rule of incidence in question cannot be applicable to the case sub judice, under penalty of illegality. For which reason, the Stamp Duty assessments Nos. 2015 … and 2015 … must be annulled, with all legal consequences.

In fact, the examination of the other questions raised by the Claimant is thus prejudiced, namely, the alleged defect of lack of substantiation of the decisions of the administrative appeals filed, as well as of the Stamp Duty assessment acts challenged and, likewise, of the alleged omission of an essential legal formality, as the illegality of the assessments above identified has been declared, by a substantive defect that prevents the renewal of the acts, effectively ensuring the protection of the rights of the Claimant, in accordance with the provision of article 124 of the CPPT. [7]

5.2. INDEMNIFICATORY INTEREST

In light of the provision of article 24, paragraph 5 of the RJAT – in the part in which it states that "payment of interest is due, regardless of its nature, in the terms provided in the General Tax Law and in the Code of Procedure and Tax Process", it has been understood that this rule permits the recognition of the right to indemnificatory interest in arbitral proceedings.

It is thus justified, by what has been stated, the examination of the request for payment of indemnificatory interest to the Claimant.

Indemnificatory interest is due when it is determined, in an administrative appeal or judicial challenge, that there has been error attributable to the services from which results payment of the tax debt in an amount greater than that legally due (see article 43, paragraph 1 of the General Tax Law).

It is, therefore, a necessary condition for the award of the said interest the demonstration of the existence of error attributable to the services. In that sense, see, for example, the following judgments: "The right to indemnificatory interest provided for in paragraph 1 of article 43 of the GTL [...] depends on it having been demonstrated in the proceedings that this act is affected by error regarding the factual or legal premises attributable to the AT." (Judgment of the STA of 30 May 2012, case 410/12); "The right to indemnificatory interest provided for in paragraph 1 of article 43 of the General Tax Law presupposes that it be determined in the proceedings that in the assessment «there was error attributable to the services», understood as «error regarding the factual or legal premises attributable to the Tax Administration»" (Judgment of the STA of 10 April 2013, case 1215/12).

Now, having there been, as follows from the present arbitral decision, error attributable to the services – which leads to the annulment of the tax acts in question and to the consequent refund of the amounts paid by the Claimant, in accordance with the provision of article 173, paragraph 1 of the Code of Administrative Court Proceedings (CPTA), ex vi article 29, paragraph 1, letter c) of the RJAT –, it is concluded, without need for further consideration, in favor of the merit of the request for payment of indemnificatory interest to the Claimant.

  1.  DECISION

With the grounds stated, the arbitral tribunal decides:

a) To judge the request for arbitral ruling to have merit and, in consequence, to declare illegal the Stamp Duty assessments Nos. 2015 … and 2015 …, with all legal consequences;

b) To judge the request for recognition of the right of the Claimant to payment of indemnificatory interest to have merit;

c) To order the AT to refund to the Claimant the Stamp Duty improperly paid, in the amount of € 21,202.00;

d) To order the AT to pay the costs.

  1.  VALUE OF THE PROCEEDING

The value of the proceeding is fixed at € 21,202.00 (twenty-one thousand two hundred and two euros), in accordance with article 97-A of the Code of Procedure and Tax Process (CPPT), applicable by virtue of paragraphs a) and b) of paragraph 1 of article 29 of the RJAT and paragraph 2 of article 3 of the Regulation of Costs in Tax Arbitration Proceedings (RCPAT).

  1.  COSTS

Costs to be borne by the AT, in the amount of € 1,224 (one thousand two hundred and twenty-four euros), in accordance with Table I of the Regulation of Costs of Tax Arbitration Proceedings, in accordance with paragraph 2 of article 22 of the RJAT.

Notify.

Lisbon, 14 July 2016

The Arbitrator,

(Hélder Filipe Faustino)

Text prepared by computer, in accordance with the provision of paragraph 5 of article 131 of the CPC, applicable by reference of paragraph e) of paragraph 1 of article 29 of the RJAT. The drafting of the present decision is governed by the spelling prior to the Orthographic Agreement of 1990.

[1] See Andreia Gabriel Pereira, "The «Luxury Homes» and Stamp Duty. Commentary on the Judgment of the Supreme Administrative Court (2nd Section), of 5 February 2015, issued in case No. 0993/14, Rapporteur Cons. Francisco Rothes", Journal of Public Finances and Tax Law, Year VII, No. 4, July 2015, pp. 235 et seq.

[2] See, by way of example, the arbitral decisions issued within the scope of cases No. 218/2013-T, No. 247/2013-T, No. 66/2014-T and No. 202/2014-T, available at https://caad.org.pt/.

[3] Ex vi the Judgment of the STA, of 29 April 2015, issued in Case No. 021/15, both available at www.dgsi.pt.

[4] As noted by Andreia Gabriel Pereira, "(…) the aim was to create a specific taxation for the holders of the so-called «luxury homes», which, indeed, is possible to infer from the fact that Item No. 28 of the General Table of Stamp Duty applies only to properties intended for residential use (and, marginally, to properties held by residents in tax havens). This is how that Item was presented to public opinion and by the latter perceived.". Op. Cit. p. 237.

[5] Available at www.dgsi.pt.

[6] Available at www.dgsi.pt.

[7] Subsidiarily applicable by virtue of the provision of paragraph a) of paragraph 1 of article 29 of the RJAT.

Frequently Asked Questions

Automatically Created

Is Verba 28.1 of the Tabela Geral do Imposto do Selo applicable to terrenos para construção (building land)?
Based on the legal interpretation in this case, Verba 28.1 of the TGIS (in its 2012-2013 version) was not applicable to terrenos para construção (building land). The provision targeted 'urban property with residential designation,' which under Article 6(2) of CIMI refers exclusively to buildings or constructions licensed for residential purposes. Building land, lacking actual construction, falls outside this definition. The subsequent amendment via Law 83-C/2013 expanding the scope reinforces that the original version excluded undeveloped plots.
What are the legal grounds for challenging a Stamp Tax (Imposto do Selo) assessment on real estate in Portugal?
Legal grounds for challenging Stamp Tax assessments in Portugal include: (1) substantive illegality - arguing the tax does not apply to the specific property type or situation; (2) lack of proper motivation - assessments must clearly state factual and legal grounds under Article 77 of the LGT; (3) violation of procedural rights under Article 60 LGT requiring taxpayer notification before assessment; (4) incorrect property classification or valuation; and (5) misapplication of tax rates or exemptions. Challenges can be filed through reclamação graciosa (administrative appeal) or directly to CAAD arbitration within statutory deadlines.
Can a taxpayer file a reclamação graciosa to contest Imposto do Selo liquidation acts?
Yes, taxpayers can file a reclamação graciosa (gracious claim/administrative appeal) to contest Imposto do Selo liquidation acts under Articles 68-75 of the LGT. This must be filed within 120 days from notification of the assessment. If the Tax Authority dismisses the reclamação graciosa, taxpayers can then pursue judicial remedies or request CAAD arbitration. In Process 91/2016-T, the claimant first filed administrative appeals which were dismissed before proceeding to arbitration, demonstrating this two-tier challenge mechanism.
What duty of motivation (dever de fundamentação) applies to Portuguese tax assessments under Verba 28 TGIS?
Portuguese tax assessments under Verba 28 TGIS must comply with the duty of motivation (dever de fundamentação) established in Article 77 of the General Tax Law. The assessment must clearly state: (1) factual grounds - the specific property characteristics, classification, and valuation; (2) legal grounds - the applicable legal provisions and why they apply; and (3) sufficient detail enabling the taxpayer to understand the decision and exercise defense rights. Assessments lacking clear explanation of why property qualifies under Verba 28.1, or merely citing the provision without explaining property classification, constitute formal illegality warranting annulment.
How does the CAAD arbitral tribunal process work for disputing Stamp Tax on building land in Portugal?
The CAAD arbitral tribunal process for Stamp Tax disputes involves: (1) filing a request for arbitral ruling within 90 days after administrative appeal dismissal or directly within the legal deadline; (2) appointment of a sole arbitrator or tribunal by the CAAD President; (3) formal constitution of the tribunal; (4) notification to the Tax Authority to submit a reply (typically 30 days); (5) optional waiver of oral hearing by agreement; (6) submission of written statements by both parties; and (7) issuance of the final decision. Process 91/2016-T exemplifies this: filed February 2016, tribunal constituted April 2016, both parties submitted written arguments by June 2016, demonstrating a streamlined 4-month procedure for resolution.