CAAD Ruling on IUC Subjective Tax Incidence and Legal Presumptions for Credit Institutions

ARBITRAL DECISION

CAAD: Tax Arbitration

Process no. 119/2014 – T

Subject: IUC – Subjective incidence; legal presumptions.

I – REPORT

A – PARTIES

"A" – FINANCIAL INSTITUTION, SA., hereinafter referred to as Claimant, legal person no. …, with registered office at Rua .., Lot …, …-… Lisbon, submitted a request on 12 February 2014 for the establishment of a singular arbitral tribunal in tax matters, pursuant to the provisions of art. 2º, no. 1, para. a) of Decree-Law no. 10/2011, of 20 January (Legal Regime for Tax Arbitration - RJAT) and in arts. 1º, para. a) and 2º of Ordinance no. 112-A/2011, of 22 March, for the purpose of resolving the dispute opposing it to the Tax and Customs Authority, hereinafter referred to as Respondent.

B – CONSTITUTION OF THE TRIBUNAL

1. The request for establishment of the Arbitral Tribunal was accepted by the President of CAAD on 13/02/2014 and automatically notified to the Claimant and the Tax and Customs Authority on 14/02/2014, having the President of the respective Deontological Council designated the signatory as arbitrator of the Singular Arbitral Tribunal, pursuant to the provisions of art. 6º, no. 1, of the RJAT, a position which was accepted in accordance with the terms legally established.

2. On 31/03/2014, the Parties were notified of this designation, in accordance with the combined provisions of art. 11º, no. 1, para. b) of the RJAT, in articles 6º and 7º of the Deontological Code, and did not manifest any intention to refuse the arbitrator's designation.

3. Under these circumstances, the Tribunal was constituted on 15/04/2014, in accordance with the provisions of para. c), of no. 1, of art. 11º of Decree-Law no. 10/2011, which was notified to the Parties on that date.

C – CLAIM

The Claimant requests that the Arbitral Tribunal declare the illegality and consequent annulment of the acts of self-assessed taxation relative to the Single Circulation Tax, relating to the vehicles identified in the record, in the amount of 1,349.76 euros, in the terms described in the Request for Arbitral Pronouncement, and, in consequence,

Determine the restitution of the tax paid by the Claimant, accrued with compensatory interest, calculated from the date of the respective payment until complete reimbursement.

D – PROCEDURAL COURSE

Following the notification of the date of constitution of the Arbitral Tribunal, on 15/04/2014, the subsequent procedural steps followed in the following manner:

• On 15/04/2014 – The Respondent was notified to, in accordance with nos. 1 and 2 of art. 17º of the RJAT, present a response within 30 days and, if desired, request additional evidence production and remit to the Arbitral Tribunal a copy of the administrative file, by electronic means.

• On 21/05/2014 – The Respondent presented Response to the Request for Arbitral Pronouncement, remitted dispatch designating the legal representatives of the Respondent and inserted in the CAAD online "Platform" the administrative file, of which the Claimant was notified.

• On 02/06/2014 – The Claimant requested the attachment to the record of a certified copy of a power of attorney by a third party, in order to remedy the irregularity of the certification of the original power of attorney, which request the Tribunal admitted on 05/06/2014, having ordered its notification to the Respondent.

• On 04/06/2014 – The Tribunal designated 23/06/2014 for the meeting provided for in art. 18º of the RJAT.

• On 23/06/2014 – The meeting provided for in art. 18º of the RJAT took place, which resulted in the following:

• The Tribunal remedied the irregularity of the power of attorney of the Claimant's representative, with the attachment to the record of a new certified copy thereof, taking into account the absence of opposition from the Respondent.

• The Claimant declared that it would not dispense with witness testimony, whereby, with the absence of opposition from the Respondent, 14 July 2014 was set for the examination of witnesses to be presented by the Parties, with production of oral arguments in the same meeting, and delivery of written summary in that meeting.

• The Tribunal set 08/09/2014 for the issuance of the arbitral decision.

• On 14/07/2014 – The meeting scheduled for 27/06/2014 took place, which resulted in the following:

• Witness "B", presented by the Claimant, was heard.

• A period of 10 days was granted to the Claimant, at its request, to attach to the record additional documentation proving the sale of the vehicles, the Respondent also having a period of 10 days to, if desired, comment.

• As a result of this evidentiary measure, the date for issuance of the decision was changed to 13/10/2014.

• On 02/09/2014 – The Claimant requested the attachment to the record of the documentation whose presentation it had undertaken, which was granted, with notification to the other party.

• On 17/09/2014 - The Respondent commented on the aforementioned documentation and raised the exception of lapse of the Claimant's right of action, of which it was notified.

• On 23/09/2014 – The Tribunal set 30/09/2014 for the production of oral arguments.

• On 23/09/2014 – The Respondent requested the attachment to the record of two arbitral decisions, which the Tribunal granted on 26/09/2014, with notification to the other party.

• On 30/09/2014 – The meeting scheduled by the Tribunal on 23/09/2014 was adjourned to 02/10/2014, due to justified absence of the Claimant's representative.

• On 02/10/2014 – The meeting scheduled by the Tribunal on 30/09/2014 took place, which resulted in the following:

• A period of 5 days was requested by the Claimant and granted by the Tribunal, with the agreement of the Respondent, for the Claimant to respond in writing to the exception raised by the Respondent in its request of 17/09/2014.

• The attachment to the record of an interlocutory dispatch issued in process no. 112/2014-T of CAAD was requested by the Respondent and granted by the Tribunal, with the agreement of the Claimant.

• 13/10/2014 was set for the holding of a meeting for the production of oral arguments.

• 27/10/2014 was set for the purpose of issuance of the arbitral decision.

• The Tribunal determined, pursuant to art. 18º, no. 2 of the RJAT, the extension of the deadline for the arbitral decision by two months, given the impossibility of complying with the deadline provided for in no. 1 of this normative.

• On 06/10/2014 – The Claimant requested and attached to the record the response to the exception.

• On 13/10/2014 – The meeting scheduled at the meeting held on 02/10/2014 took place, having resulted as follows:

• The Claimant declared and dictated to the record the following request: "The Claimant wishes to rectify the dates indicated in point 11 of the petition, in which it states that the IUC assessments were notified to it between 14/11/2013 and 20/12/2013 for the dates of 14/11/2013 and 20/11/2013, with the respective payments having been made on 26/11/2013, as appears from the assessment notes attached to the initial petition." The Respondent, heard on this matter, declared not to call into question these facts.

• Oral arguments were produced by the Parties.

• On 27/10/2014 – Issuance of the arbitral decision.

E – CLAIM OF THE CLAIMANT AND ITS GROUNDS

To substantiate the Request for Arbitral Pronouncement, the Claimant alleged, in summary, the following:

• The Claimant "A" – Financial Credit Institution, SA., also identified as "A", is a financial institution whose corporate purpose is the practice of operations permitted to banks, with the exception of the receipt of deposits, having, for this purpose, all legally required authorizations.

• In the scope of its activity, the Claimant concludes with its clients long-term rental contracts and financial leasing contracts of motor vehicles, at the end of which it transfers the ownership thereof to the respective lessees or to third parties.

• Between 14 November 2013 and 20 November 2013 (rectification made in the Record of the Meeting of 13/10/2013), the Claimant was notified of Self-Assessed Assessments of IUC relating to the vehicles identified in this request for arbitral pronouncement and to the taxation periods of 2009, 2010, 2011 and 2012.

• The Claimant having proceeded to the voluntary payment of the said IUC on 26/11/2013 (Record of the meeting of 13/10/2013).

• The Claimant disagrees with the said assessment acts, insofar as the vehicles, to which the payment of IUC was incumbent, were not its property at the date identified by the Respondent as the date of the occurrence of the tax-generating event.

• Because, in its view, in accordance with the provisions of article 3º, no. 1 of the IUC Code, "passive subjects of the tax are the owners of the vehicles, being considered as such the natural or legal persons, of public or private law, in whose name the same are registered."

• The recourse to motor vehicle registration as a structuring element of the functioning of IUC is evident throughout the Code.

• Referring, merely by way of example, to the content of article 6º of the IUC Code, relating to the definition of the tax-generating event of the tax obligation, in terms of which this "(…) is constituted by the ownership of the vehicle, as attested by the registration or registry in national territory."

• Also resulting from this provision that vehicles which are not, nor should be, subject to registration in Portuguese territory, are only subject to this tax if they remain therein for a period exceeding 183 days.

• It is, in its view, a norm which, resorting to the registral element, establishes, simultaneously, the tax-generating event of the tax and the respective tax connection.

• Being, also, from the elements of the motor vehicle register that the beginning of the taxation period is extracted, as well as, in a general manner, all elements necessary for the assessment of the tax in question, as is the case, in particular, of engine displacement, age of registration, type of fuel and level of carbon dioxide emission.

• The Claimant understands that, from the dependence of the IUC taxation regime in relation to motor vehicle registration, it cannot fail to conclude that the norm of subjective incidence insofar as it considers as owner the person in whose name the vehicle is registered constitutes a mere (legal) presumption of incidence.

• According to other interpretative elements, in particular, of its legal notion.

• Noting the literal tenor of article 3º, no. 1 of the IUC Code, it states that it is important to analyze, in particular, the expression "considering-se as such", especially from the perspective of the provision of article 9º, no. 2 of the Civil Code, when it establishes that it cannot be understood among the possible meanings of the law that legislative thought which does not have in its letter a minimum of verbal correspondence even if imperfectly expressed.

• And that the current text did not use the term "presume-se", contrary to what was contained in the extinct Motor Vehicle Tax Regulation, but examining the Portuguese legal order, there are found various examples of norms that enshrine presumptions using the verb "consider", many of which employed in the gerund ("considering" or even "considering-se").

• This is exemplified by the norms that it subsequently presents. In the Civil Code, among others, articles 314º, 369º, no. 2, 374º, no. 1, 376º, no. 2 and 1629º. In the Industrial Property Code, merely by way of example, article 98º where the term "considering" is also used in a presumptive context.

• Also in the tax legal order the verb "consider" is found with a presumptive sense.

• The Claimant referring to this matter to the provision of article 89-A, no. 4 of the LGT, in which a presumption is equally enshrined, without the term "presume-se" having been used, but rather "consider-se".

• Concluding, it alleges that, taking into account that the legal system should form a coherent whole, the examples that it has referred to, accompanied by doctrine and jurisprudence, by appeal to the systematic element, it is not only when the verb "presume" is used that we are before a presumption, but also the use of other terms or expressions may equally serve as a basis for presumptions, namely the term "consider-se", thus showing that the condition established in article 9º, no. 2 of the Civil Code is met.

• If it is true, however, that the literal element, by itself, cannot be considered entirely decisive, when accompanied by other elements it is quite relevant and indicative of the true meaning of the norm under analysis, pointing to the fact that the expression "considering-se as such" is equivalent to the expression "presuming-se as such".

• The Claimant avails itself of the rational or teleological element which, in its view, assumes the greatest importance for determining the meaning of the norm in question.

• It cites art. 1º of the CIUC which, under the heading "principle of equivalence" establishes that "The single circulation tax complies with the principle of equivalence, seeking to burden contributors in the measure of the environmental and road cost that they cause, in concrete realization of a general rule of tax equality".

• This being the principle of equivalence, in its opinion, a structuring principle of IUC.

• Whereby vehicles must be taxed in function, in particular, of their pollutant potential and the safety levels presented.

• Thus, the Claimant alleges that, considering, on the one hand, the systematic place that the principle of equivalence occupies in the IUC Code, the historical element embodied in Legislative Proposal no. 118/X and, as well, the rational element

underlying the reform of motor vehicle taxation, it only makes sense to conceive the expression "considering-se as such", in the context of article 3º of the IUC Code, as revealing the presence of a rebuttable presumption.

• For which reason, it will not be legitimate to conclude that the passive subjects of this tax are only the owners or equivalent of the vehicles, in whose name the same are registered.

• For the ratio legis of IUC rather points in the direction of the vehicle users being taxed, the actual owners or, also, financial lessees, because they are the ones that have the pollutant potential causing the environmental costs to the community.

• It adds that, in light of the provision of article 349º of the Civil Code, "presumptions are the inferences that the law or the judge draws from a known fact to establish an unknown fact".

• Presumptions constitute, therefore, means of proof, whose function is to demonstrate the reality of facts.

• Thus, whoever has the legal presumption in their favor is excused from proving the fact to which it leads.

• Nevertheless "legal presumptions may, however, be rebutted by proof to the contrary, except in cases where the law prohibits it".

• In the case of presumptions of tax incidence, these are always rebuttable.

• Thus, it cannot fail to be understood that the expression "considering-se as such" used in no. 1 of article 3º of the IUC Code, constitutes a legal presumption, which is rebuttable, according to general terms and, in particular, by force of the provision of article 73º of the LGT.

• Presumptions of tax incidence may be rebutted through the own adversarial procedure provided for in article 64º of the Code of Tax Procedure and Process or, alternatively, by means of gracious complaint or judicial challenge of the tax acts based on them.

• In the case at issue, the Claimant alleges that it did not use the said own procedure, whereby the present request for arbitral pronouncement embodies the proper means to rebut the presumption of subjective incidence of IUC that supports the tax assessments whose annulment constitutes the object of the present request.

• To this extent, and in order to rebut the presumption arising from the registration in the motor vehicle register, the Claimant presents copies of the invoices/receipts of sales of the vehicles to demonstrate that the same were sold and that the respective sale was carried out on a date prior to that to which the tax relates.

• The Claimant further alleges that IUC is a tax of annual periodicity, and for this purpose, with reference to motor vehicles, the taxation period corresponds to the year that begins on the date of registration or on each of its anniversaries.

• Being that, with the exception of situations provided for in no. 2 of article 3º of the IUC Code, the person who, on that date, holds the respective ownership is obligated to the payment of the tax.

• Concluding that the Claimant that on the date of tax exigibility to which the assessments at issue relate, it was not the owner of the vehicles identified therein, as the respective transfers had already previously taken place in accordance with civil law.

• According to the provision of article 874º of the Civil Code, purchase and sale is defined "(…) the contract by which the ownership of a thing, or another right, is transmitted, for a price".

• And, in turn, article 879º of the Civil Code provides that "(…) purchase and sale has as essential effects: (a) the transmission of ownership of the thing or the holding of the right; (b) the obligation to deliver the thing; (c) the obligation to pay the price".

• On the other hand, and as regards contracts with real effectiveness, article 408º of the Civil Code provides that "(…) the constitution or transfer of real rights over a determined thing takes place by mere effect of the contract, except for exceptions provided for in the law."

• The Claimant invokes jurisprudence where the following can be read: "The contract for the purchase and sale of a motor vehicle is not subject to any special formality, the transfer of ownership occurring by mere effect of the contract, in accordance with art. 408, no. 1, 874º and 879º, para. a) of the C.C."

• It alleges that, pursuant to article 5º of Decree-Law no. 54/75, of 12 February, the right of ownership of motor vehicles is subject to registration.

• In accordance with the provision of article 1º, no. 1 of the said Decree-Law no. 54/75, "the registration of vehicles has essentially as its aim to give publicity to the legal situation of motor vehicles and their respective trailers, with a view to the safety of legal commerce", being silent as to the legal value of motor vehicle property registration.

• It is therefore necessary to resort to the provisions relating to land registration as indicated by article 29º of that diplom.

• Thus, and in accordance with the provision of article 7º of the Land Registration Code, "the final registration constitutes a presumption that the right exists and belongs to the titled holder, in the precise terms in which the registration defines it."

• From the combined reading of both legal provisions, it results that the essential function of registration is precisely to give publicity to the situation of vehicles, that is, to the registered act, with the registration not having, in accordance with jurisprudence that it invokes, constitutive effectiveness, functioning (only) as a mere rebuttable presumption, (presumption juris tantum) of the existence of the right (arts. 1º, no. 1 and 7º, of the CRP84 and 350º, no. 2, of the Civil Code) as well as of the respective holding, all in accordance with what is contained therein".

• The Land Registration Code not containing any provision to consider registration a condition of validity of contracts subject to it concludes the Claimant that, to acquire the quality of owner, it is sufficient that this appear in the purchase and sale contract as the purchaser, regardless of registration.

• For the registration does not have constitutive value but only declarative, not affecting the absence of property registration the quality of owner, nor preventing the full effectiveness of purchase and sale contracts of a motor vehicle.

• The Claimant further alleges that, in light of no. 1 of article 5º of the Land Registration Code "facts subject to registration only produce effect against third parties after the date of their respective registration."

• The concept of third party for purposes of land registration (and concomitantly of motor vehicle property registration), has legal establishment in no. 4 of article 5º of the Land Registration Code, in terms of which "third parties, for purposes of registration, are those who have acquired from a common author incompatible rights between themselves".

• Mindful of the legal and jurisprudential notion of "third party", according to the Claimant the conclusion is that the Respondent does not meet the requirements of the said notion of "third party" and therefore cannot invoke the absence of registration to justify the ineffectiveness of contracts for the purchase and sale of motor vehicles.

• In the opinion of the Claimant, the interpretation that best safeguards the unity of the legal system is that no. 1 of art. 3º of the CIUC enshrines a presumption.

• Thus, if the purchaser (new owner of the vehicle) does not effect registration of his right of ownership, it is presumed that this right continues to belong to the seller, being able, however, this presumption to be rebutted by proof to the contrary.

• Whereby, according to the Claimant, the Respondent cannot prevail itself of the absence of updating the registration of the right of ownership, to require the payment of the tax from the previous owner in whose name the vehicle is registered if and when, by any means, sufficient proof of the respective sale is presented to it.

• From what it alleged, the Claimant extracts the following conclusions:

a) The norm contained in article 3º, no. 1, of the IUC Code, enshrines a presumption, that, concerning a tax incidence norm, always admits proof to the contrary;

b) The purchase and sale contract has the nature of a real contract, being the real effect, in light of the provision of no. 1 of article 408º of the Civil Code, an effect of the contract itself not being dependent on any subsequent act, as is, in particular, the case of registration;

c) The essential function of motor vehicle registration is to give publicity to the legal situation of vehicles, with the registration not having constitutive effectiveness, functioning (only) as a mere rebuttable presumption of the existence of the right, as well as of the respective holding, all in accordance with what is contained therein. The presumption that the registered right belongs to the person in whose name it is inscribed can be rebutted by presentation of proof to the contrary;

d) Not meeting the Respondent the requirements of the notion of "third party" for purposes of registration, it cannot prevail itself of the absence of updating the registration of the right of ownership to call into question the full effectiveness of the purchase and sale contract and to require from the seller (previous owner) the payment of the IUC due by the purchaser (new owner) provided that the presumption of the respective holding is rebutted through sufficient proof of the sale.

e) If pursuant to a purchase and sale contract that has as its object a motor vehicle, on the date of the occurrence of the tax-generating event, the vehicle has already been previously alienated although the right of ownership thereof continues to be registered in the name of its previous owner, for purposes of the provision of article 3º, no. 1, of the IUC Code, the passive subject of IUC is the new owner, provided that sufficient proof of the sale is presented which rebuts the presumption of the registration.

• Whereby, in its view, it results that the IUC assessments relating to the taxation periods of 2009, 2010, 2011 and 2012 suffer from a material defect of violation of law, and should:

a) Be declared the illegality of these assessment acts (and be consequently annulled), in the amount of € 1,349.76;

b) Be, consequently, recognized the right to reimbursement of this amount and, as well, the right to compensatory interest for the payment of tax improperly assessed.

F – RESPONSE OF THE RESPONDENT AND ITS GROUNDS

The Respondent, duly notified for this purpose, timely presented its Response, in which, in summary, it alleged the following:

• Does not challenge the tax acts of IUC assessment relating to the years 2009 to 2012 identified in the Request for Arbitral Pronouncement, having as its object the vehicles also identified in the record, in the amount of 1,349.76 euros.

BY CHALLENGE

• According to the Respondent, in the terms delineated in the request for arbitral pronouncement, it can be concluded that the "thema decidendum" translates into two essential questions, on the one hand, it is necessary to know who is, in light of the Single Circulation Tax Code (CIUC), in particular, of article 3º, nos. 1 and 2 of the said Code, the passive subject of this tax.

• Namely, it is important to clarify whether, when a certain motor vehicle is the object of a financial leasing contract, a purchase and sale contract with reservation of ownership or a leasing contract with option to purchase, the passive subject of the tax continues to be the owner, in the terms of no. 1 of the said legal provision, or whether the passive subjects of IUC are, solely, the financial lessees, the acquirers with reservation of ownership, or other holders of option to purchase rights through the leasing contract.

• On the other, the question arises of knowing what the value of motor vehicle registration of the right of ownership, financial leasing, reservation of ownership or ALD (all facts subject to motor vehicle registration) is in the determination of the passive subject of IUC.

In this respect, it is questioned:

• Whether the absence of registration affects the acquisition of the quality of owner, financial lessee, acquirer with reservation of ownership, or other holders of option to purchase rights through the leasing contract?

• Whether (even admitting that the absence of registration does not affect the acquisition of that quality and that registration is not a condition of validity of these contracts), that absence of registration prevents the full effectiveness of the contracts in question? And, if in the latter case, AT can prevail itself of the absence of registration to consider as passive subjects of IUC those in whose name the vehicles are registered with the Motor Vehicle Registration Authority.

• In light of the general rules of interpretation, in accordance with the provision of article 9º of the CC, interpretation must have as its starting point the text of the law, presuming that the legislator knew how to express its thought in adequate terms, and should not adopt an interpretative meaning that does not have in the text of the law the minimum of verbal correspondence.

• In these terms, there is an exclusive responsibility, of only one of the passive subjects, which, as a rule, will be the owner, by force of no. 1, except in cases where a financial leasing contract, sale with reservation of ownership or long-term rental of the vehicle has been concluded (and registered), in which, by force of no. 2, the passive subject of IUC becomes one of the subjects indicated therein, and only this one.

• It challenges the alleged illegitimacy of the Claimant as a passive subject of IUC, in the situations at issue, insofar as, in its view:

• The Claimant makes a skewed reading of the letter of the law, given that the legislator established expressly and intentionally that the passive subjects of IUC are the owners, or those found in the situations indicated in no. 2 of art. 3º of the CIUC, considering them as such the persons in whose name the vehicles are registered, for which reason the expression "presume-se" was not used in this legal provision, but rather "consider-se".

• The tax norm is full of provisions analogous to that enshrined in the final part of no. 1 of article 3º, in which the fiscal legislator, within its freedom of legislative shaping, expressly and intentionally, enshrines what must be considered legally, for purposes of incidence, of income, of exemption, of determination and of periodization of taxable profit, for purposes of residence, of location, among many others, as, for example, in articles 2º of the Code of Municipal Tax on Onerous Transfers of Real Estate (CIMT), 2º, 3º and 4º of the Code of Personal Income Tax (CIRS) and 4º, 17º, 18º and 20º of the Code of Corporate Income Tax (CIRC).

• Concludes, affirming that the interpretation made by the Claimant that the legislator enshrined in art. 3º, no. 1 a presumption is an interpretation against the law.

• The Respondent further alleges that that interpretation does not attend to the systematic element, violating the unity of the regime that imposes the mandatory nature of motor vehicle registration, so as to prevent the Tax Authority from falling into absolute uncertainty regarding the passive subject of IUC, even putting at risk the course of the lapse period, for which reason the legislator intended expressly and intentionally that there be considered as owners, lessees, acquirers with reservation of ownership or holders of the right to purchase option in long-term rental, for the mentioned tax purposes, the persons in whose name the vehicles are registered.

• The Respondent also alleges that the mentioned interpretation of the Claimant ignores the teleological element of the interpretation of law: the ratio of the regime enshrined not only in the legal provision at issue, but also throughout the CIUC.

• The Respondent considers that the CIUC carried out a reform of the regime of taxation of vehicles in Portugal, substantially altering the regime of motor vehicle taxation, with the passive subjects of the tax becoming the owners shown in the property register, regardless of the circulation of the vehicles on the public way. That is, the Single Circulation Tax became due by the persons who appear in the register as owners of the vehicles.

• Such conclusion results from the content of parliamentary debates around the approval of Decree-Law no. 20/2008, of 31 January, of Recommendation no. 6-B/2012 of the Ombudsman and the spirit of the CIUC which, having been motivated, essentially, by environmental concern, its "ratio" is to tax the users of the vehicles, which, by force of their use cause an environmental cost.

• The Respondent further alleges that the interpretation conveyed by the Claimant is shown to be contrary to the Constitution.

• For the always publicized principle of contributive capacity is not the only nor the principal fundamental principle that informs the tax system.

• Alongside this principle we find others with the same constitutional dignity, such as the principle of trust and legal security, the principle of efficiency of the tax system and the principle of proportionality.

• It is therefore necessary that in the interpretative task of article 3º of the CIUC the principle of contributive capacity be articulated, or if preferred tempered, with those other principles.

• The interpretation proposed by the Claimant, an interpretation which in essence devalues the registral reality in detriment of an "informal reality" and unsusceptible of minimal control by the Respondent, is offensive of the basic principle of trust and legal security that should inform any legal relationship, here including the tax relationship.

• Parallel, the interpretation given by the Claimant is offensive of the principle of efficiency of the tax system, insofar as it translates into an obstruction and expense of the competences attributed to the Respondent, with obvious prejudice to the interests of the Portuguese State, of which both the Claimant and the Respondent are part.

• Constituting an understanding that is at the antipodes of that principle and of the reform of motor vehicle taxation itself, insofar as, by seeking to disregard the registral reality, a reality that constitutes the cornerstone on which the entire building of IUC rests, it generates for the Respondent, and ultimately for the Portuguese State, additional administrative costs, obstruction of the performance of its services, absence of control of the tribute and uselessness of registral information systems.

• Finally, the argumentation conveyed by the Claimant represents a violation of the principle of proportionality, insofar as it completely disregards it in confrontation with the principle of contributive capacity, when in reality the Claimant has the legal mechanisms necessary and adequate for the safeguard of that its capacity (e.g., motor vehicle registration), without, however, having exercised them in due time.

• It adds that the Claimant would have to make suitable proof of the constitutive facts of the right it alleges in arbitral proceedings, which, according to the Respondent, does not occur, as the proof presented by the Claimant is not, by itself, sufficient to effect conclusive proof of the transmission of the vehicles in question.

• With effect, it presents copies of the sales invoices, which, in the view of the Respondent do not constitute suitable document to prove the sale of the vehicles in question, since the same are nothing more than a document unilaterally issued by the Claimant.

• According to the Respondent, the invoices are not apt to prove the celebration of a synallagmatic contract as is the purchase and sale, for that document does not reveal by itself an essential and unequivocal declaration of will (i.e., the acceptance) by the purported acquirer, especially in this process in which the Claimant did not attach documentary proof of the means of payment of the price, or the receipts of discharge of the debt.

• There are not lacking cases of issuance of invoices relating to transmission of goods and/or provision of services that never came to materialize.

• According to the Respondent, an invoice unilaterally issued by the Claimant cannot replace the Motor Vehicle Registration Request, which is a document approved by official model.

• Thus, the Respondent concludes that the tax acts in question do not suffer from the alleged error on the factual assumptions, insofar as in light of the provision of article 3º, no. 1 of the CIUC and article 6º of the same code, it was the Claimant, in the capacity of owner, the passive subject of IUC, since the IUC aims to tax the owner of the motor vehicle, being that ownership is revealed through its registration.

• Whereby the Claimant is responsible for the arbitral costs relating to the present request for arbitral pronouncement, given that the failure to supply the data gave inexorably rise to the issuance of the assessments sub judice.

• As to the responsibility for the payment of arbitral costs, if IUC is assessed in accordance with the registral information timely transmitted by the Institute of Registries and Notaries, and not in accordance with information generated by the Respondent itself, and if the Claimant did not timely proceed to update it in the Motor Vehicle Register, the Respondent is not responsible for that payment, as the transmission of ownership is not controlled by the Respondent.

• The same reasoning applies to the request for condemnation to the payment of compensatory interest, with the legal prerequisites that confer the right to be petitioned not being met.

• In light of articles 43º of the LGT and 61º of the CPPT, the right to compensatory interest depends on the verification of the following prerequisites: The tax having been paid, the respective assessment having been annulled, in whole or in part, in gracious or judicial process, determination, in gracious or judicial process, that the annulment is based on error attributable to the services, which would not occur in the case, since the tax acts in question are valid and legal, because conforming to the legal regime in force at the date of the tax facts, for which reason no error attributable to the services occurred.

BY EXCEPTION

• The Respondent further came, later, to invoke the exception of lapse of the Claimant's right of action, alleging that the request for establishment of the Arbitral Tribunal was presented already after the legal deadline for this purpose had elapsed, in a request of 17/09/2014, in response to the attachment of documents that was carried out by the Claimant.

• It alleged, for this purpose, the Respondent that, being the dates of voluntary payment of the tax, contained in the respective guides, of 31/08/2012, 30/06/2011, 29/02/2012, 31/03/2009, 31/03/2010, 31/03/2011, 02/04/2012, 02/11/2010, 31/01/2011 and 01/11/2009, the periods of 90 days fixed in art. 10º, no. 1, para. a) of the RJAT, for purposes of recourse to the Arbitral Tribunal would already have terminated.

• And, even if it is not understood in this manner, the request for establishment of the Arbitral Tribunal would always be outside the deadline the assessment that printed in the computer system by the Claimant on 14/10/2013, if refers to the vehicle 52-CB-92.

RESPONSE OF THE CLAIMANT TO THE EXCEPTION

• In the response to the exception, the Claimant alleges the following:

• That the Respondent invokes the lapse of the right of action due to untimeliness of the request, on the ground that the presentation of the same was made when the deadline for this purpose was barred, in the combined interpretation of the provision in para. a), of no. 1st, of art. 10º of the RJAT and para. a) of art. 1º of art. 102º of the CPPT.

• And that such invocation results from erroneous and undue interpretation of the documentation presented.

• It refers that para. a), of no. 1 of article 102º of the CPPT establishes a deadline of 90 days for the challenge of the tax act, counted from the end of the deadline for voluntary payment of the tax provision, legally notified to the taxpayer.

• And that the "Deadline for Payment" included in the assessments attached to the petition with numbers 2 to 24, is a date that does not actually correspond to the deadline for voluntary payment.

• For assessments issued by the Tax Administration in the year 2013, whose document number begins precisely with 2013, cannot obviously have as the deadline for voluntary payment the years of 2009, 2010, 2011 or 2012.

• In its opinion, it is a parameterization of the Tax Administration's program, which is absolutely incomprehensible and which has no consonance whatsoever with the applicable legal norms.

• The Claimant further alleges that it was not notified for the payment of the tax provisions neither in 2009, nor in 2010, nor in 2011, nor in 2012.

• For which reason it could not voluntarily pay taxes whose responsibility it was absolutely unaware of.

• Adding to that the Claimant was not even legally notified for the payment of such taxes in 2013.

• It did receive communications/notices made, by the AT, "Via CTT", of the situations in question, through which it became aware of those assessments.

• Not having been notified, the assessment acts lack effectiveness, in accordance with art. 77º, no. 6 of the LGT and 36º, no. 1 of the CPPT, whereby as long as the respective valid notification is not made, the deadline provided for in para. a) of no. 1 of art. 102º of the CPPT does not begin, as provided in no. 1 of art. 59º of the CPTA, applicable to the case by referral of art. 29º of the RJAT.

• Thus, without valid notifications existing, the deadline provided for in para. a), of no. 1 of art. 102º of the CPPT does not begin, as provided in no. 1 of art. 59º of the CPTA, applicable to the case by referral of article 29º, no. 1, para. c) of the RJAT.

• Whereby, for the Claimant, the execution of the act initiated, even without valid notification, the possibility of its challenge is not ruled out (art. 54º, no. 1 and 59º no. 2 of the CPTA) being that the period of three months provided for in article 102º of the CPPT, should be counted from that date, that is, from the date of the respective payment, which in the present case, took place on 26/11/2013.

• The act executed, even before ineffective notification, is not excluded from the possibility of its challenge, in accordance with arts. 54º, no. 1 and 59º, no. 2 of the CPTA, in which case the deadline provided for in article 102º, no. 1 of the CPPT, is begun to be counted from that execution.

• In the case at issue, that execution, that is the payment of the IUCs took place on 26/11/2013, for which reason, having the request for arbitral establishment been presented on 12/02/2014, there will be no untimeliness and, consequently, lapse of the right of action.

G – ISSUES TO BE DECIDED

Faced with the positions assumed by the Parties in accordance with the arguments presented, the following are the issues that must be assessed and decided:

1 – Exception of lapse of the Claimant's right of action.

2 – As to the merits

2.1 - Interpretation of no. 1 of art. 3º CIUC, in order to be determined whether the norm of subjective incidence inscribed therein, enshrines, or not, a legal presumption of tax incidence, susceptible of rebuttal, that is, admits, or not, that the taxpayer, in whose name the vehicle is registered with the Motor Vehicle Registration Authority, may demonstrate, through means of proof in Law permitted, that it is not, in the period to which the tax relates, its owner, or who disposes of it, thus excluding the presumption of passive subject of the tax that falls upon it.

2.2 – Compensatory interest – Existence, or not, of the right to compensatory interest, pursuant to art. 43º of the LGT, in the case that the assessments are annulled and the reimbursement of the amount petitioned determined, which would have been improperly paid.

3 – Responsibility for the payment of arbitral costs.

H – PROCEDURAL PREREQUISITES

1. The Arbitral Tribunal is regularly constituted and is materially competent, in accordance with the provision of para. a), of no. 1, of art. 2º of the RJAT (Decree-Law no. 10/2011, of 20 January).

2. The Parties enjoy legal personality and capacity, are legitimate and are properly represented, in accordance with arts. 4º and 10º, no. 2 of the RJAT and art. 1º of Ordinance no. 112/2011, of 22 March.

3. Considered the identity of the taxed fact, the tribunal competent for the decision and the grounds of fact and law invoked, the Tribunal admits the joinder of requests for declaration of illegality of the tax acts that are the object of this process, since the requirements established in art. 3º, no. 1 of the RJAT are met.

4. The process does not suffer from defects that affect its validity.

I – MATTER OF FACT

I. 1 – PROVEN FACTS

With relevance for the assessment of the issues raised, the Tribunal gives as proven the following facts:

1 – The Claimant "A" – Financial Credit Institution, SA., also identified as "A", is a financial institution whose corporate purpose is the practice of operations permitted to banks, with the exception of the receipt of deposits, having, for this purpose, all legally required authorizations.

2 – In the scope of its activity, the Claimant concludes with its clients long-term rental contracts and financial leasing contracts of motor vehicles, at the end of which it transfers the ownership thereof to the respective lessees or to third parties.

3 – Between 14 November 2013 and 20 November 201, the Claimant was notified of self-assessed assessments of IUC, relating to the vehicles identified in this request for arbitral pronouncement and to the taxation periods of 2009, 2010, 2011 and 2012.

4 – The Claimant proceeded to the voluntary payment of the said IUC on 26/11/2013.

5 – The Claimant was not the owner of the vehicles sub judice, on the dates of the occurrence of the tax-generating events at issue.

6 – On 12 February 2014, the Claimant presented the Request for Arbitral Pronouncement, which gave rise to the present proceedings.

I. 2 – SUBSTANTIATION OF PROVEN FACTS

The facts given as proven are based on the documents indicated relating to each of them, and on the factual elements brought to the process by the Parties, insofar as their conformity to reality was not questioned, in particular at the Meeting of the Tribunal with the Parties on 13/10/2014 and, also, in the deposition of witness "B", listed by the Claimant.

With regard to the invoices and sale documents relating to the vehicles, which were subsequently attached to the process, the Tribunal decided that the same constitute means of proof with sufficient force to prove the transmission of its ownership, as they enjoy the presumption of veracity established in art. 75º, no. 1 of the LGT, and based on the remaining grounds that are better set out in the Decision

I. 3 – UNPROVEN FACTS

There are no unproven facts with relevance for the assessment of the issues to be decided

J – MATTER OF LAW

Once the matter of fact is established, the following proceeds to its legal subsumption and the determination of the Law to be applied, taking into account the issues to be decided that were outlined.

The first issue to be decided concerns the exception invoked by the Respondent of lapse of the Claimant's right of action, that is, to know whether on the date of the request for establishment of the present Arbitral Tribunal the Claimant's right to do so would have, or not, already lapsed.

Only, should the same be judged unfounded, will the claim regarding the illegality and consequent annulment of the acts of self-assessed taxation relative to IUC and relating to the vehicles, whose license plates are identified in the record, in the amount of 1,349.76 euros, and the recognition of the right to restitution of the tax, as well as the possible right to compensatory interest, be assessed.

Let us then analyze the issue relating to the exception invoked by the Respondent.

The Respondent maintains that appearing in the payment guides of the IUC at issue dates from the years 2009 to 2012, the period of 90 days for purposes of request for pronouncement of the Arbitral Tribunal, provided for in art. 10º, no. 1, para. a) of the RJAT, would already have terminated, since the request for establishment of the Arbitral Tribunal was entered on 12 February 2014, and that, in the case of the vehicle with the license plate ...-...-..., "always the assessment that printed in the computer system by the Claimant on 14/10/2013 would be outside the deadline for the request for establishment of the Arbitral Tribunal."

However, in the course of the meeting of the Tribunal with the Parties on 13/10/2014, the Claimant requested a rectification to point 11 of its Request for Arbitral Pronouncement, to the effect that it be recorded that the IUC assessments were notified to it between 14/11/2013 and 20/11/2013 and that the respective payments were made on 20/11/2013, without the Respondent, heard for this purpose, calling into question these facts, which were recorded in the respective Record.

Thus, in admitting facts that are unfavorable to it, the Respondent eliminated the possibility of being considered by the Tribunal facts that may be contained in other means of proof, since, in particular, the documents attached are not authentic documents.

Under these circumstances, it results from the analysis of the proven facts, in particular, their respective dates, that on the part of the Claimant there was compliance with the deadlines established in the law for the request for establishment of the arbitral tribunal.

With effect, it is verified that, having the assessments been notified in the period between 14/11/2013 and 20/11/2013 and the voluntary payment having been made on 26/11/2013, the Claimant complied with the period of 30 days to which it was obligated under the provision of art. 85º, no. 2, of the CPTT.

On the other hand, establishing the combined provisions of arts. 10º, no. 1, para. a) of the RJAT and of art. 102º, no. 1, para. a) of the CPPT that the request for establishment of the Arbitral Tribunal should be presented within a period of 90 days counted from the date limit for voluntary payment of the tax, it is also necessary to conclude that the Claimant complied with the deadline established in the law for this purpose, since the request for establishment of the Arbitral Tribunal was made on 12/02/2014, that is, on a date prior to that defined by the application of the said legal norms.

In this conformity, the Tribunal cannot fail to conclude that the exception invoked by the Respondent is without basis, regarding the lapse of the right of action, which thus it declares unfounded.

Let us then proceed to the analysis of the issue of merits to be decided.

The Claimant alleges that it was not the owner of the vehicles it identifies on the date in which the tax-generating events occurred that originated the IUC assessments, and, consequently, was not the passive subject of the tax that was assessed against it.

The Respondent Tax Authority assumes an opposite position with respect to this issue of the subjective incidence of IUC, defending that, in the terms of art. 3º, no. 1 of the CIUC, the passive subject of IUC is the person in whose name the vehicle is registered with the Motor Vehicle Registration Authority, which fact occurred with the Claimant, in the period in question.

Art. 3º, no. 1 of the CIUC provides with respect to this contested matter, the following:

"Art. 3º - Subjective incidence

1. Passive subjects of the tax are the owners of the vehicles, being considered as such the natural and legal persons, of public or private law, in whose name the same are registered"

From the positions assumed by the Parties in the present process, it is clear that the issue ultimately comes down to knowing whether the norm of subjective incidence transcribed above, contained in no. 1 of art. 3º of the CIUC, establishes a legal presumption, susceptible of rebuttal, as the Claimant contends, or, expressly and intentionally, considers the persons in whose name the vehicles are registered as owners for the purpose of subjective incidence of IUC, as the Respondent understands.

The approaches taken by the Claimant and the Respondent with respect to this matter and their substantiation are set forth in summary, or with partial transcription, in E. and F. of the Report of this Decision.

It is therefore necessary to decide:

A preliminary point for assessing the issue of the legal value of motor vehicle registration.

No. 1 of art. 1º of Decree-Law no. 54/75, of 12 February, which governs the registration of motor vehicles, provides that the registration of vehicles "has essentially as its aim to give publicity to the legal situation of the vehicles… with a view to the safety of legal commerce".

For its part, article 7º of the Land Registration Code, applicable to motor vehicle registration by force of the provision of art. 29º of the said Decree-Law no. 54/75, establishes that "The final registration constitutes a presumption that the right exists and belongs to the titled holder in the precise terms in which the registration defines".

It is verified, thus, that the final registration is merely a presumption of the existence of the right, which admits proof to the contrary, constituting, therefore, a rebuttable presumption, as, moreover, has been recognized in jurisprudence.

Given that there is no provision in this Code that requires registration as a condition of validity of contracts, it is concluded that, to acquire the quality of owner of a vehicle, it is sufficient to appear as the purchaser in a purchase and sale contract.

Regarding the tenor of the norm in question – art. 3º, no. 1 of the CIUC -, it must be said that, as recognized unanimously and is enshrined in art. 11º of the LGT, tax laws must be interpreted in accordance with the general principles of interpretation, thus being important, for this purpose, the fundamental principle of interpretation which is art. 9º of the Civil Code, which provides the rules and elements for the interpretation of norms.

This means that the traditional instruments of legal hermeneutics should be used, with a view to determining the legislative thought, in accordance with the provision of art. 9º of the Civil Code.

In this conformity, let us begin the interpretation of art. 3º, no. 1 of the CIUC, with the literal element, that in which it is sought to detect the legislative thought that is objectified in the norm, to verify whether the same contemplates a presumption, or if it determines, definitively, that the passive subject of the tax is the owner who appears in the register.

The question that arises is whether the expression "considerando-se" used by the legislator in the CIUC, instead of the expression "presumindo-se", which was that which appeared in the diplomas that preceded the CIUC, would have removed the nature of presumption from the legal provision in question.

In our view, the answer must necessarily be negative, since, from the analysis of our legal order, it clearly emerges that the two expressions have been used by the legislator with equivalent meaning, whether at the level of rebuttable presumptions, whether within the framework of irrebuttable presumptions, whereby nothing enables the extraction of the conclusion sought by the Tax Authority on a mere semantic ground.

In truth, this happens in varied legal norms that enshrine presumptions using the verb consider, of which the following are indicated, merely by way of example:

In the context of civil law - no. 3 of art. 243º of the Civil Code, when it establishes that "always considered in bad faith the third party who acquired the right subsequently to the registration of the action of simulation, when it has place";

also in the context of industrial property law the same occurs, when art. 59º, no. 1 of the Code of Industrial Property provides that "Inventions whose patent has been applied for within the year following the date on which the inventor left the company, are considered made during the execution of the employment contract";

and, also, in the context of tax law, when nos. 3 and 4 of art. 89-A of the LGT provide that it is incumbent upon the taxpayer the burden of proof that the declared income corresponds to reality and that, not being made that proof, it is presumed ("considers-se" in the letter of the Law) that the income is that which results from the table that appears in no. 4 of the said article;

This conclusion of there being total equivalence of meanings between the two expressions, which the legislator uses indifferently, satisfies the condition established in art. 9º, no. 2 of the Civil Code, since the minimum of verbal correspondence for purposes of the determination of the legislative thought is assured.

It is important, subsequently, to submit the norm in question to the other elements of logical interpretation, in particular, the historical element, the rational or teleological element and that of systematic order.

Through the analysis of the historical element, it is extracted the conclusion that, from the entry into force of Decree-Law 59/72, of 30 December, the first to regulate this matter, up to Decree-Law no. 116/94, of 3 May, the last to precede the CIUC, the presumption of the passive subjects of IUC being the persons in whose name the vehicles were registered at the date of their assessment was enshrined.

It is verified, therefore, that tax law had, always, the objective of taxing the true and actual owner and user of the vehicle, appearing indifferent the use of one or the other expression which, as we have seen, have in our legal order a coincident meaning.

The same applies when we avail ourselves of the elements of interpretation of a rational or teleological nature.

With effect, the current and new framework of motor vehicle taxation enshrines principles that aim to subject the owners of vehicles to bearing the losses of damage to roads and the environment caused by these, as is obtained from the tenor of art. 1º of the CIUC.

Now the consideration of these principles, in particular, the principle of equivalence, which deserve constitutional protection and enshrinement in community law, and are also recognized in other branches of the legal order, determines that the mentioned costs be borne by the real owners, the causers of the said damages, which excludes, entirely, an interpretation that sought to prevent the presumed owners from proving that they are no longer so because the ownership is in the legal sphere of another.

This interpretation has foundation in the provision of no. 1, of art. 9º of the Civil Code, which provides that the search for legislative thought should have especially in view "the unity of the legal system and the circumstances in which the law was elaborated and the specific conditions of the time in which it is applied".

Thus, also, from the interpretation made in light of the elements of a rational and teleological nature, mindful of that which the rationality of the system guarantees and the aims sought by the new CIUC, it is clear that no. 1 of art. 3º of the CIUC enshrines a rebuttable legal presumption.

In face of the above, it is important to conclude that the ratio legis of the tax points in the direction of the actual owner-users of the vehicles being taxed, whereby the expression "considerando-se" is used in the normative in question in a sense similar to "presumindo-se", reason whereby doubts there are not that a legal presumption is enshrined.

Now, article 73º of the LGT establishes that "The presumptions enshrined in the norms of tax incidence always admit proof to the contrary, whereby they are rebuttable".

Thus, enshrining art. 3º, no. 1 of the CIUC a presumption juris tantum, therefore, rebuttable, the person who is inscribed in the register as owner of the vehicle and who, for that reason was considered by the Tax Authority as the passive subject of the tax, may present evidence elements aiming to demonstrate that the holder of the ownership is another person, to whom the ownership was transferred.

Analyzed the elements brought to the process by the Claimant, it is extracted the conclusion that this was not the owner of the vehicles to which the assessments in question relate, because, in the meantime, it had already transferred the ownership thereof, in accordance with civil law.

This transmission of ownership is opposable to the Respondent Tax Authority, insofar as, although facts subject to registration only produce effects against third parties when registered, in light of the provision of art. 5º, no. 1 of the Land Registration Code, the Tax Authority is not a third party for purposes of registration, since it is not found in the situation provided for in no. 2 of the said art. 5º of the CRP, that is, it has not acquired from a common author incompatible rights between themselves.

With respect to the issue raised by the Respondent regarding the evidential suitability of the invoices, which the Respondent challenges in generic terms, the Tribunal has no doubts in accepting them as means of proof of the transmission of ownership of the vehicles, especially when accompanied by the sale documents, subsequently attached by the Claimant, for the following reasons:

In the situation of the proceedings, we are before a contract for the purchase and sale of moveable things, which, by application of the provision of art. 219º of the CC, is not subject to any special formalism.

Although it is recognized that the titling of these contracts, because they have as their object motor vehicles, in which registration is mandatory, benefits from the issuance of a declaration of sale, which is necessary for registration, this does not prevent the contract being proven in another manner, for this declaration is not the only and exclusive means of proof of the sale.

For the case, it is especially important the fact that, since the Claimant has a business nature, the invoices, which were attached to the proceedings by the Claimant, are subject to rigorous legal rules of an accounting and fiscal order, with implications, also, in the collection of other taxes.

In truth, tax legislation attributes to them very special relevance, which cannot fail to confer upon them evidential credibility, and which is well expressed in the provision of the following legal norms which, by way of example, are cited: arts. 29º, no. 1, para. b) and 19º, no. 2 of the VAT Code and arts. 23º, no. 6 and 123º, no. 2 of the Corporate Income Tax Code.

Now, provided that those invoices have been issued in accordance with commercial and tax legislation, an issue which the Respondent does not raise, and which is not called into question, the same enjoy the presumption of veracity, which is attributed to them by art. 75º, no. 1 of the LGT.

It would be incumbent upon the Respondent to present and demonstrate concrete and grounded indicia that the operations titled by the mentioned invoices did not correspond to reality, in light of the provision of no. 2 of art. 75º of the LGT, which did not occur.

In this conformity, mindful of the very special relevance that tax legislation attributes to invoices in the situation at issue and that these enjoy the presumption of veracity, which is conferred on them by the provision of art. 75º, no. 1 of the LGT, completed, in the case, by the sale documents relating to some situations, we conclude that they constitute sufficient means of proof to rebut the presumption arising from art. 3º, no. 1 of the CIUC, since they prove that the Claimant was not the owner of the vehicles at the time to which the assessment of the IUC relates.

For which reason, the mentioned assessments should be annulled and, consequently, restituted to the Claimant by the Tax Authority the tax that was improperly charged.

As for compensatory interest, this matter is regulated in art. 24º of the RJAT, which expressly determines in its no. 1, para. b) that the arbitral decision binds the tax administration, in the cases therein indicated, to "Restore the situation that would have existed if the tax act object of the arbitral decision had not been practiced, adopting the acts and operations necessary for this purpose", and further provides, in its no. 5, that "Payment of interest is due, regardless of its nature in accordance with the terms provided for in the general tax law and in the Code of Tax Procedure and Process".

Also article 100º of the LGT, whose application is authorized by the provision of art. 29º, no. 1, para. a) of the RJAT, provides in an identical manner, in the sense of the immediate reconstitution of legality, comprehending the same the payment of compensatory interest, if applicable.

For its part, article 43º, no. 1 of the LGT conditions the right to compensatory interest to the cases in which "there was error attributable to the services from which results payment of a tax debt in an amount greater than that legally due".

In this conformity, the issue that arises is whether, in light of the circumstances demonstrated and the tenor of the provision of art. 3º, no. 1 of the CIUC, it can be considered that there was, or not, an error attributable to the services in the situation at issue.

Analyzed the situation, it is verified that the Tax Authority in assessing the IUC in the terms in which it did, gave effect to the legal mandate of general order established in the said normative, in the point in which the passive subject of the tax is the owner of the vehicle, attributing that quality of owner, for the said purposes, to the taxpayer in whose name the vehicle is registered with the Motor Vehicle Registration Authority, without necessity of making any proof.

Only after the recognition by this arbitral tribunal that the provision in question has the nature of a presumption juris tantum, is the Claimant in a position to rebut the said presumption, which it came to do and to prove, ceasing from now on to be the passive subject of the said tax, reason whereby it is concluded that there is no error attributable to the services.

As for responsibility for the payment of arbitral costs, the Respondent alleges that it is not responsible for its payment, as it proceeded to the assessments of the tax with the elements of which it disposed, and cannot be held responsible for what it terms "lack of diligence" of the Claimant.

This argument cannot be considered, insofar as the law is conclusive in the imputation of responsibility for the payment of costs to the party that is condemned, in light of the provision of nos. 1 and 2, of art. 527 of the Code of Civil Procedure, applicable by force of art. 29º, no. 1, para. e) of the RJAT.

Thus, responsibility for the payment of arbitral costs is the Respondent's.

L – DECISION

Considering the above, the present Arbitral Tribunal decides:

a) To judge unfounded the exception invoked by the Respondent.

b) To judge founded, on the ground of violation of law, the request for declaration of illegality of the IUC assessment, with respect to all vehicles whose license plates are identified in the record, relating to the years referred to therein, and, in consequence,

c) To annul the corresponding tax assessment acts.

d) To judge unfounded the request for recognition of the right to compensatory interest in favor of the Claimant.

e) To condemn the Respondent to pay the costs of the present process (art. 527º, nos. 1 and 2 of the Code of Civil Procedure, ex vi art. 29º, no. 1, para. e) of the RJAT).

Value of the process: In conformity with the provision of articles 306º, no. 2 of the CPC (ex. 315º, no. 2) and 97º - A, no. 1 of the CPPT and in article 3º, no. 2 of the Regulation of Costs in Tax Arbitration Processes, the value of the process is set at 1,349.76 euros.

Costs: In harmony with no. 4 of art. 22º of the RJAT, the amount of costs is fixed at 306.00 euros, in accordance with Table I attached to the Regulation of Costs in Tax Arbitration Processes.

Notify.

Lisbon, 27 October 2014

The Arbitrator

José Nunes Barata

Text prepared by computer, in accordance with no. 5 of article 131º of the CPC, applicable by referral of para. e) of no. 1 of article 29º of Decree-Law no. 10/2011, of 20/01.

The writing of the present decision follows the old orthography.