IUC Subjective Incidence: Lessee as Taxpayer in Financial Leasing – CAAD 128/2014-T

ARBITRATION DECISION

I. STATEMENT OF FACTS

A..., S.A., a company with registered office at Rua ..., Lisbon, holder of the single registration and identification number for legal entities ..., hereinafter simply designated as the Claimant, filed a request for the constitution of an arbitral tribunal in tax matters and a request for arbitral pronouncement, pursuant to Articles 2 No. 1(a) and 10 No. 1(a), both of Decree-Law No. 10/2011, of 20 January (Legal Framework for Arbitration in Tax Matters, abbreviated as RJAT), petitioning for the annulment of 6 (six) tax assessment acts for the Single Circulation Tax (IUC) relating to the years 2009 to 2012, in the total amount of €253.00, as well as reimbursement of the same amount, relating to the tax paid and the payment of corresponding compensatory interest.

To support its request, it alleges, in summary:

a) The Claimant is a credit institution that, in the course of its activities, grants financing to the automotive sector;

b) The vehicles to which the disputed assessments relate were subject to financial lease agreements;

c) As of the date of occurrence of the tax event, the Claimant was no longer the owner of the vehicles subject to financial lease;

d) These were sold to the former lessees, although the respective property registration was not updated;

e) For which reason the Claimant cannot assume the status of taxpayer;

f) However, even if this were not the case, the Claimant could never be considered a taxpayer in respect of the IUC, since the vehicles in question were subject to financial lease contracts, which entails the lessee being the taxpayer and, consequently, responsible for payment of the tax;

g) The AT (tax authority) considers that the Claimant, as the lessor entity of the vehicles, is responsible for payment of the IUC;

h) Pursuant to Article 3 of the CIUC (Code of the Single Circulation Tax), the lessee is treated as the owner of the vehicle to be considered a taxpayer of the IUC;

i) The lack of registration does not affect the validity of the sales contracts entered into but only their effectiveness and, even this, only against third parties in good faith, a qualification that the AT does not assume;

j) The AT cannot be considered a third party for registration purposes, by virtue of the fact that the sales contracts and financial lease contracts would be enforceable against it;

k) The legislator opted to privilege the criterion of economic ownership, to the detriment of legal ownership;

l) Pursuant to No. 2 of Article 3 of the CIUC, with lessees having exclusive enjoyment of the vehicle, the obligation to pay the tax also falls to them;

m) In the case of the 6 assessments in dispute, the Claimant is not a taxpayer of the IUC;

n) The assessments are not reasoned.

The Claimant attached 4 appendices and 4 documents, having not called any witnesses.

In the request for arbitral pronouncement, the Claimant opted not to designate an arbitrator, whereby, pursuant to Article 6 No. 2(a) of the RJAT, the undersigned was designated by the Ethics Council of the Administrative Arbitration Centre, with the appointment accepted in accordance with legal provisions.

The arbitral tribunal was constituted on 17 April 2014.

Notified in accordance with and for the purposes of Article 17 of the RJAT, the Respondent filed its response, alleging, in summary, as follows:

a) The legislator expressly and intentionally established that the taxpayers of the IUC are owners, being considered as such the persons in whose names the vehicles are registered;

b) Article 3 of the CIUC does not establish any presumption of ownership, but a true fiction of ownership – the legislator does not say that they are presumed to be owners but that they are considered owners;

c) Although the Claimant alleges that it was not the owner of the vehicles as of the date of the tax facts to which the disputed assessments relate, the truth is that the evidence presented by it does not permit the conclusion of the necessary transfer of the vehicles;

d) The invoices attached do not constitute an appropriate document to prove the sale of the vehicles in question, since they are merely documents unilaterally issued by the Claimant;

e) The failure to register the changes in ownership or lease situations has the consequence that the obligation to pay the IUC falls on the registered owner, and the AT cannot assess the tax based on elements not appearing in the registration;

f) The IUC is owed by the persons appearing in the registration as owners of the vehicles;

g) As for the financial lease contracts, the failure to comply with the obligation provided in Article 19 of the CIUC places upon the Claimant responsibility for the arbitration costs.

The Respondent attached 3 documents and a copy of the administrative file, having not called any witnesses.

In view of the position assumed by the parties and there being no need for additional production of evidence, it was determined that the meeting referred to in Article 18 of the RJAT would not be held, and a deadline was fixed for successive production of written submissions by the parties; which the Parties duly did within the deadline fixed therefor.

II. ISSUES TO BE DECIDED

Given the positions assumed by the Parties, set forth in the arguments presented, it is necessary to:

a. Determine who is the taxpayer of the IUC if, as of the date of occurrence of the tax event, a financial lease contract exists for its object an automobile vehicle;

b. Determine who is the taxpayer of the IUC when, as of the date of occurrence of the tax event, the automobile vehicle originally subject to a financial lease contract has already been alienated;

c. Determine what is the legal value of motor vehicle registration in respect of the IUC, especially for purposes of the subjective scope of the tax;

d. Determine whether the failure to update motor vehicle registration permits the consideration of persons in whose names the vehicles are registered as taxpayers of the IUC;

e. Determine what are the consequences of non-compliance with the provisions of Article 19 of the CIUC;

III. FACTUAL MATTERS

a. Facts Proven

With relevance to the decision to be rendered in the present case, the following facts were deemed proven:

1. The Claimant is a financial credit institution;

2. In the course of its activities, the Claimant grants financing to its clients for the purpose of acquiring automobile vehicles;

3. Such financing is, most often, formalized through the execution of financial lease contracts;

4. During the period of execution of such contracts, the Claimant maintains the legal position of lessor;

5. The Claimant was notified of 6 IUC assessment acts relating to the years 2009 to 2012, in the total amount of €253.00;

6. None of the 6 vehicles belongs to categories F or G referred to in Article 4 of the CIUC;

7. The 6 assessments relate to vehicles in respect of which, as of the date of occurrence of the tax event, an invoice for sale to a third party had been issued by the Claimant;

8. The Claimant paid the tax assessed by the Respondent and reflected in the assessments now disputed; it did so under the Exceptional System for the Regularization of Tax Debts and Social Security, instituted by Decree-Law No. 151-A/2013.

b. Facts Not Proven

No other facts of interest to the proceedings were proven.

c. Reasoning on Factual Matters

The conviction regarding the facts deemed proven was formed on the basis of the documentary evidence attached by the Claimant, cited in relation to each of the points, and whose correspondence to reality was not contested.

IV. JOINDER OF CLAIMS

Considering the significant number of vehicles and the volume of documentation necessary to prove the facts it alleges, the Claimant, invoking the principle of procedural economy, requests a judgment of illegality that encompasses the 6 tax assessment acts now in question.

Now, although we are not faced with a "significant number of vehicles," there is an identity of the nature of the tax facts, the grounds of fact and law invoked and the tribunal competent for the decision, with nothing preventing that, pursuant to Article 3 of the RJAT and Article 104 of the Tax Procedure and Process Code, the requested joinder of claims be proceeded with.

V. PRELIMINARY DETERMINATION

The Arbitral Tribunal is regularly constituted and is materially competent.

The parties enjoy legal personality and capacity, are legitimate and are regularly represented.

The proceedings do not suffer from defects that affect its validity, with no exceptions or preliminary questions existing that prevent consideration of the merits and that it is necessary to address ex officio.

VI. ON THE LAW

With the factual matters established, it is now necessary, by reference thereto, to determine the applicable law.

Examining the arguments presented by the Parties, it is readily apparent what the underlying issue is: whether the rule contained in No. 1 of Article 3 of the CIUC contains or does not contain a legal presumption; a question that, moreover, has raised extensive jurisprudence – also arbitral – which will be appropriately addressed herein.

Under the heading subjective scope, Article 3 of the CIUC provides that:

"1. – The taxpayers 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 names they are registered.

1. – Financial lessees, purchasers with reservation of ownership, as well as other holders of purchase option rights by virtue of the lease contract are treated as owners"

Now, to dispel doubts about the meaning and extent to be attributed to a particular legal rule implies carrying out an interpretative task that permits extracting from the linguistic statement a concrete meaning or "content of thought"([1]). However, such task can only be accomplished – thus achieving an understanding of the vis ac potestas legis – through the use of a concrete method, which rests on literal interpretation, on the one hand, and on logical or rational interpretation, on the other.

It should be recalled, before proceeding, that in accordance with No. 1 of Article 11 of the General Tax Law, tax rules are interpreted in accordance with commonly accepted principles of legal hermeneutics, especially those established, among us, in Article 9 of the Civil Code. Let us proceed.

Literal interpretation presents itself, then, as the first stage of interpretative activity. As FERRARA states, "the text of the law forms the substratum from which the interpreter must depart and in which he must rest"([2]).

In fact, since the law is expressed in words, the verbal significance they contain must be extracted therefrom, according to their natural connection and the rules of grammar. However, being the words employed by the Legislator equivocal or indeterminate, it will be necessary to resort to logical interpretation, which attends to the spirit of the provision to be interpreted.

Logical interpretation, as has been peacefully understood by legal writers([3]), rests on the rational element, the systematic element and the historical element; weighing them and deducing therefrom the value of the legal rule in question.

By rational element is to be understood the raison d'être of the legal rule, i.e., the purpose for which the legislator instituted it. The discovery of the ratio legis presents itself, thus, as a factor of undoubted importance for the determination of the meaning of the rule.

It happens, however, that a particular rule does not exist in isolation, but rather coexists with other legal rules and principles in a systematic and complex manner. Thus, it becomes natural that the meaning of a concrete rule results clearly from the comparison of this with the others. As BAPTISTA MACHADO states, "this element comprises the consideration of other provisions that form the normative complex of the institute into which the rule to be interpreted is integrated, that is, which regulate the same matter (context of the law), as well as the consideration of legal provisions that regulate parallel normative problems or related institutes (parallel provisions). It also comprises the systematic place that belongs to the rule to be interpreted in the global legal order, as well as its consonance with the spirit or intrinsic unity of the entire legal order."([4]).

The historical element, in turn, must refer to and include materials connected with the history of the rule, such as "the evolutionary history of the institute, the figure or the legal regime in question (…); the so-called sources of the law, that is, the legal or doctrinal texts that inspired the legislator in the elaboration of the law (…); the preparatory works.".

Let us apply, then, what has been said to the case at hand.

Examining the arguments of Claimant and Respondent, and as regards the literal element, it is readily understood that the focus of dissent resides in the expression "(…) being considered as such (…)," contained in No. 1 of Article 3 of the CIUC.

The question arises – as was indeed asked in the Arbitral Decision rendered in the context of Case No. 73/2013-T([5]): "Does the fact that the legislator opted for the word 'being considered' destroy the possibility of us being faced with a presumption?" No. It is the answer that we believe is required. And nor should it be said that such conclusion is undermined by the circumstance that the legislator did not use the word "presumed," which was employed in the ancient Vehicle Tax Regulation.

Also here we cannot fail to emphasize what was stated in that decision: "examining the Portuguese legal order, we find innumerable rules that enshrine presumptions using the verb consider, many of which employed in the gerund ('considering' or even 'being considered'). Examples thereof are the rules listed below: In the Civil Code, among others, Articles 314, 369 No. 2, 374 No. 1, 376 No. 2, 1629 (…). Also in the tax legal order one can find the verb 'consider,' namely the term 'is considered' with a presumptive sense. And there is added the teaching of LEITE DE CAMPOS, SILVA RODRIGUES and LOPES DE SOUSA which, for the clarity of exposition, is likewise transcribed. Thus, the Authors write that 'presumptions in matters of tax scope may be explicit, revealed by the use of the expression 'presumed' or similar (…). However, presumptions may also be implicit in scope norms, namely of objective scope, when certain values of movable or immovable property are considered as constituting taxable matter, in situations where it is not unfeasible to ascertain the real value'."

To this effect, JORGE LOPES DE SOUSA([6]) notes that in No. 1 of Article 40 of the Personal Income Tax Code the expression "presumed" is used, while in No. 2 of Article 46 of the same statute the word "is considered" is used, with no difference whatsoever between one expression and the other, both meaning, after all, the same thing: a legal presumption.

And what is to be said of No. 4 of Article 89-A? Are there any doubts that it is a presumption? And is such conclusion weakened by the fact that the verb consider is employed there? It does not appear so to us.

Thus, and as concerns the matter at hand, it proves admissible to assimilate the verb consider to the verb presume. Indeed, we may be faced with a presumption even when the legislator has opted for other verbs, namely the verb consider. In fact, and contrary to what is contended by the Respondent, it is this conclusion that least offends the systematic coherence postulated by the legal order as a whole.

But further: the rational element also authorizes such conclusion.

Let us invoke the explanatory memorandum of the Legislative Proposal No. 118/X, of 07/03/2007, which gave rise to Law No. 22-A/2007, of 29 June, since therefrom the ratio legis becomes clear.

It was intended to undertake a "global and coherent reform of taxes linked to the acquisition and ownership of automobile vehicles" in light of the "imperative need to bring clarity and coherence to this area of the fiscal system and the more imperative need to subordinate it to the principles and concerns of an environmental and energy nature that today mark the discussion of automobile taxation."

Thus, "the two new taxes now created, the tax on vehicles and the single circulation tax, constitute much more than the technical continuation of figures created in the 70s and 80s that preceded them, directed predominantly toward the raising of revenue, indifferent to the social cost resulting from automobile circulation. They constitute something different, figures already of the century in which we live, with which it is certainly intended to raise public revenue, but to raise it in measure of the cost that each individual causes to the community."

In a manner congruent with that motivation, the legislator came to enshrine, in Article 1 of the CIUC, the principle of equivalence, making it clear "that the tax, as a whole, is subordinated to the idea that taxpayers should be burdened in measure of the cost they cause to the environment and the road network, this being the raison d'être of this tax figure. It is this principle that dictates the burdening of vehicles in accordance with their respective ownership and until the time of scrapping."

It may, moreover, be said that environmental and energy concerns are so significant in respect of the IUC, that the principle of equivalence shapes not only the taxable base, but also, and especially, the very subjective scope, provided for in Article 3.

Once again we invoke the Arbitral Decision rendered in the context of Case No. 73/2013-T: "Having in mind both the systematic place that the principle of equivalence occupies (Article 1 of the CIUC) – systematic element – as well as the historical element embodied by Legislative Proposal No. 118/X (source of law), as well as the rational (or teleological) just analyzed, all point in the direction of the preliminary conclusion we reached when analyzing the grammatical element, making sense to conceive in the context of Article 3 of the CIUC the expression 'being considered as such' as revealing the presence of a defeasible presumption (…). In truth, the ratio legis of the tax rather points in the direction of those who utilize the vehicles being taxed, the economic owner, in the words of DIOGO LEITE DE CAMPOS, the effective owners or the financial lessees, since these are the ones who have the polluting potential causing environmental costs to the community."

With the legal nature of the rule contained in No. 1 of Article 3 of the CIUC now established, it is now necessary to clarify the question of the subjective scope of the tax during the period in which a financial lease contract is in force.

Before, however, and to better elucidate the question at hand, it should be emphasized that, during the validity of a financial lease contract, notwithstanding the lessor retaining in his legal sphere the ownership of the leased asset, only to the lessee belongs the right to enjoy, in an exclusive manner, the leased asset; which results from the combined reading of Article 1, subparagraph (b) of No. 1 of Article 9 and subparagraph (a) of No. 2 of Article 10, all of Decree-Law No. 149/95, of 24 June.

Now, since it is to the lessee that the potential for utilization of the vehicle belongs, and considering the principle informing the IUC – enshrined in Article 1 of its respective Code –, it is readily understood that it is the lessee who is burdened with the obligation of the tax by virtue of his qualification as taxpayer, through his treatment as owner. It is this, as far as concerns us, the meaning to be drawn from No. 1 and 2 of Article 3 of the CIUC.

In this manner, being the lessee the potential responsible for road and environmental costs, it is well understood that it is he, and only he, who is responsible for payment of the tax.

In light of the foregoing and in accordance with No. 2 of Article 3 of the CIUC, there is no doubt: if as of the date of occurrence of the tax event a financial lease contract exists, whose object is an automobile vehicle, the taxpayer is the lessee; never the lessor.

And what is to be said if, as of the date of occurrence of the tax event, the automobile vehicle subject to the financial lease contract has been alienated?

It must be said, by way of preamble, that sale to the lessee is a situation that frequently occurs in the economy of a financial lease contract, as indeed also occurs in the present case.

Now, being the purchase and sale entered into, the lessee will be instituted, ex contractu, in the position of owner, consequently the rule contained in No. 1 of Article 3 of the CIUC will become applicable to him; that is, the new owner maintains, for purposes of the IUC, the position of taxpayer, but no longer by virtue of the rule that attributed such quality to him as a lessee (No. 2 of Article 3 of the CIUC).

And such solution is required from the moment the purchase and sale contract is perfected not only because the Code of the IUC determines it – by stating that the taxpayers of the tax are the owners –, but also by the fact that the principle of consensuality prevails among us, which entails that the transfer of ownership occurs by mere effect of the contract; as results in the first place from No. 1 of Article 408 of the Civil Code. See also, reinforcing what is said above, subparagraph (a) of Article 879 of that statute.

It should also be noted that the understanding set forth in the paragraph immediately above is unanimously advocated by legal writers([7]) and case law([8]), requiring, thus, no further elaboration.

And what has just been said is relevant to support our position as regards the legal value of motor vehicle registration. It should be recalled, however, that in accordance with the general rule seen above the transfer of the right is produced ex contractu, without the need for any material act or publicity([9]).

As peacefully accepted by legal writers and case law, faced with the silence of Decree-Law No. 54/75, of 12 February, on the question of the legal value of motor vehicle registration, it becomes necessary to employ the framework of land registration; an operation moreover authorized by Article 29 of that Decree-Law.

Now, attending to the Land Registration Code – approved by Decree-Law No. 125/13, of 30 August –, especially its Article 7, and combining this rule with Article 1 of Decree-Law No. 54/75, it is readily inferred the primary function of (motor vehicle) registration: to give publicity to the legal situation of motor vehicles.

It can thus be stated that registration is not constitutive in nature, but merely declarative, permitting only the presumption of the existence of the right and its ownership. Note: presume and not fictionalise, and thus may be rebutted by evidence to the contrary.

And this is so precisely because, pursuant to Article 408 of the Civil Code, and except for exceptions provided by law, the constitution or transfer of real rights over a determined thing occurs by mere effect of the contract, with its validity not depending on any subsequent act, e.g., registration.

In this manner, the law not providing any exception for the contract of purchase and sale of an automobile vehicle, the real effectiveness produces its effects normally, the acquirer becoming its owner, independent of registration.

Now, if independent of registration the acquirer becomes the owner, the registered holder ceases concomitantly to be so; notwithstanding appearing in the registration as such.

In the present case, and notwithstanding the lack of registration, the transfers made are enforceable against the Respondent, and the Respondent cannot avail itself of the provisions of No. 1 of Article 5 of the Land Registration Code.

Foremost because the Respondent is not, for purposes of the provision of that rule, to be considered a third party for registration purposes.

The notion of third parties for registration purposes is given to us by No. 4 of the same Article 5: third parties, for registration purposes, are those who have acquired from a common author rights incompatible with each other. This is, manifestly, not the case in the present proceedings.

The same reasoning must, naturally, be applied to cases of financial leasing, in respect of which also registration has no constitutive efficacy, being nothing more than a presumption that the right exists. A presumption that is defeasible, in the same manner, by evidence to the contrary.

And, in like manner, the failure to register the financial lease contract in the registration does not mean that it does not exist.

Now, notwithstanding the fact that as of the date of the tax assessments the Claimant still appeared in the registration as the owner of the vehicles, the truth is that it alleges not to be, as of the date of the tax event, their owner, as it had already alienated them.

Thus, and since the presumption resulting from registration is, as we have seen, defeasible, let us see whether the documents attached by the Claimant are apt to fulfill such purpose.

In order to prove that the vehicles referred to in the present case were alienated by it at a date prior to the occurrence of the tax event, the Claimant attached the respective sales invoices.

Note that the Respondent alleged that "the invoices (by themselves) do not constitute an appropriate document to prove the sale of the vehicles in question, since it is nothing more than a document unilaterally issued by the Claimant."

It is verified, first of all, that the Claimant attached, for each of the two registrations in question, a sales invoice.

On the other hand, as results from the proven facts, none of the two vehicles in question in the present case belong to categories F or G referred to in Article 4 of the CIUC, whereby the tax event occurs on the date of their respective registration or on each of their anniversaries.

It further results from the proven facts that, as of the date of occurrence of the tax event, an invoice for sale to a third party had been issued by the Claimant, in relation to each of the vehicles (in the present case, the original lessees).

The Respondent contends that the invoice is not a document apt to prove the conclusion of a synallagmatic contract such as purchase and sale, since such document does not by itself reveal an essential and unequivocal declaration of will by the purported acquirer.

Adding that "there are no shortage of cases of issuance of invoices relating to transfers of goods and/or provision of services that never came to be materialized."

It is true, as invoked by the Respondent, that many situations exist in which invoices do not titulate any legal transaction. In the case before us, however, no element permits forming the conviction that the invoices attached do not titulate any transaction, and it is certain that their falsity was not even argued by the Respondent, which merely invoked the existence of various such situations, without concretely stating that the situation in the present case was subsumed within such.

Thus, in the absence of any elements that permit concluding otherwise, the veracity of the documents attached is accepted, naturally.

Establishing the veracity of the invoices attached by the Claimant, as well as their content, we must consider, without need for any other inquiries, these to be documents apt to prove the alienation of the vehicles in question.

Indeed, the law not providing any specific form for the conclusion of a contract of purchase and sale of a movable asset, it will, necessarily, have to be accepted as proof of said contract the invoice issued in accordance with legal requirements. Thus revealing itself, unnecessary, the accounting documents to which the Respondent refers in point 15 of its Submissions.

We hold, then, that as of the date of the tax event (date of registration or of each of its anniversaries) the Claimant had already alienated the two vehicles, notwithstanding the referred alienations not having been reflected in the respective registration.

Thus, considering the fact that the presumption resulting from registration is defeasible by evidence to the contrary – evidence that is considered effected through the presentation of the sales invoices –, and verified that, in relation to the vehicles in question, the Claimant is not their owner as of the date of occurrence of the tax event, it becomes necessary to conclude that it cannot be considered a taxpayer of the assessed IUC.

Let us now dwell on the question raised by the Respondent, relating to Article 19 of the CIUC, which provides as follows:

"For purposes of the provision of Article 3 of this code (…) entities that proceed with financial leasing, operational leasing or long-term rental of vehicles are obligated to supply to the Directorate-General of Taxes the data relating to the tax identification of the users of the leased vehicles."

The Respondent, contending that the Claimant breached the declarative obligation resulting from Article 19 of the CIUC, comes to contend that from such consequences both intra and extra-procedural should be drawn. The former would result in the holding of the Claimant responsible for the arbitration costs inherent to the present proceedings; the latter would materialize in the holding of it liable in a counter-ordination manner.

The Claimant, in turn, comes to say it is not true that it breached the obligation resulting from Article 19 of the CIUC, further noting that what is relevant in the present proceedings is the question of determining the subjective scope of the tax, and not any other related to, notably, Article 19.

It must be stated, then, and in the abstract, that the non-observance of the provisions of Article 19 of the CIUC may, indeed, configure the counter-ordination provided for in Article 117 of the General Framework of Tax Infringements. This is not, however, what is being discussed in the present proceedings, as the Claimant well notes.

Moreover, it will always be said that the cited Article 19 is inserted in Chapter III of the CIUC, relating to accessory obligations, inspection and counter-ordination framework, the obligation resulting therefrom being merely declarative and having no virtue to alter the rules of subjective scope of the tax, provided for in Chapter I under the heading "Principles and General Rules."

And that this is so results, also, from the fact that Article 19 itself does not provide such sanction for its non-compliance. Whence it is drawn, without any margin for doubt, that the breach of this obligation does not determine, without more, that the taxpayer of the tax becomes the lessor.

In summary:

· The rule contained in No. 1 of Article 3 of the CIUC contains a presumption;

· Being such presumption contained in a rule of tax scope, it will always admit evidence to the contrary, as results from Article 73 of the General Tax Law;

· When, as of the date of occurrence of the tax event, the automobile vehicle originally subject to a financial lease contract has been alienated, although the right of ownership continues registered in the name of the original owner, the taxpayer of the IUC is the new owner, provided he rebuts the presumption resulting from the registration;

· The transfer of ownership occurs by mere effect of the contract, requiring no subsequent act;

· Motor vehicle registration is not constitutive in nature, but rather aims to give publicity to the situation of vehicles through presumptions, defeasible, of the existence of the right and its respective ownership;

· The AT cannot rely on the absence of updating of the registration to, questioning the perfection of the purchase and sale contracts, attribute to the original owner the status of taxpayer of the IUC and, thus, require of him the fulfillment of the obligation to pay tax;

· Any breach of the provisions of Article 19 of the CIUC will not be relevant for purposes of determining the subjective scope of the tax.

From all that has been expounded results clear the non-existence of legal foundation for the acts of assessment of the IUC, imposing their annulment, with the other legal consequences.

VII. OPERATIVE PART

In light of the foregoing, it is decided:

a. That the request for annulment of the acts of assessment of the IUC to which the Claimant's request relates is upheld as proven;

b. The acts of assessment of the IUC referred to above are annulled;

c. That the request for reimbursement of the amount of €253.00, paid by the Claimant, plus compensatory interest at the legal rate, calculated from the wrongful payments, until full payment to the Claimant of the assessed amounts, is upheld;

The value of the proceedings is fixed at €253.00, in accordance with subparagraph (a) of No. 1 of Article 97-A of the Tax Procedure and Process Code, applicable by virtue of subparagraphs (a) and (b) of No. 1 of Article 29 of the RJAT and No. 2 of Article 3 of the Regulation of Costs in Tax Arbitration Proceedings.

The value of the arbitration fee is fixed at €306.00, in accordance with Table I of the Regulation of Costs in Tax Arbitration Proceedings, pursuant to No. 2 of Article 12 and No. 4 of Article 22, both of the RJAT, and No. 4 of Article 4 of the cited Regulation, to be paid by the Respondent as the unsuccessful party.

Register and notify.

Lisbon, 10 October 2014.

The Arbitrator,

Alberto Amorim Pereira

Text prepared by computer, pursuant to No. 5 of Article 131 of the Code of Civil Procedure, applicable by cross-reference of subparagraph (e) of No. 1 of Article 29 of Decree-Law No. 10/2011, of 20/01.

The drafting of this decision follows the old spelling conventions.

([1]) Cf. BAPTISTA MACHADO, JOÃO, Introduction to Law and Legitimating Discourse, Almedina, 1982, p. 175.

([2]) FERRARA, FRANCESCO, Interpretation and Application of Laws, 1921, Rome; Translation by MANUEL DE ANDRADE, Arménio Amado, Publisher, Successor – Coimbra, 2nd Edition, 1963, p. 138 et seq.

([3]) See, for all, BAPTISTA MACHADO, JOÃO, op. cit., p. 181.

([4]) BAPTISTA MACHADO, JOÃO, op. cit., p. 183.

([5]) Cf. Arbitral Decision of 5 December 2013, rendered in the context of Case No. 73/2013, p. 21.

([6]) Cf. LOPES DE SOUSA, JORGE, Annotated and Commented Tax Procedure and Process Code, Vol. I, 6th Edition, Áreas Publisher, Lisbon, 2011, p. 589.

([7]) See, for all, PIRES DE LIMA and ANTUNES VARELA, Annotated Civil Code, Volumes I and II, Coimbra Publisher, 4th Revised and Updated Edition, Annotations to Articles 408 and 79.

([8]) See, inter alios, Judgment of the Supreme Court of Justice of 3 March 1998.

([9]) Cf. EWALD HÖRSTER, HEINRICH, The General Part of the Portuguese Civil Code, Almedina, 2nd Reprint of the 1992 Edition, p. 467.