CAAD Ruling on IUC Subjective Incidence and Legal Presumptions for Vehicle Tax Liability

ARBITRAL AWARD

The Arbitrators Dr. Judge José Poças Falcão (arbitrator-president), Prof. Dr. Maria do Rosário Anjos and Dr. Alberto Amorim Pereira, designated by the Ethics Council of the Administrative Arbitration Center to form the Collective Arbitral Tribunal, constituted on 9 April 2015, agree to render the following award:

I – REPORT

A) The Parties and the Constitution of the Arbitral Tribunal

A… PORTUGAL, LDA, Legal Entity No. …, with headquarters in …, …, …, …-.. .., hereinafter referred to as "Claimant", requested the constitution of a singular Arbitral Tribunal, pursuant to the provisions of Article 2, No. 1, paragraph a) and Article 10, Nos. 1 and 2 of Decree-Law No. 10/2011, of 20 January, hereinafter referred to as "RJAT" and Ordinance No. 112-A/2011, of 22 March, for the challenge of the dismissal of the Gracious Complaints and the respective assessments of the Single Circulation Tax claimed therein, seeking their annulment.

The Gracious Complaints were filed with the Finance Directorate of …, under the following numbers:

a) Gracious Complaint No. … 2014 …;

b) Gracious Complaint No. … 2014…;

c) Gracious Complaint No. … 2014 …;

d) Gracious Complaint No. … 2014 …;

e) Gracious Complaint No. … 2014 …;

f) Gracious Complaint No. … 2014 …;

g) Gracious Complaint No. … 2014 …;

h) Gracious Complaint No. … 2014 …;

i) Gracious Complaint No. … 2014 …;

j) Gracious Complaint No. … 2014 …;

k) Gracious Complaint No. … 2014 …;

l) Gracious Complaint No. … 2014 …;

m) Gracious Complaint No. … 2014 …;

n) Gracious Complaint No. …2014 …;

o) Gracious Complaint No. … 2014 …;

p) Gracious Complaint No. … 2014 ….

All of them received a dismissal order, which is the reason for the present arbitral request, in which the Claimant petitions for the declaration of illegality of the additional assessments of Single Circulation Tax (IUC) and respective compensatory interest, described in the Table attached to the arbitral request (doc. no. 1), all referring to the taxation periods from 2009 to 2012, which are contained in the Administrative File joined to the records by the ATA, and which are hereby considered fully reproduced for all legal purposes, in the total amount to be paid of €79,629.35.

The request for the constitution of the Arbitral Tribunal was presented by the Claimant on 05-01-2015, was accepted by the Illustrious President of the CAAD on 07-01-2015 and notified to the Tax and Customs Authority on 15-01-2015. The Claimant opted not to designate an arbitrator, therefore, pursuant to the provisions of No. 1, Article 6 of the RJAT, the Arbitrators Dr. Judge José Poças Falcão (President), Prof. Dr. Maria do Rosário Anjos and Dr. Amorim Pereira were designated by the Ethics Council of the Administrative Arbitration Center on 27-02-2015, to form the Collective Arbitral Tribunal. Thus, in accordance with the provisions of paragraph c), No. 1, Article 11 of Decree-Law No. 10/2011, of 20 January, in the version introduced by Article 228 of Law No. 66-B/2012, of 31 December (RJAT), the Collective Arbitral Tribunal was constituted on 09-04-2015. On this same date, an arbitral order was rendered for the ATA to present a response within the legal time frame, in accordance with the terms and for the purposes of the provisions of Nos. 1 and 2 of Article 17 of the RJAT. Upon discovering the defect in the notification of the ATA, since it was not accompanied by a copy of the respective arbitral request and attached documents, a new arbitral order was rendered on 2 May 2015, ordering the repetition of the notification for response, now duly accompanied by the arbitral request and attached documents.

On 04.05.2015 the Claimant joined to the records a batch of documents, numbered as documents nos. 10 to 42, which correspond to the prior hearings and respective dismissal orders, produced in the context of the gracious complaints presented by the Claimant, with reference to the disputed tax assessments.

The ATA presented its response on 29-05-2015 accompanied by the respective administrative file, which are hereby considered fully reproduced. On 5-06-2015 the Claimant presents a request in the records in which it responds to the exception of illegality of cumulation of requests, raised by the ATA, and pronounces itself favorably regarding the dispensation of holding the meeting referred to in Article 18 of the RJAT, in accordance with what was alleged by the ATA in its response.

On 08-06-2015 the Respondent ATA presents a request requesting the setting of a successive time frame for written submissions. By arbitral order of 11-06-2015 the holding of the meeting provided for in Article 18 of the RJAT was dispensed with and a time frame of 10 successive days was set for presentation of written submissions.

Claimant and Respondent presented their written submissions, respectively, on 22/06/2015 and 30/06/2015.

By arbitral order of 20-07-2015 the date of 2 October 2015 was set for rendering the arbitral decision, which was subsequently extended for two months, in accordance with the terms provided for in Article 21, No. 2 of the RJAT, as per arbitral order of 2-10-2015.

B) THE REQUEST FORMULATED BY THE CLAIMANT:

The Claimant formulates the present request for arbitral pronouncement seeking the illegality of the dismissal of the gracious complaints identified above and of the Single Circulation Tax assessments that are underlying therein, with their consequent annulment. What is at issue is the illegality of the assessments identified in the records, referring to the periods comprised between the years 2009 to 2012, detailed in the Table attached to the Arbitral Request, in the total amount of €79,629.35.

All these assessments are duly identified and detailed in the table attached to the arbitral request, with identification of the vehicle registration number to which they relate and the legal situation in which they find themselves, therefore the content of the Table attached is hereby considered fully reproduced as document no. 1 to the arbitral request. The assessments in question are further confirmed by the analysis of the PA in the records, and also by all the elements contained in the Gracious Complaint procedures submitted by the Claimant, which are joined to the records. Pursuant to the provisions of Article 104 of the CPPT it is possible to cumulate requests.

In summary, it bases its request, alleging the following:

A… Portugal, Lda, has as its object the importation, warehousing and distribution of vehicles of the A… brand in the national territory. The Claimant proceeds to admit to the national territory all vehicles of the A1… brand, in the state of new, which it acquires directly from the manufacturer. Thus, the claimant does not sell vehicles directly to end customers, nor does it have sales showrooms for this purpose. The direct sale of these vehicles or spare parts and accessories, which is carried out by the network of authorized dealers and repairers that make up the official AA… network, with the marketing and sale of vehicles by said dealers, with which it enters into "Vehicle A1… Concession Contracts." Thus, the sale of vehicles, spare parts and accessories is the exclusive responsibility of these dealers.

It alleges that the imported vehicles are directly sold by the importer to the dealer, and when a buyer comes for the vehicle, the issuance of the respective registration is requested from the IMT. The first registration in the CRA is always made in the name of the first buyer, because if it were not so, he would be buying a vehicle in "second hand." This is the reason why, although the vehicles were sold to the dealers and by them to end customers, the vehicle registration is made directly in the name of the end buyer. These are the rules in force for the import and marketing market of motor vehicles in Portugal, in accordance with which the claimant operates.

In summary, it further alleges that in the gracious complaint procedures it has undertaken it has made abundant documentary proof, in particular, invoices for the sale of vehicles, issued in the legal manner and whose truthfulness the ATA did not dispute, from which it is concluded that as of the date of the taxable event the claimant was not the owner of the said vehicles.

Thus, the Claimant disagrees with all the disputed tax assessment acts because it considers that it is not the passive subject of IUC relating to the registrations in question in any of the years over which the assessments subject to the arbitral pronouncement request were imposed. In all cases covered by the present arbitral request, the Claimant is not the passive subject of the tax, as it is not the owner of the vehicles corresponding to the tax assessments in question, which had already been sold to the dealers and by these to their respective end customers, who always appear as the first holder of the vehicle registration.

It considers that from all the documentation joined to the records (Invoices, Single Customs Documents and others contained in the gracious complaint procedures mentioned above) it has rebutted the rebuttable presumption contained in Article 6, No. 1 of the CIUC, which constitutes grounds for exclusion of objective tax incidence. In this regard, the disputed assessments suffer from error regarding the presuppositions of the taxable event, which constitutes a defect of violation of law.

The Claimant was notified for payment of all official assessments of IUC relating to the vehicles identified in the Table attached to the arbitral pronouncement request, with reference to the taxation periods 2009, 2010, 2011 and 2012. Notified for this purpose, the Claimant proceeded to present a Gracious Complaint, which was converted into 16 Gracious Complaints, which were processed with the Finance Directorate of …, under the numbers … 2014 …, in which the Claimant presented a prior hearing after being notified of the draft dismissal, joined extensive documentation to prove the facts alleged, and despite this, all complaints were dismissed. Not accepting the reasons underlying this dismissal, the Claimant presented the present arbitral request.

As to the legal basis, in the arbitral request presented, the Claimant alleges that pursuant to the provisions of Article 3, No. 1 and Article 6 of the CIUC, the legislator has established a rule of subjective incidence based on a mere legal presumption, necessarily rebuttable in accordance with the provisions of Article 73 of the LGT. As such, conclusive proof can be made, as the Claimant alleges to be the case, that as of the date of the taxable event the Claimant was not the owner of the vehicles in question. The invoices issued to document the sales of vehicles and the remaining documents inherent to the transactions carried out, in particular the Single Customs Document (DUA). Documents that benefit from the presumption of truthfulness established by Article 75 of the LGT.

In the specific case of importers, the rules of operation of the market in which the Claimant operates, and which according to the Claimant the ATA knows well, imply that in relation to the importer the legal presuppositions of IUC incidence are never met. It is certain that the assessments, as well as the decisions to dismiss the gracious complaints presented by the Claimant, do not properly consider such rules, being based on an understanding of the rule of IUC incidence that the Claimant does not accept. There are no absolute presumptions regarding tax incidence and, in the concrete case, on the basis of all the documentation joined to the records, it should be considered that the Claimant has rebutted that presumption.

In defense of all that it alleges, it further invokes certain arbitral case law, as well as the decision rendered by the Administrative and Tax Court of Leiria, in case no. 310/12.4BELRA and further the Decision of the Supreme Court of Justice of 19-02-2004.

It concludes by petitioning for the annulment of all the dismissal acts and the disputed tax assessments, in the total amount of €79,629.35, corresponding to the value of tax unduly paid and respective undue compensatory interest. Consequently, this amount must be refunded to the Claimant plus indemnity interest for deprivation of the said amount, in accordance with Article 43 of the LGT.

C – THE RESPONDENT'S ANSWER

The Respondent ATA, duly notified for this purpose, presented its response in a timely manner in which, by exception and by challenge, it alleged, in summary, the following:

a) By way of a preliminary question, it raises the exception of illegality of cumulation of requests, alleging that "we are dealing with disparate factual situations embodied in different vehicles, with different dates, different sale procedures carried out with dealers and sales on different dates and to completely disparate owners, with completely differentiated amounts."

b) By challenge, it alleges that the Claimant is not justified, because in light of the data it has and the date of the taxable events, due to the non-existence of vehicle registration in the name of other taxpayers, it necessarily concludes that the IUC is owed by the Claimant, the sole owner of the goods in question at the time of the occurrence of the taxable event. The taxable event of the tax enshrined in Article 6 of the CIUC is measured by the registration or by registration in the national territory.

c) Furthermore, according to the Respondent, the thesis of the Claimant is not acceptable, because "the thesis upheld by the Claimant raises the question of who bears the IUC knowing that in year N, that is, in the year of the attribution of the registration and possibly also of the 1st registration of motor vehicle ownership in favor of the Claimant, there is no 2nd registration of motor vehicle ownership in favor of another, and that the registration of ownership in favor of this other party is only made in year N+1?" According to the thesis alleged by the Claimant, this question does not obtain an answer.

d) Subsequently the Respondent specifies, in Article 67 of the Response (which is hereby considered fully reproduced), the situation of 69 vehicles, which are in such a situation, that is, in relation to which, according to the thesis of the claimant, it would not be possible to determine the passive subject of tax in the year in question. Therefore, contrary to the thesis of the arguments adduced by the Claimant, the taxable event occurring with the issuance of the registration and first registration, leads to the exigibility of the tax from the Claimant and to its subjection to the tax. Therefore, the understanding proposed by the Claimant is completely out of step with the legal norms and would constitute an exclusion of taxation that finds no support whatsoever in the letter of the law.

e) For this reason, it alleges that the Claimant is not justified, whose understanding incurs a skewed reading of the letter of the law, as well as the adoption of an interpretation that does not heed the systematic element, violating the unity of the regime established throughout the CIUC and, more broadly, throughout the entire legal-fiscal system and further results from an interpretation that ignores the rationale of the regime established in the article in question, and indeed, throughout the CIUC. It further argues that the thesis of the Claimant is based on an interpretation contrary to the Constitution, colliding with Article 103 of the CRP and Article 8 of the LGT, as well as with Articles 104 of the CRP and Article 4 of the LGT.

f) As to the probative value of invoices to rebut the alleged presumption contained in Article 3 of the CIUC, the Respondent alleges that such documents do not have this virtue, because Article 3 does not establish a presumption and because if and when one wishes to react against the presumption of ownership that is attributed to the registration, it becomes necessary to react by the proper means provided for in the Vehicle Registration Regulation and in the supplementary land registration laws. It invokes in favor of this understanding the case law set forth in the judgment rendered in case no. 210/13.0BEPNF. As to the arbitral case law invoked by the Claimant, it invokes that this does not serve as precedent and does not correspond to a Superior Court case law trend, it being certain that the more recent arbitral case law has not followed in all cases the initial case law trend invoked by the Claimant;

g) Still around the question of the subjective incidence of IUC, centering its allegation on the provisions of Nos. 1 and 2, Article 3 of the CIUC, it highlights a set of arguments to demonstrate that the thesis defended by the Claimant is based on an interpretation that does not heed the systematic element, violating the unity of the system, which ignores the teleological element of the interpretation of law. It further invokes Recommendation No. 6-B/2012 of the Ombudsman.

h) In summary, according to the Respondent, understanding that the legislator established here a presumption would constitute an interpretation against the law. It concludes, therefore, that the legislator expressly and intentionally established that those persons in whose name they are registered are to be considered as such, because it is this interpretation that preserves the unity of the legal-fiscal system and that any other interpretation would be to ignore the teleological element of the interpretation of law and the rationale of the regime established in the article in question, and indeed, throughout the CIUC.

i) It concludes that Article 3 of the CIUC does not contain any legal presumption, and for the dismissal of the arbitral request, because the tax acts in question do not suffer from any defect of violation of law, insofar as in light of the provisions of Article 3, Nos. 1 and 2 of the CIUC and Article 6 of the same code, it was the Claimant, in its capacity as owner, the passive subject of the IUC, as attested by the Information regarding the history of ownership of the vehicles in question, issued by the Motor Vehicle Registration Registry;

j) In the view of the ATA, pursuant to the provisions of Article 3 of the CIUC, the tax became due from the persons appearing in the registration as owners of the vehicles. Any other interpretation would be to ignore the teleological element of the interpretation of law, the systematic element, violating the unity of the regime and would further be an interpretation contrary to the Constitution.

k) The ATA alleges that, should it not be so understood, it would still have to be considered that the probative documents joined by the Claimant (invoices) are not capable of rebutting the presumption of the registration, given the unilateral character of the invoice, such documents being insufficient to rebut the presumption of the registration. This would only be possible through the proper procedures provided for the cancellation of the registration. It invokes for this purpose the arbitral case law set forth in the decisions rendered in cases nos. 63/2014-T and 150/2014 – T.

l) Lastly, it contests the responsibility for payment of arbitral costs and the payment of indemnity interest petitioned by the Claimant. It concludes seeking the substantiation of the exception invoked or, if not so understood, the dismissal of the request, with the tax assessment acts remaining in the legal order, absolving the Respondent of the request.

II - PROCEDURAL REQUIREMENTS

The Arbitral Tribunal is regularly constituted. It is materially competent, in accordance with Article 2, No. 1, paragraph a) of Decree-Law No. 10/2011, of 20 January.

The Parties enjoy legal personality and capacity, are legitimate and are legally represented (cf. Articles 4 and 10 No. 2 of DL No. 10/2011 and Article 1 of Ordinance No. 112/2011, of 22 March).

The proceedings do not suffer from defects that would invalidate them.

Taking into account the administrative tax proceedings, the documentary evidence joined to the records, it is now necessary to present the factual matter relevant to the understanding of the decision, which is established as follows.

III - REASONING

A) Proven Facts

As a matter of relevant fact, the present tribunal accepts the following facts as established:

a) The Claimant, A… PORTUGAL, Lda, is a legal person whose corporate purpose consists of the importation, warehousing and distribution of automobiles, trucks, spare parts and accessories of the A1… brand in the national territory, as appears from the Commercial Certificate joined as document no. 2 attached to the Arbitral Request.

b) The Claimant proceeds to admit to the national territory all vehicles of the A1… brand, in the state of new, which it acquires directly from the manufacturer.

c) The Claimant does not sell vehicles directly to end customers.

d) The direct sale of the imported vehicles, spare parts and accessories is carried out by the network of authorized dealers and repairers that make up the official AA… network, in accordance with the "Vehicle A1… Concession Contracts" entered into.

e) The imported vehicles are directly sold by the importer to the dealer, and when a buyer comes for the vehicle, the issuance of the respective registration is requested from the IMT, in accordance with the time frames legally defined.

f) The first registration in the Motor Vehicle Registration Registry is always made in the name of the first buyer, so that he appears as such, that is, as a buyer of a new vehicle and not of a vehicle in "second hand."

g) The registration is made through a Motor Vehicle Registration Request, for issuance of the Single Motor Vehicle Document (DUA), signed by the buyer and presented by the seller to the Motor Vehicle Registration Registry;

h) At the moment when the vehicles are registered, the Claimant no longer has any intervention, with the entire procedure being carried out by the respective dealer;

i) It results from the sets of documents joined to the records by the Claimant, numbered with document numbers 37 to 67, that the procedure with reference to the introduction of vehicles to the national market and subsequent sale was as follows: issuance of the registration in which the name of the distributor / dealer appears and issuance of the Invoice by A… Portugal, describing in detail each vehicle and accessory articles or others, documenting the sale to the distributor / dealer. – See Sets of documents nos. 52 to 67 joined to the arbitral request, which contain for each vehicle the respective invoice, the Registration Information Report and proof of payment of the respective tax assessment.

j) From the Documents joined by the ATA, in attachment to the response, it is concluded, by consulting the history by registration of the vehicles mentioned there, that the first owner indicated in the description is A… Portugal, Lda and that this first registration occurs between 2009 and 2011, with the vehicles being transmitted to third parties a few days or months later, as a rule, finance companies or others. – See Docs. 1 to 5, joined in attachment to the Response.

k) From the vehicles described by the Claimant in the Table attached to the arbitral request, it is noted that in relation to 69 of these vehicles, in the year of attribution of the registration and the first registration of ownership of the vehicle in favor of the Claimant, there is no other motor vehicle registration in favor of another person, which occurred only in the following year. From document no. 1 joined to the response, it is concluded that the vehicles and amounts in question are as follows:

i. Vehicle with registration …-…-… assigned on 23.12.2011, with the first registration made in the name of the Claimant on 10.01.2012, to which corresponds assessment no. 2011 …, in the amount of € 98.57;

ii. Vehicle with registration …-…-… assigned on 26.12.2011, with the first registration made in the name of the Claimant on 10.01.2012, to which corresponds assessment no. 2011 … in the amount of € 98.53;

iii. Vehicle with registration …-…-… assigned on 18.12.2009, with the first registration made in the name of the Claimant on 07.01.2010, to which corresponds assessment no. 2011 … in the amount of € 164.22;

iv. Vehicle with registration …-…-… assigned on 18.12.2009, with the first registration made in the name of the Claimant on 07.01.2010, to which corresponds assessment no. 2011 … in the amount of € 164.22;

v. Vehicle with registration …-…-… assigned on 22.11.2011, with the first registration made in the name of the Claimant on 13.12.2011, and subsequently registered in the name of the end customer on 07.12.2012, to which corresponds assessment no. 2011 … in the amount of €131.77;

vi. Vehicle with registration …-…-… assigned on 06.12.2011, with the first registration made in the name of the Claimant on 30.12.2011, and subsequently registered in the name of the end customer on 06.01.2012, to which corresponds assessment no. 2011 … in the amount of €131.58;

vii. Vehicle with registration …-…-… assigned on 30.12.2011, with the first registration made in the name of the Claimant on 17.01.2012, to which corresponds assessment no. 2011 … in the amount of € 131.25;

viii. Vehicle with registration …-…-… assigned on 18.12.2009, with the first registration made in the name of the Claimant on 07.01.2010, to which corresponds assessment no. 2000 … in the amount of € 164.22;

ix. Vehicle with registration …-…-… assigned on 15.12.2011, with the first registration made in the name of the Claimant on 30.12.2011, and subsequently registered in the name of the end customer on 17.01.2012, to which corresponds assessment no. 2011 … in the amount of € 131.46;

x. Vehicle with registration …-…-… assigned on 28.12.2011, with the first registration made in the name of the Claimant on 13.01.2012, to which corresponds assessment no. 2011… in the amount of € 98.52;

xi. Vehicle with registration …-…-.. assigned on 16.12.2011, with the first registration made in the name of the Claimant on 30.12.2011, and subsequently registered in the name of the end customer on 17.01.2012, to which corresponds assessment no. 2011 … in the amount of € 131.44;

xii. Vehicle with registration …-…-… assigned on 09.12.2009, with the first registration made in the name of the Claimant on 17.12.2009, and subsequently registered in the name of the end customer on 08.03.2010, to which corresponds assessment no. 2009 … in the amount of €328.60;

xiii. Vehicle with registration …-…-… assigned on 28.11.2011, with the first registration made in the name of the Claimant on 13.12.2011, and subsequently registered in the name of the end customer on 04.01.2012, to which corresponds assessment no. 2011 … in the amount of € 98.82;

xiv. Vehicle with registration …-…-… assigned on 30.12.2011, with the first registration made in the name of the Claimant on 17.01.2012, to which corresponds assessment no. 2011 … in the amount of € 131.25;

xv. Vehicle with registration …-…-… assigned on 06.12.2011, with the first registration made in the name of the Claimant on 30.12.2011, and subsequently registered in the name of the end customer on 09.01.2012, to which corresponds assessment no. 2011 … in the amount of € 98.75;

xvi. Vehicle with registration …-…-… assigned on 20.12.2011, with the first registration made in the name of the Claimant on 30.12.2011, and subsequently registered in the name of the end customer on 06.01.2012, to which corresponds assessment no. 2011 … in the amount of €164.63;

xvii. Vehicle with registration …-…-… assigned on 20.12.2012, with the first registration made in the name of the Claimant on 30.12.2012, and subsequently registered in the name of the end customer on 12.02.2013, to which corresponds assessment no. 2012 … in the amount of €131.02;

xviii. Vehicle with registration …-…-… assigned on 28.11.2012, with the first registration made in the name of the Claimant on 07.12.2012, and subsequently registered in the name of the end customer on 15.01.2013, to which corresponds assessment no. 2012 … in the amount of €131.33;

xix. Vehicle with registration …-…-… assigned on 17.12.2010, with the first registration made in the name of the Claimant on 30.12.2010, and subsequently registered in the name of the end customer on 07.01.2011, to which corresponds assessment no. 2010 … in the amount of €233.65;

xx. Vehicle with registration …-…-… assigned on 30.11.2009, with the first registration made in the name of the Claimant on 15.12.2009, and subsequently registered in the name of the end customer on 25.01.2010, to which corresponds assessment no. 2009 … in the amount of €164.49;

xxi. Vehicle with registration …-…-… assigned on 30.11.2009, with the first registration made in the name of the Claimant on 15.12.2009, and subsequently registered in the name of the end customer on 25.01.2010, to which corresponds assessment no. 2009 … in the amount of €131.44;

xxii. Vehicle with registration …-…-… assigned on 15.12.2009, with the first registration made in the name of the Claimant on 30.12.2009, and subsequently registered in the name of the end customer on 10.02.2010, to which corresponds assessment no. 2009 … in the amount of €628.41;

xxiii. Vehicle with registration …-…-… assigned on 15.11.2010, with the first registration made in the name of the Claimant on 23.11.2010, and subsequently registered in the name of the end customer on 04.01.2011, to which corresponds assessment no. 2010 … in the amount of €100.43;

xxiv. Vehicle with registration …-…-… assigned on 13.12.2010, with the first registration made in the name of the Claimant on 30.12.2010, and subsequently registered in the name of the end customer on 02.02.2011, to which corresponds assessment no. 2010 … in the amount of €167.00;

xxv. Vehicle with registration …-…-…, whose registration was assigned on 28.12.2009, with the first registration made in the name of the Claimant on 08.01.2011), to which corresponds assessment no. 2009 … in the amount of € 131.09;

xxvi. Vehicle with registration …-…-… assigned on 13.12.2010, with the first registration made in the name of the Claimant on 30.12.2010, and subsequently registered in the name of the end customer on 12.01.2011, to which corresponds assessment no. 2010 … in the amount of € 133.44;

xxvii. Vehicle with registration …-…-… assigned on 13.12.2010, with the first registration made in the name of the Claimant on 30.12.2010, and subsequently registered in the name of the end customer on 26.01.2011, to which corresponds assessment no. 2010 … in the amount of €100.15;

xxviii. Vehicle with registration …-…-… assigned on 27.12.2010, with the first registration made in the name of the Claimant on 06.01.2011, to which corresponds assessment no. 2010… in the amount of € 100.01;

xxix. Vehicle with registration …-…-… assigned on 30.11.2010, with the first registration made in the name of the Claimant on 30.12.2010, and subsequently registered in the name of the end customer on 11.01.2011, to which corresponds assessment no. 2010 … in the amount of € 133.63;

xxx. Vehicle with registration …-…-.. assigned on 30.12.2009, with the first registration made in the name of the Claimant on 08.01.2010, to which corresponds assessment no. 2009 … in the amount of € 131.07;

xxxi. Vehicle with registration …-…-… assigned on 23.11.2010, with the first registration made in the name of the Claimant on 03.12.2010, and subsequently registered in the name of the end customer on 04.01.2011, to which corresponds assessment no. 2010 … in the amount of €167.35;

xxxii. Vehicle with registration …-…-… assigned on 23.11.2010, with the first registration made in the name of the Claimant on 03.12.2010, and subsequently registered in the name of the end customer on 04.01.2011, to which corresponds assessment no. 2010 … in the amount of €167.35;

xxxiii. Vehicle with registration …-…-…, assigned on 30.12.2010, with the first registration made in the name of the Claimant on 07.01.2011, to which corresponds assessment no. 2010 … in the amount of € 99.99;

xxxiv. Vehicle with registration …-…-… assigned on 23.11.2010, with the first registration made in the name of the Claimant on 03.12.2010, and subsequently registered in the name of the end customer on 04.01.2011, to which corresponds assessment no. 2010 … in the amount of €103.36;

xxxv. Vehicle with registration …-…-… assigned on 25.11.2009, with the first registration made in the name of the Claimant on 15.12.2009, and subsequently registered in the name of the end customer on 08.01.2010, to which corresponds assessment no. 2009 … in the amount of €131.52;

xxxvi. Vehicle with registration …-…-… assigned on 16.12.2009, with the first registration made in the name of the Claimant on 30.12.2009, and subsequently registered in the name of the end customer on 20.01.2010, to which corresponds assessment no. 2009 … in the amount of €328.38;

xxxvii. Vehicle with registration …-…-… assigned on 16.10.2009, with the first registration made in the name of the Claimant on 03.11.2009, and subsequently registered in the name of the end customer on 10.02.2010, to which corresponds assessment no. 2009 … in the amount of €132.02;

xxxviii. Vehicle with registration …-…-… assigned on 06.12.2010, with the first registration made in the name of the Claimant on 30.12.2010, and subsequently registered in the name of the end customer on 27.01.2011, to which corresponds assessment no. 2010 … in the amount of € 167.12;

xxxix. Vehicle with registration …-…-… assigned on 15.12.2010, with the first registration made in the name of the Claimant on 30.12.2010, and subsequently registered in the name of the end customer on 20.01.2011, to which corresponds assessment no. 2010 … in the amount of €100.14;

xl. Vehicle with registration …-…-…. assigned on 15.12.2010, with the first registration made in the name of the Claimant on 30.12.2010, and subsequently registered in the name of the end customer on 11.02.2011, to which corresponds assessment no. 2010… in the amount of € 133.43;

xli. Vehicle with registration …-…-.. assigned on 15.12.2010, with the first registration made in the name of the Claimant on 30.12.2010, and subsequently registered in the name of the end customer on 07.01.2011, to which corresponds assessment no. 2010… in the amount of €233.49;

xlii. Vehicle with registration …-…-… assigned on 29.11.2010, with the first registration made in the name of the Claimant on 14.12.2010, and subsequently registered in the name of the end customer on 20.01.2011, to which corresponds assessment no. 2010… in the amount of €133.63;

xliii. Vehicle with registration …-…-… assigned on 29.12.2010, with the first registration made in the name of the Claimant on 07.01.2011, to which corresponds assessment no. 2010… in the amount of € 166.75;

xliv. Vehicle with registration …-…-… assigned on 29.12.2010, with the first registration made in the name of the Claimant on 07.01.2011, to which corresponds assessment no. 2010… in the amount of € 333.49;

xlv. Vehicle with registration …-…-… assigned on 29.12.2010, with the first registration made in the name of the Claimant on 07.01.2011, to which corresponds assessment no. 2010…. in the amount of € 166.75;

xlvi. Vehicle with registration …-…-… assigned on 27.11.2009, with the first registration made in the name of the Claimant on 15.12.2009, and subsequently registered in the name of the end customer on 08.01.2010, to which corresponds assessment no. 2009…. in the amount of €131.49;

xlvii. Vehicle with registration …-…-… assigned on 18.12.2012, with the first registration made in the name of the Claimant on 31.12.2012, and subsequently registered in the name of the end customer on 18.01.2013, to which corresponds assessment no. 2012… in the amount of €131.05;

xlviii. Vehicle with registration …-…-… assigned on 29.11.2012, with the first registration made in the name of the Claimant on 07.12.2012, and subsequently registered in the name of the end customer on 18.01.2013, to which corresponds assessment no. 2012… in the amount of €131.32;

xlix. Vehicle with registration …-…-.. assigned on 20.12.2012, with the first registration made in the name of the Claimant on 22.01.2013, and subsequently registered in the name of the end customer on 18.01.2013, to which corresponds assessment no. 2012… in the amount of €131.02;

l. Vehicle with registration …-…-… assigned on 09.11.2010, with the first registration made in the name of the Claimant on 23.11.2010, and subsequently registered in the name of the end customer on 02.02.2011, to which corresponds assessment no. 2010…. in the amount of €100.50;

li. Vehicle with registration …-…-… assigned on 21.12.2010, with the first registration made in the name of the Claimant on 30.12.2010, and subsequently registered in the name of the end customer on 20.01.2011, to which corresponds assessment no. 2010…. in the amount of €100.08;

lii. Vehicle with registration …-…-… assigned on 21.12.2010, with the first registration made in the name of the Claimant on 30.12.2010, and subsequently registered in the name of the end customer on 07.02.2011, to which corresponds assessment no. 2010… in the amount of €133.35;

liii. Vehicle with registration …-…-… assigned on 10.12.2009, with the first registration made in the name of the Claimant on 19.12.2009, and subsequently registered in the name of the end customer on 01.02.2010, to which corresponds assessment no. 2009… in the amount of €230.01;

liv. Vehicle with registration …-…-… assigned on 11.12.2012, with the first registration made in the name of the Claimant on 19.12.2012, and subsequently registered in the name of the end customer on 17.01.2013, to which corresponds assessment no. 2012… in the amount of € 98.61;

lv. Vehicle with registration …-…-… assigned on 12.12.2012, with the first registration made in the name of the Claimant on 19.12.2012, and subsequently registered in the name of the end customer on 15.01.2013, to which corresponds assessment no. 2012…. in the amount of €98.60;

lvi. Vehicle with registration …-…-… assigned on 25.11.2010, with the first registration made in the name of the Claimant on 03.12.2010, and subsequently registered in the name of the end customer on 20.01.2011, to which corresponds assessment no. 2010…. in the amount of €100.34;

lvii. Vehicle with registration …-…-…, assigned on 28.12.2010, with the first registration made in the name of the Claimant on 07.01.2011, to which corresponds assessment no. 2010… in the amount of € 333.52;

lviii. Vehicle with registration …-…-…, assigned on 28.12.2010, with the first registration made in the name of the Claimant on 07.01.2011, to which corresponds assessment no. 2010…. in the amount of € 233.39;

lix. Vehicle …-…-…, whose registration was assigned on 21.12.2010, with the first registration made in the name of the Claimant on 30.12.2010, and subsequently registered in the name of the end customer on 26.01.2011, to which corresponds assessment no. 2010…. in the amount of €166.88;

lx. Vehicle with registration …-…-…, assigned on 02.12.2010, with the first registration made in the name of the Claimant on 30.12.2010, and subsequently registered in the name of the end customer on 25.01.2011, to which corresponds assessment no. 2010…. in the amount of €234.00;

lxi. Vehicle with registration …-…-…, assigned on 09.11.2010, with the first registration made in the name of the Claimant on 23.11.2010, and subsequently registered in the name of the end customer on 23.02.2011, to which corresponds assessment no. 2010…. in the amount of €100.50;

lxii. Vehicle with registration …-…-…, assigned on 22.12.2009, with the first registration made in the name of the Claimant on 07.01.2010, to which corresponds assessment no. 2009 … in the amount of € 131.17;

lxiii. Vehicle with registration …-…-…, assigned on 09.12.2010, with the first registration made in the name of the Claimant on 30.12.2010, and subsequently registered in the name of the end customer on 15.03.2011, to which corresponds assessment no. 2010…. in the amount of €233.83;

lxiv. Vehicle with registration …-…-…, assigned on 10.12.2010, with the first registration made in the name of the Claimant on 30.12.2010, and subsequently registered in the name of the end customer on 25.01.2011, to which corresponds assessment no. 2010 … in the amount of €167.07;

lxv. Vehicle with registration …-…-…, assigned on 19.12.2011, with the first registration made in the name of the Claimant on 30.12.2011, and subsequently registered in the name of the end customer on 24.01.2012, to which corresponds assessment no. 2011…. in the amount of €167.07;

lxvi. Vehicle with registration …-…-…, assigned on 29.12.2011, with the first registration made in the name of the Claimant on 13.01.2012, to which corresponds assessment no. 2011…. in the amount of € 131.27;

lxvii. Vehicle with registration …-…-…, assigned on 29.12.2011, with the first registration made in the name of the Claimant on 13.01.2012, to which corresponds assessment no. 2011… in the amount of € 98.51;

lxviii. Vehicle with registration …-…-…assigned on 10.12.2010, with the first registration made in the name of the Claimant on 30.12.2010, and subsequently registered in the name of the end customer on 28.01.2018, to which corresponds assessment no. 2010 … in the amount of €133.50;

lxix. Vehicle with registration …-…-…assigned on 23.12.2010, with the first registration made in the name of the Claimant on 06.01.2011, to which corresponds assessment no. 2010 … in the amount of € 100.06.

l) The sum total of all assessments described in the previous point is €10,464.73.

m) The Claimant was notified for payment of the additional assessments of IUC and respective compensatory interest, identified in the Table attached to the Arbitral Request, which is hereby considered fully reproduced, referring to vehicles of the A1… brand, disputed in the present arbitral request;

n) The Claimant paid these assessments, in the total amount of €79,629.35;

o) The Claimant presented a Gracious Complaint, which was converted by the ATA into 16 Gracious Complaints, which were processed with the Finance Directorate of …, under the numbers … 2014 …, … 2014 …, … 2014 …, … 2014 …, … 2014 …, … 2014 …, … 2014 …, … 2014 …, … 2014 …, … 2014 …, … 2014 …, … 2014 …, … 2014 …, … 2014 …, … 2014 …, … 2014 …;

p) In the context of these Gracious Complaint proceedings, the Claimant was notified of the draft dismissal decisions, for the exercise of the right to prior hearing;

q) The Claimant exercised this right as appears from the documents joined to the records, and then submitted to the ATA the following documents:

i. Copy of each additional assessment and proof of respective payment;

ii. Invoices for the sale of each of the vehicles contained in the additional assessments;

iii. Information Report from which the information of the registration of each vehicle appears, corresponding chassis number and respective date of assignment of the registration.

r) The ownership of these vehicles was found at the date of the taxable events registered in the motor vehicle registration in favor of the Claimant.

B) UNPROVEN FACTS

There are no unproven facts relevant to the final decision.

C) REASONING OF THE PROVEN FACTS

The facts described above were accepted as proven on the basis of the documents that the parties joined to the present proceedings, the Claimant in attachment to the request formulated and the ATA in the response presented and respective Administrative File.

II – REASONING (cont.)

THE LAW AND THE ISSUES TO BE DECIDED

It is therefore necessary to consider and decide the issues to be settled:

A) On the invoked exception of illegality of cumulation of requests

The Claimant petitions for the annulment of the dismissal of the gracious complaints presented and the annulment of various additional IUC assessments relating to various vehicles and compensatory interest, for being illegal.

The ATA invokes that the factual situations alleged by the Claimant are disparate, as they refer to "different vehicles, with different sale dates, different sale procedures carried out with dealers and sales on different dates and to completely disparate owners, with completely differentiated amounts."

It concludes, arguing that the cumulation of requests made is illegal, therefore it requests the notification of the Claimant in accordance with the terms and for the purposes of the provisions of Article 47, No. 5 of the CPTA.

The Claimant responded to the exception invoked, defending the legality of the cumulation of requests, "because the substantiation of the request depends on the same factual circumstances and on the interpretation and application of the legal norms relating to the subjective incidence of IUC."

It is necessary to decide:

Pursuant to the provisions of Article 3, No. 1 of the RJAT, the cumulation of requests, even though relating to different acts, is admissible when the substantiation of the requests depends essentially on the assessment of the same factual circumstances and on the interpretation and application of the same principles or rules of law.

In the same sense, Article 104 of the CPPT provides that the cumulation of requests is admissible in the case of identity of the nature of the taxes, the factual and legal grounds invoked and the court competent to render the decision.

In the case of the records, although the facts refer, as the ATA alleges, to different vehicles, with different sale dates, different sale procedures carried out with dealers and sales on different dates and to completely disparate owners, with completely differentiated amounts, the truth is that it is not clear how such circumstance could prevent the cumulation of requests.

Indeed, regardless of the different factual situation existing, as the ATA alleges, the truth is that there is total identity (i) of the nature of the taxes, (ii) of the factual and legal grounds invoked and (iii) of the court competent to render the decision.

As can be seen:

In all the situations invoked by the Claimant, the tax in question is the IUC.

In fact, it will always be said that in the context of an arbitral pronouncement request, identity of taxes is not required for this purpose, given the fact that this identity is not provided for in Article 3, No. 1 of the RJAT and the norms provided for in the CPPT are of subsidiary application, as results from the provisions of Article 29, No. 1 a of the RJAT.

In the same manner, the factual and legal grounds invoked by the Claimant are exactly the same in all situations, the former being reduced to the alleged alienation of the vehicles at a time prior to the date of the taxable event and the latter to the assessment of the legal norms relating to the subjective incidence of IUC.

The identity of the court competent to render the decision seems evident in all the situations listed by the Claimant, with this arbitral tribunal being materially competent for this purpose.

Therefore, it is necessarily concluded that the presuppositions on which the law makes the possibility of initial cumulation of requests depend are met.

Nor should it be said, as the ATA does, that the fact that the situations invoked refer to different vehicles, with different sale dates, different sale procedures carried out with dealers and sales on different dates and to completely disparate owners, with completely differentiated amounts, would prevent cumulation. If that were the case, the Claimant would be forced to challenge each IUC assessment separately, which manifestly cannot be defended.

Therefore, considering the verification of the legal presuppositions on which the cumulation of requests depends, the requested notification of the Claimant in accordance with the terms and for the purposes of the provisions of Article 47, No. 5 of the CPTA is not justified.

The invoked exception of illegal cumulation of requests is therefore unfounded.

B) On the merits

Having fixed, in the manner stated above, the factual matter, it is necessary to know of the question of law raised by the Claimant, which consists of assessing the terms of the configuration of the subjective incidence of IUC in light of the provisions of Article 3 of the Code of Single Circulation Tax (CIUC), namely, the question of whether the subjective incidence is based strictly on the inscription of the ownership of the vehicle in the Motor Vehicle Registration, or whether the registration operates only as a presumption of tax incidence, rebuttable, in accordance with the provisions of Article 73 of the General Tax Law. On this matter, the arbitral case law is already abundant and well-defined, set forth in various arbitral decisions.

On subjective incidence: the taxable event and the effects of motor vehicle registration in terms of IUC incidence

The question to be decided is strictly about the presuppositions of IUC incidence, relating to the concrete case and, to that extent, it is necessary to consider the alleged illegality due to a defect of violation of law for error regarding the presuppositions that led the ATA to issue the disputed assessments.

Thus, having analyzed the factual matter brought to the records, the applicable legal regime resulting from the combined provisions of the CIUC, the ISV and the Road Code, it is necessary to assess its application to the concrete case in order to conclude whether or not the disputed IUC assessments are illegal.

First of all, it must be taken into account that the CIUC establishes, as a rule of incidence, that the passive subjects are the owners of the vehicles, considering as such the persons in whose name they are registered. The fundamental legal framework applicable in this matter is provided for in Articles 1 to 6 of the CIUC, approved by Law No. 22-A/2007, of 29 June.

Article 1 of the CIUC defines the objective incidence of the tax, distinguishing vehicles by specified categories, a norm that appears clear and without difficulty of application.

However, the same is not true of the rule of subjective incidence contained in No. 1, Article 3 of the CIUC, which is at the origin of the present dispute and constitutes, therefore, the question to be decided in the case under consideration. The analysis of both provisions (Articles 1 and 3) allows one to conclude that in the functioning of the IUC, motor vehicle registration plays a fundamental role, but the correct application of the regime proposed by the legislator requires recourse to other interpretive elements.

What matters, therefore, is to determine the meaning and scope of the rule of subjective incidence, contained in Article 3, No. 1, of the CIUC and the eventual existence or not of a rebuttable presumption, connected with the question of the legal effects of motor vehicle registration, raised by the Claimant.

Article 3 of the CIUC provides:

"ARTICLE 3

SUBJECTIVE INCIDENCE

1 – The passive subjects of the tax are the owners of the vehicles, considering as such the natural or legal persons, of public or private law, in whose name they are registered.

2 – Financial lessees, acquirers with retention of ownership, as well as other holders of purchase option rights under lease contracts are equated with owners."

Article 11, No. 1 of the LGT provides:

"In determining the meaning of tax norms and in qualifying the facts to which they apply, the general rules and principles of interpretation and application of laws are observed."

The interpretation and application of legal norms presupposes the carrying out of an interpretive activity, which must be objective, balanced, and in accordance with the letter and spirit of the law. Any text, and the law is no exception, contains multiple meanings and frequently contains ambiguous or obscure expressions. For that reason, although the letter of the law is "the thread that guides" the interpreter, it must be interpreted taking into account the underlying objectives, "the rationale" or the motivation of the legislator in establishing the norm in question. To these elements is added another according to which the interpretation of legal norms must respect the "unity of the legal system," its coherence and intrinsic logic.

Article 9 of the Civil Code (CC) provides the fundamental rules and elements for the interpretation of legal norms, to which the interpretation of tax law must also comply with the provisions of that normative, which begins by stating that interpretation should not be limited to the letter of the law, but should reconstruct from it the "legislative thought."

To these general principles are added the principles contained in the LGT, in particular in Article 73, which establishes that presumptions contained in tax incidence norms always admit proof to the contrary.

Furthermore, regarding the matter under analysis, attention must be drawn to the contribution of arbitral decisions already rendered in cases nos. 14/2013-T, of 15 October, 26/2013-T of 19 July, 27/2013-T, of 10 September, 217/2013-T of 28 February and, more recently, in the decisions rendered in cases 286/2013-T, of 2 May 2014, 293/2013-T, of 9 June 2014, 46/2014-T of 5 September, 250/2014 – T, of 17 November 2014 and 43/2014 – T, which, among others, reveal a refined reflection on the fundamental question under consideration.

It is, therefore, in this fundamental context, using the hermeneutic principles referred to above, accepted by the case law of our superior courts, that we should seek to find the adequate interpretation to the norms at hand.

Returning to the analysis of the concrete case, the taxable event, under the terms of the CIUC, is constituted by the ownership of the vehicle, as attested by the registration or registration in the national territory, in the year of its importation or introduction into the national market (Article 3, No. 1, of the CIUC).

The tax is considered due on the first day of the taxation period (Article 6, No. 3, of the IUC Code), which corresponds to the year that begins on the date of registration (cf. Article 4, No. 2, of the Code of the IUC).

Now, in the case of the present records, it is noted that the first registration was made in the name of the now Claimant (though the latter was no longer the owner of the vehicles), but immediately thereafter the registration was made in favor of the legitimate owners.

In the absence of registration of ownership of the vehicle made within the legal time frame, the tax owed in the year of the vehicle's registration is assessed and demanded from the passive subject of the tax on vehicles (ISV) on the basis of the customs declaration of the vehicle, or on the basis of the supplementary vehicle declaration on which the assessment of that tax is based, even if not owed (Article 18, No. 1, paragraph a), of the CIUC). From this latter provision it results that, in the case of there being a registration of ownership of the vehicle made within the legal time frame, the tax owed in the year of the vehicle's registration is assessed and demanded from the respective holder of that registration.

Now, from the proven factuality in the records, it is concluded that in the case of the vehicles contained in the assessments now disputed and identified in document no. 1, that is exactly what happened. That is: although the vehicles in question had a first registration in favor of the now Claimant (as is understood from the legally established procedure to which the importer is subject), the vehicles were already, at that date, the property of others, in favor of whom they were registered in the Motor Vehicle Registration Registry, and the arbitral request condenses all the information relating to the date of the sale/contractual transfer, date of registration and registration.

Thus, if the Claimant was not the actual owner thereof as of the date of the occurrence of the facts that determine the obligation of tax, given that they had already been sold to the respective dealers at a date prior to the actual registration of the vehicles, as evidenced by the invoicing issued, which it joins as evidentiary material, it is not understood nor justified the assessment of the IUC to the importer and now Claimant.

This conclusion also results from the interpretation of the norms of No. 1 of Article 17 and Article 18 of the CIUC, relating to the time limit for payment of the tax and official assessment, respectively, which are based on the presupposition that "in the year of the registration the passive subject of the IUC is the owner of the vehicle as of the date on which those 60 days counted from the date of assignment of the registration expire, which must assess and deliver it to the State within the 60 subsequent days."

And, being thus, in the case of the present records, it is demonstrated that the passive subject was not the now Claimant.

Indeed, any other understanding would be manifestly contrary to the principles underlying the IUC reform and even to its nature as a tax on the circulation of the motor vehicle.

In fact, in the activity developed by the now Claimant, in its capacity as importer, the transmission of the ownership of vehicles normally operates, even before the date of registration. This is because the Claimant proceeds to admit to Portuguese territory new vehicles which, at a moment prior to their respective registration, it transmits to its customers, dealers.

However, by virtue of the applicable legal norms, the registration of the vehicles in question is made in the name of the Claimant, even though, at the moment when it is effected, the latter is no longer its owner. This procedure, moreover, results from the provisions of Articles 117, No. 4, of the Road Code, which attributes to the person, natural or legal, who proceeds to admit, import or introduce into consumption in the national territory, the obligation to request the registration of vehicles, as well as, from the provisions of Article 24, No. 1, of the Motor Vehicle Registration Regulation, which determines that the initial registration of ownership of imported vehicles, admitted, assembled, constructed or reconstructed is based on the respective request.

From the aforementioned norms it results, therefore, that the Claimant, in its capacity as a registered operator who proceeds to admit new vehicles to the national territory, necessarily appears in the respective initial registration as its owner, even though at the moment when it is effected, the ownership of the same has already been transmitted to third parties. And, if that is so, by imposition of the legislator, this aims at the control of the activity by the competent authorities in order to control who comes to acquire such vehicles and when. From this result, among others, various tax obligations.

In this regard, we are therefore faced with the question of whether the interpretation of Article 3, No. 1, of the CIUC is at issue, in order to determine whether the same establishes, or not, a presumption regarding the qualification as owner, and consequently, as a passive subject of this tax, of the person, natural or legal, in whose name the ownership of the vehicle is registered against, and if it is concluded in this sense, its rebuttal on the basis of the evidentiary elements that comprise it.

Notwithstanding the fact that the IUC Code elevates as a structuring principle of this tax the principle of equivalence, understood as compensation for the harmful effects in terms of environmental and energy results of the circulation of vehicles, the referred Code elects, regarding subjective incidence, the owner of the vehicle, considering as such the person in whose name the same is registered (Article 3, No. 1, of the CIUC). But, despite this, the legislator has reserved certain particular cases in which the formal or legal ownership of the vehicle has been subordinated to its use, imputing to the latter the obligation to pay the IUC, as happens with financial lessees, acquirers with retention of ownership, as well as other holders of the right to purchase option by virtue of lease contract (Article 3, No. 2, of the CIUC).

Certainly, the incidence rule, by referring to the elements of motor vehicle registration, does not distinguish between the initial registration of the vehicle and subsequent registrations: the passive subject of the tax is the owner of the vehicle, considered as such the person, natural or legal, in whose name the vehicle is registered. It is, therefore, on the interpretation of the rule of No. 1 of Article 3 that, as already mentioned, the different positions expressed by the Claimant and the Respondent stand out.

According to the Claimant, the referred norm establishes a presumption of ownership, based on registration, rebuttable in accordance with general terms and, in particular, by virtue of the provisions of Article 73 of the General Tax Law.

For the Respondent, in establishing the CIUC the passive liability as well as the taxable event of the tax obligation, by reference to the elements contained in motor vehicle registration, as results from Articles 3 and 6 of the CIUC and the Claimant being the person requesting the issuance of the registration certificate and finding itself in the vehicles registered in its name in the taxation period, the presuppositions of the taxable event of the IUC are met, as well as of its exigibility, the Claimant being the passive subject of the tax with reference to the period in question. It says nothing about the fact that this same registration was immediately altered to the name of the true and acquirers of the motor vehicles, in the same taxation period, certainly by disregarding such fact as relevant, which, from the start, contradicts the value that it itself claims to attribute to motor vehicle registration.

This matter has been the subject of various arbitral decisions which, repeatedly and uniformly, have pronounced themselves in the sense of considering that the rule of No. 1, Article 3 of the CIUC establishes a presumption, rebuttable, (underlined) in accordance with general terms and, in particular, by virtue of the provisions of Article 73 of the LGT. This tribunal will also closely follow that orientation.

Indeed, the recourse to motor vehicle registration as a structuring element of the assessment system of this tax is evident throughout the respective Code. But it is necessary to heed the provisions of its Article 6, relating to the definition of the taxable event of the tax obligation, whose No. 1 provides that the taxable event is "the ownership of the vehicle, as attested by the registration or registration in the national territory."

From this provision it results that motor vehicles that are not, nor should be, registered in Portuguese territory, are only covered by the objective incidence of this tax if they remain in the same for a period exceeding 183 days, as provided for in No. 2 of the same article. There is no doubt that it is by recourse to the registration element that the legislator establishes, simultaneously, the taxable event of the tax, as well as the determination of the moment of the beginning of the taxation period and the constitution of the tax obligation and, in a general manner, all the elements necessary for the assessment of the tax in question, as, moreover, well emphasized in the response elaborated by the ATA.

Despite the above regarding the dependence of the IUC taxation regime on motor vehicle registration, it cannot be immediately concluded that the rule of subjective incidence, in the segment in which it considers as owner the person in whose name the vehicle is registered, does not constitute a presumption of incidence. According to the notion contained in Article 349 of the Civil Code, presumptions are the inferences that the law or the judge draws from a known fact to establish an unknown fact. Furthermore, Article 341 of the Civil Code provides that presumptions constitute means of proof, having as its function the demonstration of the reality of facts, in such a way that whoever has the legal presumption in their favor is excused from proving the fact to which it leads (cf. No. 1 of Article 350 of the Civil Code).

That being said, it further results that presumptions, which may be explicit or implicit, except in cases where the law prohibits it, may be rebutted, through proof to the contrary, as indeed results expressly from the provisions of No. 2, Article 350 of the Civil Code. Finally, where presumptions of tax incidence are concerned, these are always rebuttable, as expressly provided for in Article 73 of the LGT.

The controversy surrounding this question arose in the context of the new law, as the expression "presumed" was replaced by the expression "considered." In the same sense, Article 3, No. 1, of the Regulation of Circulation and Haulage Taxes, approved by DL No. 116/94, of 3/05, provides that the passive subjects of these taxes are "the owners of vehicles being presumed as such, unless proven otherwise, the natural or legal persons in whose name they are registered."

We understand, however, that we are dealing with a mere semantic question, which does not alter the content of the norm in question in the least.

Thus, as to the question of whether, in light of the literal tenor of the provisions of No. 1, Article 3 of the CIUC, what is the scope of the expression "considered as such," given that in the current version the legislator did not use the term "presumed" (which was contained in the now defunct Motor Vehicle Tax Regulation), the Tribunal understands that it can only be the following: the legislator presumes (considers) that the owners are the persons in whose name the vehicles are registered (underlined). This means that such presumption, implicit, is naturally rebuttable in accordance with the terms provided for in Article 73 of the LGT.

Thus, in the current version of the Code, only the verb changed, with the legislator now opting for the expression "considered." It is certain that, between the earlier legislative versions and the current one, the LGT came into force, which expressly enshrined the principle contained in Article 73, from which it results that in matters of tax incidence any presumption always admits proof to the contrary. Therefore, it becomes indifferent whether an explicit or implicit presumption is adopted, as both are equally rebuttable.

It is understood, in this manner, that the fact that the legislator, in the current version of the CIUC, opted for an implicit presumption (using the expression "considered") instead of an explicit presumption (with recourse to the expression "presumed"), as happened previously, does not translate a substantial alteration in what concerns the subjective incidence of the tax. It is not, therefore, the ownership recorded in the motor vehicle registration the determining condition, by itself, of tax incidence, but rather the ownership as results from the registration, which results in a mere rebuttable presumption.

Furthermore, we can easily point out several examples, drawn from the tax legal order, in which the legislator opted for the use of the verb "consider," with presumptive meaning. Moreover, as has been said above, where a tax incidence norm is involved, an absolute presumption could never be admitted. As stated by Diogo Leite Campos, Benjamim Silva Rodrigues and Jorge Lopes de Sousa (General Tax Law, annotation to No. 3, Article 73 of the LGT), "presumptions in matters of tax incidence may be explicit, revealed by the use of the expression presumed or similar (…). However, presumptions may also be implicit in incidence norms, in particular of objective incidence, when certain amounts of movable or immovable property are considered as constituting taxable matter, in situations in which it is not impractical to determine the actual value."

And there are many examples of norms in which the verb "consider" is used to establish rebuttable presumptions, as is the case with the provisions of No. 2 of Article 21 of the CIRC, in Article 89-A of the LGT or in Article 40, No. 1 of the CIRS among others.

Taking into account that the legal system should form a coherent whole, the examples referred to above, as well as the doctrine and case law indicated, allow one to conclude that it is not only when the verb "presume" is used that we are dealing with a presumption, but also the use of other terms or expressions, such as the term "considered" can serve as the basis for presumptions. And, as mentioned above, since the literal element is the first instrument of interpretation of the legal norm, in search of legislative thought, it is necessary to confront it with the other elements of interpretation, namely the rational or teleological element, the historical element and the systematic element.

Regarding the historical element, it is necessary to mention that since the inception of the circulation tax, with the entry into force of Decree-Law No. 599/72 of 30 December, a presumption was explicitly established, regarding the passive subjects of the tax as being those in whose name the vehicles were registered or recorded. This version of the law used the literal expression "presumed as such."

However, taking into account the purposes of the tax in question, it must be recognized that the use of the expression "considered," in the current version, contemplates an expression with a similar effect to that, also constituting a presumption. This is the case with the formulation contained in No. 1, Article 3 of the CIUC, in which a presumption was established, revealed by way of the use of the expression "considering," of similar meaning and equivalent value to the expression "presumed," in use since the creation of the tax in question. The use of the expression "considered" is justified by appearing, perhaps, more in line with the reinforcement given to the ownership of the vehicle, which came to constitute the taxable event of the tax, in accordance with the terms contained in Article 6 of the CIUC.

Therefore, in light of the literal element of interpretation, nothing prevents the understanding that the provisions of No. 1, Article 3 of the CIUC, establish a rebuttable presumption.

Thus, as to the subjective incidence of the tax, it is to be concluded that no changes are verified with respect to the situation previously in force within the scope of the Municipal Tax on Vehicles, Circulation Tax and Haulage Tax, as is moreover widely recognized by doctrine, with a rebuttable presumption continuing to be valid in this matter.

This understanding is further the only one that appears adequate and in conformity with the principle of material truth and justice, underlying fiscal relationships, with the objective of taxing the real and effective owner and not the one who, by circumstances of a different nature, is often, for all intents and purposes, an apparent and false owner, by appearing in the motor vehicle registration, as happens in the concrete case with the Claimant, by virtue of its activity as an importer and to comply with the rules legally applicable to the registration of new vehicles imported and introduced into the national territory.

In this sense, arbitral decisions rendered in cases nos. 150/2014-T and 220/2014-T also confirm the same understanding already embodied in earlier arbitral decisions, in the sense that: "(…) if the legislator had, as the Respondent claims, established in the law a non-presumptive qualification as to who is the owner of the vehicles (a legal fiction), it would thereby be establishing, through a different formulation, a rule entirely identical to the hypothetical rule referred to. It would be basing the subjective incidence of the tax on a legal fiction, in total disconnection with any economic substance as the basis of the subjective incidence. (…) And, if that is so, it will necessarily also be concluded that Article 3, No. 1, can only establish a presumption of ownership of the vehicle, even with all the negative consequences that this conclusion will certainly entail, in terms of the efficiency of the administration of the tax."

On the matter under analysis, therefore, the understanding that has been defended in successive, diverse and numerous arbitral decisions rendered is unanimous.

For this reason, it must be permitted to the person recorded in motor vehicle registration the possibility of presenting sufficient evidentiary elements to demonstrate that the actual owner is, after all, a person different from the one appearing in the registration, and which initially, and as a matter of principle, was supposed to be the true owner. Otherwise, the supremacy of the formal truth of the registration over material truth would be accepted, and the gross violation of the fundamental fiscal principles stated above would be admitted, and further of the principle contained in Article 73 of the LGT according to which there are no absolute presumptions in matters of fiscal incidence.

To all that is left above is added that any other understanding would translate the violation of the principles of legality, proportionality and justice, as well as that of the inquisitorial principle, respectively enshrined in Articles 55 and 58 of the LGT.

Incidentally, it is also possible to draw another argument from the provisions of Article 7 of the Code of Land Registration (which constitutes the fundamental legal basis in matters of registration of ownership), which provides that "the final registration constitutes a presumption that the right exists and belongs to the registered holder, in the precise terms in which the registration defines it." In light of the principle of uniformity and coherence intrinsic to the legal system, no foundation appears acceptable for the principle in force in the registration of ownership in general to suffer an inflection or even "trampling" unjustifiably in matters of motor vehicle registration.

But, if any doubt persisted, it would always be said that, as to the elements of interpretation of a rational or teleological bearing, the statement of reasons of Proposal for Law No. 118/X of 07/03/2007, underlying Law No. 22-A/2007, of 29/06, is quite expressive in clarifying that the reform of automotive taxation is implemented by way of the displacement of part of the tax burden from the moment of vehicle acquisition to the circulation phase and aims to "form a coherent whole" which, although intended for the collection of public revenue, intends that the same be collected "in measure of the environmental costs that each individual causes to the community," adding, with regard to the tax in question and the different types and categories of vehicles, that "as a structuring and unifying element (…) the principle of equivalence is enshrined, thus 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 reason for existence of this tax figure," further stating that it is "(…) this principle that dictates the burden of vehicles according to their respective ownership and even to the moment of scrapping (…)."

Thus, the logic and rationality of the new system of automotive taxation presupposes and aims at a passive subject coinciding with the owner of the vehicle, on the presupposition of that being, and not another, the real and effective subject causing environmental damage, as results from the principle of equivalence inscribed in Article 1 of the CIUC. This principle of equivalence, which informs the current single circulation tax, has underlying the principle of polluter-pays, and implements the idea, inscribed in it, that whoever pollutes should, for that reason, pay. It is, after all, about achieving the negative environmental externalities that result from the use of motor vehicles, whether assumed by their owners and/or users, as costs that only they should bear.

On this subject, the position set forth in the recent Arbitral Decision No. 286/2013-T of 2 May 2014, is quite enlightening in stating that: "It is this principle (of equivalence) that dictates the burden of vehicles according to their respective ownership and even to the moment of scrapping, the common employment of a specific taxable base, the review of the current framework of tax benefits and the allocation of a portion of revenue to the municipalities of the respective use.

Now, to claim, as the Respondent does, that the legislator, in Article 3, No. 1 of the CIUC, established, whatever the underlying technical means, the subjective incidence of the tax in the persons in whose name the vehicles are registered, with total independence of whether or not, in the relevant taxation period, they are holders of the right to use the vehicle, most of its ownership, would imply disregarding that purpose which presides over the normative nature of the taxation, well manifested in the objective incidence and in the taxable base associated with the various categories of vehicles (cf. Articles 2 and 7 of the CIUC). For a registration entry, without correspondence with the underlying ownership, has no validity for providing satisfaction and compliance with such purpose, as it is not the persons in whose name the vehicles are registered when they are not holders of rights over their use that cause environmental and road costs, but rather such environmental and road costs are caused by the actual users of the vehicles, in accordance with the relevant substantive legal situations, even if they do not appear, as they should, in the motor vehicle registration. The registration, in fact, in no way detracts from or serves the principle of equivalence established in Article 1 of the CIUC. Indeed, assuming that the determining element of subjective tax incidence is simple and exclusively motor vehicle registration also does not allow one to assert a connection with any manifestation of relevant contributive capacity, which, as a rule, in taxes not strictly commutative, is essential, since there must be, without prejudice to requirements of practicality, some actual connection between the tax and a substantive economic presupposition materially capable of substantiating the tax. The reason for existence of the tax figure thus excludes the idea that the incidence itself is tied strictly and exclusively to the registration entry itself of the ownership of the tax vehicles and not to the substantive situations attributive of the right...

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