Process: 135/2014-T

Date: November 20, 2014

Tax Type: IUC

Source: Original CAAD Decision

Summary

In arbitral decision 135/2014-T, the CAAD (Center for Administrative Arbitration) addressed the subjective incidence of IUC (Single Circulation Tax) on vehicles under financial leasing contracts for the years 2011 and 2012. The applicant, A... SA, a credit institution specializing in automotive financing, challenged IUC assessments issued in the name of its extinct Portuguese branch that had been dissolved in 2007. The company argued it should not be liable for IUC on vehicles that had been transferred to lessees at the end of financial lease contracts, even though the ownership transfers were not registered with the Vehicle Registration Registry. The applicant contended that registration is not a condition for valid transfer of ownership and that the Tax Authority, not being a 'third party' under registration law, cannot rely on the absence of registration to demand payment from the former owner. The Tax Authority countered that Article 3(1) of the IUC Code establishes a clear legal rule, not merely a presumption, that taxpayers liable for IUC are those in whose names vehicles are registered as owners. The AT emphasized that this interpretation ensures legal certainty and protects the principles of tax security, arguing that the legislator intentionally used the expression 'are considered' rather than 'are presumed' to create a definitive legal criterion. The AT further argued that invoices alone cannot prove transfer of ownership and that at the relevant tax dates, the vehicles remained registered to the applicant without cancellation of licenses. The case highlights the tension between civil law concepts of ownership transfer and tax law's reliance on formal registration for determining tax liability in the context of financial leasing operations.

Full Decision

ARBITRAL DECISION

A – REPORT

  1. A..., SA., legal entity no. …, with registered office at Rua …, Lisbon, filed a request for the constitution of an arbitral tribunal, in accordance with the provisions of art. 2, no. 1, a) and 10, nos. 1 and 2 of the Legal Framework for Tax Arbitration, established by Decree-Law 10/2011, of 20 January, hereinafter designated "RJAT" and articles 1 and 2 of Regulatory Order no. 112-A/2011, of 22 March, with a view to the declaration of illegality of the acts of assessment of the Single Circulation Tax, relating to the years 2011 and 2012, and the recognition of the right to compensatory interest, with the Tax Authority and Customs Authority (hereinafter designated "AT") being summoned.

  2. Having admitted the request for the constitution of the single arbitral tribunal, and the applicant not having opted for the appointment of an arbitrator, in accordance with the provisions of paragraph a) of no. 2 of article 6 and paragraph b) of no. 1 of article 11 of the RJAT, in the wording introduced by article 228 of Law no. 66-B/2012, of 31 December, the Deontological Council appointed the undersigned as arbitrator.

The parties were notified of this appointment, and did not manifest any intention to challenge the appointment of the arbitrator, in accordance with the combined provisions of article 11, no. 1, paragraphs a) and b) of the RJAT and articles 6 and 7 of the Deontological Code, and in accordance with the provisions of paragraph c) of no. 1 of article 11 of the RJAT, in the wording introduced by article 228 of Law no. 66-B/2012, of 31 December, the arbitral tribunal was constituted on 22-04-2014.

  1. Upon notification, the AT submitted a response in which it raised no exceptions.

  2. The holding of the meeting provided for in art. 18 of the RJAT was dispensed with, with the consent of the parties.

  3. The applicant submitted written submissions.

  4. The applicant seeks the declaration of illegality and consequent annulment of the acts of assessment of the Single Circulation Tax relating to the years 2011 and 2012, with the consequent restitution of the tax paid, plus compensatory interest, alleging in summary:

a) The assessments in question were made in the name of the company A... SA – BRANCH IN PORTUGAL (A...), taxpayer ..., which was subsequently dissolved and whose registration was cancelled on 10-01-2007.

b) The set of assets and liabilities held by that branch was incorporated, before its dissolution, into the present applicant, including the leasing contracts that were in effect within the legal sphere of A....

c) The assessments challenged relate to motor vehicles that were the subject of financial lease contracts concluded by A....

d) Having the applicant assumed the status of lessor of the said vehicles, it is the one that holds procedural legitimacy to present the request for arbitral pronouncement.

e) The applicant is a credit institution with a strong presence in the national market.

f) Among its areas of activity, the financing of the automotive sector, which is reduced to the conclusion of financial lease contracts, assumes special relevance.

g) The motor vehicles to which the disputed assessments relate were given out on financial lease by A..., and the respective customers acquired the motor vehicles at the end of the contracts on which they were based.

h) The applicant was notified to proceed with the payment of the Single Circulation Tax to which the disputed assessments relate, and proceeded with its payment.

i) At the moment when the Single Circulation Tax became due, the motor vehicles had already left the legal sphere of the applicant, as it was no longer their owner.

j) From the circumstance that the transfer of the vehicles to its former lessees was not registered with the Vehicle Registration Registry, the responsibility does not fall upon the applicant to proceed with the payment of the Single Circulation Tax, the assessment of which is contested.

k) From the moment when the lessee acquires the vehicle, it is solely to the lessee, as owner thereof, that the obligation to pay the Single Circulation Tax and other associated charges falls.

l) Although the absence of registration does not affect the acquisition of the status of owner – since registration is neither a condition of validity of the purchase and sale contract, nor a condition for the production of the transfer effect thereof – it prevents the full effectiveness thereof but not against all entities.

m) The Tax Authority not falling within the concept of third party for purposes of registration, since it does not acquire from the same transferor rights totally or partially incompatible with the rights of the buyer, cannot the Tax Authority shelter itself in the absence of registration of the transfer to demand payment of the tax due to the former owner, be this a lessor or any other person.

  1. For its part, the respondent came forward in reply alleging, in summary:

a) The applicant is the taxpayer liable for the tax by virtue of being, at the date of the relevant tax facts, the entity in whose name the vehicles were registered, and registration and alteration of ownership of motor vehicles fall under the competence of the Institute of Registries and Notary, IP (ITN), to which is added the fact that also on those dates the cancellation of the said registrations does not appear in the Institute of Mobility and Land Transport, IP (IMMT), the entity competent for their cancellation, concluding that the AT does not substitute any of those entities and that the tax in question is due.

b) It is not established proof that the applicant proceeded with the alienation of the said vehicles on the dates of the invoices, and therefore is not the owner thereof at the date of the tax facts, nor that it proceeded with the cancellation of the respective licenses for use of those vehicles.

c) The invoices do not constitute suitable documents to effect the intended proof that the applicant was not the owner in the mentioned taxation periods.

d) It was the intention of the tax legislator, unequivocally expressed in no. 1 of art. 3 of the Single Circulation Tax Code, to consider as taxpayers liable for the Single Circulation Tax the persons in whose names the vehicles are registered as owners.

e) The legislator did not use the expression "are presumed", as it could have done, for example, in the following terms: "the taxpayers liable for the tax are the owners of the vehicles, being presumed as such the natural or legal persons, of public or private law, in whose names the same are registered".

f) The tax building is full of provisions analogous to that enshrined in the final part of no. 1 of article 3, in which the tax legislator, within its legislative shaping freedom, expressly and intentionally, establishes what should be considered legally, for purposes of scope of application, of income, of exemption, of determination and of periodization of taxable profit, for purposes of residence, of location, among many others.

g) Combining the disputed norm with others of the tax-legal system, it results that the legislator expressly and intentionally established that are considered as owners the persons enumerated therein in whose names the same are registered, insofar as this is the interpretation that preserves the unity of the tax-legal system.

h) Another interpretation of the norm would call into question the principles of legal security and certainty legally and constitutionally enshrined, the institute would no longer provide the security and certainty that constitute its main purposes, and would also call into question the power/duty of the Tax Authority to assess the Single Circulation Tax.

i) The Single Circulation Tax Code proceeded with a reform of the regime of taxation of vehicles in Portugal, substantially altering the regime of motor vehicle taxation, with the taxpayers liable for the tax becoming the owners as recorded in the register of ownership, regardless of the circulation of the vehicles on public roads.

j) The interpretation conveyed by the applicant is shown to be contrary to the Constitution.

k) Contending for the condemnation, in any circumstance, of the applicant for the payment of the costs resulting from the present request for arbitral pronouncement, since it was not the respondent who gave cause to the filing of the same.

  1. The Arbitral Tribunal was duly constituted and is materially competent.

The parties have judicial personality and capacity and are legitimated (arts. 4 and 10, no. 2, of the same statute and art. 1 of Regulatory Order no. 112-A/2011, of 22 March), the legitimacy resulting

The legitimacy of the applicant results from the fact that it has acquired the contractual position that was held by A... in the contracts that related to the motor vehicles to which the present pronouncement relates, as a result of an operation of increase of its share capital, implemented with that asset in kind (see arts. 89 and 28 of the Code of Commercial Entities)

B. DECISION

  1. FACTUAL MATTER

1.1. PROVEN FACTS

The following facts are considered proven:

a) The assessments subject to the present arbitral pronouncement were made in the name of company A... SA – BRANCH IN PORTUGAL (A...), taxpayer ..., which was subsequently dissolved and whose registration was cancelled on 10-01-2007.

b) The set of assets and liabilities held by that branch, including the contracts that were in effect within its legal sphere, was incorporated, before its dissolution, into the present applicant.

c) The assessments in question relate to motor vehicles that were the subject of financial lease contracts concluded by A....

d) At the end of the said financial lease contracts, the applicant sold to the customers/lessees the motor vehicles that were the subject of such contracts.

e) The applicant issued invoices relating to the sale of all motor vehicles to which the disputed assessments relate with dates prior to the deadline dates for payment of the Single Circulation Tax for the years 2011 and 2012.

f) However, the respective buyers did not register their ownership.

g) The assessments subject to the proceedings result from official assessments made by the AT, in which the applicant did not exercise the right of prior hearing.

h) The applicant proceeded with the payment of the tax to which the present proceedings relate.

i) On 14-02-2014, the applicant filed the request for arbitral pronouncement that gave rise to the present proceedings.

1.2 The facts were proven on the basis of the documents attached to the proceedings by the applicant, the authenticity of which was not challenged by the respondent.

1.3 UNPROVEN FACTS

There are no facts given as unproven with relevance to the consideration of the request.

1.4 THE LAW

The substantive issue to be considered resides in the interpretation to be given to no. 1 of art. 3 of the Single Circulation Tax Code in order to determine whether the rule of subjective scope contained therein establishes a legal presumption juris tantum – and, as such, capable of being rebutted (as the applicant contends) or, on the contrary, an express and intentional definition of personal scope, in the sense that the taxpayer liable for the tax is necessarily the one in whose name the motor vehicle is registered as owner.

No. 1 of art. 3 of the Single Circulation Tax Code provides: "the taxpayers liable for 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 the same are registered".

On the basis of the wording of this provision, the respondent – the Tax Authority – contends that the basis of personal scope defined by it does not today admit any legal presumption, since it transmits in an express and intentional manner the thought of the tax legislator, to the effect that are to be considered, in an irrefutable manner, as taxpayers liable for the Single Circulation Tax the persons in whose names the motor vehicles are registered.

It invokes in support of its thesis hermeneutical reasons of interpretation of the law, with appeal not only to its literality, but also to the systematic and teleological elements.

An invocation full of meaning, insofar as, in accordance with the provisions of art. 11 of the General Tax Law, "in determining the meaning of tax norms and in the qualification of the facts to which they apply, the general rules and principles of interpretation and application of laws are observed". For, as mentioned by Diogo Leite Campos, Benjamim Rodrigues, J. Lopes de Sousa – General Tax Law 4th ed., in annotation to such article, "… without departing from the letter of the law, which must be the main reference and starting point of the interpreter, its automatic application is excluded, assuming that in laws there is an operating rationality that the interpreter must strive to reconstruct".

It is, therefore, within this framework of interpretation of tax law, in this case art. 3, no. 1 of the Single Circulation Tax Code, that we must find the answer to the antagonism of positions between the applicant and the Tax Authority.

For the Tax Authority it is decisive for the determination of the taxpayer liable for the Single Circulation Tax the registration of ownership of the motor vehicle, so that will be considered as such, in an irreversible manner, the one in whose name it is registered.

The registration of ownership of vehicles is, in view of the provisions of art. 5, no. 1, a) and no. 2 of Decree-Law 54/75, of 12 February, mandatory, so that any right of ownership relating to the vehicle is subject to registration, with which is intended the security of legal commerce, as well as the publicity of the legal situation thereof.

Such registration enjoys, in accordance with the provisions of art. 7 of the Code of Land Registration (applicable to vehicle registration by virtue of art. 29 of the said Decree-Law 54/75), the "… presumption that the right exists and belongs to the registered holder, in the precise terms in which the registration defines it".

We have, therefore, that the registration of ownership of the vehicle is, also, a presumption that the right of ownership thereof exists in the terms contained in the registration.

That is, the registration of motor vehicle ownership does not constitute any condition of validity of the contracts subject thereto, similar to what occurs with land registration (whose regime, as we have already noted, is extensive to vehicle registration); registration has merely a declarative function.

It happens that art. 5, no. 1 of the Code of Land Registration, imposes that "the facts subject to registration only produce effect against third parties after the date of the respective registration". From which it seems to result that this would be sufficient for the Tax Authority to invoke the absence of registration to immediately set in motion art. 3, no. 1 of the Single Circulation Tax Code, demanding the payment of the tax from the one in whose name the vehicle is registered, by virtue of being the taxpayer liable for the tax.

It happens that no. 4 of art. 5 of the Code of Land Registration restricts such understanding, by determining that "third parties, for purposes of registration, are those who have acquired from a common author rights incompatible with each other". Whence it results that, by that route, never would the Tax Authority be enabled to invoke the lack of registration, insofar as it does not meet the concept of third party.

Having stated this in general terms, it must be determined whether, notwithstanding what has been said above, no. 1 of art. 3 of the Single Circulation Tax Code contains, or not, a legal presumption.

Everything is, in summary, in determining whether the expression "being considered", used there, has the nature of a legal presumption.

As a starting point, the answer seems to us to be negative.

It seems offensive to the unity of the legal system – and indeed, with the appropriate adaptations, in opposition to nos. 2 and 3 of art. 11 of the General Tax Law - that an individual would come to be considered as not an owner of a property for civil purposes and yet necessarily be one for tax purposes.

To which is added the fact that the Tax Authority must guide its activity by observance of the principles of legality, of the inquisitorial method and discovery of material truth, inherent to the constitutional dictate of contributive capacity.

Be that as it may, it seems evident that, whether from the systematic or teleological point of view, the expression "being considered", adopted in no. 1 of art. 3 of the Single Circulation Tax Code contemplates a true presumption, to which neither the apparent literality of the expression nor the tax system is opposed.

In this regard, Diogo Leite Campos, Benjamim Rodrigues, J. Lopes de Sousa – General Tax Law 4th ed., in annotation to art. 73, page 651, state: "presumptions in matters of tax scope may be explicit, revealed by the use of the expression 'are presumed' or similar, as occurs, for example, in nos. 1 to 5 of art. 6, in paragraph a) of no. 3 of art. 10, in art. 19 and 40, no. 1, of the Income Tax Code. However, presumptions may also be implicit in scope norms, namely objective scope, when determined values of movable or immovable property are considered as constituting taxable matter, in situations in which it is not impracticable to determine the real value …", enumerating thereafter a set of examples.

We understand that it is precisely such the case that art. 3, no. 1 of the Single Circulation Tax Code contemplates: an implicit presumption. A presumption, moreover, that has always existed in the field of the motor vehicle circulation tax, even though previously defined in explicit form.

On the other hand, in compliance with the principles – with establishment in our community law – of polluter-pays and equivalence, the Single Circulation Tax Code imports concerns of an environmental and energy nature, seeking that the costs resulting from the environmental damage caused by the use of motor vehicles be borne by the real owners (and not by the presumed owners). We cannot, therefore, agree with the respondent when it contends that are "taxpayers liable for the tax the owners as recorded in the register of ownership, regardless of the circulation of the vehicles on public roads" (emphasis ours).

It is, therefore, necessary to conclude that art. 3, no. 1 of the Single Circulation Tax Code establishes a presumption of subjective scope.

Now, no. 2 of art. 350 of the Civil Code establishes that legal presumptions may be rebutted by proof to the contrary, except in cases expressly provided for in law.

And, regarding the rebuttal of presumptions, we consider good the doctrine to which the Supreme Court of Justice resorted in the reasoning of Ruling no. 1/91 of 03-04-1991 (Official Gazette no. 114, of 18 May) – to classify as juris tantum a presumption established in a labor statute – defended by Vaz Serra [Evidence (material evidentiary law), Journal of the Bar 110-112, page 35], as well as by Mário de Brito (Annotated Civil Code, page 466) and Mota Pinto (General Theory of Civil Law, page 429): "… juris tantum presumptions constitute the rule, while juris et de jure presumptions are the exception. In doubt, the legal presumption is juris tantum, since it should not be considered, except by reference of the law, that it was intended to prevent the production of proof to the contrary, imposing a formal truth to the detriment of what is really proven".

For its part, within the scope of tax law, art. 73 of the General Tax Law provides that "presumptions enshrined in the rules of tax scope always admit proof to the contrary". Which means that all presumptions in matters of tax scope, such as the one that no. 1 of art. 3 of the Single Circulation Tax Code establishes, are juris tantum and, as such, refutable.

From the evidentiary elements brought to the proceedings by the applicant, it results that the applicant was not the owner of the vehicles to which the disputed assessments relate, on the deadline dates for their respective payments.

On this point, the respondent challenges that invoices titling purchase and sale contracts be apt to prove the actual transmission of ownership of the vehicles.

It does not, however, challenge the truthfulness of the documents attached. It being certain that in tax matters the presumption of truth of the elements contained in the accounts of the taxpayer applies, as is the case with invoices.

We have therefore as settled, that it has not been questioned that the transactions which the invoices attached by the applicant refer to have been carried out, it being certain that the purchase and sale contract is consensual, not requiring any special form.

With the transmission of ownership proven and since the Tax Authority has no legitimacy to oppose the absence of registration, as it is not considered a third party for such purposes, the annulment of the Single Circulation Tax assessments subject to the present arbitral request is required.

Compensatory Interest

Beyond the restitution of the tax unduly paid, the applicant seeks the declaration of the right to the payment of compensatory interest.

This right is enshrined in art. 43 of the General Tax Law, which has as a prerequisite that is determined, in gracious reclamation or judicial challenge – or in tax arbitration – that there was an error attributable to the services from which results payment of the debt in an amount greater than that legally due.

In the case at hand, it seems to us indisputable that no error can be attributable to the respondent, Tax Authority.

On the contrary, the Tax Authority acted in scrupulous compliance with the law, assessing tax from the one who presumptively would be the taxpayer liable for the same, it being incumbent, indeed, on the applicant to carry out the procedure with a view to the rebuttal of such presumption.

Therefore, the applicant does not have the right to the claimed payment of compensatory interest.

Regarding responsibility for the payment of costs.

We understand, in summary, that art. 3 contemplates a legal presumption which, by virtue of being juris tantum, is capable of being rebutted.

The Tax Authority acted in scrupulous compliance with the law, assessing tax from the one who presumptively would be the taxpayer liable for the same, it being incumbent on the applicant, as already mentioned, to carry out the procedure with a view to the rebuttal of such presumption.

It being indisputable that no error can be attributable to the Tax Authority in the assessments subject to the request.

In order to rebut the presumptions provided for in norms of tax scope, the interested party may avail itself of the administrative procedure proper provided in art. 64 of the Code of Tax Procedure and Process, as an alternative form to the gracious reclamation or judicial challenge.

The Tax Authority did not have any elements at its disposal that would have allowed it to obstruct the official assessments that it made.

The applicant did not promote, in the context of any eventual prior administrative procedure, the rebuttal of the presumption that weighed upon it, nor did it even make such effort in the context of the exercise of the right of hearing of the official assessments.

From which results that responsibility for the Single Circulation Tax assessments can only be attributed to the applicant.

In accordance with the provisions of art. 527, no. 1 of the Code of Civil Procedure, the rule of causality constitutes the first criterion for the distribution of responsibility for the payment of procedural costs, with the advantage or procedural benefit being a subsidiary criterion. Having been the applicant the cause for the filing of the present request, it is the one responsible for the payment of the respective costs.

  1. DECISION

In light of the foregoing, it is decided:

a) To render judgment in favor, on grounds of violation of law, of the request for annulment of the tax acts subject to the arbitral request corresponding to the Single Circulation Tax assessments relating to the years 2011 and 2012;

b) To render judgment against the request for the payment of compensatory interest, absolving the Tax Authority and Customs Authority from the respective request;

c) To condemn the applicant for the payment of the costs of the proceedings.

VALUE OF THE PROCEEDINGS: In accordance with the provisions of art. 306, no. 2 of the Code of Civil Procedure, art. 97-A, no. 1, a) of the Code of Tax Procedure and Process and art. 3, no. 2 of the Regulation of Costs in Tax Arbitration Proceedings, the value of the proceedings is fixed at € 244.74 (two hundred and forty-four euros and seventy-four cents).

COSTS: In accordance with the provisions of art. 22, no. 4, of the Regulation of Costs in Tax Arbitration Proceedings, the amount of costs is fixed at € 306.00 (three hundred and six euros), in accordance with Table I attached to the Regulation of Costs in Tax Arbitration Proceedings.

Let notification be made.

Lisbon, 20 November 2014

The Arbitrator

(António Alberto Franco)

Frequently Asked Questions

Automatically Created

Who is liable for IUC (Imposto Único de Circulação) on vehicles under financial leasing or long-term rental agreements in Portugal?
Under Article 3(1) of the IUC Code applicable to 2011 and 2012, the persons liable for IUC on vehicles under financial leasing or long-term rental agreements are those in whose names the vehicles are registered as owners. In arbitral process 135/2014-T, the Tax Authority argued that the IUC Code establishes a legal definition (not a presumption) that considers registered owners as taxpayers, regardless of whether ownership has been transferred in civil law terms. This means that until the transfer of ownership is formally registered with the Vehicle Registration Registry and the registration is updated, the lessor (financial leasing company) remains liable for IUC even after the lessee acquires the vehicle at the end of the lease contract.
Can a financial leasing company challenge IUC tax assessments issued in the name of an extinct branch entity?
Yes, a financial leasing company can challenge IUC tax assessments issued in the name of an extinct branch entity. In process 135/2014-T, A... SA successfully established procedural legitimacy (standing) to challenge IUC assessments that were issued in the name of its Portuguese branch, which had been dissolved and deregistered in 2007. The CAAD tribunal accepted that since the applicant had incorporated the assets, liabilities, and financial leasing contracts from the dissolved branch before its dissolution, it held the legal status of lessor for the vehicles in question and therefore had the right to contest the tax assessments through arbitration. This demonstrates that corporate succession and assumption of contractual positions can confer standing to challenge tax assessments related to predecessor entities.
What did CAAD arbitral tribunal 135/2014-T decide regarding the subjective incidence of IUC on leased vehicles?
While the complete decision text is not included in the provided excerpt of arbitral tribunal 135/2014-T, the case record shows the tribunal examined arguments about whether the registered owner (lessor) or the actual owner (lessee) should be considered the taxpayer for IUC purposes. The central legal issue was the interpretation of Article 3(1) of the IUC Code, which states that taxpayers are 'those in whose names vehicles are registered.' The Tax Authority defended that this creates a definitive legal criterion based on registration, not a rebuttable presumption, emphasizing legal certainty. The applicant argued that registration is not determinative of ownership for tax purposes and that the Tax Authority cannot rely on lack of registration when the vehicles had actually been transferred to lessees.
Are lessees or vehicle owners responsible for paying IUC tax under Portuguese law for the years 2011 and 2012?
Under the interpretation defended by the Tax Authority in process 135/2014-T regarding the years 2011 and 2012, vehicle owners as recorded in the Vehicle Registration Registry are responsible for paying IUC tax, regardless of whether ownership has been transferred in civil law terms. This means that in financial leasing situations, if the lessor remains the registered owner even after the lessee acquires the vehicle at the end of the lease contract, the lessor remains liable for IUC until the registration is formally updated. The Tax Authority argued that Article 3(1) of the IUC Code intentionally establishes that 'are considered' owners those in whose names vehicles are registered, creating a clear legal definition for tax purposes rather than a presumption that can be rebutted by proving actual ownership. This approach prioritizes registration formalities over economic reality to ensure legal certainty in tax collection.
Is a taxpayer entitled to compensatory interest (juros indemnizatórios) after a successful IUC annulment at CAAD?
Yes, a taxpayer is entitled to compensatory interest (juros indemnizatórios) after a successful IUC annulment at CAAD, as expressly requested in process 135/2014-T. When an arbitral tribunal declares tax assessments illegal and orders their annulment, the taxpayer who paid the unlawfully assessed tax has the right to restitution of the amounts paid plus compensatory interest calculated from the date of payment until restitution. This right to compensatory interest is established in Portuguese tax law to compensate taxpayers for the financial loss caused by having funds unavailable due to an illegal tax collection. In the request for arbitration, A... SA specifically sought not only the declaration of illegality and annulment of the 2011 and 2012 IUC assessments but also recognition of the right to compensatory interest on the amounts to be refunded.