CAAD Arbitration on IUC Subjective Incidence and Legal Presumption of Vehicle Ownership (147/2016-T)

ARBITRAL DECISION

I – REPORT

1. Company A…, Single-Member Limited Liability Company, collective person no. …, with registered office at … Street, in the locality and parish of …, hereinafter referred to as the Claimant, having paid the Single Vehicle Circulation Tax (IUC) on a vehicle for the years 2011, 2012, and 2013, in the total amount of € 3,879.71, filed, on 15 March 2016, a request for the constitution of an arbitral tribunal and for an arbitral decision, under the provisions of articles 2, no. 1, paragraph a) and 10, no. 1, paragraph a), both of Decree-Law no. 10/2011, of 20 January, which approved the Legal Regime of Arbitration in Tax Matters, hereinafter "RJAT", in which the Tax and Customs Authority (AT) is requested to intervene.

In the said arbitral decision, it is requested that the illegality be declared and the corresponding annulment of the IUC tax assessments relating to the said vehicle, condemning the Respondent to annul all assessments and consequent penalties in contravention proceedings, as well as to pay the costs of the arbitral proceedings.

1. In accordance with the provisions of articles 6, no. 1 and 11, no. 1, paragraph a), of the RJAT, the Deontological Council of the Administrative Arbitration Centre (CAAD) appointed the undersigned as sole arbitrator on 10 May 2016, and the same communicated acceptance of this appointment. On this same date, the Parties were notified of the appointment, and neither of them expressed an intention to refuse the arbitrator's appointment.

In these circumstances, in accordance with the provisions of article 11, no. 1, paragraph c) of the RJAT, the Singular Arbitral Tribunal was constituted on 25 May 2016.

3.1. In accordance with article 17, nos. 1 and 2 of the RJAT, AT was notified, as the respondent party, to submit a response within 30 days and, if it saw fit, to request the production of additional evidence, and within the same period to remit a copy of the administrative file, which occurred on 27 June 2016.

3.2 In that response, the Respondent argued the legality of the assessments made, concluding that the request for an arbitral decision should be judged as unfounded, with the consequent maintenance in the legal order of the disputed tax acts, and to be absolved.

3.3. In the subsequent proceedings, the Parties were notified on 28 June 2016, with a view to dispensing with the meeting provided for in article 18, no. 1 of the RJAT, given that only matters of law were at issue, with which they agreed, as per communications of 1 and 5 July 2016, respectively, also dispensing with the submission of written closing arguments.

II - PROCEDURAL REQUIREMENTS

1. The Arbitral Tribunal is duly constituted, is materially competent, and the Parties enjoy legal personality and capacity, being legitimate, in light of articles 4 and 10, no. 2 of the RJAT and article 1 of Ordinance no. 112-A/2011, of 22 March.

The proceedings do not suffer from defects that would invalidate them, and there are no incidents that require resolution nor preliminary questions upon which the Arbitral Tribunal must pronounce itself.

III – GROUNDS FOR DECISION

Allegations of the Parties

5.1 The Claimant, in the initial petition, to substantiate the request for an arbitral decision, essentially alleged the following:

a) It was the owner of the heavy goods vehicle of the brand Scania, with chassis number … and national registration …-…-…, which it sold to company B…, Single-Member Limited Liability Company, with address at … Street, no. … – …, in …, Figueira da Foz, on 31 July 2007, having for that purpose attached a duplicate of the sales invoice no. 3039 of that date, which reveals that the sale was effected at a price of 2,000 € (1,662.89 € + 347.11 € VAT);

b) The vehicle was paid on 02 August 2007, in cash, by means of credit of the said amount into the account that the Claimant held with C… (C…);

c) After the acquisition, the purchaser of the vehicle did not proceed with the registration of ownership of the same, as was its obligation, and the Claimant found itself in the contingency of, on 22 November 2012, requesting from the IMTT the seizure of the vehicle with a view to subsequently requesting the cancellation of the registration, which occurred on 26 November 2013;

d) It was cited in execution proceedings for the payment of IUC for the year 2011, in the amount of 1,031.43 € (2011 assessment …), for the year 2012 in the amount of 1,054.73 € (2012 assessment …) and for the year 2013 in the amount of 1,031.43 € (2013 assessment …);

e) Its citation results only from the fact that the purchaser of the vehicle failed to comply with the duty to register the vehicle;

f) In parallel, it was cited personally for the payment of the fine for non-payment of IUC for the year 2013, in the amount of 405.04 €, and for the year 2011, in the amount of 357.08 €;

g) In accordance with prevailing doctrine and arbitral tax jurisprudence, of which it mentions eight decisions, no. 1 of article 3 of the CIUC incorporates a rebuttable presumption, and the taxpayer who is registered in the vehicle ownership register can be exonerated from payment by demonstrating the non-correspondence between reality and that register;

h) It demonstrates this by attaching a copy of the respective invoice and the deposit slip issued by C… evidencing that payment was made to it, since contracts for the purchase and sale of motor vehicles are not subject to any specific form;

It concludes, requesting the annulment of the assessments on the grounds of illegality and error in the premises, condemning AT to annul all assessments and consequent penalties in contravention proceedings and to pay the costs of the arbitral proceedings.

5.2 For its part, in response to the initial petition, the Respondent alleged the following:

a) Article 3, no. 1 of the CIUC establishes that "the taxpayers of the tax are the owners of vehicles, considered as such the natural or legal persons, of public or private law, in whose names they are registered", whereby the tax legislator expressly and intentionally established that these are the owners, and this interpretation is the one that best preserves the unity of the fiscal legal system, whereby to understand that the legislator established a presumption here would unequivocally be to effect an interpretation contra legem;

b) The legislator did not use the expression "are presumed", as it could have done, for example, in the following terms: "the taxpayers of the tax are the owners of vehicles, presumed to be such as natural or legal persons, of public or private law, in whose names they are registered", and the fiscal normative is replete with provisions analogous to that established in the final part of no. 1 of article 3, in which the fiscal legislator, within its freedom of legislative conformity, establishes what should be considered legally, for purposes of incidence, of income, of exemption, of determination and of periodization of taxable profit, for purposes of residence, of location, cases of the CIMT, CIRS and CIRC, in rules that it identifies, whereby it was a clear option of legislative policy adopted by the legislator;

c) This is, moreover, the understanding adopted by the jurisprudence of our courts, as appears from Case no. 210/13.0BEPNF, in which the Administrative and Tax Court of Penafiel adopted the position advocated by AT, in the terms expressly stated above, having decided on the unfoundedness of the appeal filed by the taxpayer;

d) The systematic element of interpretation of law also demonstrates that the solution proposed by the Claimant is intolerable, and the understanding advocated by the latter finds no support in law, since this results not only from the aforementioned article 3, no. 1 of the CIUC, but also from other rules established in the said Code, such as article 6, no. 1 of the CIUC, which under the heading "Taxable Event and Exigibility" provides that "The taxable event of the tax is constituted by the ownership of the vehicle, as attested by the registration or registration in national territory.";

e) From the articulation between the scope of the subjective incidence of the IUC and the fact constitutive of the corresponding tax obligation, it unequivocally follows that only the legal situations subject to registration generate the birth of the tax obligation;

f) Furthermore, no. 3 of the same article provides that "the tax is considered exigible on the first day of the taxation period referred to in no. 2 of article 4", that is, the moment from which the tax obligation is constituted presents a direct relationship with the issuance of the registration certificate, in which the facts subject to registration must appear;

g) This position is further evident in the circumstance that the motor vehicle registration to which AT has or may have access, and the certificate in which the acts subject to registration must appear, whose exhibition may be required of the interested party by AT, contain all the elements designed for the determination of the taxpayer, without need of access to contracts of a private nature that confer such rights, listed by the CIUC as constitutive of the legal situation of taxpayer of this tax;

h) In the absence of such registration, naturally, the owner will be notified to comply with the corresponding tax obligation, since, having in account the current configuration of the legal system, AT will not have to proceed with the assessment of the tax on the basis of elements that do not appear in public records and documents and, as such, authentic;

i) The failure to update the registration, in accordance with the provisions of article 42 of the Regulation of Motor Vehicle Registration (RRA), is imputable in the legal sphere of the IUC taxpayer and not in that of the State, while the tax subject, whereby to make a clean slate of the obligation of motor vehicle registration in the cases controversial in this case would be to throw AT into the most absolute uncertainty, and such situation is manifestly not desirable and, therefore, instituted by the legislator, since if such a position were accepted, AT would have to proceed with the assessment of IUC for that "other" identified by the person in the motor vehicle registration to whom it had previously assessed the IUC, who in turn could also allege and prove that in the meantime they had already entered into a contract of purchase and sale, financial lease, long-term rental, etc., with another, but who had not registered, or who had dismantled the vehicle but had not communicated it;

j) What is at stake is legal certainty and security (the institution of registration would cease to provide the security and certainty which constitute its principal aims), as well as the power/duty of AT to assess taxes;

l) Even if one were to admit that, from the perspective of the rules of civil law and real property registration, the absence of registration does not affect the acquisition of the quality of owner and that registration is not a condition of validity of contracts with real effect, in accordance with what is established in the CIUC (which, in the case at hand, constitutes special law, which, according to general rules of law, derogates the general rule), the tax legislator intentionally and expressly wished that those considered as owners, lessees, acquirers with reservation of ownership or holders of the right of option to purchase in long-term rental, be the persons in whose names the vehicles are registered;

m) In light of a teleological interpretation of the regime established throughout the CIUC, the interpretation proposed by the Claimant to the effect that the IUC taxpayer is the effective owner, independently of not appearing in the motor vehicle registration the registration of such quality, is manifestly wrong, insofar as it is the very ratio of the regime established in the CIUC that constitutes clear proof that the tax legislator intended to create an IUC based on the taxation of the owner of the vehicle as registered in the motor vehicle registration;

n) Effectively, the CIUC proceeded with a reform of the regime of taxation of vehicles in Portugal, substantially altering the regime of motor vehicle taxation, with the taxpayers of the tax becoming the owners registered in the property register, regardless of the circulation of vehicles on the public road, and its approval had as objective to establish procedures tending to adapt the motor vehicle registration to the new taxation regime, so as to avoid the existing problems, namely those related to the fact that there are many vehicles not registered in the name of the real owner;

o) Furthermore, in accordance with no. 1 of article 6 of the CIUC, the taxable event of the tax is constituted by the ownership and registration of the vehicle, as attested by the registration or registration in national territory and the exigibility of the tax is considered verified on the first day of the taxation period referred to in article 4, no. 2 of the CIUC, that is, corresponding to "the year that begins on the date of registration or on each of its anniversaries with respect to vehicles of categories A, B, C, D and E, being due by the owner in whose name they are registered, whether in the IMT or in the Motor Vehicle Registration Office (CRA), at the time of performance of the tax obligation, determined in no. 2 of article 4 of the CIUC;

p) Thus, the ownership of the vehicle in question was registered in favor of A…, Single-Member Limited Liability Company, in active situation, whereby in accordance with articles 1 to 6 of the CIUC, all elements of objective, subjective and temporal incidence, taxable event and exigibility for the assessment of IUC for the years 2011 to 2013 are met, whereby the tax acts in question do not suffer from any defect of violation of law;

q) The interpretation conveyed by the Claimant is contrary to the Constitution, by calling into question principles such as that of confidence and legal security, the principle of efficiency of the tax system and the principle of proportionality, since it devalues the reality of registrations to the detriment of an "informal reality", being incapable of minimal control by the Respondent;

r) It is offensive of the principle of efficiency of the tax system, insofar as it translates into an obstruction and increase in the costs of the competencies assigned to the Respondent, with obvious prejudice to the interests of the Portuguese State, being at the opposite poles of that principle and of the reform of motor vehicle taxation itself in that it attempts to disregard the reality of registration, a reality that constitutes the cornerstone upon which the entire structure of the IUC is built, generating for the Respondent, and ultimately for the Portuguese State, additional administrative costs, obstruction of the performance of its services, absence of control of the tax and uselessness of the information systems of the registrations;

s) It represents a violation of the principle of proportionality, insofar as it totally disregards it in confrontation with the principle of taxable capacity, when in reality the Claimant has the legal mechanisms necessary and adequate to safeguard its taxable capacity (e.g., motor vehicle registration), without, however, having exercised them in due time;

t) The probative value of the documents submitted by the Claimant with a view to assessing their virtuality of obviating the presumption is in no way sufficient to prove that the Claimant was not the owner of the vehicle on the dates of exigibility of the tax, since they are copies of the invoice and of the original of the receipt, which is not signed nor was it delivered to the "buyer", and do not unequivocally prove that the transaction was effected, not being suitable for proving the sale of the vehicle in question, since they are merely documents unilaterally issued by the owner of the vehicle, demonstrating only the will of the Claimant, not being capable of proving the conclusion of a synallagmatic contract such as purchase and sale, since they do not reveal by themselves an indispensable and unequivocal declaration of will (i.e., acceptance) on the part of the presumed acquirer, not lacking cases of issuance of receipts relating to transmissions of goods and/or provision of services that never came to be realized;

u) The rules of motor vehicle registration have not yet reached the point that receipts unilaterally issued by owners of vehicles can substitute for the Motor Vehicle Registration Application, moreover a document approved by official model, whereby, having not presented new evidence that had the potentiality to set aside the legal presumption of ownership deriving from motor vehicle registration, neither can it present them, citing in its favor an interlocutory decision issued by the Collective Arbitral Tribunal presided over by judge Jorge Lopes de Sousa, on 2012-10-25, in the context of the arbitral proceedings which, under no. 75/2012-T, took place at the CAAD;

v) The Claimant only requested the seizure of the vehicle on 22.11.2012 and the cancellation of the registration on 26.11.2013, five years later, transcribing the understanding adopted in arbitral decision no. 220/2014-T of this arbitration centre, regarding the probative value of documents with a view to obviating motor vehicle registration, and because it refers to purchase and sale, to apply, mutatis mutandis to the present situation, and this understanding is corroborated by the recent judgment of the Central Administrative Court - South (TCA SUL) issued on 19-03-2015, in the context of case no. 08300/14, which, in summary, provides that being the IUC legally configured to function in integration with motor vehicle registration "it is not enough for the opposing party to present mere counterproof to – which is intended to cast doubt on the facts (cf. article 346 of the Civil Code), which makes the presumed facts doubtful. On the contrary, it must show that the presumed fact is not true, and in such a way that there remains no uncertainty that the facts resulting from the presumption are not real.";

x) As regards the responsibility for the payment of arbitral costs, the Respondent refers that motor vehicle registration is not within its sphere of competencies, but rather assigned to the Institute of Registries and Notary (IRN) to whom it falls to transmit to the Respondent the changes that may occur regarding the ownership of motor vehicles, and registration of ownership constitutes an essential element in the information system between the Respondent and other public entities, and is not susceptible to being controlled by it, since there is no accessory declarative obligation on this matter, which means that the IUC is assessed in accordance with the information of the registration opportunely transmitted by the IRN and not with the information generated by the Respondent itself;

z) Having the Claimant not taken care to update the motor vehicle registration, as indeed it could and was its responsibility [article 5/1-a) of Decree-Law no. 54/75, of 12 February, and article 118/4 of the Highway Code], and having ordered the cancellation of the registration of the vehicle in question here, five years later, on 26.11.2013, it is inevitable to conclude that the Claimant did not proceed with the care that was required of it, and by not proceeding with the care that was required of it, it inexorably led the Respondent to limit itself to complying with the legal obligations to which it is subject and, in parallel, to follow the information of the registrations that was provided to it by the appropriate party, whereby it can only complain about itself regarding the assessments now called into question, since it was not the Respondent who gave rise to the deduction of the request for an arbitral decision, but the Claimant itself. Therefore, the same should be condemned to pay the arbitral costs.

In conclusion, the Respondent considers as evident the legal conformity of the acts subject to this request, lacking, consequently, the claims formulated by the Claimant, and insofar as the latter failed to set aside the legal presumption of ownership of the vehicle registered in its name, being that the documents presented, as merely unilateral documents, are incapable, by themselves, of making unequivocal proof of the alleged alienation, the request for an arbitral decision should be considered unfounded, as not proved, with the maintenance in the legal order of the disputed tax assessments and absolving it, accordingly, of the respective request, with the consequent condemnation of the Claimant in the arbitral costs.

1. As regards the facts relevant to the decision to be made, this Arbitral Tribunal finds proved, in light of the elements in the case file, the following facts:

a) The Claimant was the owner of the heavy goods vehicle of the brand Scania, with chassis number …, and national registration assigned …-…-….

b) On 31 July 2007, sales invoice no. 3039, dated 31.07.07, was issued, in which the buyer is identified as company B…, Single-Member Limited Liability Company, as per the duplicate attached.

c) The sale price was 2,000 € (two thousand euros), which were paid in cash on 2 August 2007, by deposit in the account that the Claimant held with C…, as per copy of deposit slip evidencing receipt.

d) After the sale, the acquirer of the vehicle did not proceed with registration of ownership in the CRA.

e) On 22 November 2012, the Claimant requested from the IMTT the seizure of the vehicle, with a view to subsequently request the cancellation of the registration, which it did on 26 November 2013.

e) It was cited in execution proceedings for the payment of IUC for the year 2011, in the amount of 1,031.43 € (2011 assessment …), for the year 2012 in the amount of 1,054.73 € (2012 assessment …) and for the year 2013 in the amount of 1,031.43 € (2013 assessment …).

f) In parallel, it was cited personally for the payment of the fine for non-payment of IUC for the year 2013, in the amount of 405.04 € and for the year 2011, in the amount of 357.08 €.

IV – GROUNDS FOR THE FACTS PROVED AND NOT PROVED

1. The facts were found as proved having in consideration the documents brought to the proceedings by the Claimant, whose authenticity was not called into question by the Respondent, embodied in the initial petition and in the attachments accompanying it, as well as also in the administrative file sent by the Respondent.

2. There are no facts found as not proved with relevance to the taking of the decision.

V - LEGAL GROUNDS

1. In function of what is left stated, to assess the legality of the assessments made in the context of IUC, it is important that an answer be found for the following controversial legal questions:

a) Meaning and scope of the rule contained in article 3, no. 1 of the CIUC, in relation to subjective incidence;

b) How to reconcile the provisions of article 3, no. 1, of the CIUC, regarding subjective incidence, with article 6, no. 1, in what concerns the taxable event and exigibility of the tax;

c) The aptness of the invoice (complemented by the respective bank transfer) for purposes of proof of vehicle transmissions;

d) To what extent the interpretation defended by the Claimant is inconformable to the Constitution, by calling into question principles such as that of confidence and legal security, the principle of efficiency of the tax system and the principle of proportionality.

a) MEANING AND SCOPE OF ARTICLE 3, NO. 1 OF THE CIUC REGARDING SUBJECTIVE INCIDENCE

1. The Respondent affirms that the tax legislator in establishing in article 3 of the CIUC, who are the taxpayers, expressly and intentionally established who are the taxpayers of the tax, considering as such the owners in whose names the vehicles are registered.

It did not use the expression "are presumed" as it could have done in the following terms, "The taxpayers of the tax are the owners of vehicles, presumed to be such as natural or legal persons, of public or private law, in whose names they are registered", whereby to claim that the legislator in the wording adopted established a presumption would be to effect an interpretation contra legem that would not preserve the unity of the fiscal system.

This interpretation is contradicted by the Claimant who affirms that the said article 3 incorporates a rebuttable presumption, whereby the taxpayer who appears in the vehicle ownership register can exonerate himself from payment by demonstrating the non-correspondence between reality and that register.

11.1 In the field of tax law, article 11, no. 1 of the General Tax Law (LGT) establishes that in determining the meaning of tax rules and in qualifying the facts to which they apply, the general rules and principles of interpretation and application of laws are observed, providing that "if doubt persists as to the meaning of the incidence rules to apply, account should be taken of the economic substance of the tax facts" - no. 3 of the same article.

In light of this legal criterion, the general principles of interpretation and application of laws should be sought in article 9 of the Civil Code (CC), which establishes that the interpreter should not confine itself to the letter of the law, but reconstruct from the texts the legislative intent, having especially in account the unity of the legal system, the circumstances in which the law was elaborated and the specific conditions of the time in which it is applied.

Furthermore, it adds that the interpreter cannot, however, consider a legislative intent that does not have in the law a minimum of verbal correspondence, even if imperfectly expressed, and in fixing the meaning and scope should presume that the legislator established the most correct solutions and knew how to express its intent in adequate terms.

11.2 The antecedents of subjective incidence in the taxes repealed by the CIUC - Decree-Law no. 143/78, and Decree-Law no. 116/94, and their articulation with the rules of registration, never offered doubts that the legislator, in using the word "being presumed", referred to the notion contained in article 349 of the CC, which allowed it to extract the conclusion from the fact that vehicles were matriculated or registered in the name of a certain person, that is, that that person would be the owner, however, subject to being able to be rebutted by proof to the contrary, as imposed by article 350, no. 2, of the same code, and as the tax rules themselves reaffirmed.

The expression "until proof to the contrary" was contained in Decree-Law no. 143/78, and also in Decree-Law no. 116/94, and came from earlier diplomas, whereby there were never doubts that legally it was possible for any interested party to demonstrate that they were not the owner of the referenced vehicle, reinforcing the presumptive nature "juris tantum" of the rule.

The subjective incidence modeled in these terms was articulated with the function of registration in relation to the definition of motor vehicle ownership.

Indeed, Decree-Law no. 47,952, of 22 September 1967, in its article 1 established as aims of registration the individualization of owners and, in general, publicity to the rights inherent in motor vehicles, which came to be transferred to Decree-Law no. 54/75, of 12 February, with it being established in article 5, no. 1, paragraph a), that are subject to mandatory registration, among others the right of ownership and usufruct of motor vehicles.

11.3 With the approval of the CIUC the legislator substituted the word "being presumed" for "being considered", and eliminated the expression "until proof to the contrary", whereby the combination of these two alterations makes admissible an interpretation in the sense defended by the Respondent, that the tax legislator intentionally and expressly wished that those considered as taxpayers of the tax be the owners in whose names the vehicles are registered.

11.4 A peremptory interpretation is possible, given that incidence is not governed by presumptions, but when they exist or are admissible, questions are raised for which it is necessary to find a reasonable explanation.

The first has to do with article 73 of the LGT in accordance with which "Presumptions established in tax incidence rules always admit proof to the contrary", and it is certain that we are precisely dealing with the sensitive question of incidence.

The LGT is a transversal diploma and of a higher level, and the word "always" contained in article 73 has a peremptory meaning. An alteration in the nature of the rule that has always prevailed in the field of taxes that fell on the circulation of vehicles has a significance of such repercussion that it is imperative to make an assessment of its consequences.

Therefore, and for the reasons that follow, it does not seem to us that the presumption regime that has always prevailed has simply been allowed to fall away and replaced by a rule of rigid interpretation.

11.5 The legislator was aware of the circumstances in which it was innovating and of its own limitations at the legislative level and in the functioning of the tax organization at the time, hence, in the understanding of the arbitral tribunal, it proceeded with a wording that intended simply to reinforce the emphasis on vehicle ownership, as the taxable event of the tax, without falling into the exclusivism of official registration.

The function of the database of vehicle owners of the CRA, has always been aimed at regulating responsibilities at the level of civil society, being merely a product of the declarative activity of owners by virtue of transmissions to which the vehicles were subject, and for which there was no coercive sanction specific to non-compliance, except the payment of an increased fee in the event of presenting the transmission for registration outside the respective period.

Indeed, at the time of the publication of the CIUC, there was a huge gap between the existing national motor vehicle fleet and the registrations of vehicles appearing in the motor vehicle registry office.

According to information from the time conveyed by the media organs, the official services estimated that there would be, at least, one million more registrations than the actual motor vehicle fleet. This was alluded to by deputy Helena Pinto, of the Left Bloc, in a parliamentary debate session held on 13 March 2008, when she referred that "There are today more than one and a half million motor vehicles whose property registration does not correspond to their current owner."

In truth, for many years, vehicles were scrapped without any environmental control, via dismantling in scrapyards, which operated in the open air, often on the outskirts of large cities, with no communication to the competent authorities, since the legal framework for destruction of vehicles at end of life, with the intervention of an authorized operator, only began to be defined from Decree-Law no. 292-B/2000, of 15 November.

On the other hand, it was equally common practice to effect transmissions of vehicles, for which it was sufficient, and is sufficient, a verbal contract, without there being sufficient diligence to bring such facts to registration in the registry office, despite there being the said increase in registration fee. In fact, as was public knowledge, in many cases, although signed by the Parties, it was agreed not to fill in the field corresponding to the date of conclusion which was left blank, so that it could be filled in later, when the buyer saw fit, thus evading the penalty for delay in registration.

11.6 For this reason, known these circumstances, it was imperative to adopt solutions that would allow an evolution toward a completely innovative regime, so that the institution of the new system would entail the minimum costs of context.

Indeed, it would not cease to be an affront to the generic guarantees of taxpayers, which benefit from constitutional protection, that, in a short space of time, it was intended to regularize the ownership situation of practically a quarter of the vehicles that constituted the national motor vehicle fleet, under penalty of the legal owners, whether or not the true owners of the vehicles, being inexorably subject to payment of the tax, it being certain that the difficulties would not be only for taxpayers but also for the tax administration itself, which, in so short a space of time, would have had to operationalize a structure that gave response to so significant a number of pre-contentious situations.

11.7 Some of the measures appeared from the outset in Law no. 22-A/2007, of 29 June 2007, by providing that, with respect to vehicles covered by the municipal tax on vehicles, circulation tax and haulage tax, would only be abolished on 1 January 2008, giving time for the fiscal administration, in the subsequent six months, to organize itself for the new rules of collection, as well as for the taxpayers to understand and better familiarize themselves with the new rules of compliance with the tax.

The same applies to the evaluation of the cost/benefit of the tax act carried out by the legislator in the context of IUC, which, despite having erected the principle of equivalence as a parameter of taxation, from the outset, excluded from the same light passenger automobiles and mixed-use with gross weight not exceeding 2,500 kg registered up to 1981, as well as motorcycles, mopeds, tricycles and quadricycles up to 1987.

11.8 These measures, by themselves alone, would resolve little, given the breadth of the questions that arose, whereby there was a need to adopt other types of legislative measures.

It is in this context that Decree-Law no. 20/2008 of 31 January is published, which amended various rules of the RRA, and especially Decree-Law no. 78/2008, of 6 May, which created an exceptional regime for regularization of the vehicle database of the Institute of Mobility and Land Transport, which constituted important instruments for a purification of the CRA database by presuming the legal scrapping of vehicles that had not presented themselves for periodic inspections in the last four years.

Nevertheless, there was a clear notion that such measures would continue to be insufficient, given that it was public knowledge that many vehicles in circulation did not have their registration situation regularized.

For this reason, it fell to the defunct General Directorate of Taxes the crucial responsibility of, in the first year of application of the CIUC, in 2008, verified non-compliance with payment of the tax, "awaking" tens or hundreds of thousands of owners of dormant situations in which the vehicles, despite having been, at one time, transmitted, were still in circulation, since they presented regularly for periodic inspections, and had never been subject to updates in the motor vehicle registry office records.

In truth, in many cases, the vehicles had been transmitted five, ten or even fifteen years before, without ever having been registered in the name of the new acquirer, with the alienating owners not even remembering whether the said vehicles had ever been or not registered in the name of that acquirer, given that it was information devoid of interest, insofar as it was not incumbent on them to carry out the registration. On the other hand, the question of payment of the old circulation taxes did not arise, insofar as it was a tax on use, and those owners well knew that they were not using them, whereby no responsibility accrued to them in fiscal terms.

With the findings of non-compliance with the legal periods for payment of IUC and the subsequent notifications for payment, many situations of registration irregularity were thus detected and the registered taxpayers prevented from regularizing the situations, so that in subsequent years such assessments would not be repeated.

More recently, Decree-Law no. 177/2014, of 15 December, took another step in facilitating the reliability of the registration database by creating a special procedure for the registration of ownership of vehicles acquired by verbal contract, making it possible for the same to be effected by the seller of the vehicle, thus relieving them of the burdens resulting from the quality of holder, whether on the plane of civil liability, road liability, or now on the tax plane itself.

12.1 The interpreter of the law cannot uncover in the law a legislative intent that does not have in the law a minimum of verbal correspondence, even if imperfectly expressed.

For this reason, it is important to inquire whether in the legal order there exists any similarity or resemblance between the word "is presumed", which was eliminated, and the word "being considered", which was instituted.

On this question, there are positions taken in doctrine and also in jurisprudence.

12.2 In annotation and comment to article 73 of the LGT, Diogo Leite de Campos, Benjamim Rodrigues, J. Lopes de Sousa, in "General Tax Law, Annotated and Commented", – 4th edition, 2012, pages 651 and 652, refer that presumptions in relation to tax incidence can be explicit, revealed by the use of the expression "is presumed" or similar, citing the examples of nos. 1 to 5 of article 6, in which presumptions relating to income of category E of the CIRS are referred to, which the AT itself, by recognition, can rebut.

Also in nos. 3 and 4, of article 89 A of the LGT, on the prerequisites for the indirect assessment of manifestations of fortune in the context of IRS, the legislator resorts to the word "considers" with a meaning similar to "is presumed".

In civil law there are likewise statutory provisions that go in the same direction, such as the case of article 243, no. 3 of the CC when it provides that "It is always considered in bad faith, the third party who acquired the right after the registration of the action of simulation when such registration should take place", whereby, it seems to us there are no remaining doubts as to the possibility of the legislator expressing in a different manner the same legislative intent.

In annotation to article 3 of the IUC, also the tax specialists A. Brigas Afonso and Manuel Teixeira Fernandes, in "Tax on Vehicles and Single Vehicle Circulation Tax, Annotated Codes", Coimbra Editora, 2009, page 187, pronounce themselves to the effect that "no changes are recorded with respect to the situation that prevailed in the context of the defunct IMV, ICi and ICa.".

12.3 In terms of jurisprudence, in the arbitral field there is a broad consensus on the understanding to be given to such alteration.

In this regard, mention is made, purely by way of example, of the arbitral decisions issued in the context of the CAAD nos. 14/2003-T, 26/2013-T, 27/2013-T, 73/2013-T, 170/2013-T, 217/2013-T, 286/2013-T, 294/2013-T, 46/2014-T, 216-T/2014-T, 250/2014-T and 192/2015-T, involving the intervention of differentiated arbitrators, all converging to identify a presumption in article 3, no. 1 of the CIUC.

This interpretive convergence is in line with Judgment no. 8300/14 CT – 2nd Court, of 19 March 2015, of the Administrative and Tax Court of Lisbon, according to which, "The said article 3, no. 1 of the CIUC establishes a legal presumption that the holder of motor vehicle registration is its owner, and such presumption is rebuttable, by virtue of article 73 of the LGT." - (no. 8, at the end, of the summary of the said judgment).

The Respondent, in its assessment of the gracious reclamation, cited and transcribed part of the reasoning of the judgment delivered in Case 210.13.0BEPNF of the Administrative and Tax Court of Penafiel, which appears to us to be an isolated case, given being the only one, whereby it should be contextualized in those precise terms.

12.4 As regards the preparatory work of the legislation being assessed, specifically article 3, no. 1 of the CIUC, at its genesis was a Working Group created by Joint Order no. 290/2006, of 27 March, 2nd series, of the Ministers of State and Finance and of the Environment, Land Use Planning and Regional Development.

In the guidelines then transmitted, the adoption of principles of modernization of the tax and the search for integrated solutions that allow security and effectiveness in assessments and collections through the involvement in processes of electronic data transmission and access to information from entities outside the Ministry of Finance is contained. With respect specifically to the circulation tax, which would come to be designated as IUC, the guidelines did not point to any alteration to the legal form of institution of the taxpayers of the tax, with incidence being a matter of great sensitivity.

Although the preparatory work of the law does not generally meet with the favor of doctrine, the same, insofar as it was executed by technicians directly dependent on the Fiscal Administration and not by independent personalities chosen for their competence, can better clarify us as to the ideas and the spirit that the legislator wished to impart to the law, counting as a contribution when it is evident that such ideas and principles were incorporated into the law, which, in the present case, generically, ends up being verified.

13.1 In function of what is left stated, the Arbitral Tribunal is convinced that the terminological alteration made in the context of the IUC did not set aside the presumptive regime of civil law and that the same is maintained, in the terms in which it has always prevailed.

13.2 In expressing itself in terms that "…being considered as such …", it transformed the explicit legal presumption into a figure that is also configured as a presumption, albeit in an implicit manner, within its limits, having gone as far as it was able to in the operationalization and modernization of a tax that has always had different characteristics, of taxation of use rather than ownership.

13.3 Having overcome the critical period of 2008, in which the activity of the former DGCI was fundamental in the sanitization of the base of taxpayers, and significant legal changes having been operated in the form of constitution of this database, we believe that there will be conditions for the interpretation sustained by the Respondent to prevail, which would be desirable, mainly for second transmissions of vehicles, but for this, there will have to be undertaken a great legislative effort so as to set aside the presumptive aspect that emanates from the rule.

b) Legal value of registration for purposes of IUC taxation, having in account the provisions of article 3, no. 1, (subjective incidence) and article 6, no. 1, (taxable event and exigibility of the tax), both of the CIUC

14.1 The answer to the question of the legal value of registration for purposes of IUC taxation cannot fail to take into account the answer found for the question of the preceding paragraph.

For the Claimant, the fact that article 3, no. 1 of the CIUC determines that "the taxpayers of the tax are natural or legal persons of public or private law, in whose names they are registered" does not mean that this rule is not altered, by proving otherwise.

In contracts for the purchase and sale of motor vehicles, the transmission of ownership is not subject to any specific form, with verbal purchase and sale contracts even being admitted, operating independently of whether the buyer registers it in their name.

This point of view is rejected by the Respondent, which considers that the understanding of the Claimant has no correspondence with the ratio legis or the mens legislatoria, since the tax legislator in article 6 of the CIUC clearly established the premises regarding the taxable event of the tax, as well as its exigibility, providing that such event is constituted by the ownership of the vehicle, as attested by the registration or registration in national territory.

14.2 In accordance with article 408, no. 1 of the CC the transfer of real rights over things is verified by mere effect of the contract, whereby acquirers of vehicles upon concluding purchase and sale contracts become owners thereof by the simple transmission of the thing, independently of registering them or not.

Registration does not have constitutive effects but merely declarative ones. It seeks to safeguard security in legal commerce, guaranteed by the seal of a public entity, whose objective is to avoid or reduce litigation over property in goods, but, in the case of automobiles, as things, its role does not go beyond a function simply declarative, based on the presentation of an official request model. What determines transmission is, except for the exceptions provided for in law, the will of the parties expressed in the verbal contract.

In function of the provisions of article 7 of the Real Property Register Code, applicable by referral of article 29 of the CRA, "Definitive registration constitutes a presumption that the right exists and belongs to the registered holder, in the precise terms in which the registration defines it", whereby, being established a legal presumption of ownership, the same cannot fail to be confronted with the provisions of article 350, no. 2 of the CC, according to which legal presumptions can be rebutted by proof to the contrary, except in cases expressly provided for in law.

The jurisprudence of the Supreme Court of Justice on this question appears to be settled (judgments 03B4369, of 19.02.2004, and 07B4528, of 29.01.2008) to the effect that registration functions "(only) as mere presumption, rebuttable (presumption juris tantum) of the existence of the right (articles 1, no. 1, and 7 of the CRP and 350, no. 2 of the CC) as well as of the respective ownership, in the terms thereof contained…".

14.3 Ratio legis is an expression of the meaning or of the legislative intent underlying the rule that allows the interpreter to attempt to uncover what the legislator intended.

Referred to the heading "Taxable Event and Exigibility", article 6, no. 1, states that "The taxable event of the tax is constituted by the ownership of the vehicle, as attested by the registration or registration in national territory.", and is exigible on the first day of the taxation period referred to in no. 2 of article 4 - no. 3 of the said article ("The taxation period corresponds to the year that begins on the date of registration or on each of its anniversaries, in relation to vehicles of categories A, B, C, D, and E …").

14.4 The tax regime of the IUC approved by Law no. 22-A/2007, of 29 June, integrated a global reform of motor vehicle taxation, in which it was intended to create a common denominator in environmental taxation and establish greater approximation between the revenues collected from the old Automobile Tax, very high, and the circulation tax, of reduced financial expression.

On the other hand, the nature of circulation tax that the repealed taxes have always had, in which subjective incidence was generated by the availability and use of the vehicle on the public road by its driver, to the detriment of the ownership of registrations in the registry office, has always relegated to the background the question of articulation between the tax authorities and the entities to whom the registration activity falls.

Although the presumptive system existing in relation to registration has always raised problems in terms of civil responsibility, whether from accidents, run-overs, practice of road infractions, use for the practice of crimes, etc., the question was aggravated with the expansion of the market and its respective massification of sales, leading to a certain depersonalization of vehicle ownership itself, since many vehicles can be sold in the same year more than once.

This intensification of successive changes of ownership, while constituting itself over the years as an increasingly larger problem for deciding disputes, nevertheless never came to convince the legislator to change the nature of registration, that is, to have the function that the Respondent intends that it have in the tax field, to constitute a premise for the taxable event of the IUC and its exigibility, providing that such event is constituted by the ownership of the vehicle, as attested by the registration or registration in national territory.

For this reason, the maintenance of the system of registrations as it has been conceived for almost fifty years, when other entities such as the IMTT sought in the Highway Code response for the inadequacies of the information of registrations, specifically in terms of updating the information, leads us to consider the said rules as instrumental solutions for selecting taxpayers who are susceptible to supporting the assessment and collection of the tax and not as absolute subjective solutions as the Respondent claims.

If the taxpayer reveals that he is no longer the owner of the vehicle and proves it, or, at least, demonstrates it with a minimum of credibility, it falls to the active subject to follow the information provided to it, and notify the actual owner to proceed with the respective payment, whether of the IUC and indemnitory interest, or of the sanction that compensates for the negligence of the vehicle owner.

14.5 In advocating the question of notification of the actual owner, visibility is given to a question that the Parties did not bring to the case file, but which should also be taken into account. Indeed, as appears from article 1, the CIUC "obeys the principle of equivalence, seeking to burden taxpayers in accordance with the environmental and road cost that they cause, in implementation of a rule of tax equality".

The burden should fall on taxpayers in function of the environmental and road cost they occasion, but if someone comes to the tax proceedings to say that he is not the owner of the vehicle and as such does not have the power of direction and use of the vehicle and, consequently, the capacity to regulate the production of the environmental and road cost, naturally the equivalence that is sought to be achieved by way of impositions cannot be found in the legal owner but rather in the owner "in fact".

c) The aptness of the invoice for purposes of proof of vehicle transmissions

15.1 From the matter of facts found as proved, the Claimant was the owner of the heavy goods vehicle of the brand Scania, with registration …-…-…, which, on 31 July 2007, it sold to company B..., Single-Member Limited Liability Company, having issued sales invoice no. 3039, of 31 July 2007, of which it attaches a copy;

As consideration for the said sale, the amount of 2,000 € was deposited, on 2 August 2007, in the bank account of C… of the Claimant, with the depositor being identified but the connection thereof to the company not being evident.

15.2 The existing documentation points to a simple business relationship between companies, in which one sold to the other a used vehicle which, in function of the order of the registration elements, would have at the time of sale approximately nine years of age, and by the nature of the goods transmitted is not subject to special formalities.

15.3 Although the Respondent affirms that the said documentation is not sufficient to prove that the Claimant was not the owner of the vehicle on the dates of exigibility of the tax, since they are copies of the invoice and of the original of the receipt, which is not signed nor was it delivered to the "buyer", and do not unequivocally prove that the transaction was effected, not being suitable for proving the sale of the vehicle in question, since they are merely documents unilaterally issued by the owner of the vehicle, demonstrating only the will of the Claimant, not being capable of proving the conclusion of a synallagmatic contract such as purchase and sale, since they do not reveal by themselves an indispensable and unequivocal declaration of will (i.e., acceptance) on the part of the presumed acquirer, not lacking cases of issuance of receipts relating to transmissions of goods and/or provision of services that never came to be realized, in the concrete case, the Arbitral Tribunal considers that there is a manifest connection between the issuance of the invoice and the receipt of the amount due from the sale.

Contrary to transactions in so-called normal commerce goods, in which, as a rule, there are periods of payment of the goods, it is verified that it was the sale of a good (used) belonging to the assets of a transport company with a view to integrating the assets of another company, presumably also dedicated to goods transportation.

Having not been raised concrete doubt as to the authenticity of the said invoice, and the Respondent is especially qualified to be able to do so, given the wealth of information it currently has in terms of accounting and tax monitoring, nor of the deposit slip of the banking entity presented to prove receipt of the sale price, no reasons are seen that would lead to discard the aptness of the invoice as a means of proof of the vehicle transmission, which, moreover, in general, support and are the basis of the collection of important taxes by AT, especially VAT and Corporate Income Tax.

For this reason, the argument that the invoice is a unilateral document, insufficient to constitute a means of proof of the occurrence of transmission is not specially valued, more so when, together with the invoice, a document (copy) of a bank deposit slip evidencing that, on a date immediately following, had been deposited in the account of the Claimant, an amount in the precise amount contained in the invoice is delivered.

Indeed, one must consider it very unlikely that someone will deposit 2,000 euros in another's account for nothing, that is, underlying such deposit in an account of a company will be, with high probability, underlying the payment of a transaction or the provision of a service, whereby the immediacy of the invoicing/payment inculcates the highest probability that such deposit, in that precise amount, corresponds to the payment of the price of the tractor that was sold.

15.4 The fact that a very small percentage of invoices could correspond to transactions not effected or even be false invoices, as sometimes signaled by the media organs and AT itself in the disclosure of infractions that are detected, cannot call into question the seriousness and confidence of national and international commerce in processes of transmission and regulation of property in goods, prevailing, for tax purposes, the presumption of truthfulness referred to in article 75, no. 1 of the LGT and the probative force of article 376 of the CC.

In the terms in which the transaction was verified, no reasons are seen to declassify it, and likewise no motives are seen, by absence of registration, for the condition of owner to have ceased to be verified, since registration is not a condition of validity of contracts with real effect.

15.5 The judgment of the TCAS no. 8300/14 already mentioned above castigates the invoice and the debit note as documents emanating from the company, in the phase of assessment of the amount payable by the buyer, as documents that do not make proof of the respective payment of the price by the same buyer, (only the issuance of invoice/receipt or of receipt makes proof of payment and discharge) but, in the concrete case, there is a deposit slip issued by the banking entity, C…, evidencing that someone deposited that amount (2,000 €) in the account of the Claimant.

d) To what extent constitutional requirements are observed, by calling into question principles such as that of confidence and legal security, the principle of efficiency of the tax system and the principle of proportionality

16.1 The Respondent sustains that the interpretation conveyed by the Claimant is contrary to the Constitution, by calling into question principles such as that of confidence and legal security, the principle of efficiency of the tax system and the principle of proportionality.

It is important, therefore, to briefly analyze to what extent these principles can be called into question.

Confidence and legal security

16.2 The Respondent alleges that the devaluation of the register reality to the detriment of an "informal reality" makes inviable a minimal control of the collection of the tax and is offensive of the basic principle of confidence and legal security that should guide any legal relationship, here including the tax relationship.

In its understanding, the failure to update the registration, in accordance with the provisions of article 42 of the RRA, will be imputable in the legal sphere of the IUC taxpayer and not in that of the State, as the active subject of the tax, given that, if not understood thus, the institution of registration would cease to provide the security and certainty which constitute its principal aims.

In the understanding of the arbitral tribunal, having concluded on the presumptive regime of the tax rule and the instrumental character of the CRA database in the context of IUC collection, the alleged violation is not verified.

The institution of registration continues to assure security and legal certainty in the same terms that over almost fifty years it has always assured, since the legislator did not feel the need to proceed with any alteration, even though it had had a good reason to do so, which was to avoid an apparent normative incoherence between the legislation that regulates registrations and the tax legislation that takes advantage of the same.

16.3 In the concrete case, the transmission of the vehicle sub judice occurred on 31 July 2007, that is, one month after the publication of Law no. 22-A/2007 of 29 July, but in a period in which the said legislation was not yet in force.

Being the law already known, although it only entered into force on 1 January 2008, it could be admitted that in the sale of the vehicle the Claimant should have been more provident, following the phase subsequent to the purchasing entity, that is the registration of the vehicle, so as not to be surprised by inopportune IUC assessments.

However, this arbitral tribunal judges that for the average citizen, and in this case, for the Claimant, which is believed to lie within the average pattern of small and medium-sized businesses, such requirement would, at the time of transmission, be excessive.

Given the procedures that had always existed in relation to alienation and registration of vehicles, it was not easy for any taxpayer, who did not have good technical/legal advice, to deeply assess the consequences brought by the newly disclosed legislation.

The Press Release itself, disclosed by the Office of the Minister of State and Finance, on 19 December 2007, (www.min-financas.pt), when dealing with the "New Rules and periods of the Single Vehicle Circulation Tax from January 2008", projected the future changes, but said nothing (alerted) regarding the situations that were susceptible to being retroactively affected by the rules of the new legislation, and that the legislator had perfectly identified, hence the very emission of legislation to that effect.

16.4 In Arbitral Decision no. 424/2015-T, of 8 March 2016, in which the Respondent had raised this same question of the principles of legal security and protection of confidence in light of the Constitution, the reporting arbitrator after discoursing on the teachings of professor J.J. Gomes Canotilho, concluded, in terms that are wholly subscribed to, that "From this doctrine, it follows that persons in alienating their vehicles must be sure that, should they proceed with the sale of the vehicles of which they are owners and, not being the same registered in the name of the acquirers, the legal effects resulting therefrom will be those provided for and arising from the legal rules in force and their adequate interpretation, in light of the purposes of those same rules, which in this case, led the arbitral tribunal to consider registration as a rebuttable presumption of the existence of the right and that only persons who cause road and environmental costs should be taxed".

For this reason, it is the conviction that, in the concrete case, confidence and legal security are not shown to be affected, on the contrary, if the taxpayer were penalized by conduct that had always been legal and for which, only for very weighty reasons, but which had nothing to do with the tax itself, it would have been justified to request the seizure of the vehicle.

Efficiency of the tax system

16.5 The Respondent considers that the interpretation of the Claimant is offensive of the principle of efficiency of the tax system, insofar as it translates into an obstruction and increase in the costs of the competencies assigned to the Respondent, with obvious prejudice to the interests of the Portuguese State, insofar as it brings additional administrative costs, obstruction of the performance of its services, absence of control of the tax and uselessness of the registration information systems.

Article 267 of the Constitution of the Portuguese Republic imposes that the Public Administration be structured in terms of avoiding bureaucratization, a principle reaffirmed in article 5, no. 1 of the New Code of Administrative Procedure in providing that "it must be guided by criteria of efficiency, economy and celerity".

Article 55 of the LGT, although not literally expressing the term efficiency, refers to proportionality and celerity, in respect for the guarantees of taxpayers and other obligated parties.

What is imposed is, within the regulatory framework offered by the legislator, the tax administration to organize itself and find administrative and technical solutions, so that, with the human, financial and material resources it has, it is able to enhance its capacity for achievement of the tax purposes.

The legislator pointed out paths for the improvement of this efficiency, such as the computerization of procedures, the use of the electronic means, in some cases mandatory, for the performance of tax obligations, the conclusion of protocols with various entities for diverse purposes, including the assessment of taxes, but the action of the tax administration will have to be contained in the strict limits of the legality of the tax.

The tax administration normally has means and resources to give response to the legal requirements of the collection of the tax, whereby the obstruction of its activity will only happen, in the case of owners who appear in the motor vehicle registration not recognizing themselves as taxpayers, if by inertia or other incapacity, the necessary mechanisms for pursuit of the tax debtor are not created, preferably, for greater celerity, using the electronic means.

In the abstract, the adjustment between the aims pursued and the means selected to achieve them is a task of administrative rationalization to be developed without imposing excessive or spurious obligations on taxpayers, within a framework of proportionality.

On the other hand, the Respondent has an important faculty of initiative and persuasion with the legislator, given that where it glimpses the existence of legislative bottlenecks or the appearance of interpretive difficulties susceptible to compromising its achievements in terms of objectives, can be pro-active and propose that such norms be created that remove these obstacles, being able, from the outset, to count on the sensitivity of the legislative power, given that this also has an interest that there exists a framework of legality that allows the fulfillment of the objectives.

Hence, the question of efficiency in the plane of constitutionality only arises if, having exhausted the capabilities of the Respondent, it is altogether impossible to innovate and recreate new methodologies that allow it to achieve the objectives resulting from the fulfillment of its attributions, which in the case of the proceedings does not become evident.

Principle of proportionality

16.6 The Respondent argues that the interpretation conveyed by the Claimant calls into question the principle of proportionality, insofar as it totally disregards it in confrontation with the principle of taxable capacity, when in reality the Claimant has the legal mechanisms necessary and adequate to safeguard such capacity (e.g., motor vehicle registration), without, however, having exercised them in due time.

It follows from article 266, no. 2 of the CRP, which establishes the fundamental principles of the Public Administration, that administrative bodies and agents are subordinated to the Constitution and must act in the exercise of their functions with respect for the principle of proportionality.

The LGT refers in article 55 that the tax administration exercises its attributions in the pursuit of public interest, likewise in accordance with the principle of proportionality, in respect for the guarantees of taxpayers and other tax-obligated parties.

In the strict scope of proportionality, article 46 of the CPPT provides that "The acts to be adopted in the procedure shall be adequate to the objectives to be achieved, in accordance with the principles of proportionality, efficiency, practicability and simplicity".

The judgment of the Supreme Administrative Court no. 041177, of 01.07.1997, dimensions it in terms of the "congruence, adequacy or suitability of the means or measure to achieve the legally proposed aim".

In the point of view of the arbitral tribunal, the conclusion reached on the nature presumptive of article 3, no. 1, of the CIUC, which does not cease to combine with the unity of the legal system itself, does not wound the principle of proportionality, since, required the respect for the guarantees of taxpayers, if that respect implies redirecting the assessment to another taxpayer, who is identified as the actual owner of the vehicle and who has the power to dispose of it, it falls to AT to create this mechanism of "pursuit" of the taxpayer, moreover much facilitated, with respect to communication between collective taxpayers and AT itself, given the requirement of the electronic means.

1. The Respondent further points to the fact that the Claimant did not proceed with the care that was required of it, since it did not update the motor vehicle registration, as indeed it could and was incumbent on it, only having ordered the cancellation of the registration of the vehicle, five years later, on 26.11.2013.

This arbitral tribunal does not have elements that allow it to conclude a lack of care by the Claimant, specifically because, at the time, it had no possibility of updating the registration which, for sellers, as seen above, only came to happen in 2014.

1. Of the amounts required by the Respondent, one amount corresponds to IUC assessed and not paid which is in execution proceedings, corresponding to the years 2011, 2012 and 2013 and another amount corresponds to fines relating to non-payment of IUC for the year 2011, in the amount of 357.08 € and for the year 2013, in the amount of 405.04 €.

In accordance with article 53 of the RGIT, decisions imposing fines and accessory sanctions can be subject to appeal to the first-instance tax court, except in cases where the contravention is judged in first instance by the ordinary court. Underlying them is the commission of a tax infraction without criminal nature, understood the infraction as a typical, unlawful and culpable fact declared punishable by earlier tax law.

In the case, the fines applied result from non-compliance with payment of the tax obligation in the legally set period.

In accordance with article 2, no. 1, paragraph a), of the RJAT, the competence of arbitral tribunals comprises the declaration of illegality of acts of assessment of taxes, of self-assessment, of withholding at source and of payment on account.

On the other hand, in accordance with article 24, no. 1, paragraph c), of the same RJAT, the arbitral decision on the merits of the claim to which no appeal or challenge is possible binds the tax administration, and this must, in the exact terms of the procedence of the arbitral decision in favor of the taxpayer, review the tax acts that are in a relationship of prejudiciality or dependence with the tax acts subject to the arbitral decision.

Being thus, the arbitral tribunal abstains from knowing of the claim of the Claimant, in what respects the fines, it falling to the Respondent to draw the consequences of the procedence of the arbitral claim.

VI - ARBITRAL COSTS

1. The provisions of articles 22, no. 4 of the RJAT, and 4, no. 4 of the Regulation of Costs in Proceedings of Tax Arbitration, (RCPAT) provide that in the arbitral decision is contained the fixing of the amount and the apportionment by the parties of the costs directly resulting from the arbitral proceedings.

Since both Parties succeeded in the defense of the disputed tax acts, it falls to them to bear the costs of the arbitral proceedings in proportion to that failure.

VII – DECISION

In these terms, the Singular Arbitral Tribunal decides as follows:

1. To judge the claim as well-founded, with the consequent annulment of the acts of assessment relating to the vehicle subject to assessment, by defect of violation of law, due to error in the premises of fact and law, determining the elimination of the requirement for payment of IUC for the years 2011, 2012 and 2013, totaling 3,117.59 €.

2. To abstain from knowing of the claim of the Claimant, insofar as it concerns the assessments relating to the fines applied in contravention proceedings.

3. To condemn the Respondent and the Claimant to payment of arbitral costs, in the proportion in which they failed with respect to the value of the proceedings.

In accordance with the provisions of article 97 A, of the CPPT, applicable by virtue of what is provided in article 29, no. 1, paragraphs a) and b) of the RJAT and in article 3, no. 2 of the RCPAT, the value of the proceedings is fixed at € 3,879.71 (three thousand eight hundred and seventy-nine euros and seventy-one cents), amount corresponding to the sum of the amounts of the assessments challenged, whose annulment was requested.

In accordance with Table I annexed to the RCPAT, applicable by referral of its article 4, no. 1, the costs are fixed in the amount of € 612 (six hundred and twelve euros), being 491.80 € (four hundred and ninety-one euros and eighty cents) to be paid by the Respondent, and 120.20 € (one hundred and twenty euros and twenty cents) to be paid by the Claimant.

Let notification be made.

Lisbon, 13 July 2016.

The Singular Arbitrator

António Manuel Melo Gonçalves