Summary
Full Decision
ARBITRAL DECISION
I – REPORT
A..., S.A, taxpayer no.…, with registered office at Av…, Plot…, in Lisbon, hereinafter referred to as Claimant, filed a request for the constitution of an arbitral tribunal in tax matters and a request for an arbitral award, pursuant to Articles 2, no. 1 a) and 10, no. 1 a), both of Decree-Law no. 10/2011, of 20 January (Legal Regime for Arbitration in Tax Matters, hereinafter referred to as RJAT), petitioning for the declaration of illegality of the tax assessments of the Single Road Tax (IUC), identified in the Table attached to the request for constitution of the request for an arbitral award, which are hereby fully reproduced, issued by the Tax and Customs Authority, relating to the years 2013 and 2014, in the total amount of € 1,257.44, as well as the payment of indemnificatory interest on the amounts paid.
The request for constitution of the arbitral tribunal was accepted by the President of CAAD and automatically notified to the Tax and Customs Authority on 16-03-2015.
Pursuant to Articles 5, no. 2, a), 6, no. 1 and 11, no. 1, a) of the RJAT, the Deontological Council appointed the signatory as arbitrator of the single arbitral tribunal, who communicated acceptance of the appointment within the applicable time limit.
On 06-05-2015 the parties were duly notified of this appointment, and neither party manifested the intention to reject the arbitrator's appointment, in accordance with the combined terms of Article 11, no. 1 letters a) and b) of the RJAT and Articles 6 and 7 of the Deontological Code.
Thus, in accordance with the provisions of letter c) of no. 1 of Article 11 of the RJAT, the single arbitral tribunal was constituted on 26-05-2015.
By agreement of the parties, the tribunal dispensed with the meeting provided for in Article 18 of the RJAT, and the parties submitted written pleadings.
The arbitral tribunal has been regularly constituted and is substantively competent, in accordance with the provisions of Articles 2, no. 1, letter a), and 30, no. 1, of Decree-Law no. 10/2011, of 20 January.
The parties have legal personality and capacity, are legitimate parties and are represented (Arts. 4 and 10, no. 2, of the same statute and Art. 1 of Order no. 112-A/2011, of 22 March).
The proceedings are not affected by any nullities and no exceptions were raised.
The arguments supporting the Claimant's request for an arbitral award are, in summary, as follows:
Arguments of the Claimant
10.1 The present request is filed following the decision to reject the administrative review petition relating to the self-assessment acts of IUC for the years 2013 and 2014, and this tribunal has competence to declare the illegality of the self-assessment acts and the decision rejecting the administrative review petition, pursuant to letter a) of no. 1 of Article 2 of the RJAT.
10.2 The Claimant is a credit financial institution subject to the supervision of the Bank of Portugal, which carries on its activity in the field of motor vehicle financing, namely under the modality of granting loans for the acquisition of vehicles or the conclusion of financial leasing contracts.
10.3 In all cases covered by the present arbitral request, the Claimant is not the tax debtor, for the following reasons:
a) In all situations identified in the table attached to the Request, with the exception of the last two, the ownership of the vehicles was transferred on a date prior to the date of maturity of the IUC;
b) The IUC assessment relating to the second-to-last situation identified in the table attached to the Request is illegal because the ownership of the vehicle "was not within the sphere of the Claimant on the date the tax became due";
c) The tax assessment relating to the last situation identified in the table attached to the Request is manifestly illegal, insofar as the vehicle was acquired by the Claimant after the date of maturity of the IUC.
10.4 These tax acts constitute a defect consisting of violation of law because, pursuant to Article 6, no. 3 of the IUC Code, the tax is considered due to the owner on the first day of the tax period of the vehicle, which takes place, in accordance with Article 4, no. 2, on the date the registration is assigned.
10.5 The Claimant transferred the motor vehicles, with the exception of the vehicle with registration no. …-…-…, on dates prior to the payment deadlines for the IUC of the years 2013 and 2014.
10.6 The ownership of these vehicles would not have been registered in the motor vehicle register in the name of the owner, a fact to which the Claimant is not responsible.
10.7 Despite no longer being the owner of the vehicles, the Claimant proceeded to pay them.
10.8 Simultaneously, it filed an administrative review petition against the respective assessment acts.
10.9 Now, although Article 3, no. 1 of the IUC Code provides that "tax debtors are the owners of vehicles, being considered as such the persons (…) in whose names the same are registered", the expression "being considered" should be understood as a rebuttable legal presumption, subject to proof to the contrary by the transferor of the vehicle, for which the present request appears appropriate.
10.10 Any arguments of a hermeneutical nature aimed at attaching a different meaning would always be incompatible with the principle of fiscal capacity.
10.11 It also alleges in its defense the uniform understanding in various arbitral decisions.
10.12 It concludes by requesting the annulment of the IUC assessments that are the subject of the present proceedings and the consequent reimbursement of the amounts paid as tax and compensatory interest, as well as the condemnation of the AT to pay the respective indemnificatory interest.
Response of the Respondent
11.1 In its Response, it raises as preliminary points (i) the fact that the Claimant has not proven the date on which it was notified of the rejection of the administrative review petition, (ii) the lack of documents supporting the thesis defended, and finally, the lack of proof of payment of the tax, with the exception of the IUC for 2014 of the vehicle with registration no. …-…-….
11.2 It further adds that, contrary to what is alleged by the Claimant, the case law of CAAD does not bind this tribunal nor is it settled, as demonstrated by decisions cited by way of example.
11.3 In substantive terms, the AT considers that the Claimant's allegations: a) constitute a distorted reading of the letter of the law; b) do not take into account the systematic element, violating the unity of the regime enshrined in the entire IUC and, more broadly in the entire legal-tax system; and, finally, c) also arise from an interpretation that ignores the ratio of the regime enshrined in no. 1 of Article 3 of the CIUC.
11.4 The tax legislator when establishing in Art. 3, no. 1 who are the tax debtors of the IUC established expressly and intentionally that these are the owners (or in situations provided for in no. 2 the persons mentioned there), being considered as such the persons in whose names the same are registered.
11.5 The legislator did not use the expression "it is presumed" as it could have done, for example, in the following terms: "tax debtors are the owners of vehicles, being presumed as such the natural or legal persons, of public or private law, in whose names the same are registered".
11.6 Thus, the wording of Art. 3 of the CIUC corresponds to a clear choice of legislative policy adopted by the legislator, so that to understand that a presumption is enshrined there would undoubtedly constitute an interpretation against the law.
11.7 In accordance with this, this understanding has already been adopted by the case law of our courts, transcribing, for this purpose, part of the judgment of the Administrative and Tax Court of Penafiel, handed down in Case no. 210/13.0BEPNF. (See Art. 43 of the Response)
11.8 Regarding the systematic element of interpretation, the Claimant alleges that the solution advocated by the Claimant is intolerable, finding the understanding championed by it no legal support. (Art. 64 of the Response)
11.9 Finally, with regard to the "ratio", of parliamentary debates surrounding the approval of the present regime, it is clearly established that the motor vehicle taxation regime approved establishes that the IUC "is now due by the persons who appear in the register as owners of the vehicles" (Article 99).
11.10 It further adds that invoices alone do not constitute suitable documentation to prove the sale of the vehicles, since the same is nothing more than a document unilaterally issued by the Claimant.
11.11 The Claimant could, for example, have attached to the request for constitution of the arbitral tribunal proof of receipt of the price but did not.
11.12 On the other hand, the invoices submitted present in their description different mentions ("non-leased sale", "total loss insurer", "residual value", "rescission"), which indicate different realities.
11.13 Indeed, regarding vehicles with registration numbers "…-…-…" and "…-…-…" loan contracts are presented which do not prove the transfer of the vehicle or its timing.
11.14 For the foregoing reasons, unilateral documents do not have sufficient probative value to rebut the legal presumption contained in the register.
11.15 It cites, in this sense, the jurisprudence of CAAD in Cases nos. 63/2014-T, 130/2014-T, 150/2014-T, 220/2014-T and 339/2014-T.
11.16 As for indemnificatory interest, it alleges that, even if it is understood that the tax is not due, there is no error attributable to the service because the AT merely complied with the rule of no. 1 of Article 3 of the CIUC, so the legal requirements for the right to indemnificatory interest are not met.
11.17 A similar argument is used regarding liability for the payment of arbitral costs: it was not the Respondent who gave rise to the filing of the request for an arbitral award but the Claimant which only submitted documentary evidence relating to the alleged transfer of ownership after the tax assessment.
11.18 Consequently, the Claimant should be condemned to pay the arbitral costs, in line with what was decided in a similar case within Case no. 72/2013-T of this Arbitration Centre.
Having considered all the foregoing, it is now necessary to render a final decision.
A. FINDINGS OF FACT
A.1. Established Facts
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The Claimant is a Credit Financial Institution subject to the supervision of the Bank of Portugal which is dedicated to motor vehicle financing, namely under the modality of granting loans for the acquisition of vehicles or the conclusion of a financial leasing contract.
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The Claimant proceeded to the assessment and payment of the IUC identified in the table attached to the Request, in the total amount of € 1,257.44.
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In the context of an administrative review petition, the Claimant invoked the transfer of ownership of the vehicles, attaching the respective invoices.
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In response, the Tax and Customs Authority rejected the petition and considered that the obligation to pay the tax remained.
B. AS TO THE LAW
B.1 Preliminary Points
In its Response, the Respondent raises as "preliminary points" the lack of mention in the request for constitution of the arbitral tribunal of the date of rejection of the administrative review petition, as well as proof of payment of the assessed tax.
It should first be stated that the Claimant complies with all the requirements of the request for constitution of the arbitral tribunal provided for in letters a) to g) of no. 2 of Article 10 of the RJAT.
On the other hand, as the Claimant alleges, the allegedly omitted information is contained in the administrative file which, we recall, the Respondent is obliged to submit to the arbitral tribunal, pursuant to no. 2 of Article 17 of the RJAT.
For the foregoing reasons, the request for an arbitral award is timely with respect to all the assessments now impugned, so the "preliminary points" do not constitute exceptions preventing the tribunal from hearing the request and rendering a decision.
B.2 THE PRESUMPTION OF OWNERSHIP OF THE VEHICLE
Given the positions taken by the parties in the arguments presented, the central question is whether, on the date the tax was triggered (Article 3, no. 1, of the CIUC) the owners of the vehicles are not those registered, will nonetheless these be always considered the tax debtors of the IUC, the ownership revealed by the register not being therefore considered a rebuttable presumption, or, in other words, whether the rule of subjective incidence contained in Article 3, no. 1 of the CIUC, establishes or not a presumption.
This matter has already been extensively addressed in Tax Arbitral Case Law. See, by way of example, the various CAAD decisions published at www.caad.org.pt, namely those handed down in Cases nos. 14/2013, 26/2013, 27/2013, 73/2013, 170/2013, 294/2013 and 216/2014. In the present decision we shall follow the understanding and conclusions of those decisions.
For the sake of synthesis and clarity of thought, we adhere, without reservation, to the framework set out in the arbitral decision in Case no. 216/2014-T, which we cite and to which we refer:
"The general and unanimous sense of such case law is to consider that Article 3-1 of the CIUC establishes a rebuttable presumption of ownership based on the entries or registrations contained in the Motor Vehicle Register office and/or the IMTT database on the date of the tax event.
That is: if the IUC is assessed based on the entries in the register or in accordance with the elements contained in the IMTT databases, the tax debtor may exonerate himself from payment by demonstrating the non-correspondence between reality and those entries and elements which the Tax Authority used to proceed with the assessments.
No reasons are apparent to reverse or alter the essential sense of this case law.
Let us examine, then, once again and more closely the question:
Article 3 of the CIUC (Single Road Tax Code) provides:
Article 3
Subjective Incidence
1 – The tax debtors are the owners of vehicles, being considered as such the natural or legal persons, of public or private law, in whose names the same are registered.
2 – Equivalent to owners are financial lessees, purchasers with reservation of title, as well as other holders of purchase option rights by virtue of the leasing contract".
For its part, no. 1 of Article 11 of the GTL provides 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".
Resolving the doubts that may arise in the application of legal rules presupposes the carrying out of an interpretative activity.
It is thus necessary to consider what is the best interpretation of Art. 3, no. 1 of the CIUC, in light, first, of the literal element, that is, that in which it is aimed at detecting the legislative thought that is objectified in the rule, to verify whether the same contemplates a presumption, or whether it determines, definitively, that the tax debtor is the owner registered in the register.
The question that arises is, in the case sub judicio, whether the expression "being considered" used by the legislator in the CIUC, instead of the expression "being presumed", which was that contained in the statutes preceding the CIUC, will have removed the nature of presumption from the legal provision in question.
In our view, and contrary to what is learned argued by the AT, the answer must necessarily be negative, since from the analysis of our legal system it is clearly apparent that the two expressions have been used by the legislator with equivalent meaning, whether at the level of rebuttable presumptions, or in the context of irrebuttable presumptions, so nothing enables us to draw the conclusion sought by the Tax Authority on the basis of a mere semantic reason.
In fact, this occurs in various legal rules that enshrine presumptions using the verb "to consider", of which the following are indicated, merely by way of example:
~ in the field of civil law - no. 3 of Art. 243 of the Civil Code, when it establishes that "it is always considered in bad faith the third party who acquired the right after the registration of the simulated action, when this takes place";
~ also in the field of industrial property law the same occurs, when Art. 59, no. 1 of the Industrial Property Code provides that "(…)the inventions whose patent was requested during the year following the date the inventor left the company, are considered made during the performance of the employment contract (…)";
~ and, finally, in the field of tax law, when nos. 3 and 4 of Art. 89-A of the GTL provide that it is incumbent on the taxpayer to bear the burden of proof that the declared income corresponds to reality and that, if such proof is not provided, it is presumed ("is considered" in the wording of the Law) that the income is that which results from the table contained in no. 4 of the said article.
This conclusion that there is total equivalence of meanings between the two expressions, which the legislator uses indifferently, satisfies the condition established in Art. 9, no. 2 of the Civil Code, since the minimum of verbal correspondence is ensured for purposes of determining the legislative thought.
It is important, subsequently, to submit the rule in question to the other elements of logical interpretation, namely, the historical element, the rational or teleological element and the element of systematic order.
Discussing the interpretative activity Francisco Ferrara says that this "is the most difficult and delicate operation to which the jurist can dedicate himself, and it demands fine touch, refined sense, happy intuition, much experience and perfect mastery not only of the positive material, but also of the spirit of a certain legislation. (…) The interpretation should be objective, balanced, without passion, bold sometimes, but not revolutionary, acute, but always respectful of the law" (See Essay on the Theory of Interpretation of Laws, translation by Manuel de Andrade, (2nd ed.), Arménio Amado, Editor, Coimbra, 1963, p. 129).
As Batista Machado points out "the legal provision presents itself to the jurist as a linguistic utterance, as a set of words that constitute a text. Interpreting evidently consists in drawing from that text a certain sense or content of thought.
The text bears multiple meanings (polysemy of the text) and frequently contains ambiguous or obscure expressions. Even when apparently clear at first reading, its application to the concrete cases of life often gives rise to interpretation difficulties unexpected and unpredictable. Moreover, although apparently clear in its verbal expression and bearing only one sense, there is still the possibility that the verbal expression has betrayed the legislative thought – a phenomenon more frequent than would appear at first sight " (See Introduction to Law and to Legitimizing Discourse, pp.175/176).
"The purpose of interpretation is to determine the objective meaning of the law, the vis potestas legis.(…) The law is not what the legislator wished or wished to express, but only that which he expressed in the form of law. (…) On the other hand, the legal command has an autonomous value which may not coincide with the will of the architects and drafters of the law, and may lead to unexpected and unforeseen consequences for legislators. (…) The interpreter must seek not what the legislator wished, but what in the law appears objectively intended: the mens legis and not the mens legislatoris (See Francesco Ferrara, Essay, pp. 134/135).
Understanding a law "is not solely to grasp in mechanical fashion the apparent and immediate sense that results from verbal connection; it is to inquire deeply into the legislative thought, to descend from the verbal surface to the intimate concept that the text contains and develop it in all its possible directions"(loc. cit., p.128).
With the objective of unveiling the true sense and scope of legal texts, the interpreter resorts to the interpretative factors which are essentially the grammatical element (the text, or the "letter of the law") and the logical element, which, in turn, is subdivided into the rational element (or teleological), systematic element and historical element. (See Baptista Machado, Loc. Cit., p. 181; Oliveira Ascensão, Law – Introduction and General Theory 2nd Ed., Calouste Gulbenkian Foundation, Lisbon, p.361).
Among us, it is Article 9 of the Civil Code (CC) that provides the rules and fundamental elements for the correct and adequate interpretation of norms.
The text of no. 1 of Article 9 of the CC begins by saying that interpretation should not be confined to the letter of the law, but should reconstitute from it the "legislative thought".
On the expression "legislative thought" Batista Machado tells us that Article 9 of the CC "did not take a position in the controversy between the subjectivist doctrine and the objectivist doctrine. Evidence for this is the fact that it does not refer, either to the "will of the legislator" nor to the "will of the law", but instead points to as the scope of the interpretative activity the discovery of "legislative thought" (Art. 9, 1st). This expression, purposefully colorless, means precisely that the legislator did not wish to commit itself" (loc. cit., p. 188).
In the same sense P. de Lima and A. Varela pronounce in annotation to Article 9 of the CC (See Annotated Civil Code – vol. I, Coimbra ed., 1967, p. 16 ).
And on no. 3 of Article 9 of the CC Batista Machado further states: "(…) this no. 3 proposes to us, therefore, a model of ideal legislator who enshrined the most correct solutions (more correct, just or reasonable) and knows how to express itself in correct form. This model clearly bears objectivist characteristics, for the concrete legislator (often incorrect, precipitate, unhappy) is not taken as a point of reference but an abstract legislator: wise, foresighted, rational and just" (Work and loc. cit. p. 189/190).
Immediately after this distinguished Master draws attention to the fact that no. 1 of Article 9, refers to three more elements of interpretation "the unity of the legal system", the "circumstances in which the law was prepared" and the "conditions specific to the time in which it is applied" (loc. cit, p. 190).
As for the "circumstances of the time in which the law was prepared", Batista Machado further explains that this expression "represents that which is traditionally called the occasio legis: the conjunctural factors of a political, social and economic order that determined or motivated the legislative measure in question" (loc. cit., p.190).
With respect to the "conditions specific to the time in which it is applied", this element of interpretation "has decidedly an updated connotation (loc. cit., p. 190) which coincides with the opinion expressed by P. de Lima and A. Varela, in annotations to Article 9 of the CC.
As regards the "unity of the legal system", Baptista Machado considers this the most important interpretative factor: " (…)its consideration as a decisive factor would always be imposed on us by the principle of the coherence value or axiological order of the legal system" (loc. cit., p. 191).
It is also this author who tells us, with respect to the literal or grammatical element (text or "letter of the law") that this "is the starting point of interpretation. As such, it is incumbent on it from the start a negative function: that of eliminating those meanings which have no support, or at least any correspondence or resonance in the words of the law.
But it is equally incumbent on it a positive function, as follows: if the text bears only one meaning, it is that meaning of the rule – with the reservation, however, that it can be concluded on the basis of other rules that the wording of the text has betrayed the thought of the legislator" (loc. cit., p. 182).
Referring to the rational or teleological element, this author says that it consists "in the reason for being of the law (ratio legis), in the end sought by the legislator in elaborating the rule. Knowledge of this end, especially when accompanied by knowledge of the circumstances (political, social, economic, moral, etc.,) in which the rule was elaborated or of the political-economic-social situation that motivated the legislative decision (occasio legis) constitutes a subsidy of the greatest importance for determining the meaning of the rule. It suffices to recall that the clarification of the ratio legis reveals to us the assessment or weighing of the various interests that the rule regulates and, therefore, the relative weight of those interests, the choice between them expressed by the solution that the rule expresses" (loc. cit., pp. 182/183).
As regards the systematic element (context of the law and parallel provisions) that "this element comprises the consideration of other provisions which form the complex normative of the institution into which the interpreted rule fits, that is, which regulate the same matter (context of the law), as well as the consideration of legal provisions which regulate parallel normative problems or related institutes (parallel provisions). It further comprises the systematic place which belongs to the interpreted rule in the overall ordering, as well as its consonance with the spirit or intrinsic unity of the entire legal ordering.
This is based on the interpretative aid on the postulate of the intrinsic coherence of the ordering, namely in the fact that the norms contained in a codification obey in principle a unitary thought" (Batista Machado, loc.cit., p. 183).
" (…) In particular we must take into account the interconnection of the various laws of the country, because a fundamental requirement of all sound legislation is that the laws adjust to one another and do not result in a jumble of disconnected provisions (Joseph Kohler, cited by Manuel de Andrade, in Essay, p. 27).
Descending to the case at hand and to the legal and juridical framework that underlies it:
Through the analysis of the historical element, it is concluded that, from the entry into force of Decree-Law 59/72, of 30 December, the first to regulate this matter, until Decree-Law no. 116/94, of 3 May, the last to precede the CIUC [see Law no. 22-A/2007, with amendments from Laws 67-A/2007 and 3-B/2010], the presumption [italics] of tax debtors of the IUC being the persons in whose names the vehicles were registered on the date of their assessment was enshrined.
It is therefore verified that tax law has always had the objective of taxing the true and effective owner and user of the vehicle, appearing indifferent the use of one or another expression which, as we have seen, have a coincident meaning in our legal system.
The same is true when we resort to elements of interpretation of a rational or teleological nature.
In fact, the current and new framework of motor vehicle taxation enshrines principles that aim to subject the owners of vehicles to bear the prejudices caused by road and environmental damage caused by them, as is apparent from the tenor of Art. 1 of the CIUC.
Now the consideration of these principles, in particular, the principle of equivalence, which merit constitutional protection and recognition in community law, and are also recognized in other branches of the legal ordering, determines that the said costs be borne by the real owners, the causers of the said damage, which removes entirely an interpretation that aimed to prevent presumed owners from proving that they are no longer so because ownership is in the legal sphere of another[5].
Likewise, from the interpretation carried out in the light of elements of a rational and teleological nature, given what the rationality of the system ensures and the ends sought by the new CIUC, it is clear that no. 1 of Art. 3 of the CIUC enshrines a rebuttable legal presumption.
In light of the foregoing, it is important to conclude that the ratio legis of the tax points towards taxing the actual owners-users of the vehicles so that the expression "being considered" is used in the normative in question in a sense similar to "being presumed", reason for which there is no doubt that a legal presumption is enshrined.
On the other hand, Article 73 of the GTL provides that "(…) the presumptions enshrined in the rules of tax incidence always admit proof to the contrary, so they are rebuttable (…)".
Accordingly, enshrining Article 3, no. 1 of the CIUC a presumption juris tantum [and therefore rebuttable], the person who is registered in the register as owner of the vehicle and who, for that reason was considered by the Tax Authority as tax debtor, may present evidentiary elements aimed at demonstrating that the holder of ownership, on the date of the tax event, is another person, to whom ownership was transferred."
- Proof of the Transfer of Motor Vehicles
In light of the foregoing, we conclude that no. 1 of Art. 3 of the CIUC enshrines a rebuttable presumption, pursuant to Article 73 of the GTL, that the holder of the motor vehicle register is its owner. In the present case, the Claimant must prove, in order to rebut the presumption of Article 3, no. 1 of the CIUC (and even of the Motor Vehicle Register) that it was not the owner of the vehicles in question during the period to which the impugned assessments relate.
To prove that such transfers of ownership took place through purchase and sale contracts, the Claimant presents copies of invoices relating to the vehicles identified in the list attached to the Request, with the exception of the vehicles with registration numbers "…-…-…" and "…-…-…", in which the registration of the vehicle, client no., identification of the recipient and the following mentions are indicated: Doc- no. 1 – "residual value": Doc. no. 2 – "Total loss insurer"; Docs. nos. 3 to 6 – "residual value"; Doc. 7 – "Non-leased sale"; and Doc. no. 8 – "Residual value".
In its pleadings, the Respondent argues that the invoices, as private and unilateral documents, do not constitute sufficient proof to rebut the presumption.
We disagree with this understanding, as we have been doing in similar cases.
It cannot fail to be noted, first, that the contract for the purchase and sale of a motor vehicle is a verbal contract, not subject, consequently, to specific form. From this framework results, inevitably, special importance of the fiscal document not only for tax purposes but also for civil or other purposes.
Invoices constitute, for tax purposes, the documents legally required to prove sales operations and provision of services, as clearly results from the various tax codes (see the provision of no. 6 of Article 23 of the Corporation Income Tax Code, letter b) of no. 1 of Article 29 and Article 36 of the Value Added Tax Code and Article 115 of the Personal Income Tax Code).
It would be strange, therefore, if an invoice constitutes, from the point of view of the transferor, sufficient proof to determine income from the sale of a vehicle, taxable under Personal Income Tax (in the organized accounting regime) or Corporation Income Tax but, to the contrary, does not constitute sufficient proof to establish the same transfer, now for purposes of IUC.
This statement does not prevent the AT from demonstrating that it is a false document because no transfer actually exists (with all fiscal and criminal consequences).
In the present case, the question is whether the invoices presented constitute sufficient proof. Through a request presented on 11-11-2015, the Claimant, under the principle of cooperation and discovery of material truth, invoking its inability to obtain it on an earlier date, attached accounting statements proving the payment of the invoices indicated.
The Respondent opposed this attachment, invoking, in summary, that, pursuant to Article 108, nos. 1 and 3 of the Code of Tax Procedure and Process and Article 10, no. 2, letter d) of the RJAT, the right to present new evidence was precluded.
Pursuant to Article 16 of the RJAT, the principles of the arbitral process are, contradiction (letter a)), equality of parties (letter b)), the autonomy of the tribunal in conducting the process (letter c)) and also "free determination of the evidentiary procedures necessary, in accordance with the rules of experience and free conviction of the arbitrators" (letter e)).
From the foregoing, it results, in our opinion, a space of autonomy conferred by the legislator on the tribunal in order to, in search of the truth, accept the evidence presented by the parties, provided that the principles of contradiction and equality of parties are respected.
On the other hand, not accepting the evidence presented would constitute a violation of these principles of contradiction and equality of parties: the Claimant, faced with what is alleged by the Respondent in the response, comes to consolidate the proof relating to the transfer of ownership already that, in the context of administrative review, the AT did not contest the proof presented, qualifying it as insufficient or implausible. This allegation is only made in the Response to the Request for an arbitral award.
For the foregoing reasons, we conclude that it is sufficient for proof of the transfer the invoices presented and document proving the receipt of the amounts contained in the same invoices, relating to the tax assessments identified in the list attached to the request, with the exception of the assessments nos. 2014-… and 2013-…, relating to vehicles with registration numbers "…-…-…" and "…-…-…". As for these assessments, the loan contracts presented do not prove the transfer of ownership to third parties or, in the last case, the subsequent acquisition of the vehicle by the Claimant.
In conclusion, the requirements necessary for the partial success of the request for annulment of the assessments, on the basis of illegality and error in the presuppositions, are met.
C. Indemnificatory Interest and Arbitral Costs
The Claimant proceeded to the full payment of the said IUC assessments, whereby it requests the reimbursement of these undue amounts, increased by indemnificatory interest, at the legal rate, pursuant to Article 43 of the GTL and 61 of the Code of Tax Procedure and Process.
In the case at hand, it is manifest that, following the declaration of illegality of part of the assessment acts, there is grounds for reimbursement of the respective tax paid, by force of the said Arts. 24, no. 1, letter b), of the RJAT and 100 of the GTL, because this is essential to "restore the situation that would have existed if the tax act that is the subject of the arbitral decision had not been practiced".
With regard to indemnificatory interest, it is also clear that, contrary to what is alleged by the Respondent, the error is not attributable to the Claimant, from the moment that, in the context of administrative review, it informed that it was no longer the owner of the vehicles. From this moment, as regards the assessments considered illegal, we are faced with an error in the presuppositions of law, attributable to the Tax Administration.
Consequently, the Claimant has the right to indemnificatory interest, pursuant to Article 43, no. 1, of the GTL and Article 61 of the Code of Tax Procedure and Process, calculated on the amount that was paid unduly, from the date of rejection of the submission of administrative review petitions until the full reimbursement of that same amount.
D. DECISION
For these reasons, this Arbitral Tribunal decides:
a) To find that the request for declaration of illegality of the IUC assessments nos. 2014-… and 2013-… is dismissed;
b) To find that the request for declaration of illegality of the remaining IUC assessments identified in the Annex to the request for an arbitral award is granted, condemning the Respondent to the restitution of the tax and compensatory interest paid, in the total amount of € 1,082.59;
c) To find that the request for payment of indemnificatory interest relating to the tax paid unduly is granted.
E. Value of the Case
The value of the case is fixed at € 1,257.44, pursuant to Article 97-A, no. 1, a), of the Code of Tax Procedure and Process, applicable by force of letters a) and b) of no. 1 of Article 29 of the RJAT and of no. 2 of Article 3 of the Regulation of Costs in Tax Arbitration Proceedings.
F. Costs
The value of the arbitration fee is fixed at € 306.00, pursuant to Table I of the Regulation of Costs in Tax Arbitration Proceedings, to be paid by the Claimant and Respondent, in the proportion of €42.55 and € 263.45, respectively.
Notify the parties.
Lisbon, 29 March 2016
The Arbitrator
(Amândio Silva)
[1] The genesis of the tax legal relationship presupposes the cumulative verification of the three necessary presuppositions for its creation, namely: the real element, the personal element and the temporal element. (In this sense, see, among many other authors, Freitas Pereira, M.H., Tax Law, 3rd Edition, Almedina, Coimbra, 2009.
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