Summary
Full Decision
ENGLISH TRANSLATION
CLAIMANT: A..., SA
RESPONDENT: TAX AND CUSTOMS AUTHORITY
I – REPORT
A) The Parties and Constitution of the Arbitral Tribunal
A..., SA, Tax ID No. …, with registered office at …Street, Lisbon, hereinafter designated as "Claimant", requested the constitution of a Single Arbitral Tribunal, pursuant to the provisions of Articles 2, No. 1, subsection a) and 10, Nos. 1 and 2 of Decree-Law No. 10/2011, of 20 January, hereinafter designated as "RJAT" and of Order No. 112-A/2011, of 22 March, seeking the declaration of illegality of assessments of Single Circulation Tax (IUC) relating to the tax periods 2009, 2010, 2011 and 2012, attached to the case file as documents Nos. 2 to 52 and which are deemed to be fully reproduced herein, in the total amount payable of €3,046.16. It further seeks recognition of the right to reimbursement of the amount of tax unduly paid as well as the right to compensatory interest, calculated on the said amount of tax paid.
The request for constitution of the Arbitral Tribunal was submitted by the Claimant on 24 February 2014, was accepted by the Honourable President of CAAD on 26 February 2014 and was immediately notified to the Tax and Customs Authority.
The Claimant chose not to appoint an arbitrator, wherefore, pursuant to the provisions of No. 1 of Article 6 of the RJAT, the undersigned was appointed, on 11 April 2014, by the Ethics Council of the Centre for Administrative Arbitration as sole arbitrator. The appointment was accepted and the parties were notified of the arbitrator's appointment, having not expressed the will to challenge the appointment.
Thus, in accordance with the provisions of subsection c), of No. 1, of Article 11, of Decree-Law No. 10/2011, of 20 January, in the wording introduced by Article 228 of Law No. 66-B/2012, of 31 December (RJAT), the Single Arbitral Tribunal was constituted on 30 April 2014. On the same date, the TA was notified, in accordance with the provisions of Nos. 1 and 2 of Article 17 of the RJAT, to submit a response within the legal time limit.
The TA submitted its response on 2 June 2014, in which it presents its defence by exception and by challenge, which is deemed to be fully reproduced herein. On 5 June 2014 the Claimant submitted a request for response to the exceptions raised by the TA, which is deemed to be fully reproduced herein.
On 13 June 2014, an arbitral order was issued for the scheduling of the meeting provided for in Article 18 of the RJAT, fixing the date thereof for 10 July 2014 at 15:00 hours, inviting the parties to express themselves on the possibility of dispensing with the meeting, having regard to the fact that a written response to the exceptions raised by the TA had been submitted and there being no testimonial evidence to be produced, proceeding immediately to the phase of presentation of written submissions and final decision. The parties expressed themselves in favour of dispensing with the meeting, scheduling of a time limit for presentation of written submissions and proceeding immediately to the final decision phase.
On 24 June 2014 an arbitral order was issued which cancelled the date designated for the meeting of Article 18 of the RJAT, fixed a time limit of ten consecutive days for the parties to submit written submissions and fixed as the probable date for issuance of the arbitral decision 20 October 2014, with the deadline for issuance of the arbitral decision being 30 October 2014. The parties submitted their submissions, respectively, on 6 and 7 July 2014.
On 21 July 2014 the Respondent TA submitted a request for attachment to the case file of arbitral decision No. 183/2014, alleging that in a case identical in all respects to the present case the arbitral tribunal decided favourably on the exception of material incompetence of the arbitral tribunal raised in the case. Notwithstanding the provisions of No. 2 of Article 18 of the RJAT, having regard to the relevance of the question under discussion and to the principles of autonomy of the arbitral tribunal in the conduct of the proceedings and in the determination of the rules to be observed, an order for attachment to the case file was issued and notification was given to the Claimant, which did not express itself.
Already on 23 September 2014 the Respondent TA further requested attachment to the case file of arbitral decisions Nos. 150/2014-T and 220/2014-T, relating to a matter identical to that of the present case as regards the evidentiary value of invoices as sufficient evidence documents to rebut the presumption provided for in Article 3, No. 1 of the CIUC, should the Tribunal decide on the lack of merit of any of the exceptions raised. For the same reasons and in compliance with the principle of contradiction, the request for attachment was accepted and the Claimant was notified to express itself, if it so wished, within a period of ten days.
On 10 September 2014 the Claimant submitted a request for attachment of two arbitral decisions issued in cases Nos. 115/2014-T and 169/2014-T, decided on a matter identical to that of the present case, in which the lack of merit of the exceptions raised by the Respondent TA in the present case was decided.
The Tribunal admitted attachment to the case file of the aforementioned request, in accordance with the principles described above and also in respect of the principle of equality of the parties that should govern the arbitral proceedings. Having regard to the relevance of the questions raised in the present case, to the attachment of the aforementioned decisions and to the necessary consideration thereof, the date initially indicated for issuing the arbitral decision was extended to 27 October 2014. Considering the deadline for issuance of the arbitral decision already mentioned above and the questions raised by the parties already after the closure of discussion and the presentation of submissions, in the terms set out above, it was not necessary to issue an order extending the time limit for this purpose.
B) THE REQUEST FORMULATED BY THE CLAIMANT
The Claimant formulates the present request for arbitral pronouncement seeking the illegality, with consequent annulment, of the assessments of Single Circulation Tax and respective Compensatory Interest, relating to the tax periods 2009, 2010, 2011 and 2012, summarized in the summary table attached to the case file as document No. 1 and in accordance with documents attached to the case file with Nos. 2 to 52, designated by the Claimant as official IUC assessments.
In summary, it bases its request, alleging the following:
a) In the scope of its activity the Claimant enters into long-term rental contracts and financial leasing contracts for motor vehicles with its clients, upon the expiration of which it transfers ownership thereof to the respective lessees or to third parties;
b) Between 10 and 20 December 2013, the Claimant was notified of the official IUC assessments relating to the vehicles identified in the request for arbitral pronouncement (summary table attached as document No. 1 and documents Nos. 2 to 52) and to the tax periods 2009, 2010, 2011 and 2012;
c) Between October and December 2013 the Claimant proceeded to voluntary payment of the IUC allegedly in arrears. Despite this, the Claimant cannot but express its disagreement with the said assessment acts, insofar as the vehicles in respect of which payment of IUC was incumbent were no longer its property on the date identified by the TA as the date of occurrence of the taxable event;
d) In accordance with the provisions of Article 3, No. 1 and Article 6 of the CIUC, the legal system in force, using the elements contained in the motor vehicle register, the legislator established, simultaneously, enshrines a subjective rule of application that establishes, merely, a legal presumption, all the more so that in the tax legal system we may find the verb "to be considered" used in a presumptive sense;
e) This is, therefore, a presumption whose rebuttal is permitted by Article 73 of the LGT; the Claimant indicates, to this effect, several examples drawn from the legal system in force;
f) It further invokes, in defence of its thesis, the principle of equivalence, provided for in Article 1 of the CIUC, in accordance with which the tax must burden taxpayers to the extent of the environmental and road cost that they cause in implementation of a general rule of tax equality, this principle being structural to the IUC being a rational element underlying the reform of motor vehicle taxation revealed from the outset in Bill No. 118/X;
g) Accordingly, the passive subjects of this tax are only the owners or those in equivalent positions (as is the case with lessees of vehicles since they are the potential polluters) in whose names the same are registered, that is their "effective owners";
h) The Claimant alleges that presumptions of tax application are rebuttable, pursuant to Article 73 of the LGT and, accordingly, with the purpose of rebutting the presumption arising from the registration in the motor vehicle register, the Claimant presented a set of documents attached to the case file as documents Nos. 52 to 89;
i) It thus concludes that on the date of taxability of the tax to which the said assessments relate, the now Claimant A... was no longer the owner of the vehicles identified therein, as the respective transfer of ownership had already previously occurred by payment of the residual values provided for contractually, that is, by contract of sale and purchase, in accordance with the law of contract, in accordance with the principles enshrined in Articles 874, 879 and 408 of the Civil Code (CC), occurring independently of registration;
j) It adds that, if it is true that Article 5 of Decree-Law No. 54/75 of 12 February, provides that the right of ownership of motor vehicles is subject to registration, from the same diploma it is extracted that registration has essentially the purpose of giving publicity to the legal situation of vehicles, the registration not having constitutive effect, functioning as a rebuttable presumption of the existence of the right, which may be rebutted by presenting evidence to the contrary, such as that which the Claimant presents in the present case;
k) The TA does not meet the requirements of the notion of "third party" for purposes of registration, wherefore, it cannot avail itself of the failure to update the registration of the right of property to call into question the full effect of the contract of sale and purchase and to require the former owner to pay the IUC due by the buyer new owner, provided that the presumption of the respective ownership is rebutted;
l) It concludes by petitioning the declaration of illegality of these IUC assessments, in the total amount of €3,046.16, recognition of the right to reimbursement of the amount of tax already paid, as well as the right to compensatory interest for payment of tax unduly assessed.
C – THE RESPONSE OF THE RESPONDENT
The Respondent, duly notified for this purpose, timely submitted its response in which it alleged, in summary, the following:
By exception:
a) Lack of subject matter and material incompetence of the Arbitral Tribunal;
b) Incompetence of the arbitral tribunal having regard to the fact that no prior Amicable Reclamation had occurred, which it considers to be mandatory in the case of the present case.
By challenge:
a) The TA alleges that the Claimant's position has no merit as regards the alleged error as to the presuppositions, given that the understanding advocated by the Claimant incurs, not only in a skewed reading of the letter of the law, but also in the adoption of an interpretation that does not take account of the systematic element, violating the unity of the system established throughout the CIUC and, more broadly, throughout the entire tax legal system and further derives from an interpretation that ignores the ratio of the system established in the article in question, and likewise, throughout the CIUC;
b) It bases its allegation on the provisions of Nos. 1 and 2, of Article 3 of the CIUC;
c) The TA further alleges that the legislator did not use the expression "presumed to be", as it could have done, indeed in the same way as occurs in other legal provisions, exemplifying some situations provided for in the law;
d) It understands, for this reason, that in cases where the tax legislator uses the expression "is considered", it is not establishing a presumption;
e) To understand that the legislator established here a presumption would be unequivocally to carry out an interpretation contra legem;
f) It concludes, therefore, that in the case of the present case, the legislator established expressly and intentionally that the persons in whose names they are registered are to be so considered, insofar as this is the interpretation that preserves the unity of the tax legal system and any other interpretation would be to ignore the teleological element of interpretation of the law: the ratio of the system established in the article in question, and likewise, throughout the CIUC;
g) It reinforces this allegation by invoking that this is the understanding followed by the jurisprudence of our courts expressed in the judgment delivered by the Administrative and Tax Court of Penafiel, in the context of Case No. … 0BEPNF;
h) It concludes that Article 3 of the CIUC contains no legal presumption, and advocates the lack of merit of the arbitral request, insofar as the tax acts in dispute do not suffer from any defect of violation of law, inasmuch as in light of the provisions of Article 3, Nos. 1 and 2 of the CIUC and of Article 6 of the same code, it was the Claimant, in its capacity as owner, the passive subject of the IUC, as attested by the Information relating to the history of ownership of the vehicles in question, issued by the Motor Vehicle Registry Office;
i) From the perspective of the TA it is undeniable that the Real Property Registry Code applies subsidiarily to the Motor Vehicle Registration Regulation, however, the Real Property Registry Code is not subsidiary legislation to the IUC Code, wherefore IUC became, in accordance with the provisions of Article 3 of the CIUC, due by the persons who appear in the register as owners of the vehicles;
j) Any other interpretation would be to ignore the teleological element of interpretation of the law; it would, moreover, be an interpretation not in accordance with the Constitution, by violation of the principle of trust and legal certainty, the principle of efficiency of the tax system and the principle of proportionality;
k) Finally it alleges, merely as a precautionary matter, should it not be understood otherwise, it concludes that the evidential documents joined by the Claimant, and their evidentiary value, with a view to rebutting the presumption, concluding that the documents joined by the Claimant (55 invoices contained in the case file as documents Nos. 78 to 133 attached to the PI) "do not constitute sufficient proof to shake the alleged legal presumption established in Article 3 of the CIUC, insofar as an invoice is not a document capable of proving the conclusion of a synallagmatic contract of sale and purchase, as that document does not reveal by itself an essential and unequivocal declaration of will (i.e. of acceptance) on the part of the alleged purchaser"; to this effect it requested attachment to the case file of arbitral decisions Nos. 150/2014-T and 220/2014-T;
l) The evidence presented by the Claimant is incapable of demonstrating the alleged facts, namely for purposes of rebutting the legal presumption, indicating exhaustively the cases referenced in the arbitral request, especially when the invoices attached are presented as valid as a receipt after good collection, which imposed proof of all receipts of the amounts mentioned;
m) Consequently, it concludes advocating for the merit of the exceptions raised in its response or, if not so understood, for the lack of merit of the arbitral request, as well as the request for interest, invoking as to these the absence of any error attributable to the services that, in any case, would sustain such condemnation; it further alleges, on the same grounds, its non-liability for payment of arbitration costs.
D. RESPONSE TO THE EXCEPTIONS
The Claimant submitted, on 5 June 2014, a request for response to the exceptions raised by the TA, in which it alleged, in summary, that it was confronted in its private area of the Finance Portal, with a series of IUC debts, documented in what the TA calls collection notes (collection documents). For purposes of its tax situation, the IUC debts documented by the said collection notes were already capable of payment, and were paid by the Claimant as evidenced by the documentation attached to the request for constitution of an Arbitral Tribunal.
It was a priority for the claimant to proceed to payment of those IUC debts appearing in the system, since the harm arising from the inability to obtain, for the most varied purposes of its business activity, a certificate of non-indebtedness (certificate of regularized tax status), far exceeded the harm of the concrete tax assessments, presupposed in those debts and which are logically prior to them. "Furthermore, the claimant does not know, has no way of knowing. And finds it highly concerning that the TA, with respect to a plurality of situations of debts in the IUC area that the Claimant was unaware of and did not invent, contained in the TA's computer system at a stage that allowed and allowed their payment, now comes to say that it has nothing to do with it, and that it would have been the claimant that was responsible for the generation of the collection notes, whatever that may exactly mean."
The IUC debts contained in the TA's computer system (in the area of access reserved to the claimant), are an undeniable fact of the TA's creation, the possibility of their payment is also an undeniable fact of the TA's responsibility, and the quantification of their very concrete amounts, year and tax license plate, is also the entire responsibility of the TA and its computer system. These IUC debts presuppose a series of IUC assessments, it being irrelevant for the case the means by which the claimant became aware of them and the fact is that it reacted against them via a request for constitution of an Arbitral Tribunal.
Finally, the Claimant further notes that it paid the IUC debts in December 2013 and, as of that date (June 2014), has not yet been directly or formally notified of the assessments. It invokes that this situation is occurring with other taxpayers, which reveals bad faith on the part of the TA. This is "serious conduct on the part of the TA: it places IUC debts visible to taxpayers in their respective reserved areas of the Finance Portal; these come to pay to avoid being prevented from obtaining certificates of non-indebtedness fundamental for the most varied purposes (or to avoid, namely at the end of the fiscal year, seeing the tax benefits they are enjoying prejudiced, for example); payment made, the TA considers the matter closed and does not notify or make known via the Finance Portal (reserved area), anything further; and then comes to invoke that there is no assessment (which by itself is a logical impossibility) capable of being discussed in Court."
The TA expressed itself by request attached to the case file on 24 June 2014, alleging that the RJAT does not provide for the figure of a Reply, wherefore, having the Claimant submitted a written response to the exceptions and this being accepted, the possibility of pronouncing itself on this matter later would thus be ruled out, namely in the meeting to which Article 18 alludes. On the same date of 24 June 2014 an arbitral order was issued admitting the response to the exceptions and attachment to the case file of the TA's response request and the parties invited to pronounce themselves on the possible dispensing of the holding of the meeting provided for in Article 18 proceeding immediately to final decision or to maintain the meeting or, alternatively, scheduling of a time limit for written submissions. The parties expressed themselves in favour of dispensing with the holding of the meeting wherefore a time limit was fixed for the written submissions.
In the submissions presented by the parties, which are deemed to be fully reproduced herein, they came to allege essentially reinforcing all that was already contained in the respective pleadings attached to the case file.
By request of 21 July 2014 the TA came, pursuant to the principles of cooperation and justice, to request attachment to the case file of the arbitral decision issued in the scope of case No. 183/2014-T, as it deals with the same matter under discussion in the present case. Subsequently, as described above in the report, the Claimant attached to the case file arbitral decisions Nos. 115/2014-T and 169/2014-T, which decided, in a case identical to that of the present case, unfavourably to the TA the matter relating to the exceptions raised. And further subsequently the TA attached to the case file decisions 150/2014-T and 220/2014-T which, in a case identical to the present, decided on the insufficiency of invoices as a means of proof of the transfer of ownership, for purposes of rebutting the presumption contained in Article 3, No. 1 of the CIUC.
Having reached this point, it is necessary to clarify from the outset the reason why this tribunal admitted attachment to the case file of the arbitral decisions in accordance with the terms requested by the parties.
Thus, it seems established that in the context of the tax arbitral proceeding the moment that marks the closure of the discussion of fact around the case to be decided is that which coincides with the closure of the meeting to which Article 18 of the RJAT alludes, or with the presentation of written submissions when so requested by the parties or determined by the tribunal having heard them.
In the case of the present case, the parties requested attachment to the case file of the aforementioned arbitral decisions at different moments, but in both cases after the closure of evidence production and closure of discussion and already after the submission of submissions. The tax contentious proceeding and likewise the arbitral proceeding do not admit loose requests, all the more so that, in this case, the proceeding should be expeditious. However, it is also true that the proceeding should be fair and provide the parties with the legitimate means of defence of their procedural interests, in compliance with the principles of contradiction, equality of the parties, cooperation and good procedural faith, principle of autonomy of the arbitral tribunal in the conduct of the proceedings and in the determination of the rules to be observed, within a reasonable time limit, of a pronouncement on the merits of the claims formulated, as provided for in Article 16 of the RJAT. This last legal provision further adds the principle of publicity, which requires that disclosure be assured of arbitral decisions duly purged of any elements capable of identifying the person or persons to whom they relate.
Having weighed the principles set out above and having regard to the fact that many of the arbitral decisions already issued in this matter are not yet available for public consultation, notably those that were attached to the case file by the parties at the time such request was made, this tribunal understood that it was justified to permit attachment of the said decisions, complying with the principle of contradiction which was assured, even if this resulted in some additional time until issuance of the final decision. In this way the parties were fully assured that, in defence of their respective procedural positions, they would invoke the arbitral jurisprudence that came to their knowledge about the questions under discussion in the present case, in an equal and completely transparent manner.
That said, it must be noted that this Tribunal will consider all legitimate arguments adduced by the parties, and it is certain that it will decide in accordance with its reasoned judgment, as no limitation or constraint can be imposed upon it by the orientation followed in these or other arbitral or jurisprudential decisions.
II - PROCEDURAL REQUIREMENTS
The Arbitral Tribunal is regularly constituted. It is materially competent, in accordance with Article 2, No. 1, subsection a) of Decree-Law No. 10/2011, of 20 January.
The Parties possess legal personality and capacity, are legitimate and are legally represented (Cf. Articles 4 and 10, No. 2 of DL No. 10/2011 and Article 1 of Order No. 112/2011, of 22 March).
The proceeding does not suffer from defects that would invalidate it.
Having regard to the tax administrative proceeding, the documentary evidence joined to the case file, it is necessary now to present the factual matter relevant to the understanding of the decision, which is fixed as follows.
III - FACTUAL FOUNDATION
A) Proven Facts
As relevant factual matter, this tribunal establishes as certain the following facts:
a) The Claimant is a financial institution whose corporate purpose is the practice of operations permitted to banks, with the exception of deposits, and in the scope of its activity enters into Long-Term Rental (ALD) contracts and financial leasing contracts for motor vehicles, upon the expiration of which it transfers ownership thereof to the respective lessees or to third parties;
b) The Claimant between 10 and 20 December 2013, proceeded to voluntary payment of Single Circulation Tax, considered by the TA as in arrears, relating to the tax periods 2009, 2010, 2011 and 2012 and to the vehicles identified in documents Nos. 1 and 2 to 52 attached hereto with the arbitral request, which are hereby deemed fully reproduced;
c) To proceed to this payment the Claimant issued the IUC assessments, from the TA's computer system, contained in the aforementioned documents Nos. 2 to 52, according to proper procedure, in the Finance Portal, in which it verified that a series of collection documents corresponding to IUC debts, relating to these vehicles, existed;
d) The vehicles referred to above were disposed of to third parties on the dates contained in documents Nos. 53 to 69, attached hereto with the arbitral request, which are hereby deemed fully reproduced;
e) The TA did not notify the Claimant of any official IUC assessment relating to any of the vehicles contained in the present case, a situation that persisted at least until June 2014;
f) The Claimant did not submit an Amicable Reclamation in relation to the IUC assessments, whose payment it effected, and which it challenged in the present case;
B) UNPROVEN FACTS
There are no unproven facts of relevance to the decision to be issued.
C) FOUNDATION OF PROVEN FACTS
The facts described above were established as proven on the basis of the documents that the parties joined to the present proceeding, the Claimant in an annex to the request formulated and the TA in the response submitted.
IV – QUESTIONS TO BE DECIDED AND LEGAL FOUNDATION
It is necessary, therefore, to assess and decide the questions to be resolved.
As a preliminary matter, the TA raised the question of irregular certification of the power of attorney joined to the case file by the Representative of the Claimant. This irregularity was, however, properly remedied.
Considering the positions assumed by the Parties in the arguments presented, it is necessary first to assess the exceptions raised by the TA, relating to lack of subject matter and to the preclusion of prior Amicable Reclamation generating material incompetence of the Arbitral Tribunal.
Thus, these questions are preliminary and precedent to the other questions of law raised by the parties. Only the illegality of the IUC assessment acts and respective compensatory interest in question in the present case will be assessed, as well as the right to restitution of the value of tax paid and possible right to compensatory interest, should these exceptions be judged to lack merit.
Let us analyze, therefore, the first question to be decided, that is, the consideration of the exceptions raised by the TA.
A) Regarding Lack of Subject Matter:
The Respondent alleges that what is at issue, contrary to what the Claimant alleges, are not official tax assessments, but merely collection notes, which do not constitute, truly, an assessable tax act, which constitutes a situation of lack of subject matter generating incompetence of the arbitral tribunal. According to the TA, the arbitral tribunal is materially incompetent to assess and decide the request object of the dispute, having regard to the non-existence of official IUC assessment acts issued by the TA.
From the perspective of the Respondent such situation constitutes a dilatory exception preventing consideration of the merits of the case, in light of the provisions of Articles 576, Nos. 1 and 2 of the CPC, by virtue of Article 2, subsection e), of the CPPT and of Article 29, No. 1, subsections a) and e) of the RJAT.
Well, as to this question it is important to consider the nature of documents Nos. 2 to 52 joined to the case file, and, having analyzed its content, extract therefrom whether these show only a mere collection note, as the TA claims, or something more than that, namely an official assessment as the Claimant claims. Now, having analyzed the said documents, there is no doubt that we are not faced with mere "collection notes", as the TA claims, but neither are we faced with official assessments as the Claimant claims.
In fact, it results very clearly that the documents in question contain the typical elements of a tax assessment, even including in the said document the demonstration of the interest owed, which clearly induces the passive subject to conclude that it is in arrears with the payment of the tax and it is its obligation to effect its payment, under penalty of suffering all the harmful effects resulting from its non-compliance.
In the concrete case, the assessment of the tax, in strictly technical-legal sense, was effected, or issued by the passive subject itself, in accordance with the proper procedure provided for in the law for this purpose and in accordance with the rules implemented by the TA itself. And, thus being, the TA's argument in this matter is not understood, when it alleges that these are mere collection notes, to conclude therefrom that there is no assessable tax act.
The collection document constitutes a title from which a tax obligation flows deriving from the relationship between the passive subject and the Tax Authority. Its placement in the system or finance portal was at the initiative of the TA, so much so that if the passive subject can very well verify in its history the existence of those debts which is preventive, for example, of the issuance of a certificate of non-indebtedness that may be requested.
For all this, it is unequivocal that the collection notes in question in the case file contain within themselves all the presuppositions or requirements proper to an assessment act, namely: identification of the issuing service, identification of the entity proceeding to the assessment, including the tax identification number, the period to which it relates, the nature of the debt or the tax in arrears, its amount and the deadline for payment. It is further added that, the passive subject has the option to proceed or not to issue the said collection note to proceed to its payment in compliance with the elements contained in the system, and cannot alter any of these elements previously inserted in the finance portal.
Now, the documents joined to the present case by fulfilling all the requirements described above constitute the nature of tax acts, wherefore, on this point, the respondent TA's position has no merit.
However, this is not a matter of official assessments as the Claimant invokes, but rather of self-assessments, which are true tax acts, capable of being challenged.
It is important to this regard to take into account the provisions of Article 16, No. 2 of the CIUC, from which, moreover, it results as a rule that "the assessment of the tax is made by the passive subject itself via the internet, under the conditions of registration and access to electronic declarations, and is mandatory for legal entities".
And No. 4 of the same legal provision adds that "it is at the moment of this assessment of the tax that the single collection document is issued which, certified by the means in use in the collection network, proves the good payment of the tax".
It is understood, therefore, that in light of the provisions of the law, despite the TA not having proceeded to issue an official tax assessment, in the terms and with the meaning provided for in Article 18, No. 2 of the CIUC, from this the conclusion invoked by it cannot be extracted, according to which we are faced with mere collection notes and not with assessable tax acts. The truth is that these were available in the private area of the passive subject in the Finance Portal, with explicit indication of the amounts in debt and with demonstration of assessment of compensatory interest.
Any ordinary citizen would understand such "collection note", as the TA claims, in the same sense that the now Claimant attributed to it, which merely complied with the legal procedure and issued the respective self-assessments and effected their payment.
The fact that the assessments were produced at the initiative of the passive subject, as the TA alleges, can only have the meaning that the law itself attributed to it, when providing for the system that is contained in Article 16 of the CIUC. Now, it would be wholly unacceptable for the passive subject to be penalized for complying with the legal procedures provided for.
The TA's thesis is not accepted, according to which, in the case sub judice, there are no tax assessments or that these are not true tax acts, incurring therefrom lack of subject matter and material incompetence of the arbitral tribunal. Likewise decided the Arbitral Tribunal in the decision issued in case No. 183/2014, which, moreover, was invoked by the respondent TA in the scope of the present case, as well as in arbitral decisions 115/2014-T and 169/2014-T.
In conclusion, as regards the first exception raised by the TA it is this arbitral tribunal's understanding that the self-assessments in question in the present case are tax acts and, as such, may be challenged in accordance with the legally provided terms, one of the avenues being recourse to the request for arbitral pronouncement, in accordance with Article 2, No. 1, subsection a) of the RJAT, which provides for the possibility of assessment of the legality of acts of assessment and self-assessment of taxes.
There is no doubt that the acts challenged in the present case constitute harmful acts, capable of being challenged by the passive subject in accordance with the provisions of Articles 9, No. 2 and 95, No. 1 of the General Tax Law (LGT).
Thus, the Respondent TA's position in the invoked dilatory exception by lack of subject matter has no merit, which is considered to lack merit.
B) Regarding Material Incompetence of the Arbitral Tribunal by Preclusion of Prior Amicable Reclamation:
Related to the arguments adduced regarding the first exception raised, the TA alleges that, even if it is understood that the acts challenged constitute self-assessments generated by the Respondent itself in the Finance Portal, it must be concluded that the Arbitral Tribunal lacks competence, by preclusion of the necessary prior Amicable Reclamation.
Let us see whether the TA's position has merit as to this question.
Article 2, No. 1, subsection a) of the RJAT provides that the competence of arbitral tribunals comprises the assessment of the declaration of illegality of acts of assessment of taxes, of self-assessment, of withholding at source and of payment on account. Order No. 112-A/2011 of 22 March, exempts from the competence of arbitral tribunals the claims relating to the declaration of illegality of self-assessment acts that have not been preceded by prior recourse to the administrative route, when this is mandatory, in accordance with Articles 131 and 133 of the CPPT.
On this matter there are divergent positions resulting from arbitral decisions attached to the present case by the parties (arbitral decision No. 183/2014 invoked by the TA and decisions Nos. 115/2014 and 169/2014-T invoked by the Claimant). In the same sense as arbitral decision No. 183/2014-T we may further add, also, arbitral decision No. 113/2014-T, not yet published on the CAAD website, but of which both parties intervening in the present case are aware, in which the exception of material incompetence of the arbitral tribunal was considered to have merit.
Article 124 of Law No. 3-B/2010, of 28 April, which authorized the Government to legislate in the sense of establishing arbitration as an alternative form of jurisdictional resolution of conflicts in tax matters, so that the tax arbitral proceeding would constitute an alternative procedural means to the judicial challenge proceeding and to the action for recognition of a right or legitimate interest in tax matters. It so happens that, in accordance with Article 4 of the RJAT, the commencement of operation of arbitral tribunals was conditioned to the binding of the tax administration, by joint order of the members of Government responsible for the areas of finance and justice, which would only occur with the publication of Order No. 112/2011, of 22 March, with entry into force on 1 July.
It is in light of this legal framework that the scope of competence of arbitral tribunals is defined, delimited with some restrictions, by the awareness that this was, and continues to be, an innovative experience. Thus, the competence attributed to arbitral tribunals configures the respective proceeding, on the one hand, as an alternative means to the judicial challenge proceeding, even as to the special situations provided for in Articles 131 to 134 of the Code of Procedure and Tax Process (CPPT), which are those that in the concrete case of the present case interest us to analyze. Essentially the competence of the arbitral tribunal in these cases depends on the same presupposition that the CPPT imposes for the competence of tax tribunals: the prior precedence of amicable reclamation.
Article 131 of the CPPT provides, with reference to challenge in case of self-assessment, that:
"1 – In case of error in self-assessment, the challenge shall necessarily be preceded by an amicable reclamation addressed to the head of the regional peripheral body of the tax administration, within two years after presentation of the declaration.
2 – In case of express or tacit rejection of the reclamation, the taxpayer may challenge, within thirty days, the assessment that it effected, counted, respectively, from notification of the rejection or from the formation of the presumption of tacit rejection.
3 – Without prejudice to the provisions of the preceding paragraphs, when its foundation is exclusively a matter of law and the self-assessment was effected in accordance with generic orientations issued by the tax administration, the time limit for challenge does not depend on prior reclamation, the challenge being presented within the time limit of No. 1 of Article 102."
Now, the provision of Article 2, No. 1, subsection a), of Decree-Law No. 10/2011, of 20 January, exempts the competence of the arbitral tribunal as to the claims relating to the declaration of illegality of self-assessment acts, of withholding at source and of payment on account that have not been preceded by recourse to the administrative route in accordance with Articles 131 to 133 of the Code of Procedure and Tax Process.
The question that now arises is, therefore, the following: the TA bound itself to the jurisdiction of arbitral tribunals, in accordance with Order 112-A/2011, of 22 March, which have as their object the assessment of the legality of claims relating to taxes whose administration is entrusted to them, excepting claims relating to the declaration of illegality of self-assessment acts that have not been preceded by recourse to the administrative route, in accordance with the provision of Article 131 CPPT.
Now, in the case of the present case, for everything that has already been set out above, this Tribunal understands that the acts in question, whose declaration of illegality is petitioned, are characterized as self-assessments of IUC. As such, they should have been preceded by prior Amicable Reclamation required, in accordance with Article 131 of the CPPT, wherefore, on this question the TA's position has merit in the invoked exception of incompetence of this Arbitral Tribunal.
But there remains to analyze one last question that the Claimant came to raise, indirectly, by attachment to the case file of arbitral decisions Nos. 115/2014-T and 169/2014-T, and that is whether in the case under consideration the recourse to the amicable route would or would not be mandatory. The Claimant understands that it would not, as the grounds for illegality are based on the knowledge of mere question of law. Well, it is not correct, as will be demonstrated.
In the case of the present case the prior amicable reclamation was, indeed, mandatory. But as the purpose of the decision is not only to "win" but, above all, to "convince", let us see why.
As well stated by Jorge Lopes de Sousa, in his commentary to the Regime of Tax Arbitration "the reasons underlying the legal imposition and exemption of prior amicable reclamation in relation to the use of jurisdictional means, also applies in relation to access to arbitral tribunals."[1]
Thus, the assessment of the competence of the arbitral tribunal on this matter depends on the same terms in which one would analyze, in an identical case, the competence of the competent administrative and tax court to know of possible challenge proceedings. In fact, the prior recourse to amicable reclamation is only mandatory in cases where the ground of challenge and the questions under consideration in the proceeding to know of those grounds are not exclusively of law and the acts are issued in accordance with the orientations of the TA itself. This very thing derives from the provision of No. 3 of Article 131 and No. 6 of Article 132.
Now, that in the case of the present case the self-assessment acts were issued in accordance with generic orientations of the TA, we have no doubt. However, the grounds invoked as the reason for the illegality of the acts challenged do not rest on exclusively a matter of law, quite the contrary. Thus, having analyzed the question as it is configured by the Claimant in the arbitral request, the knowledge of the illegality of the acts implies the knowledge of two fundamental questions, namely:
a) the first consists in deciding whether Article 3, No. 1 of the CIUC configures or does not configure the establishment of a rebuttable presumption, and this question is clearly a question of law;
b) the second question (once the first is decided) consists in the knowledge of the factual matter invoked in the case file and in the assessment of the evidence adduced by the Claimant from which the tribunal may decide whether the claimant succeeded in fulfilling the burden of proof and in rebutting the presumption. In other words, it is for the tribunal to decide whether the claimant produced in the case file the necessary and sufficient evidence to demonstrate the transfer of ownership of the vehicles, to whom, when and in what moment. This is factual matter, which implies the production of evidence, which may be exclusively documentary or supplemented with testimonial evidence, but in any case it is a matter of fact whose knowledge is essential to the correct decision of the case.
In the terms set out above, this tribunal understands that in the case of the present case the knowledge of the alleged illegality of the acts challenged does not imply knowledge of questions exclusively of law, wherefore prior amicable reclamation was mandatory and should have preceded recourse to the challenge route.
One final reference is necessary, still on this point, as regards the meaning and scope of the very establishment of prior amicable reclamation in cases such as the present. In fact, the tax proceeding aims to ensure in a balanced and fair manner the guarantees of taxpayers but also the public interest at stake, notably that of proper state administration. To this extent, admitting that errors and oversights may occur that may be corrected via the administrative route, the legislator imposed recourse to the amicable route, even granting a substantially extended time limit, avoiding immediate recourse to the judicial route.
Thus, it grants a generous time limit to the passive subject to attempt to repair its prejudice and guarantees to the Tax Administration the opportunity to amend the error, voluntarily, setting a good example of compliance with legality and pursuit of the public interest at stake.
It is not for the applier of the law to exceed the limits that the legislator defined.
For all that has been set out, this arbitral tribunal concludes that having no prior recourse to the amicable administrative route occurred, in the case of the case file, the Arbitral Tribunal lacks competence to judge this question, as results from the provisions of Article 2, subsection a) of Order 112-A/2011, of 22 March.
In this same sense decided, in an identical situation, the arbitral tribunal constituted in the scope of arbitral cases Nos. 183/2014-T and 113/2014-T, already mentioned above.
In these terms, it is concluded that the exception of absolute material incompetence of this Arbitral Tribunal is sustained.
Consequently the knowledge of the remaining questions of law raised by the parties is prejudiced.
V - DECISION
In light of the foregoing, this Arbitral Tribunal decides to sustain the exception of absolute material incompetence in reason of subject matter, in the terms and on the grounds set out above, with the consequent absolution of the instance of the Tax and Customs Authority.
Value of the Case: In accordance with the provisions of Articles 306, Nos. 1 and 2 of the CPC, Article 97-A, No. 1, subsection a), of the CPPT and Article 3, No. 2 of the Regulation of Costs in Tax Arbitration Proceedings, the value of the case is fixed at €3,064.16
Costs: In accordance with the provisions of Article 22, No. 4, of the RJAT and in accordance with Table I attached to the Regulation of Costs in Tax Arbitration Proceedings, the amount of costs is fixed at €612.00, to be borne by the Claimant.
Let it be registered and notified.
Lisbon, 24 October 2014
The Sole Arbitrator,
(Maria do Rosário Anjos)
[1] Cf. Jorge Lopes de Sousa, "Commentary to the Regime of Tax Arbitration", contained in Guide to Tax Arbitration, Coordinated by Nuno Vila Lobos and Mónica Brito Vieira, Almedina, 2013, p. 131 et seq.
Frequently Asked Questions
Automatically Created