IUC Tax on Leased Vehicles: Rebuttable Presumption of Subjective Incidence (CAAD 181/2015-T)

Arbitral Decision

CAAD: Tax Arbitration

Case No. 181/2015-T

Subject: IUC (Unique Vehicle Tax)

CLAIMANT: A…, SA

DEFENDANT: TAX AND CUSTOMS AUTHORITY

I – REPORT

A) The Parties and Constitution of the Arbitral Tribunal

1. A…, S.A., hereinafter referred to as "Claimant", formerly designated as B…, S.A., a company with registered office at Rua …, no. …, … Lisbon, with tax identification number …, notified of the decision of partial allowance issued by dispatch of 14.11.2014 by the Excellent Director of Services for the Municipal Tax on Onerous Transfers of Real Estate, Stamp Tax, Unique Vehicle Tax and Special Contributions, which fell upon the hierarchical appeal no. …/13, filed against the decision rejecting the administrative review filed against the self-assessments of Unique Vehicle Tax (IUC), relating to the years 2008 and 2009, requested the constitution of a Singular Arbitral Tribunal, in accordance with the provisions of articles 2, no. 1, paragraph a), 5, no. 2, paragraphs a) and b), 6, no. 1, 10, no. 1, paragraph a) and no. 2, all of the Legal Framework for Tax Arbitration (RJAT), with a view to annulling the aforementioned tax acts.

2. The hierarchical appeal was processed before the Finance Directorate of Lisbon, having been partially allowed, as appears from the documents attached to the proceedings by the Claimant and also from the administrative file submitted by the Defendant.

Thus, given the request formulated by the Claimant, only the tax assessments contained in document no. 2, attached to the arbitral request, are in question. These are 110 IUC assessments, relating to the vehicles identified therein, in the total amount of €12,657.70.

1. The request for constitution of the Arbitral Tribunal was presented by the Claimant on 16-03-2015 and was accepted by the Excellent President of CAAD on 18-03-2015 and notified to the Tax and Customs Authority on 24-03-2015. The Claimant chose not to appoint an arbitrator, therefore, pursuant to the provisions of no. 1, article 6 of the RJAT, Prof. Dr. Maria do Rosário Anjos was appointed as arbitrator by the Deontological Council of the Administrative Arbitration Centre on 08-05-2015. In accordance with the provisions of paragraph c), no. 1, article 11, of Decree-Law no. 10/2011, of 20 January, as amended by article 228 of Law no. 66-B/2012, of 31 December (RJAT), the Singular Arbitral Tribunal was constituted on 26-05-2015. An arbitral dispatch was issued for the TA to present its answer within the legal period, on 27-05-2015, in accordance with and for the purposes of the provisions of nos. 1 and 2 of article 17 of the RJAT.

2. The TA presented its answer on 29-05-2015, accompanied by the respective administrative file, attached to the proceedings and considered fully reproduced herein. On 14-07-2015 the Claimant came to make submissions regarding the exceptions invoked by the Defendant in its answer.

3. On 13-07-2015, an arbitral dispatch was issued for consultation with the parties regarding the possibility of dispensing with the holding of the meeting provided for in article 18 of the RJAT, since the issues under discussion in the case appear to be exclusively matters of law. In the same dispatch, the date of 07-09-2015 is indicated for the holding of the meeting if the parties deemed it necessary.

The Claimant made submissions by request of 04-05-2015 to the effect of maintaining the holding of the meeting. The Defendant, on 07-08-2015, made submissions in favor of dispensing with the holding of the said meeting, considering it would be futile, especially since the Claimant had already made submissions in the proceedings on the matter of exceptions invoked in the Answer.

Accordingly, considering the position taken by the parties and all the elements already attached to the proceedings, from which it appears there is no controversy regarding the factual matter under discussion, but only questions of law, an arbitral dispatch was issued on 14-08-2015, in which the Tribunal decides to dispense with the holding of the meeting, sets a period of ten equal and successive days for the parties to present, if they wish, their submissions. In the same dispatch, a date was set for the rendering of the arbitral decision until 23-11-2015 and the Claimant was notified to, until this date, make payment of the subsequent court costs.

Neither the Claimant nor the Defendant presented written submissions.

B) OF THE REQUEST FORMULATED BY THE CLAIMANT:

1. The Claimant formulates the present request for arbitral decision arguing for the illegality of the partial rejection of the hierarchical appeal, which followed the rejection of the administrative review previously filed against the Unique Vehicle Tax assessments that underlie the present case, arguing for their annulment. At issue is the illegality of the assessments identified in the proceedings, relating to the periods between the years 2009 to 2012, contained in document no. 2 attached to the arbitral request, in the total amount of €12,657.70.

2. All these assessments are duly identified and itemized in the proceedings (doc. no. 2 attached to the arbitral request), with identification of the vehicle registration number, the year to which they relate and their respective value and proof of payment. The assessments in question are further confirmed by analysis of the administrative file attached to the proceedings, and by all the elements contained in the procedures of Administrative Review and Hierarchical Appeal filed by the Claimant, which are attached to the proceedings as integral parts of the Administrative File. In accordance with the provisions of article 104 of the Tax Code of Procedural and Substantive Law (CPPT), the cumulation of requests is permissible.

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

1. The present request for arbitral decision aims at the declaration of illegality of the decision of partial rejection of the hierarchical appeal that maintained the IUC self-assessments better identified in Table 1 contained in the arbitral request and which is considered fully reproduced, arguing for the illegality thereof, relating to the years 2008 and 2009, in the total amount of €12,657.70, on the grounds provided in paragraph a) of article 99 of the Tax Code of Procedural and Substantive Law (CPPT).

2. In summary, the Claimant further argues that in the procedures of administrative review and hierarchical appeal that it initiated, it presented abundant documentary evidence, namely Sales Invoices for the vehicles, issued in the legal form and whose veracity the ATA did not contest, Customs Vehicle Declarations (DAV), and detailed maps with registration numbers, date of registration, proof of payment by transfer and identification of the buyer, accounting extracts and customer account statements (see Documents 5 and 7 attached to the arbitral request) from which it concludes that on the date of the tax event the Claimant was not the owner of the said vehicles.

3. Thus, despite the partial allowance of the Hierarchical Appeal, the Claimant disagrees with all the other tax assessment acts claimed and now contested, and therefore also does not accept the decision of the hierarchical appeal that maintained them, as it considers that it is not the subject liable for IUC relating to the registration numbers in question, in none of the years on which the assessments subject to the request for arbitral decision were based. In all cases covered by the present arbitral request, the Claimant considers that it is not the subject liable for tax, as it is not the owner of the vehicles corresponding to the tax assessments in question, which had already been sold to their respective buyers.

4. It considers that with all the documentation attached to the proceedings (Invoices, Customs Vehicle Declarations (DAV) and others contained in the administrative review and hierarchical appeal process mentioned above, it has rebutted the rebuttable presumption contained in article 3, no. 1 of the IUC Code, which constitutes grounds for exclusion of subjective tax incidence. Accordingly, the decision of partial rejection of the Hierarchical Appeal and the impugned assessments suffer from error regarding the assumptions of the tax event, which constitutes the vice of violation of law.

5. The Claimant was notified for payment of all official IUC assessments relating to the vehicles identified in the Table Attached to the request for arbitral decision, with reference to the tax periods 2008 and 2009. It made payment of all assessments when notified to that effect, and proceeded to file an Administrative Review, which was processed under no. …PT, at the Finance Directorate of Lisbon, in which it attached extensive documentation to prove the alleged facts, and despite this, the review was rejected and the hierarchical appeal was partially rejected. Thereafter came the filing of a Hierarchical Appeal, within which a decision of partial allowance was rendered, by which some assessments were annulled and all those identified in Table 1 of the Request for Arbitration and attached in document no. 2 to the arbitral request were maintained. As the Claimant did not accept the reasons underlying that partial allowance, it presented the present arbitral request.

6. As to the legal reasoning, the Claimant considers it demonstrated that in the case in question part of the vehicles identified in the proceedings were disposed of to the Claimant's customers before registration or within the 60-day period legally provided (cf. docs. nos. 4, 5, 6 and 7). Therefore, it concludes that the Claimant is not the subject liable for IUC due in the year of registration and, as such, the tax acts relating to the said vehicles are illegal, and should be annulled. On the other hand, it also considers it demonstrated that another part of the vehicles identified in the proceedings were disposed of to the Claimant's customers up to the date of the anniversary of the registration (cf. docs. nos. 5 and 8), and therefore it is also not the subject liable for IUC due in the years subsequent to the year of registration, and, as such, the tax acts relating to the said vehicles are illegal, and should be annulled.

7. The Claimant argues that in accordance with the provisions of article 3, no. 1 and article 6 of the IUC Code, the legislator established a rule of subjective tax incidence that rests on a mere legal presumption, necessarily rebuttable in accordance with the provisions of article 73 of the General Tax Law. As such, conclusive proof can be made, as the Claimant alleges to be the case, that on the date of the tax event the Claimant was not the owner of the vehicles in question. The invoices issued to evidence the sales of vehicles and the remaining documents inherent to the business transactions, namely the Unique Customs Document (DUA), customer account extracts and proofs of transfers noted in the Map attached to the proceedings. Documents that benefit from the presumption of truthfulness established by article 75 of the General Tax Law.

Furthermore, regarding vehicles registered between 1964 and 2001 and disposed of more than ten years ago, the Claimant argues that as results from the inventories relating to the last 10 fiscal years, those vehicles are not listed therein, which proves that they are not its property. Being that the obligation to maintain in its possession commercial and accounting documentation expires after 10 years, as results from the provisions of article 40 of the Commercial Code and article 123 of the Corporate Income Tax Code (CIRC). Given that these are vehicles disposed of more than a decade ago, the Claimant concludes that it is not obligated to produce further proof in this regard.

In this connection, the Claimant further argues that, in accordance with the provisions of article 5, no. 3 of Decree-Law 78/2008, the vehicles in question should have benefited from the scheme provided therein, which imposed the official cancellation of registrations of vehicles registered between 01-01-1980 and 31-12-2000. Any other understanding would result in violation of the principle of equality and, consequently, in manifest unconstitutionality of that rule.

1. In summary, it considers that in the specific case of the activity carried out by the defendant (importer), the rules of functioning of the market in which the Claimant operates, and which according to the Claimant the ATA knows well, imply that in relation to the importer, the legal assumptions of IUC incidence never occur. The fact is that the assessments, as well as the decisions rejecting the administrative review and the hierarchical appeal (partial rejection) presented by the Claimant, do not properly consider such rules, resting on an understanding of the IUC incidence rule that the Claimant does not accept. There are no irrebuttable presumptions in tax incidence and, in the specific case, by all the documentation attached to the proceedings, it should be considered that the Claimant has rebutted that presumption.

2. It concludes by petitioning for the annulment "of the tax acts identified above", that is, of the rejection of the hierarchical appeal and the impugned tax assessments, in the total amount of €12,657.70, corresponding to the amount of tax unduly paid and respective undue compensatory interest. Consequently, this amount should be returned to the Claimant plus indemnity interest for the deprivation of said amount, in accordance with article 43 of the General Tax Law.

C – THE DEFENDANT'S ANSWER

1. The Defendant ATA, duly notified to that effect, timely presented its answer in which, by exception and by impugnation, alleged, in summary, the following:

a) As a preliminary matter, it alleges the exceptions of untimeliness of the request for arbitral decision and illegality of cumulation of requests, arguing:

i. As to the first exception, that the Claimant only petitions the declaration of illegality of the self-assessment acts identified in the proceedings, in relation to which the period provided in article 10, no. 1 of the RJAT has long since expired; it adds that in the arbitral request the Claimant did not formulate any request for annulment of the express rejection of the hierarchical appeal presented (…);

ii. Regarding the second exception, the ATA invokes that the acts of assessment in question in the proceedings refer to differentiated situations that do not relate to the same circumstances of fact, nor to the same vehicles, in relation to which different circumstances are discussed, and therefore the cumulation of requests should not be considered possible.

b) By impugnation, it argues that the Claimant is not right, as it differs from the Claimant as to the interpretation of articles 3, 4 and 6 of the IUC Code. From the perspective of the ATA, the fundamental question under discussion relates to the objective/subjective incidence of IUC. It results from the provisions of article 17 of the Vehicle Tax Code (CISV) that the introduction into consumption and assessment of tax on vehicles that do not have a national registration is evidenced by the issuance of a Customs Vehicle Declaration (DAV). This document constitutes the tax event in accordance with, for the purposes of article 5 of the CISV. In the ATA's view, the interpretation and application of the provisions of article 117, no. 4 of the Highway Code, the registration is requested from the IMTT by the entity that proceeds to admit or introduce the vehicle into consumption. For all this and by force of the provisions of article 24 of the Motor Vehicle Registration Regulations and article 3, no. 1 of the IUC Code, the ATA considers that the subject liable for tax, in all situations described in the proceedings, is the Claimant.

c) In its answer, the TA describes the procedure for introduction of vehicles into consumption and concludes that the application of the rules in question, as well as article 24 of the Motor Vehicle Registration Regulations (RRA) imply that the first registration of each vehicle is made in the name of the importing entity (Claimant). Thus, it concludes that it is "peremptory that the Claimant appears as owner of the vehicles better identified in the arbitral request."

d) Based on the data at its disposal, it concludes that on the date of the tax events the motor vehicle registration was in the name of the Claimant and not third parties, and therefore concludes that IUC is due by the Claimant, sole owner of the assets in question at the time of occurrence of the tax event. The tax event established in article 6 of the IUC Code is measured by the registration or registration in national territory.

e) It was precisely the application of these rules that led to the rejection within the administrative review and the partial allowance of the Hierarchical Appeal. In sum, according to the Defendant, "having the Claimant requested the issuance of a registration certificate and such being registered in its name, the assumptions of the tax event are undoubtedly met, as well as its enforceability, being the Claimant the subject liable for tax."

f) Furthermore, according to the Defendant, the thesis of the Claimant is not acceptable, as the "tax legislator intentionally and expressly wanted that the tax event, as attested by the registration, be considered."

g) The tax event occurred with the issuance of the registration and first registration, leading to the enforceability of tax by the Claimant and its subjection to tax. Therefore, the understanding advocated by the Claimant is completely at odds with the legal rules and would constitute an exclusion of taxation that finds no support whatsoever in the letter of the law.

h) For this reason, it argues, that the Claimant is not right, whose understanding incurs a reading inconsistent with the letter of the law, as the adoption of an interpretation that does not attend to the systematic element, violating the unity of the scheme established throughout the IUC Code and more broadly throughout the entire legal-fiscal system and further stems from an interpretation that ignores the ratio of the scheme established in the article in question, and also throughout the IUC Code. It further argues that the Claimant's thesis rests on an interpretation inconsistent with the Constitution, violating the principle of tax-paying capacity, colliding with article 103 of the CRP and 8 of the General Tax Law, as well as articles 104 of the CRP and 4 of the General Tax Law.

i) It argues that, "notwithstanding the arguments put forward by the claimant, if only registration were considered, the tax event occurring with the issuance of the registration and the enforceability of tax in the year it is issued would be irremediably excluded."

j) As to the probative value of invoices to rebut the alleged presumption contained in article 3 of the IUC Code, the Defendant argues that such documents do not have that virtue, because article 3 does not establish a presumption and because if and when one wishes to react against the presumption of ownership that is attributed to the registration, it becomes necessary to react through the proper means provided for in the Motor Vehicle Registration Regulations and in the registration laws subsidiarily applicable. It invokes in favor of this understanding the jurisprudence expressed in the judgment rendered in arbitral process no. 63/2014-T. Regarding the arbitral jurisprudence invoked by the Claimant, it invokes that this does not serve as precedent and does not correspond to the current jurisprudence of Superior Courts, it being the case that the most recent arbitral jurisprudence has not followed in all cases the initial jurisprudential current invoked by the Claimant;

k) It refutes, finally, the thesis invoked by the Claimant regarding the illegality of the assessments by violation of article 2 of the IUC Code in conjunction with article 5, no. 3 of Decree-Law 78/2008, when it invokes the latter rule to defend the thesis that the official cancellation of registrations of motor vehicles in question was required, insofar as they predate January 1980, and consequently, as a result of that cancellation, the vehicles would necessarily fall outside the scope of IUC incidence. With regard to this matter, the Defendant argues that the present arbitral tribunal would not even have jurisdiction to know of this matter (although it does not do so as a title of exception), because it understands that such matter is beyond the competence that is reserved by law to CAAD.

l) Around the question of the subjective incidence of IUC, focusing its allegation on the provisions of nos. 1 and 2, of article 3 of the IUC Code, it emphasizes a set of arguments to demonstrate that the thesis defended by the Claimant rests on an interpretation that does not attend to the systematic element, violating the unity of the system, which ignores the teleological element of interpretation of law.

m) In sum, according to the Defendant, to understand that the legislator established a presumption would constitute an interpretation against the law. It concludes, therefore, that the legislator expressly and intentionally established that persons in whose name they are registered are considered as such, as this is the interpretation that preserves the unity of the legal-fiscal system and that any other interpretation would be to ignore the teleological element of interpretation of law and the ratio of the scheme established in the article in question, and also throughout the IUC Code.

n) It concludes that article 3 of the IUC Code does not contain any legal presumption, and for the dismissal of the arbitral request, as the tax acts in question do not suffer from any vice of violation of law, insofar as in light of the provisions of article 3, nos. 1 and 2 of the IUC Code and article 6 of the same code, it was the Claimant, in its capacity as owner, the subject liable for IUC, as attested by the Information relating to the history of ownership of the vehicles in question, issued by the Motor Vehicle Registration Office;

o) In the opinion of the AT, in accordance with the provisions of article 3 of the IUC Code, the tax became due by the persons appearing in the registration as owners of the vehicles. Any other interpretation would be to ignore the teleological element of interpretation of law, the systematic element, violating the unity of the scheme and would also be an interpretation inconsistent with the Constitution.

p) The AT argues that, should it be understood otherwise, it would always have to be considered that the probative documents submitted by the Claimant (invoices) are not susceptible to rebut the presumption of the registration, given their unilateral character, and therefore it is a document insufficient to rebut the presumption of registration. This would only be possible through the proper procedures provided for the annulment of the registration. It invokes arbitral jurisprudence expressed in various decisions rendered and in the recent judgment of the South Administrative Court of 19-03-2015.

q) Finally, it contests liability for payment of arbitral costs and payment of indemnity interest petitioned by the Claimant. It concludes arguing for the allowance of the exception invoked or, should it be understood otherwise, for the dismissal of the request, with the tax assessment acts impugned remaining in the legal order, absolving the Defendant of the request.

II - PROCEDURAL REQUIREMENTS

1. The Arbitral Tribunal is regularly constituted. It is materially competent, in accordance with article 2, no. 1, paragraph a) of Decree-Law no. 10/2011, of 20 January, to know of the request formulated, which consists of the annulment of the tax acts impugned in the present proceedings.

2. The Parties enjoy legal personality and capacity, are legitimate and are legally represented (See 4 and 10 no. 2 of DL no. 10/2011 and article 1 of Ministerial Order no. 112/2011, of 22 March).

3. The proceedings do not suffer from vices that would invalidate it.

4. Taking into account the tax administrative file, the documentary evidence attached to the proceedings, it is now necessary to present the factual matter relevant to the understanding of the decision, which is set forth as follows.

III – FACTUAL FINDINGS

A) Proved Facts

1. As relevant factual matter, this tribunal considers the following facts as established:

a) In the course of its activity, the Claimant A…, S.A. (formerly designated as B…, S.A.), imports automobiles of the C brand and subsequently proceeds to dispose of them to its customers.

b) For purposes of selling automobiles in conditions ready for immediate circulation, the Claimant requests from the competent services the attribution of the respective registrations.

c) The registration is requested on a date prior to or on the same date as the disposition of the vehicles.

d) Whenever the Claimant requests the attribution of a registration, it is obligated to make the initial registration of ownership of the vehicle in its name.

e) The Claimant imports the vehicles in question and proceeds to their introduction into consumption, through the submission of the respective Customs Vehicle Declaration (DAV);

f) It subsequently requests the issuance of the vehicle registration certificate upon which the submission of the DAV depends, which is issued in the name of the Claimant;

g) The initial registration of ownership is necessarily made in its name;

h) Only after these procedures does the Claimant dispose of and register the said vehicles in the names of its customers;

i) In some cases, the Claimant disposes of and registers automobiles in favor of its customers within the period of 60 days following the attribution of their respective registrations;

j) However, in some cases, for reasons relating to delays in the process of registering the vehicle in the name of the customer, notwithstanding the sale being carried out within the said period of 60 days, the registration of ownership of automobiles in favor of customers is made after that period;

k) In the years subsequent to the year of registration, the Claimant disposes of and registers automobiles in favor of its customers before the anniversary of the registration;

l) However, similarly to what occurs in some cases in the year of attribution of registration, notwithstanding the sale being carried out before the anniversary of registration, the registration of ownership of automobiles in favor of customers is made, in some situations, after that date;

m) During the years 2012 and 2013, the Claimant received several communications from the tax administration in which it was stated that it was in default on IUC assessments with respect to various vehicles of which the Claimant would allegedly be the owner;

n) During the years 2012 and 2013, the Claimant was notified of several additional IUC assessments relating to the vehicles identified in the same;

o) At the origin of said communications and assessments is the fact that the Claimant, had its name in the request for registration and in the respective initial registration of ownership of the vehicle;

p) The Claimant paid the €12,657.70 self-assessed, which includes the following situations:

i. 38 vehicles registered in the year 2008 and disposed of before the attribution of the registration, but registered in favor of the customer after the period of 60 days following the date of its attribution, to which IUC corresponds, in the amount of €2,013.40;

ii. 22 vehicles equally registered in the year 2008 and disposed of within the period of 60 days following the date of attribution of registration, but registered in favor of the customer after that period, to which IUC corresponds, in the amount of €1,459.30;

iii. 20 vehicles registered in the years 2001 to 2008 and for which payment of IUC for years subsequent to the year of registration is required, disposed of before the anniversary of registration, but registered in favor of the customer after that date, to which IUC corresponds, in the amount of €1,389.00; and

iv. 41 vehicles registered between the years 1964 and 2001, disposed of by the Claimant more than 10 years ago, to which IUC corresponds, in the amount of €7,796.00.

q) The Claimant requested the cancellation of the respective registrations with reference to 25.01.2010 and in one case with reference to 1.10.2010, the registrations having been officially cancelled with respect to 5 vehicles;

r) The ownership of these vehicles was, on the date of the tax events, still inscribed in motor vehicle registration in favor of the Claimant.

B) FACTS NOT PROVED

1. There are no relevant facts not proved for the purposes of final decision-making.

C) REASONING FOR THE PROVED FACTS

1. The facts described above were considered proved based on the documents that the parties attached to the present proceedings, the Claimant in the request formulated and the ATA in the answer presented and respective Administrative File.

IV – ISSUES TO BE DECIDED: EXCEPTIONS AND LEGAL REASONING

1. It is therefore necessary to appreciate and decide the issues to be resolved, first regarding the exceptions invoked and only after may the Tribunal rule on the merits.

A) Regarding the Exceptions Invoked:

1st - Untimeliness of the Request for Arbitral Decision

1. As to this first exception, the ATA is not correct, as it is quite clear and unequivocal that the request for annulment of the assessments as formulated by the Claimant stems from the rejection of the hierarchical appeal, and it is with this decision that the Claimant does not conform, arguing for the consequent annulment of the assessment acts in question. Moreover, in the request itself, the claimant petitions the annulment "of the tax acts identified above", that is, the (partial) rejection of the hierarchical appeal and the impugned tax assessments. Now, it is manifest that having been rendered on 14-11-2014, the decision of partial allowance of the hierarchical appeal, notified to the Claimant on 12-12-2014, considering the Christmas judicial recess, and the arbitral request having been presented on 16-03-2015, this is within the legal period for impugnation, provided for in article 10, no. 1 of the RJAT and in accordance with the provisions of article 102, no. 1, paragraph e).

2. However, the Defendant came to allege the untimeliness of the request for arbitral decision presented, by virtue of it petitioning only the declaration of illegality of the self-assessment acts better identified in the proceedings and, consequently, of already having exceeded the legal period defined in article 10, no. 1 of the RJAT for the impugnation of assessment acts in arbitration (…)", namely the period of 90 days counted from the "(…) day following the end of the period for voluntary payment of tax obligations (…)"

3. The ATA further adds that "although the Claimant submitted the said request following notification of the decision that denied the hierarchical appeal filed against the decision rejecting the administrative review presented against the self-assessment acts in question in the proceedings, it is considered that the Claimant "(…) did not formulate/specify to this Tribunal in its initial petition any request aimed at annulment of the express rejection of the hierarchical appeal presented (…)", and therefore "(…) there is no support that could establish the timeliness of the request and, consequently, the possibility for the Tribunal to rule on the request formulated regarding the assessment act (…)"

4. The reasoning of the defendant does not hold. Let us see:

a) From the very beginning of the petition presented by the Claimant it is clearly stated that the present arbitral request follows from having been "notified of the decision of partial allowance rendered (…) which fell upon the hierarchical appeal no. …/13 (…)" – (see 1st page of the arbitral request);

b) Throughout the entire petition, the Claimant explicitly refers to the reasons that led it to the present request for constitution of arbitral tribunal, indicating the decision of partial allowance rendered within the hierarchical appeal, with which it does not conform, as it understands that the remaining assessment acts should also be annulled;

And,

c) In the final part, it concludes by formulating the request for "allowance of the present request for constitution of arbitral tribunal and, consequently, for the annulment of the tax acts identified above (…)

1. It is clear to this tribunal that the decision of partial rejection of the hierarchical appeal presented is the act from which the Claimant departs for the presentation of the arbitral request. It is explicitly referred to on the 1st page of the arbitral request to the decision of (non-) allowance as being the act that led it to the presentation of the request for constitution of the arbitral tribunal, arguing, naturally, for the illegality of the remaining assessments, that is, those not annulled by the decision of the hierarchical appeal. Thus, there is no doubt that that act (decision of the hierarchical appeal), is part of the subject matter of the present proceedings, is at its origin and is one of the acts whose annulment is requested.

2. An administrative decision, rendered within a process of administrative review or hierarchical appeal over a hierarchical appeal is itself, no less, a tax act. Let us recall the concept of tax act according to Alberto Xavier: "the tax act is the act of application of the material tax norm to the concrete case."[1]

3. Thus, the decision of an administrative review or a hierarchical appeal, as decisions practiced by the Tax Administration, are individual and concrete decisions that apply the material tax law to the concrete case. To which is added that the object of the administrative review and the hierarchical appeal consists of assessing the legality underlying the application of the tax norm that gives rise to the assessment act impugned. We are faced with the legitimate exercise of the subject liable choosing to exhaust the administrative remedy, using the gracious impugnatory guarantees provided for in law.

In other words, what is discussed within these gracious guarantees is exactly what is intended to be discussed within the process of impugnation, the illegality of the assessments, in the case by resort to the avenue of constitution of arbitral tribunal. Note that, as appears from the administrative file and is alleged by the Claimant, during the years 2012 and 2013, it was warned via email, of the fact that it was in default on IUC assessments with respect to various vehicles of which it would allegedly be the owner. Still in the same years, it was notified of several additional IUC assessments, and therefore the Claimant as a precaution proceeded to self-assess and deliver to the State the IUC in question.

Subsequently, it used the legally provided guarantees to claim the illegality of these assessments, resorting to the presentation of an administrative review and hierarchical appeal. The avenue is legitimate and appropriate to the concrete situation under discussion and prudent, if we consider the provisions of article 131 of the CPPT. Thus, the thesis defended by the Defendant regarding the counting of the period from the deadline for payment of said assessments does not merit acceptance.

1. In the concrete case, the Claimant explicitly refers to presenting this request for constitution of arbitral tribunal for not conforming with the decision of partial rejection of the hierarchical appeal rendered, as it considers all the assessment acts in question to be illegal and not only those that were revoked by the impugned decision. In truth, the decision of the hierarchical appeal, in this as in any case, will only be illegal for having maintained in the legal order illegal assessment acts, which justifies that the dominant act is, effectively, the assessment act. Therefore, in petitioning the "annulment of the tax acts mentioned above", it clearly follows from the entire petition that at issue are the decision of the hierarchical appeal and the assessment acts identified in the present proceedings.

2. To accept the understanding of the Defendant would correspond to a manifest violation of the principle of justice and access to law, beyond which we would be contradicting the intention of the legislator in establishing the gracious impugnatory guarantees in question (see article 131 of the CPPT) and removing any useful effect from resort to these guarantees, making form prevail over substance, which appears unacceptable.

3. Furthermore, in the factuality presented in the request for arbitral decision, express mention is made of the decision of partial allowance of the hierarchical appeal, expounding the reasons that led the tax administration to conclude toward the partial allowance, which are reduced to the defense of the legality of the self-assessment acts contested, and not conforming with the understanding of the tax administration contained in the decision in question, it filed the request for constitution of arbitral tribunal at the origin of the proceedings (cf. articles 42 to 46 of the request for constitution of arbitral tribunal). Also, throughout Chapter IV of the request for arbitral decision, relating to Matters of Law, the Claimant invokes and specifies the illegalities that the decision falling upon the hierarchical appeal suffers from, presenting the reasons why it disagrees with the understanding of the tax administration expressed in that decision (cf., by way of example, articles 53 to 57, 163 and 164 of the request for constitution of arbitral tribunal). Finally, the Claimant requests the attachment to the proceedings of the administrative file instructing the case, which includes the procedure of administrative review no. …2013… and the procedure of hierarchical appeal no. …/2013-…. Wherefore, as the Claimant alleges in the reply to the exceptions invoked by the ATA, "it is evident that the express decision of partial allowance falling upon the hierarchical appeal is part of, contrary to what is invoked, the subject matter of the request for arbitral decision."

4. In any case, what is intended is the annulment of the decision of the hierarchical appeal (with which the claimant does not conform) and, truly, the declaration of illegality of the assessment acts in question. For this reason, it is from the grounds of illegality of these acts that the Tribunal must rule, and if it considers them illegal, it must necessarily conclude for the illegality of the decision of the hierarchical appeal, if it considers that the acts do not suffer from any illegality, it will conclude that the decision of the hierarchical appeal does not suffer from any illegality.

5. The Claimant is therefore right when it states that "it is not by virtue of not invoking vices peculiar to the decisions of rejection of the hierarchical appeal and/or the administrative review presented that one should conclude for the absence of a request for its annulment. In fact, the illegality of said decisions stems, not from vices peculiar to the procedure of hierarchical appeal and/or administrative review, but from the fact that in them, the vices suffered by the self-assessment acts in question in the proceedings were not recognized. Without prejudice to the above, and although doubts subsist as to the scope of the request formulated, which is only conceived by caution of representation, without conceding, what is certain is that such circumstance does not constitute a reason, with due respect, to conclude for the untimeliness of the present request for arbitral decision.

6. Indeed, from the outset, the alleged lack of clarity and specification of the request is not conceived as an obstacle to the continuation of the proceedings, whenever it is possible to discern what the taxpayer intends."

7. For all the above, this Tribunal considers that the request is clear and leaves no doubt about what the Claimant intends: the annulment of the tax acts identified in the proceedings, which encompasses the decision of the hierarchical appeal and the assessment acts.

8. Finally, and as the Claimant rightly argues, the jurisprudence of our superior courts is also quite clear on this matter. In this sense, we could list various Judgments of the Supreme Administrative Court (STA) and of the Central Administrative Courts, from which we highlight the following, which reveal the position of the STA on the subject:

"(…) this Supreme Administrative Court has adopted a position of great flexibility in the interpretation of the request when, in view of the concrete grounds of action invoked, it may be inferred that the true intention of legal protection is different from that formulated (…)"

"Having been understood by all the interveners in the proceedings - Tax Administration, Judge, representative of the Public Treasury and Public Prosecution that one was faced with the judicial impugnation of a given tax assessment act for succession tax, it is irrelevant that in the petition the request for annulment of that tax act does not come expressed and clearly formulated (…)" (cf. Judgments of the STA, of 27.06.2012, and of 22.09.1999.)

1. Thus, no doubts remain that, being clear the intention of the Claimant toward the annulment of the self-assessments contested and, necessarily, of the decision of the hierarchical appeal that determined their maintenance in the legal order, as evidenced above, there is no obstacle to the examination of the legality of the same.

2. What is relevant, therefore, is all that the Claimant expounds throughout the petition, and in concluding by requesting the annulment of the tax acts formulates a clear, understandable and sufficient request. Any other understanding would lead to an interpretation violating the principles of access to courts, proportionality and effective judicial protection, enshrined in the Constitution (article 18, 20 and 268, nos. 4 and 5 of the CRP.

3. Thus, in light of all the above, the invoked exception should be judged to be without merit.

2nd) Exception of Illegality of Cumulation of Requests

1. Also regarding this exception, the Defendant is not correct. The Claimant impugns the decision of rejection of the hierarchical appeal and argues for the annulment of various additional IUC assessments relating to various vehicles and compensatory interest, as illegal. The AT invokes that the factual situations invoked by the Claimant are disparate, as they refer to differentiated situations and concludes, arguing that the cumulation of requests effected is illegal. The Claimant replied to the exception invoked, defending the legality of the cumulation of requests, as the allowance of the request depends on the same circumstances of fact and on the interpretation and application of the legal rules relating to the subjective incidence of IUC.

2. Pursuant to the provisions of article 3, no. 1, of the RJAT, the cumulation of requests, even relating to different acts, is admissible when the allowance of the requests depends essentially on the appreciation of the same circumstances of fact and on the interpretation and application of the same principles or rules of law. In the same sense, article 104 of the CPPT provides that the cumulation of requests is admissible in case of identity of the nature of the taxes, of the grounds of fact and law invoked, and of the court competent for the decision.

3. In the case at hand, notwithstanding the facts refer, as the AT argues, to different vehicles, with different sale dates to completely disparate owners, with completely different values, the truth is that such circumstance does not prevent the cumulation of requests. This is because, notwithstanding the different factual situation existing, the truth is that all the assumptions upon which the cumulation of requests depends are verified, namely: total identity of the nature of the taxes, identity of the grounds of fact and law invoked, and, finally, identity of the court competent for the decision.

4. Now, in all the situations invoked by the Claimant, the tax in question is the IUC. Indeed, it will always be said that, within the scope of a request for arbitral decision, identity of taxes is not required for this purpose, given the fact that this identity is not provided for in article 3, no. 1 of the RJAT and the rules provided for in the CPPT are of subsidiary application, as results from the provisions of article 29, no. 1 a of the RJAT.

In the same way, the grounds of fact and law invoked by the Claimant are the same in all situations, being reduced the first to the alleged disposition of vehicles at a moment prior to the date of the tax event and the second to the appreciation of the legal rules relating to the subjective incidence of IUC.

1. The identity of the court competent for the decision appears evident in all situations listed by the Claimant, being the present arbitral tribunal materially competent for that purpose. Whereby it is necessarily concluded for the verification of the assumptions upon which the law makes the possibility of initial cumulation of requests depend. Let it not be said, as the AT does, that the fact that the situations invoked refer to different vehicles, with different sale dates, different sales procedures carried out to dealers and sales on different dates and to completely disparate owners, with completely different values, would prevent cumulation. If so, the Claimant would be forced to impugn separately each IUC assessment, which would manifestly be absurd and would contradict the reason for the legal provision of the possibility of cumulation of requests.

2. Given the verification of the legal assumptions upon which the cumulation of requests depends, the notification of the Claimant in the terms and for the purposes of the provisions of article 47, no. 5 of the CPTA is not justified.

Thus, the invoked exception of illegal cumulation of requests does not merit acceptance.

B) LEGAL REASONING

1. In the decision of the hierarchical appeal, the rejection is based on the following grounds:

a) "The respective computer applications were consulted and it was verified that on the date of the tax event, the registration of ownership of the vehicles in question was registered in the name of the appellant;

b) For its part, in cases where the appellant alleges that the cancellation of registrations occurred, the tax is due since the cancellation occurred later than the date of the anniversary of the registration of the respective vehicles;

c) IUC falls on the ownership of vehicles, as attested by the registration (cf. no. 1, article 6 of the IUC Code), and not on the use or enjoyment thereof;

d) The subject liable for tax is measured in function of the registration (cf. article 3 and no. 1 of article 6 of the IUC Code);

e) It is therefore justified that as long as the ownership of the vehicle appears in the motor vehicle registration (IRN) in the name of the appellant, this person is the subject liable for tax (IUC); It is with the motor vehicle registration services that proof should be presented that it is not the owner of the vehicle (…)"

1. In sum, the AT understands that whoever appears in the registration as the owner of the vehicles at the time of issuance of the respective registration or on the first day of the tax period, is subject liable for tax. As appears from the established facts, at issue in the present proceedings are:

a) IUC relating to vehicles disposed of before the date of registration, before the date of its anniversary or within the period of 60 days following the issuance of the registration;

b) And IUC relating to vehicles registered between the years 1964 and 2001 and disposed of more than 10 years ago.

1. In these terms, with the factual matter fixed, it is necessary to rule on the merit question raised by the Claimant, which consists of appreciating the terms of the configuration of the subjective incidence of IUC in light of the provisions of article 3 of the IUC Code.

The essential question to be addressed first, as it precedes the others, is whether the subjective incidence rests strictly on the inscription of the vehicle ownership in the Motor Vehicle Registration, or if the registration operates only as a presumption of tax incidence, rebuttable, in accordance with the provisions of article 73 of the General Tax Law. On this matter, the arbitral jurisprudence expressed in various arbitral decisions is already abundant and well-defined.

a) Subjective Incidence: the Tax Event and the Effects of Motor Vehicle Registration in IUC Incidence

1. The question to be decided relates strictly to the assumptions of IUC incidence, relating to the concrete case and, in that measure, it is necessary to rule on the alleged illegality by vice of violation of law by error regarding the assumptions that led the AT to issue the impugned assessments. Having analyzed the factual matter brought to the proceedings, the legal regime applicable resulting from the joint provisions of the IUC Code, of the Vehicle Tax Code and of the Highway Code, it is necessary to assess its application to the concrete case to be able to conclude whether the impugned IUC assessments are or are not illegal.

2. The IUC Code establishes, as a rule of incidence, that the subjects liable are the owners of vehicles, considering as such the persons in whose name they are registered. This same results from the fundamental legal framework applicable in this matter is provided for in articles 1 to 6 of the IUC Code, approved by Law no. 22-A/2007, of 29 June.

3. Article 1 of the IUC Code defines the objective incidence of the tax, distinguishing vehicles by specified categories, a rule that appears clear and presents no difficulties in application. However, the same is not the case with the rule of subjective incidence contained in no. 1, article 3 of the IUC Code, which is at the origin of the present dispute and thus constitutes the question to be decided in the case under examination. The analysis of both rules (articles 1 and 3) allows for the conclusion that in the functioning of IUC, the motor vehicle registration has a fundamental role, but the correct application of the regime proposed by the legislator requires resort to other interpretive elements.

4. Thus, what is truly at issue is determining the meaning and scope of the rule of subjective incidence, contained in article 3, no. 1, of the IUC Code and the eventual existence or non-existence of a rebuttable presumption, connected to the question of the legal effects of motor vehicle registration, raised by the Claimant.

Article 3 of the IUC Code provides that:

"1 – The subjects liable for tax are the owners of vehicles, being considered as such the natural or legal persons, of public or private law, in whose name the same are registered.

2 – Financial lessees, acquirers with reservation of ownership, as well as other holders of purchase option rights by virtue of lease contracts are equated to owners".

Article 11, no. 1, of the General Tax Law provides that:

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

1. The interpretation and application of the legal norm presupposes the performance of an interpretive activity, which must be objective, balanced, and in accordance with the letter and spirit of the law. Any text, and the law is no exception, bears multiple meanings and frequently contains ambiguous or obscure expressions. For this reason, although the letter of the law is "the guiding thread" of the interpreter, it must be interpreted having in mind the underlying objectives, "the ratio" or the motivation of the legislator in establishing the rule in question. To these elements is added another according to which the interpretation of the legal norm must respect the "unity of the legal system", its coherence and intrinsic logic.

2. It should be recalled that article 9 of the Civil Code provides the rules and fundamental elements for the interpretation of the legal norm, to which the interpretation of fiscal law also obeys, which begins by saying that interpretation should not be limited to the letter of the law, but should reconstruct from it the "legislative thought". To these general principles are added, furthermore, the principles contained in the General Tax Law, namely in article 73, which establishes that presumptions contained in rules of tax incidence always admit proof to the contrary.

3. Furthermore, with respect to the question under analysis, the contribution of arbitral decisions already rendered in cases nos. 14/2013-T, of 15 October, 26/2013-T of 19 July, 27/2013-T, of 10 September, 217/2013-T of 28 February and, more recently, in the decisions rendered in cases 286/2013-T, of 2 May 2014, 293/2013-T, of 9 June 2014, 46/2014-T of 5 September, 250/2014-T, of 17 November 2014 and 43/2014-T, 157/2015-T, of 10 August 2015 and, due to the similarity of the cases under discussion, the Judgment rendered in cases 212/2014-T, of 5 March 2015 and 13/2015-T, of 28 October 2015, which, among many others, reveal a refined reflection on the fundamental question under examination.

4. It is, therefore, in this background framework, using the fundamental hermeneutic principles just mentioned, endorsed by the jurisprudence of our superior courts and also by arbitral jurisprudence, that we should seek to find the adequate interpretation of the norms in question.

5. In the concrete case under examination, the tax event, in the terms of the IUC Code, is constituted by the ownership of the vehicle, as attested by the registration or registration in national territory, in the year of its importation or introduction into the national market (article 3, no. 1, of the IUC Code). The tax is considered enforceable on the first day of the tax period (article 6, no. 3, of the IUC Code), which corresponds to the year that begins on the date of registration (cf. article 4, no. 2, of the IUC Code).

6. There are, therefore, two distinct factual situations under examination. The first concerns IUC relating to vehicles disposed of before the date of registration, before the date of its anniversary or within the period of sixty days following the issuance thereof. Now, in relation to all these vehicles, it is verified that the first registration was made in the name of the now Claimant, when it was no longer the owner of the vehicles, having disposed of them to its customers identified in the invoices attached to the proceedings, customs vehicle declarations (DAV), complemented with information on vehicle transactions, proof of payment transfers for vehicles and identification of buyers and legitimate owners, from which stands out a public entity: the D…. (cf. doc. 4, 5 and 7, attached to the Arbitral Request).

7. As for the second situation referred to, in which at issue is IUC relating to vehicles registered between the years 1964 and 2001 and disposed of more than ten years ago, the Claimant demonstrates that it was no longer the owner of said vehicles on the date of the tax events in question in the proceedings. It does not attach the invoices relating to these vehicles, which is understandable given the time period in which such sales occurred and the rule of the obligation to keep accounting documentation for 10 years. However, the demonstration by the accounting elements that appear in the company's inventories, shows that these vehicles were also no longer property of the Claimant at the time the tax events occurred.

8. Now, in the absence of registration of vehicle ownership made within the legal period, the tax due in the year of vehicle registration is assessed and required from the subject liable for vehicle tax (ISV) on the basis of the customs vehicle declaration, or on the basis of the complementary vehicle declaration upon which that tax assessment is based, even if it is not due (article 18, no. 1, paragraph a), of the IUC Code). From this last provision, it results that, in the case there is registration of vehicle ownership made within the legal period, the tax due in the year of vehicle registration is assessed and required from the respective holder of that registration.

9. From the factuality proved in the proceedings, it is concluded that in the case of the vehicles contained in the assessments now impugned and identified in document no. 2, this is precisely what occurred. That is: although the vehicles in question had an initial registration in favor of the now Claimant (as is understood by the legally established procedure to which the importer is subject), the vehicles included in the first group were already, at that date, the property of another, in favor of whom they were registered at the Motor Vehicle Registry Office, for this is the only way to understand that the problem under discussion is limited to the year in question.

As for the vehicles included in the second group, it was also no longer its owner, as results from the accounting elements attached to the proceedings, based essentially on the company's inventories, from which it appears that those assets were not part of the company's assets on the date of the tax events in question.

1. The elements attached, relating to this second group of vehicles (disposed of more than ten years ago) are the possible ones, given the long period of time already elapsed, are credible and benefit from the presumption of truthfulness provided for in article 75 of the General Tax Law, in which the legislator considers that "the statements of taxpayers presented in accordance with the provisions of law are presumed to be true and made in good faith, as well as the data and computations recorded in their accounting or records, when these are organized in accordance with commercial and tax legislation, without prejudice to other requirements upon which the deductibility of expenses depends."

2. Thus, if the Claimant was not the effective owner of the vehicles on the date of occurrence of the facts that determine the obligation of tax, given that they had already been sold to their respective customers, on a date prior to the very registration of the vehicles, before the date of its anniversary or within the period of sixty days following the issuance of the registration, as per the invoices issued and remaining accounting elements already mentioned above, which it attaches as probative elements, it is not understood nor justified the assessment of IUC to the importer and now Claimant.

3. This conclusion also results from the interpretation of the rules of no. 1 of article 17 and article 18 of the IUC Code, relating to the deadline for payment of tax and official assessment, respectively, which are based on the assumption that "in the year of registration the subject liable for IUC is the owner of the vehicle on the date on which those 60 days counted from the date of attribution of the registration expire, who must assess and deliver it to the State within the 60 days thereafter."

4. And, being such, in the case of the present proceedings, it is demonstrated that the subject liable, on the date of the tax events, was not the now Claimant. Indeed, any other understanding would manifestly contradict the principles underlying the IUC reform and even contradict its nature as a tax on the circulation of motor vehicles.

5. In truth, in the activity developed by the now Claimant, in its capacity as an importer, the transfer of ownership of vehicles normally occurs even before the date of registration. This is because the Claimant proceeds to admit into Portuguese territory new vehicles, which, at a moment prior to their respective registration, it transfers to its customers. However, by force of the applicable legal rules, the registration of vehicles in question is made in the name of the Claimant, even though at the moment it becomes effective, the Claimant is no longer its owner. This procedure, moreover, results from the provisions of article 117, no. 4, of the Highway Code, which imposes on the person, natural or legal, who proceeds to admit, import or introduce into consumption in national territory, the obligation to request the registration of vehicles, as well as from the provisions of article 24, no. 1, of the Motor Vehicle Registration Regulations, which determines that the initial registration of ownership of imported, admitted, assembled, constructed or reconstructed vehicles is based on the respective request. From said rules, it results, therefore, that the Claimant, in its capacity as a registered operator that proceeds to admit new vehicles into national territory, necessarily appears in the respective initial registration as its owner, even though at the moment this occurs, the ownership of the same has already been transferred to third parties. And, if such is the case, by imposition of the legislator, this aims at the control of the activity by the competent authorities so as to control who comes to acquire such vehicles and when. From this result, among others, various tax obligations.

6. Accordingly, we are faced with the question of whether the issue concerns the interpretation of article 3, no. 1, of the IUC Code, to determine whether the same establishes, or does not establish, a presumption relating to the qualification as owner, and consequently, as subject liable for this tax, of the natural or legal person in whose name the vehicle ownership is recorded and, should it be concluded in that sense, its rebuttal on the basis of the probative elements that comprise it.

7. Such understanding is reinforced by the fact that the IUC Code establishes as a structuring principle of this tax the principle of equivalence, understood as compensation for the harmful effects in environmental and energy terms resulting from the circulation of vehicles, the said Code elects, regarding subjective incidence, the owner of the vehicle, considering as such the person in whose name the same is registered (article 3, no. 1, of the IUC Code). But, despite this, the legislator reserved certain particular cases in which the formal or legal ownership of the vehicle was relegated to secondary importance due to the use thereof, imputing to the latter the obligation of payment of IUC, as occurs with financial lessees, acquirers with reservation of ownership, as well as other holders of the right of purchase option by virtue of a lease contract (article 3, no. 2, of the IUC Code).[2]

8. Certain it is that the rule of incidence, in referring to the elements of the motor vehicle registration, does not distinguish between the initial registration of the vehicle and subsequent registrations: the subject liable for tax is the owner of the vehicle, considered as such the natural or legal person in whose name the vehicle is registered. It is, therefore, upon the interpretation of the rule of no. 1 of article 3 that, as already mentioned, the different positions expressed by the Claimant and the Defendant are evident.

9. According to the Claimant, said rule establishes a presumption of ownership, based on the registration, rebuttable in the general terms and, in particular, by force of the provisions of article 73 of the General Tax Law.

10. For the Defendant, establishing the IUC Code the passive subjection as well as the tax event generator of the obligation of tax, by reference to the elements contained in the motor vehicle registration, as results from articles 3 and 6 of the IUC Code and the Claimant requesting the issuance of the registration certificate and the vehicles being registered in its name in the tax periods, the assumptions of the tax event are met, as well as its enforceability, being the Claimant the subject liable for tax with reference to the period in question. It says nothing about the fact that that same registration was immediately altered to the name of the true owners and acquirers of motor vehicles, in the same tax period, certainly by disregarding such fact as irrelevant, which, from the outset, contradicts the value it itself purports to attribute to motor vehicle registration.

11. This matter has been the subject of various arbitral decisions that, repeatedly and uniformly, have pronounced in the sense of considering that the rule of no. 1, article 3 of the IUC Code establishes a presumption, rebuttable, (underlined) in the general terms and, in particular, by force of the provisions of article 73 of the General Tax Law. This tribunal will also follow this orientation closely.[3]

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

13. From this provision it follows that motor vehicles that are not, and should not be, registered in Portuguese territory are only encompassed by the objective incidence of this tax if they remain therein for a period exceeding 183 days, as provided for in no. 2 of the same article. There is no doubt that it is by resorting to the registration element that the legislator establishes, simultaneously, the tax event generator, as well as the determination of the moment of the beginning of the tax period and the constitution of the tax obligation and, in a general manner, all elements necessary to the assessment of the tax in question, as alleged by the AT.

14. Despite the above as to the dependence of the IUC tax regime on motor vehicle registration, it cannot be extracted, as an immediate conclusion, that the rule of subjective incidence does not constitute a presumption of incidence. According to the notion contained in article 349 of the Civil Code, presumptions are the inferences that the law or the judge draws from a known fact to establish an unknown fact. Furthermore, article 341 of the Civil Code provides that presumptions constitute means of proof, having the function of demonstrating the reality of facts, such that whoever has the legal presumption in its favor is excused from proving the fact to which it leads (cf. no. 1 of article 350 of the Civil Code). In the case, the AT has the presumption in its favor, but this can be rebutted by the Claimant.

15. Furthermore, presumptions, which may be explicit or implicit, unless the law prohibits it, may be rebutted, through proof to the contrary, as indeed results expressly from the provisions of no. 2, article 350 of the Civil Code. Finally, in the case of presumptions of tax incidence, these are always rebuttable, as expressly provided for in article 73 of the General Tax Law.

16. The controversy surrounding this matter arose within the context of the new law, as the expression "presumed to be" was replaced by the expression "considered to be". In the same sense, article 3, no. 1, of the Regulations for Circulation and Haulage Taxes, approved by Decree-Law no. 116/94, of 3/05, provides that the subjects liable for these taxes are "the owners of vehicles being presumed to be, until proof to the contrary, the natural or legal persons in whose name the same are registered."

17. However, we are faced with a mere semantic question, which minimally does not alter the content of the rule in question. Thus, as to the question of whether, in view of the literal wording of the provisions of no. 1, article 3 of the IUC Code, the scope of the expression "considered to be as such", given that in the current version the legislator did not use the term "presumed to be" (which was contained in the defunct Vehicle Tax Regulations), the Tribunal understands that it can only be the following: the legislator presumes (considers) that owners are the persons in whose name the vehicles are registered (underlined). This means that such presumption, implicit, is naturally rebuttable in accordance with the provisions of article 73 of the General Tax Law.

18. It is so true that in the current version of the Code, only the verb changed, the legislator now opting for the expression "considered to be". Certainly, between the previous legislative versions and the current one, the General Tax Law came into force, which expressly enshrined the principle contained in article 73, from which it results that in tax incidence any presumption always admits proof to the contrary. Therefore, it becomes irrelevant the adoption of an explicit or implicit presumption, as both are equally rebuttable.

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

20. To the above is added that we can easily point to various examples, extracted from the tax legal order, in which the legislator opted for the use of the verb "consider", with a presumptive sense. Besides which, as already stated above, dealing with a rule of tax incidence, it would never be admissible the establishment of an irrebuttable presumption. As affirm Diogo Leite Campos, Benjamim Silva Rodrigues and Jorge Lopes de Sousa (General Tax Law, annotation to no. 3, article 73 of the General Tax Law), "presumptions in tax incidence matters can be explicit, revealed by the use of the expression 'presumed to be' or similar (…). However, presumptions can also be implicit in rules of incidence, namely of objective incidence, when certain values of goods, movable or immovable, are considered to constitute taxable matter, in situations in which it is not unfeasible to ascertain the actual value".[4]

21. And there are many examples of rules in which the verb "consider" is used to establish rebuttable presumptions, as occurs with the provision of no. 2 of article 21 of the Corporate Income Tax Code, in article 89-A of the General Tax Law or in article 40, no. 1 of the Income Tax Code on Capital Gains, among others.

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

1. As for the historical element, it should be noted that since the origin of the circulation tax, with the entry into force of Decree-Law no. 599/72 of 30 December, a presumption was explicitly established, relating to the subjects liable for the tax as being those in whose name the vehicles were registered. That version of the law used the literal expression "presumed to be as such".

2. Given the ends of the tax in question, it must be recognized that the use of the expression "considered to be", in the current version, contemplates an expression with an effect similar to that, embodying, equally, a presumption. This same occurs in the formulation contained in no. 1 of article 3 of the IUC Code, in which a presumption was established, revealed by the use of the expression "considered to be", of similar meaning and equivalent value to the expression "presumed to be", in use since the creation of the tax in question. The use of the expression "considered to be" is justified as it appears, perhaps, more in keeping with the reinforcement conferred to vehicle ownership, which became the tax event generator, in accordance with the contents of article 6 of the IUC Code.

Thus, in light of the literal element of interpretation, nothing prevents the understanding that the provision of no. 1, article 3 of the IUC Code establishes a rebuttable presumption.

1. Thus, as to the subjective incidence of the tax, it is to be concluded that no alterations are verified regarding the situation previously in effect within the scope of the Municipal Tax on Vehicles, Circulation Tax and Haulage Tax, as is widely recognized by doctrine, with a rebuttable presumption continuing to apply in this matter. This understanding is, furthermore, the only one that appears adequate and consistent with the principle of material truth and justice, underlying fiscal relations, with the objective of taxing the real and effective owner and not that who, due to circumstances of a diverse nature, is merely, at times, an apparent and false owner, appearing in motor vehicle registration, as occurs in the concrete case with the Claimant, by force of its activity as an importer and to comply with the rules legally applicable to the registration of new imported vehicles and introduced into national territory.

2. It should be noted that for many years, there were many owners of motor vehicles who did not proceed to register, this being an obligation of the acquirer. In the concrete case, we note, for example, that sixty-two (62) "pick-up" vehicles were sold by the Claimant and acquired by D…. It would be expected that a public entity would have the situation regularized in the scope of motor vehicle registration. The truth is that acquirers often did not proceed to register because this never had an obligatory character.

But the question that also makes sense to pose in the concrete case is the following: having the AT the power/duty to investigate the procedures, observing the principles of the inquisitorial system and material truth, for only this way the assessment and collection procedure complies with the principle of tax legality, did it not manage to discover to whom the vehicles belonged? Even those which are the property of a public entity such as D…?

The truth is that it could have had access to that information by its own means, but even if it was not so, it is not understood how it ignored this fact after all the information, duly documented, attached to the administrative review and hierarchical appeal.

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

2. On the question under analysis, it is, therefore, unanimous the understanding that has come to be defended in successive, diverse and numerous arbitral decisions rendered. For being such, the holder inscribed in motor vehicle registration must be allowed the possibility of presenting probative elements sufficient for the demonstration that the effective owner is, after all, a different person from that which appears in the registration, and that initially, and in principle, was presumed to be the true owner. Otherwise, one would accept the supremacy of the formal truth of the registration over material truth, and it would be to admit the gross violation of the fundamental fiscal principles enunciated and, further, of the principle contained in article 73 of the General Tax Law according to which there are no irrebuttable presumptions in tax incidence.

3. To all that is left above is added that any other understanding would translate the violation of the principles of legality, proportionality and justice, as well as that of the inquisitorial system, established, respectively, in articles 55 and 58 of the General Tax Law.

Besides, it is possible to extract, further, another argument from the provisions of article 7 of the Real Property Registry Code (which constitutes the fundamental legal basis in the matter of registration of ownership), which provides that "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." In light of the principle of uniformity and intrinsic coherence of the legal system, no justifiable ground appears acceptable for the principle prevailing in property registration in general to suffer an inflection or even unjustified "trampling" in the matter of motor vehicle registration.

1. But, if some doubt persisted, it would always be said that, regarding elements of interpretation of a rational or teleological nature, the statement of reasons of Proposal for Law no. 118/X of 07/03/2007, underlying Law no. 22-A/2007, of 29/06, is quite expressive in clarifying that the reform of automobile taxation is effected by means of the displacement of part of the tax burden from the moment of vehicle acquisition to the circulation phase and aims to "form a coherent whole" which, although intended for the raising of public revenue, intends that the same be raised "in the measure of the environmental costs that each individual causes to the community", further adding, with respect to the tax in question and the different types and categories of vehicles, that "as a structuring and unifying element (…) the principle of equivalence is established, thus making clear that the tax, as a whole, is subordinated to the idea that taxpayers should be burdened in the measure of the cost they cause to the environment and to the road network, this being the reason for this tax figure", further referring, to be "(…) this principle that dictates the burdening of vehicles based on their respective ownership and until the moment of scrapping (…)".

2. Thus, the logic and rationality of the new system of automobile taxation presupposes and aims at a subject liable coinciding with the owner of the vehicle, in the assumption of it being such, and not another, the real and effective subject causing environmental damage, as results from the principle of equivalence inscribed in article 1, of the IUC Code. This principle of equivalence, which informs the current unique vehicle tax, has underlying the polluter-pays principle, and realizes the idea inscribed in it, that whoever pollutes must, for that reason, pay. It is, after all, about reaching the negative environmental externalities that arise from the use of motor vehicles, are assumed by their owners and/or users, as costs that only they should bear.

3. To this end, the position expressed in the recent Arbitral Decision no. 286/2013-T of 2 May 2014, is quite enlightening when it states that: "It is this principle (of equivalence) that dictates the burdening of vehicles based on their respective ownership and until the moment of scrapping, the common use of a specific tax basis, the review of the framework of tax benefits in force and the allocation of part of the revenue to the municipalities of their respective use. Now, to contend, as the Defendant does, that the legislator, in article 3, no. 1 of the IUC Code, fixed, whatever the underlying technical means, the subjective incidence of the tax on persons in whose name the vehicles are registered, with total independence of whether or not, in the relevant tax period, they are holders of the right to use the vehicle, especially of its ownership, would imply disregarding that purpose which presides over the normativity of taxation, well expressed in the objective incidence and in the tax basis associated with the various categories of vehicles (cf. articles 2 and 7 of the IUC Code). For an inscription registration, without correspondence with the underlying ownership, possesses no value to give satisfaction and fulfillment to such purpose, for it is not the persons in whose name the vehicles are inscribed when they are not holders of rights over their use that cause environmental and road costs, but rather such environmental and road costs are caused by the effective users of the vehicles, in accordance with the relevant substantive legal situations, even if they do not appear, as they should, in the motor vehicle registration. The registration, in truth, in no way depones or serves as to the principle of equivalence established in article 1 of the IUC Code. Indeed, to assume that the determining element of subjective tax incidence is simple and exclusively motor vehicle registration also does not allow the assertion of a connection with any manifestation of relevant tax-paying capacity, which, as a rule, in non-strictly commutative taxes, is indispensable, as there must exist, without prejudice to requirements of practicability [text truncated as indicated in original]