Process: 184/2014-T

Date: October 21, 2014

Tax Type: IUC

Source: Original CAAD Decision

Summary

This arbitral award from CAAD (Process 184/2014-T) addresses the material competence of tax arbitration tribunals to decide disputes involving IUC (Vehicle Circulation Tax) assessments. The claimant, a financial institution specializing in long-term and financial leasing of vehicles, challenged IUC assessments for tax periods 2009-2012 totaling €1,788.02. The company argued it was not the vehicle owner when the taxable events occurred, as the vehicles had been sold prior to the relevant tax dates. The core legal issue centered on whether payment notices generated through the Financial Portal constitute challengeable tax acts under the RJAT (Legal Framework for Tax Arbitration, Decree-Law 10/2011). The Tax Authority raised critical procedural exceptions: (1) lack of subject matter, arguing that self-generated payment notices are not official tax acts subject to arbitration; (2) lack of material jurisdiction due to pretermission of mandatory administrative appeal under article 131 of the Tax Procedure Code; and (3) exclusion from arbitral jurisdiction under Order 112-A/2011, which requires prior administrative recourse for self-assessment disputes. The AT distinguished between official ex officio assessments and self-assessments, contending that the latter require exhaustion of administrative remedies before accessing arbitration. This case establishes important precedent regarding the scope of arbitral jurisdiction over IUC matters, particularly for financial institutions operating leasing businesses, and clarifies the procedural prerequisites for challenging tax assessments through CAAD's arbitration mechanism rather than traditional administrative or judicial channels.

Full Decision

ARBITRAL AWARD

The arbitrator Guilherme W. d'Oliveira Martins, designated by the Deontological Board of the Administrative Arbitration Center (CAAD) to form the single arbitrator tribunal constituted on 30 April 2014, decides as follows:

I. REPORT

  1. On 25.02.2014, the company "A..., S.A.", NIPC ... submitted a request for constitution of a single arbitrator tribunal, in accordance with and for the purposes of the provisions of articles 2 and 10 of Decree-Law No. 10/2011, of 20 January (Legal Framework for Tax Arbitration, hereinafter, "LFTA"), with the Tax and Customs Authority (AT) being named as respondent.

  2. The request for constitution of the Arbitral Tribunal was accepted by the Honorable President of CAAD and automatically notified to the AT on 27.02.2014.

  3. In accordance with the provisions of article 6(1) and article 11(1)(b) of Decree-Law No. 10/2011, of 20 January, as amended by article 228 of Law No. 66-B/2012, of 31 December, the Deontological Board designated the undersigned as arbitrator of the single arbitrator tribunal, who communicated acceptance of the respective appointment within the applicable period.

  4. On 11.04.2014 the parties were duly notified of this designation and did not manifest any intention to refuse the arbitrator's designation in accordance with article 11(1)(a) and (b) of the LFTA and articles 6 and 7 of the Deontological Code.

  5. Thus, in accordance with the provisions of article 11(1)(c) of Decree-Law No. 10/2011, of 20 January, as amended by Law No. 66-B/2012, of 31 December, the arbitral tribunal was constituted on 30.04.2014.

  6. By order of 13.10.2014, the Tribunal decided to dispense the parties from the hearing provided for in article 18 of the LFTA, as well as from the submission of written arguments, having set 30.10.2014 as the date for rendering its decision.

  7. In the present arbitral proceeding, the Claimant seeks that the Arbitral Tribunal declare the illegality of the ex officio assessments of the vehicle circulation tax (IUC) relating to the tax periods 2009 to 2012, which were paid between October and December 2013 and whose total amount amounts to €1,788.02.

7.A. The Claimant substantiates its request, in summary, in the following terms:

  1. The Claimant is a financial institution whose corporate purpose is the performance of operations permitted to banks, with the exception of the reception of deposits, and has, for this purpose, all the legally required authorizations.

  2. In the course of its activity, the Claimant enters into contracts with its clients for Long-Term Leasing and Financial Leasing Contracts of motor vehicles, upon the expiration of which it transfers ownership thereof to the respective lessees or to third parties.

  3. Between 10 and 20 December 2013, the Claimant was notified of ex officio assessments of IUC relating to the vehicles identified in this request for arbitral ruling and the tax periods of 2009, 2010, 2011 and 2012.

  4. However, the Claimant submits that the vehicles in question were not its property on the date on which the Tax and Customs Authority (AT) considers the taxable event to have occurred.

  • Under article 3 of the Vehicle Circulation Tax Code: "1- The passive subjects of the tax are the owners of vehicles, considered as such the natural or legal persons, of public or private law, in whose name the same are registered." and "2 - Equated to owners are financial lessees, buyers with reservation of ownership, as well as other holders of purchase option rights by virtue of the lease contract." The legislator presumes, therefore, that the owners are the persons in whose name the vehicles are registered.

  • The subjective scope rule, insofar as it considers as owner the person in whose name the vehicle is registered, constitutes, therefore, merely a (legal) presumption of scope. Thus, the passive subject is the owner or equated person, considered as such the entity that appears in the vehicle register as owner, but admitting proof to the contrary.

Tax incidence presumptions can be rebutted through the adversarial procedure specifically provided for in article 64 of the Tax Procedure and Process Code or, alternatively, by way of administrative recourse or judicial challenge of the tax acts based thereon.

The Claimant did not use the appropriate procedure, and accordingly seeks that the present request for arbitral ruling constitute the appropriate means to rebut the presumption of subjective scope of the IUC in question.

With this objective, it attaches copies of invoices/receipts of the sales as documents 58 to 103, with which it seeks to prove that the vehicles were all sold on a date prior to that to which the tax relates (date of registration in the first year; anniversary in the remaining years).

The Claimant further adds that, as the Vehicle Registration Code does not contain any provision to the effect that registration is a condition of validity of the contracts subject to it, for someone to acquire the status of owner it is sufficient that that person/entity appears in the purchase and sale contract as buyer, independently of registration.

On the other hand, the absence of registration does not prevent the full effectiveness of purchase and sale contracts of a motor vehicle – should the buyer (new owner of the vehicle) fail to register their ownership right, it is presumed that this right continues to belong to the seller, but this presumption may be rebutted by proof to the contrary.

7.B. In its Response, the AT invoked, in summary, the following:

7.B.1 By way of Exception

First, the AT invokes the exception of "lack of subject matter and lack of jurisdiction of the arbitral tribunal ratione materiae". It bases this on the fact that the Claimant calls ex officio assessments the documents it attaches as documents 2 to 57, which, according to the AT, are payment notices generated and extracted by the Claimant from the Financial Portal. Thus, it was the Claimant that, without having been notified for this purpose, proceeded to issue the payment notices that it attaches to the proceedings.

From this, the AT concludes that, as the payment notice is not a tax act, there is a situation of lack of subject matter, which constitutes a peremptory exception, which gives rise to the dismissal of the Respondent in accordance with articles 576(3) and 577(3) of the Civil Procedure Code, applicable pursuant to article 29(1)(e) of the LFTA.

Subsequently, the AT also concludes that, as the payment notices are not tax acts, the Arbitral Tribunal lacks jurisdiction ratione materiae, which constitutes a dilatory exception preventing knowledge of the merits of the case, in accordance with articles 576(1) and (2) of the Civil Procedure Code, applicable pursuant to article 2(e) of the Tax Procedure and Process Code and article 29(1)(e) of the LFTA.

Second, the AT invokes the exception of lack of material jurisdiction of the arbitral tribunal by pretermission of the necessary administrative recourse in accordance with article 131 of the Tax Procedure and Process Code and Order No. 112-A/2011, of 22 March.

Now characterizing the acts attached by the Claimant to the proceedings as documents 2 to 57 as acts of self-assessment of taxes, the AT invokes the regime of necessary administrative recourse provided for in article 131 of the Tax Procedure and Process Code to contend that the Claimant should have first submitted an administrative recourse.

The AT further invokes the provision of article 2(a) of Order No. 112/2011, of 22 March, according to which the binding of the AT to the jurisdiction of the arbitral tribunals operating at CAAD does not cover claims relating to the declaration of illegality of acts of self-assessment that have not been preceded by recourse to the administrative route, in accordance with articles 131 to 133 of the Tax Procedure and Process Code.

In these terms, the AT considers that the exception of absolute lack of jurisdiction due to violation of the rules of material jurisdiction is verified, and the Respondent should be dismissed from the instance in accordance with articles 96(a), 99(1), 278(1)(a) and 577(a) of the Civil Procedure Code, applicable pursuant to article 29(1)(e) of the LFTA.

Third, the AT invokes the exception of untimeliness, as the period of 90 days counted from the end of the period for voluntary payment of the tax installments provided for in article 102(1)(a) of the Tax Procedure and Process Code had already expired at the date of the submission of the arbitral request (25.02.2014).

Still within the framework of the exception of untimeliness, the AT considers that the same conclusion should be reached if the period is counted in accordance with article 102(1)(f) of the Tax Procedure and Process Code, which sets as the starting point for the calculation of the 90 days provided for in article 10(1) of the LFTA "the knowledge of the acts prejudicial to legitimately protected interests". Thus, as the Claimant became aware of the acts, ultimately, at the moment of extraction of the Payment Documents that it attached to the request, i.e., on 16.10.2013, on the date of the submission of the arbitral request – 25.02.2014 – the request was already untimely.

The AT further alleges that the prerequisites for the joinder of claims are not met because the merits of the various claims for annulment do not depend entirely on the assessment of the same factual circumstances, being prohibited by article 3(1) of Decree-Law No. 10/2011, of 20 January.

7.B.2 By way of Merits

Without conceding, the AT invokes the following arguments on the merits:

· The legislator expressly and intentionally established that those considered as such [as owners or in the situations provided for in paragraph 2, the persons listed therein] are the persons in whose name the same [the vehicles] are registered, because this is the interpretation that preserves the unity of the tax legal system.

· To understand that the legislator established a presumption here would unequivocally be to undertake an interpretation contra legem.

· From the articulation between the scope of the subjective incidence of the IUC and the constitutive fact of the corresponding tax obligation it unequivocally follows that only the legal situations subject to registration (without prejudice to the continued presence of a vehicle in national territory for a period exceeding 183 days, provided for in article 6(2)) generate the birth of the tax obligation.

· The failure to update the registration, in accordance with article 42 of the Vehicle Registration Regulation, shall be imputable within the legal sphere of the passive subject of the IUC and not in that of the Portuguese State, as the active subject of this Tax.

· The interpretation given by the Claimant is offensive to the principle of efficiency of the tax system, insofar as it results in an obstruction and an increase in the costs of the competencies assigned to the Respondent, with obvious prejudice to the interests of the Portuguese State, of which both the Claimant and the Respondent form part.

· The argument put forward by the Claimant represents a violation of the principle of proportionality, insofar as it completely disregards it in confrontation with the principle of tax capacity, when in reality the Claimant has at its disposal the necessary and adequate legal mechanisms to safeguard that capacity (e.g., vehicle registration), without, however, having exercised them in due time.

· As to the documents attached by the Claimant, the AT considers that these, as they are invoices, are not fit to prove the conclusion of a synallagmatic contract such as purchase and sale, as they do not reveal in themselves an essential and unequivocal declaration of will (i.e., acceptance) on the part of the alleged buyer.

· Specifically regarding some of the invoices attached, the AT further invokes the following:

Invoices embodied in Documents 58 to 103:

a) Although the invoice attached as Document 58 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 11.10.2007, the truth is that according to the information provided by the Vehicle Registry the transfer of ownership only occurred on 24.03.2009. Thus, and because the date of registration of the vehicle is 17 March, the IUC for that year is owed by the Claimant;

b) Although the invoice attached as Document 59 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 28.03.2006, the truth is that according to the information in the AT database, ownership of the vehicle remains in the name of the Claimant, with no change to such data, in particular furnished by the Vehicle Registry. Thus, the IUC is owed by the Claimant;

c) Although the invoice attached as Document 60 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 19.10.1999, the truth is that according to the information in the AT database, ownership of the vehicle remains in the name of the Claimant, with no change to such data, in particular furnished by the Vehicle Registry. Thus, the IUC is owed by the Claimant;

d) Although the invoice attached as Document 61 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 11.02.2005, the truth is that according to the information provided by the Vehicle Registry the transfer of ownership only occurred on 18.02.2009. Thus, and because the date of registration of the vehicle is January, the IUC for that year is owed by the Claimant;

e) Although the invoice attached as Document 62 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 17.01.2005, the truth is that according to the information provided by the Vehicle Registry the transfer of ownership only occurred on 18.02.2009. Thus, and because the date of registration of the vehicle is January, the IUC for that year is owed by the Claimant;

f) Although the invoice attached as Document 63 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 09.01.2008, the truth is that according to the information provided by the Vehicle Registry the transfer of ownership only occurred on 07.05.2009. Thus, and because the date of registration of the vehicle is March, the IUC for that year is owed by the Claimant;

g) Although the invoice attached as Document 64 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 22.03.2007, the truth is that according to the information provided by the Vehicle Registry the transfer of ownership only occurred on 24.03.2009. Thus, and because the date of registration of the vehicle is February, the IUC for that year is owed by the Claimant;

h) Although the invoice attached as Document 65 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 11.05.1998, the truth is that according to the information in the AT database, ownership of the vehicle remains in the name of the Claimant, with no change to such data, in particular furnished by the Vehicle Registry. Thus, the IUC is owed by the Claimant;

i) Although the invoice attached as Document 66 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 26.01.2004, the truth is that according to the information provided by the Vehicle Registry the transfer of ownership only occurred on 07.05.2009. Thus, and because the date of registration of the vehicle is March, the IUC for that year is owed by the Claimant;

j) Although the invoice attached as Document 67 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 08.06.2006, the truth is that according to the information provided by the Vehicle Registry the transfer of ownership only occurred on 06.09.2006. It should be noted, with reference to the request for annulment regarding this vehicle, that it was only in 2014 – therefore after issue and payment of the payment notice - that the AT became aware of the aforementioned occurrence;

k) Although the invoice attached as Document 68 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 27.07.2006, the truth is that according to the information provided by the Vehicle Registry the transfer of ownership only occurred on 18.02.2009. Thus, and because the date of registration of the vehicle is January, the IUC for that year is owed by the Claimant;

l) Although the invoice attached as Document 69 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 28.01.2008, the truth is that according to the information provided by the Vehicle Registry the transfer of ownership only occurred on 05.02.2009. Thus, and because the date of registration of the vehicle is January, the IUC for that year is owed by the Claimant;

m) Although the invoice attached as Document 70 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 07.06.2006, the truth is that according to the information in the AT database, ownership of the vehicle remains in the name of the Claimant, with no change to such data, in particular furnished by the Vehicle Registry. Thus, the IUC is owed by the Claimant;

n) Although the invoice attached as Document 71 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 05.06.2007, the truth is that according to the information provided by the Vehicle Registry the transfer of ownership only occurred on 07.05.2009. Thus, and because the date of registration of the vehicle is January, the IUC for that year is owed by the Claimant. We cannot fail to note the circumstance that the name of the customer mentioned in the invoice differs from the name of the buyer identified in the same invoice. In fact, the customer identified in the invoice presented as evidence only acquires registered ownership in their name in 2010;

o) Although the invoice attached as Document 72 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 01.06.1998, the truth is that according to the information in the AT database, ownership of the vehicle remains in the name of the Claimant, with no change to such data, in particular furnished by the Vehicle Registry. Thus, the IUC is owed by the Claimant. It is equally striking that the same invoice contains the sale value of the car with conversion to Euros at the rate of 200.482, when the conversion rate was only fixed on 31.12.1998;

p) Although the invoice attached as Document 73 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 09.03.2006, the truth is that according to the information provided by the Vehicle Registry the transfer of ownership only occurred on 24.03.2009. Thus, and because the date of registration of the vehicle is 4 March, the IUC for that year is owed by the Claimant;

q) Although the invoice attached as Document 74 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 14.01.2008, the truth is that according to the information provided by the Vehicle Registry the transfer of ownership only occurred on 19.01.2009. Thus, and because the date of registration of the vehicle is 13 January, the IUC for that year is owed by the Claimant;

r) Although the invoice attached as Document 75 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 15.11.2006, the truth is that according to the information provided by the Vehicle Registry the transfer of ownership only occurred on 12.02.2009. Thus, and because the date of registration of the vehicle is January, the IUC for that year is owed by the Claimant;

s) Although the invoice attached as Document 76 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 10.03.2006, the truth is that according to the information provided by the Vehicle Registry the transfer of ownership only occurred on 31.07.2006. It should be noted, with reference to the request for annulment regarding this vehicle, that it was only in 2014 – therefore after issue and payment of the payment notice - that the AT became aware of the aforementioned occurrence;

t) Although the invoice attached as Document 77 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 07.03.2006, the truth is that according to the information provided by the Vehicle Registry the transfer of ownership only occurred on 07.05.2009. Thus, and because the date of registration of the vehicle is April, the IUC for that year is owed by the Claimant;

u) Although the invoice attached as Document 78 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 07.06.2000, the truth is that according to the information in the AT database, ownership of the vehicle remains in the name of the Claimant, with no change to such data, in particular furnished by the Vehicle Registry. Thus, the IUC is owed by the Claimant;

v) Although the invoice attached as Document 79 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 07.06.2006, the truth is that according to the information provided by the Vehicle Registry the transfer of ownership only occurred on 24.03.2009 (see Document 139 attached). Thus, and because the date of registration of the vehicle is February, the IUC for that year is owed by the Claimant;

w) Although the invoice attached as Document 80 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 07.03.2006, the truth is that according to the information provided by the Vehicle Registry the transfer of ownership only occurred on 24.03.2009. Thus, and because the date of registration of the vehicle is February, the IUC for that year is owed by the Claimant;

x) Although the invoice attached as Document 81 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 07.03.2006, the truth is that according to the information provided by the Vehicle Registry the transfer of ownership only occurred on 24.03.2009. Thus, and because the date of registration of the vehicle is February, the IUC for that year is owed by the Claimant;

y) Although the invoice attached as Document 82 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 07.03.2006, the truth is that according to the information provided by the Vehicle Registry the transfer of ownership only occurred on 24.03.2009. Thus, and because the date of registration of the vehicle is February, the IUC for that year is owed by the Claimant;

z) Although the invoice attached as Document 83 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 22.03.2004, the truth is that according to the information provided by the Vehicle Registry the transfer of ownership only occurred on 18.03.2009. Thus, and because the date of registration of the vehicle is 13 March, the IUC for that year is owed by the Claimant;

aa) Although the invoice attached as Document 84 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 21.03.2006, the truth is that according to the information provided by the Vehicle Registry the transfer of ownership only occurred on 16.07.2009, the date on which it appears registered, not in the name of the buyer mentioned in the invoice attached as Document 84, but rather in the name of a third party. Thus, and because the date of registration of the vehicle is February, the IUC for that year is owed by the Claimant;

bb) Although the invoice attached as Document 85 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 11.08.2005, the truth is that according to the information in the AT database, ownership of the vehicle remains in the name of the Claimant, with no change to such data, in particular furnished by the Vehicle Registry. Thus, the IUC is owed by the Claimant;

cc) Although the invoice attached as Document 86 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 29.05.2006, the truth is that according to the information provided by the Vehicle Registry the transfer of ownership only occurred on 10.11.2006. It should be noted, with reference to the request for annulment regarding this vehicle, that it was only in 2014 – therefore after issue and payment of the payment notice - that the AT became aware of the aforementioned occurrence;

dd) Although the invoice attached as Document 87 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 11.08.2005, the truth is that according to the information in the AT database, ownership of the vehicle remains in the name of the Claimant, with no change to such data, in particular furnished by the Vehicle Registry. Thus, the IUC is owed by the Claimant;

ee) Although the invoice attached as Document 88 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 21.02.2001, the truth is that according to the information provided by the Vehicle Registry the transfer of ownership only occurred on 07.05.2009. Thus, and because the date of registration of the vehicle is February, the IUC for that year is owed by the Claimant;

ff) Although the invoice attached as Document 89 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 27.03.2007, the truth is that according to the information in the AT database, ownership of the vehicle remains in the name of the Claimant, with no change to such data, in particular furnished by the Vehicle Registry. Thus, the IUC is owed by the Claimant;

gg) Although the invoice attached as Document 90 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 24.04.2006, the truth is that according to the information provided by the Vehicle Registry the transfer of ownership only occurred on 04.03.2009. Thus, and because the date of registration of the vehicle is January, the IUC for that year is owed by the Claimant;

hh) Although the invoice attached as Document 91 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 13.03.2006, the truth is that according to the information provided by the Vehicle Registry the transfer of ownership only occurred on 03.04.2009. Thus, and because the date of registration of the vehicle is March, the IUC for that year is owed by the Claimant;

ii) Although the invoice attached as Document 92 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 29.01.2008, the truth is that according to the information provided by the Vehicle Registry the transfer of ownership only occurred on 03.04.2009. Thus, and because the date of registration of the vehicle is March, the IUC for that year is owed by the Claimant;

jj) Although the invoice attached as Document 93 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 22.03.2006, the truth is that according to the information provided by the Vehicle Registry the transfer of ownership only occurred on 13.12.2006. It should be noted, with reference to the request for annulment regarding this vehicle, that it was only in 2014 – therefore after issue and payment of the payment notice - that the AT became aware of the aforementioned occurrence;

kk) Although the invoice attached as Document 94 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 07.03.2006, the truth is that according to the information provided by the Vehicle Registry the transfer of ownership only occurred on 03.04.2009. Thus, and because the date of registration of the vehicle is February, the IUC for that year is owed by the Claimant;

ll) Although the invoice attached as Document 95 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 07.03.2006, the truth is that according to the information provided by the Vehicle Registry the transfer of ownership only occurred on 03.04.2009. Thus, and because the date of registration of the vehicle is February, the IUC for that year is owed by the Claimant;

mm) Although the invoice attached as Document 96 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 07.03.2006, the truth is that according to the information provided by the Vehicle Registry the transfer of ownership only occurred on 03.04.2009. Thus, and because the date of registration of the vehicle is February, the IUC for that year is owed by the Claimant;

nn) Although the invoice attached as Document 97 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 08.03.2006, the truth is that according to the information provided by the Vehicle Registry the transfer of ownership only occurred on 03.04. Thus, and because the date of registration of the vehicle is February, the IUC for that year is owed by the Claimant;

oo) Although the invoice attached as Document 98 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 15.05.1999, the truth is that according to the information in the AT database, ownership of the vehicle remains in the name of the Claimant, with no change to such data, in particular furnished by the Vehicle Registry. Thus, the IUC is owed by the Claimant;

pp) Although the invoice attached as Document 99 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 08.02.2006, the truth is that according to the information provided by the Vehicle Registry the transfer of ownership only occurred on 18.03.2009. Thus, and because the date of registration of the vehicle is February, the IUC for that year is owed by the Claimant;

qq) Although the invoice attached as Document 100 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 28.06.2007, the truth is that according to the information provided by the Vehicle Registry the transfer of ownership only occurred on 22.04.2009. Thus, and because the date of registration of the vehicle is March, the IUC for that year is owed by the Claimant;

rr) Although the invoice attached as Document 101 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 05.01.2006, the truth is that according to the information provided by the Vehicle Registry the transfer of ownership only occurred on 18.03.2009. Thus, and because the date of registration of the vehicle is January, the IUC for that year is owed by the Claimant;

ss) Although the invoice attached as Document 102 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 22.03.1999, the truth is that according to the information provided by the Vehicle Registry the transfer of ownership only occurred on 24.03.2009. Thus, and because the date of registration of the vehicle is 13 March, the IUC for that year is owed by the Claimant;

tt) Although the invoice attached as Document 103 seeks to attest to the transfer of ownership of the vehicle with registration ..-..-.. on 14.02.2005, the truth is that according to the information in the AT database, ownership of the vehicle remains in the name of the Claimant, with no change to such data, in particular furnished by the Vehicle Registry. Thus, the IUC is owed by the Claimant.

· In summary, according to the AT, the Claimant failed to prove the alleged transfer of the vehicles in question on the dates mentioned in the invoices that it attached as Documents 58 to 103, and therefore it should be considered that, even if there existed a supposed rebuttable presumption in article 3 of the Vehicle Circulation Tax Code, it would not have been rebutted with the evidence produced in the proceedings.

II. THE EXCEPTIONS INVOKED BY THE RESPONDENT

The AT begins by invoking the exception of "lack of subject matter and lack of jurisdiction of the arbitral tribunal ratione materiae", basing it on the fact that the Claimant calls ex officio assessments the documents it attaches as documents 2 to 57, which, according to the AT, are payment notices generated and extracted by the Claimant from the Financial Portal. From this, the AT concludes that, as the payment notice is not a tax act, there is a situation of lack of subject matter, which constitutes a peremptory exception, giving rise to the dismissal of the Respondent in accordance with articles 576(3) and 577(3) of the Civil Procedure Code, applicable pursuant to article 29(1)(e) of the LFTA. On the other hand, from the same argument, the AT also derives that, as the payment notices are not tax acts, the Arbitral Tribunal lacks jurisdiction ratione materiae, which constitutes a dilatory exception preventing knowledge of the merits of the case, in accordance with articles 576(1) and (2) of the Civil Procedure Code, applicable pursuant to article 2(e) of the Tax Procedure and Process Code and article 29(1)(e) of the LFTA.

As to this argument, the Tribunal cannot agree therewith, as it considers that the acts that are the subject of the proceedings constitute acts of tax assessment, being configured, in the strict sense, as the operation of determination of the amount due through the application of the rate to the taxable or collectible matter. Thus, as to the first exception invoked, it is considered that it is not well-founded.

Second, and contrary to what it had previously invoked, the AT now contends that the acts that constitute the subject of the request for arbitral ruling are acts of self-assessment of IUC, with which agreement is reached. In fact, it was the Claimant itself that proceeded to declare the elements necessary to determine the tax owed in the Financial Portal (being, for this purpose, incidental who is the passive subject of the tax), having, therefore, by its own initiative, given rise to the tax assessment.

Now, with respect to acts of self-assessment, article 2(a) of Order No. 112/2011, of 22 March, limits the binding of the AT to the jurisdiction of the arbitral tribunals operating at CAAD to claims relating to the declaration of illegality of acts of self-assessment that have been preceded by recourse to the administrative route, in accordance with article 131 of the Tax Procedure and Process Code.

In the present case, the submission of the request for arbitral ruling was not preceded by recourse to the administrative route in accordance with article 131 of the Tax Procedure and Process Code, wherefore the tribunal must agree with the AT when it invokes the exception of lack of material jurisdiction of the arbitral tribunal by pretermission of the necessary administrative recourse in accordance with article 131 of the Tax Procedure and Process Code and Order No. 112-A/2011, of 22 March, which has as a consequence the dismissal of the Respondent from the instance in accordance with articles 96(a), 99(1), 278(1)(a) and 577(a) of the Civil Procedure Code, applicable pursuant to article 29(1)(e) of the LFTA.

Thus, consideration of the remaining exceptions invoked by the Respondent, as well as consideration of the merits of the case, is precluded.

III. DECISION

In light of all that has been set forth above, it is decided to uphold the dilatory exception of lack of material jurisdiction invoked by the Respondent and, in consequence, to dismiss the Tax and Customs Authority from the instance.

Consideration of the remaining issues raised in this proceeding is precluded.

The value of the action is set at €1,788.02 in accordance with article 97-A(1)(a) of the Tax Procedure and Process Code, applicable pursuant to articles 29(1)(a) and (b) of the LFTA and paragraph 2 of article 3 of the Regulation on Costs in Tax Arbitration Proceedings.

The arbitration fee is set at €306.00 in accordance with Table I of the Regulation on Costs of Tax Arbitration Proceedings, entirely borne by the Claimant, in accordance with articles 12(2) and 22(4), both of the LFTA, and article 4(4) of the aforementioned Regulation.

Let notification be made.

Lisbon, 21 October 2014

The Arbitrator,

Guilherme W. d'Oliveira Martins

Frequently Asked Questions

Automatically Created

What is the material competence of the CAAD Arbitral Tribunal to decide on IUC (Imposto Único de Circulação) disputes?
The material competence of CAAD Arbitral Tribunals for IUC disputes is governed by Decree-Law 10/2011 (RJAT) and limited by Order 112-A/2011. The tribunal has jurisdiction to decide on the legality of official tax assessments (liquidações oficiosas) issued by the Tax Authority. However, this jurisdiction does not extend to self-assessments without prior administrative recourse under article 131 of the Tax Procedure Code. The distinction between payment notices generated by taxpayers through the Financial Portal and official assessments issued by the AT is critical for determining material competence. Acts of self-assessment fall outside arbitral jurisdiction unless the mandatory administrative appeal procedure has been exhausted first.
Can financial institutions challenge official IUC tax assessments through tax arbitration in Portugal?
Financial institutions can challenge official IUC tax assessments through CAAD tax arbitration, but procedural requirements must be met. When the Tax Authority issues ex officio assessments (liquidações oficiosas), these constitute tax acts directly challengeable through arbitration under article 2 of the RJAT. However, if the institution merely generates payment notices through self-assessment via the Financial Portal without receiving an official assessment from the AT, these acts require prior administrative recourse under article 131 CPPT before arbitration becomes available. The nature of the challenged act—whether an official assessment or self-assessment—determines the appropriate procedural pathway and arbitral jurisdiction.
How does the RJAT (Regime Jurídico da Arbitragem Tributária) apply to IUC liquidation disputes for leasing companies?
The RJAT (Decree-Law 10/2011) applies to IUC liquidation disputes for leasing companies with specific limitations. Article 2(a) of Order 112-A/2011 explicitly excludes from arbitral jurisdiction claims concerning self-assessments that have not been preceded by administrative recourse pursuant to articles 131-133 CPPT. For leasing companies, this means that disputes arising from official IUC assessments issued by the Tax Authority can proceed directly to arbitration. However, if the leasing company performs self-assessment of IUC obligations and later seeks to challenge the tax basis or amount, mandatory hierarchical administrative appeal must be filed first. Only after exhausting this administrative remedy can the matter proceed to tax arbitration under the RJAT framework.
What are the procedural steps for constituting a singular arbitral tribunal under Decree-Law 10/2011 for IUC cases?
The procedural steps for constituting a singular arbitral tribunal under Decree-Law 10/2011 for IUC cases follow a structured timeline: (1) The claimant files a request for constitution of the tribunal with CAAD, identifying the challenged tax act and the Tax Authority as respondent (article 10 RJAT); (2) CAAD's President accepts the request and automatically notifies the AT; (3) The Deontological Board designates an arbitrator within the applicable timeframe under article 6(1) and 11(1)(b); (4) The designated arbitrator communicates acceptance of appointment; (5) Both parties are notified of the designation and have the right to refuse under articles 6-7 of the Deontological Code; (6) If no refusal occurs, the tribunal is formally constituted 30 days after notification per article 11(1)(c). The tribunal may then dispense with hearings under article 18 and set deadlines for decision.
Are official IUC assessments on vehicles under long-term rental and financial leasing contracts subject to arbitral review?
Official IUC assessments on vehicles under long-term rental and financial leasing contracts are subject to arbitral review at CAAD, provided they constitute liquidações oficiosas (ex officio assessments) issued by the Tax Authority. The review encompasses challenges to the identification of the passive subject (taxpayer), including disputes over who qualifies as the vehicle owner under article 3 of the IUC Code. Financial lessors can challenge the presumption that registered owners are liable taxpayers by presenting evidence that ownership transferred prior to the taxable event. However, self-assessments performed by leasing companies through the Financial Portal require prior mandatory administrative recourse under article 131 CPPT before arbitral review becomes available, as established by Order 112-A/2011. The arbitral tribunal's jurisdiction depends on properly characterizing the challenged act.