Summary
Full Decision
ARBITRAL AWARD
I STATEMENT OF FACTS
A... – BRANCH IN PORTUGAL ("Claimant", hereinafter), Corporate Entity No. ..., with registered office in ..., ..., ..., came to challenge the dismissal order of 16.12.2016, from the Large Taxpayers Unit (AT), which dismissed the Gracious Complaint duly filed against 749 self-assessments of Unique Vehicle Circulation Tax (IUC) and compensatory interest (JC), relating to the years 2014 and 2015, in the total amount of €99,732.89.
It further requests:
a) A declaration of illegality of the acts of self-assessment of IUC and JC, subject matter of the same Gracious Complaint, which total €99,732.89, whose copies were annexed to the initial petition, as doc. 3, and whose content is considered fully reproduced for all legal purposes (cfr. also annex containing the listing of the self-assessments here specifically challenged), as well as
b) The condemnation of the defendant AT to the restitution of the entirety of IUC paid [€99,732.89], plus indemnity interest in accordance with legal terms.
The Claimant alleges, in essence, that the aforementioned Gracious Complaint proceeded in the UGC under the administrative gracious complaint procedure no. ...2016... and that AT based itself uniquely and exclusively on the presumption of ownership in the Vehicle Registry to proceed with the aforementioned IUC and JC assessments, whereas the Claimant was unaware of this IUC and JC until it consulted the Tax Portal and verified the existence, among others, of the IUC and JC collection documents at issue here, having obtained from the Tax Portal the respective collection documents for self-assessment and payment of IUC and JC; having made a case-by-case analysis of all vehicles it filed a complaint against the self-assessments of IUC and JC here selected, because they relate to vehicles whose passive subject of IUC and JC was not the Claimant; it took the initiative to self-assess and pay the respective IUC and JC, obtaining the respective documents for payment via the internet, at the Tax Portal, although it disagreed with these self-assessments and payments insofar as it was not itself who effectively was or should be the passive subject of IUC and JC; the vehicles which it lists in the document it attaches (doc 5) and in relation to which IUC and JC were assessed for the years 2014 and 2015, in the total amount of €99,732.89, allegedly on the basis of the provisions of articles 3-1, 4-2 and 6-1 and 3, of the CIUC, were not the property of the Claimant nor was it, in any capacity, the passive subject of the tax; being the applicant a commercial company importing, exclusively, all vehicles of brand "B..." for the national market, the imported vehicles are done so by means of a prior request from the dealerships to the Claimant, presented via information technology; once imported, the vehicles are immediately sold to the brand's dealerships who, in turn, sell them to end customers such that when a vehicle is imported, it already has a buyer; furthermore, as soon as vehicles are imported, a request is made in the name of the Claimant for the assignment of registration to the vehicles and when these are sent from the dealerships to their customers, the change of registration of the owner is made – done, in a first phase, in the name of the Claimant – to the name of the end customer; in any event, always as of the date of the request for registrations, the vehicles had already been invoiced/sold by the Claimant to the dealerships without indication of the registrations, for the obvious reason that they did not yet possess them, being identified by the "chassis" numbers, as results from the invoices attached under document no. 6; furthermore, the debits of ISV/IA to the dealerships occur after the date of issuance of the vehicle sale invoices and, therefore, already contain the registration of these vehicles; from this interconnection of these ISV/IA debits (doc 6) with the foregoing vehicle sale invoices to the dealerships, the coincidence between the chassis numbers and the registrations is evidenced, these requested effectively by the dealership when the vehicles are available for the end customer; only in a strictly formal perspective is the registration and registration of the vehicles done, initially, by the importer (the Claimant); thus it is that, although the Claimant appeared in the Vehicle Registry and the IMTT as the (presumed) owner of the vehicles at the date of the registrations, the reality is that it was no longer the owner inasmuch as the vehicles had been sold to the dealerships; consequently the assessments subject to this challenge suffer from illegality due to error in the factual and legal assumptions [namely, violation of the provisions of articles 1, 2/1-a) and d), 3, 4, 6 and 11, of the CIUC].
AT, notified to present a Response, did so, alleging, in summary and in essence, that, pursuant to art. 24 of the RRA, the importer appears in the registry as first owner of the vehicle and, in that sense, is in accordance with the provisions of art. 3 and 6 of the CIUC, the passive subject of the tax, and it is certain that it is not established in Law that the ownership appearing in the vehicle registry is defeasible for purposes of identifying the passive subject of the tax; even if it were not, the invoices submitted by the Claimant are not fit to prove the conclusion of synallagmatic contracts as is the case with purchase and sale, since such documents do not reveal by themselves an indispensable and unequivocal declaration of will (that is, acceptance) by part of the alleged purchasers; it is further added that all invoices expressly state that the ownership of the sold vehicle is reserved to the Claimant until full payment of the respective value, as appears from the top left corner contained in the invoices, which reads: "The seller reserves for itself the ownership of the goods contained in this invoice until full payment of the respective price"; none of the documents attached to the arbitration request demonstrate full payment of the invoice amounts and the date on which such fact occurred, as the invoices themselves establish; not containing the invoices any registrations, then obviously there is no computer system that, through the crossing of information contained in those invoices with the information of the IRN and the IMT, can determine transfer of ownership; IUC is assessed in accordance with the registration information duly transmitted by the Institute of Registries and Notaries; not having the Claimant taken care of updating the vehicle registry, as it could and was incumbent upon it [article 5/1-a) of Decree-Law 54/75, of 12 February, and article 118/4 of the Road Code], and not having ordered the cancellation of the registrations of the vehicles here in question, it is necessary to conclude that the Claimant did not proceed with the diligence required of it; therefore, it was not the Respondent who gave rise to the filing of the request for arbitral pronouncement, but rather the Claimant itself; consequently, the Claimant should always be condemned to payment of the arbitral costs arising from this request for arbitral pronouncement, pursuant to article 527/1 of the CPC ex vi of article 29/1-e) of the RJAT, in line, moreover, with a similar question decided in the context of the proceeding that, under no. 72/2013-T, proceeded in this arbitration center, this same reasoning being applicable with respect to the request for condemnation to payment of indemnity interest formulated by the Claimant; even if it is understood that the tax is not owed by the Claimant because it is not the passive subject of the tax obligation, still and just as was decided by the already cited Arbitral Tribunal constituted in the context of proceeding no. 26/2013-T, it is undeniable that the Respondent merely gave effect to article 3/1 of the CIUC, which imputes such quality to the persons in whose name the vehicles are registered, therefore also from here necessarily the recognition of the right to payment of indemnity interest must fail.
Formation of the Arbitral Tribunal
The applicant did not proceed with the appointment of arbitrators, therefore, pursuant to the provisions of article 6, no. 2, paragraph a), of the RJAT, the undersigned were appointed by the president of the Deontological Council of CAAD to comprise this Collective Arbitral Tribunal, having accepted the charge under the terms legally provided.
The parties were duly and properly notified of this appointment of arbitrators and did not manifest a will to refuse it pursuant to the combined terms of article 11, no. 1, paragraphs a) and b) of the RJAT and articles 6 and 7 of the Deontological Code.
The Tribunal was constituted on 26-5-2017 [article 11-1/c), of the RJAT, in the wording introduced by article 228, of Law no. 66-B/2012, of 31-12]
Meeting of the Tribunal with the Parties (article 18, of the RJAT)
By order of 6-7-2017, the Tribunal, absent opposition from the parties within 5 days [which did not occur] waived the meeting provided for in article 18, of the RJAT, as well as the production of testimonial evidence and final arguments.
Procedural Purification/Prerequisites
The arbitral tribunal was regularly constituted and is materially competent, in light of the provisions of articles 2, no. 1, paragraph a), and 30, no. 1, of the RJAT.
Given that it concerns the same tax (IUC) and considering the identity of the factual and legal grounds in all challenges to the assessments, the prerequisites provided for in arts 104, of the CPPT and 3, of the RJAT, are met for the cumulation of claims.
The parties enjoy legal personality and capacity and are legitimate (arts. 4 and 10, no. 2, of the same statute and art. 1 of Ordinance no. 112-A/2011, of 22 March).
The proceeding does not suffer from nullities and no issues have been raised that may obstruct the consideration of the merits of the case.
II LEGAL REASONING
Facts Established
There being no essential disputed facts but only divergent interpretations or legal framework of the assessment acts, as was tacitly and expressly recognized by the Claimant and by AT, the following factual framework is established:
a) The claimant is a commercial company which, in the course of its business, exclusively imports all motor vehicles of the B... brand for the national market.
b) The vehicles are imported by the claimant from B... International, by means of a prior order from the dealerships, submitted via information technology directly to the factory.
c) The needs for vehicle importation stem from orders made directly by the dealerships to the claimant, therefore there are no sales of vehicles to the claimant and from it to those, without the respective purchase order.
d) Upon arrival in Portugal, the vehicles are immediately invoiced by the claimant to the dealerships and immediately delivered to their facilities, except for vehicles destined for Madeira and the Azores which are deposited in the warehouse of a logistics company.
e) Once vehicles are imported, the official representative associated –C...– requests in the name of the claimant the assignment of registrations to the vehicles.
f) The sales invoices of the vehicles to the dealerships do not contain the registrations, because they had not yet been requested, but only the chassis numbers of the vehicles sold to the dealerships.
g) After the sale to the dealerships the claimant pays the due Vehicle Tax, requests the issuance of the registration and invoices to them the tax borne, causing the registrations of the vehicles to appear in the respective invoices.
h) The self-assessments now challenged result from the fact that the claimant is, for the reasons above, the first registered owner of the vehicles as their importer.
i) The 749 IUC assessments, relating to the years 2014 and 2015 had as their object the vehicles listed in the respective list attached to this judgment, initialed by the arbitrators of this tribunal, and which constitutes "Annex I";
j) The claimant filed a gracious complaint relating to such self-assessments, whose proceeding ran under no. ...2016..., which was dismissed by order of 16-12-2016, notified to the Claimant via postal registration of 19-12-2016;
k) The claimant was granted the right to a hearing regarding the draft order mentioned, but did not exercise it;
l) The claimant proceeded to payment of the aforementioned assessments as discriminated in doc. 3, attached with the arbitration request;
m) On the dates referred to in "Annex I" to this decision, the Claimant was not the owner of the vehicles listed there
Facts Not Established
There are no other facts that prove to be essential for the decision, whether established or not.
Legal Reasoning
The Tribunal does not have the duty to pronounce on all the matters alleged, but rather the duty to select only that which is relevant to the decision, taking into account the cause (or causes) of action that grounds the claim formulated by the author (cfr. arts. 596-1 and 607-2 to 4, of the C.P.Civil, in the version of Law 41/2013, of 26/6, and to state whether it considers it proven or unproven (cfr. art. 123-2, of the CPPT).
According to the principle of free assessment of evidence, the Tribunal bases its decision, in relation to the evidence produced, on its intimate conviction, formed from the examination and evaluation it makes of the means of proof brought to the proceeding and in accordance with its life experience and knowledge of people (cfr. art. 607-5, of the CPC). Only when the probative force of certain means is pre-established in law (e.g., full probative force of authentic documents - cfr. art. 371, of the Civil Code - does the principle of free assessment of evidence not dominate in the assessment of the evidence produced.
The Tribunal's conviction was based, in this case, on the critical analysis of the documents submitted by the parties and the copy of the instructing administrative proceeding submitted by AT, in conjunction with the position assumed by the parties in their respective pleadings.
Particular consideration was given to the silent position of the Claimant, with the meaning of agreement or acceptance, with respect to the production of testimonial evidence and that of the Respondent on the same matter which, in the response to the request for arbitral pronouncement, stated that "(...) in accordance with the terms outlined in the learned request for arbitral pronouncement the production of testimonial evidence appears unnecessary, in the case at hand, both because the documentary elements are contained in the proceedings that will prove the facts, and because, with respect to the other articles, these constitute conclusive matter or of law (...) Thus, the waiver of the production of testimonial evidence is requested, inasmuch as the examination of witnesses would constitute a manifestly useless act (...)" [cfr articles 129 and 130, of the Response].
II LEGAL REASONING (continued)
The Law
The contentious regime provided for in the RJAT is one of mere legality, aiming only at the declaration of illegality of acts of the types provided for in paragraphs a) and b) of no. 1 of its article 2.
Therefore, the legality of the challenged acts must be assessed as they were practiced, with the reasoning used in them, with other possible justifications being irrelevant that could serve as support for other acts, with decisory content totally or partially coinciding with the practiced act. Thus, justifications invoked a posteriori, after the end of the tax proceeding in which the act whose declaration of illegality is requested was practiced, are irrelevant, including those put forward in the jurisdictional proceeding.
On the other hand, it must be noted once again that the Courts (which obviously include arbitral courts) do not have to assess all the arguments formulated by the parties (Cfr., inter alia, Ac of the Pleno of the 2nd Section of the STA, of 7 Jun 95, rec 5239, in DR – Appendix of 31 March 97, pgs. 36-40 and Ac STA – 2nd Sec – of 23 Apr 97, DR/AP of 9 Oct 97, p. 1094).
Questions to be Decided
Given the positions assumed by the parties in the arguments presented in the gracious complaint and in the pleadings and arguments, the central decisive questions are as follows:
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What is the legal value of the vehicle registry in the economy of the CIUC, namely for purposes of the subjective incidence of this tax and, in particular, whether the subjective incidence rule contained in article 3 no. 1 of the CIUC, establishes or not a presumption;
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Whether the presentation of vehicle sales invoices constitutes an apt means for proof of sale of a motor vehicle;
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Whether indemnity interest is owed to be paid by AT in the event that, for purposes of taxation under IUC, the ownership of the vehicle appearing in the vehicle registry has the nature of a rebuttable presumption (and is rebutted); and
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Whether, even in the event the claim is upheld, AT should bear the costs.
Let us then look at the answers to these questions.
a. What is the legal value of the vehicle registry in the economy of the CIUC, namely for purposes of the subjective incidence of this tax and, in particular, whether the subjective incidence rule contained in article 3 no. 1 of the CIUC establishes or not a presumption
It is stated from the outset that the majority arbitral tax jurisprudence on this matter is followed essentially [Cfr, in particular, decisions issued in the CAAD proceedings no. 14/2013, 26/2013, 27/2013, 73/2013, 170/2013 and 154/2014 and, more recently, in proceedings no. 539/2016-T, 580/2016-T, 623/2016-T, 109/2017-T and 145/2017-T, all published at www.caad.org.pt].
Article 3 of the CIUC provides:
"Article 3
Subjective Incidence
1 – The passive subjects of the tax are the owners of the 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 the lease contract are equated to owners".
Establishes, for its part, no. 1 of article 11 of the LGT that "in determining the meaning of tax norms and in qualifying the facts to which they apply, the general rules and principles of interpretation and application of laws are observed".
Resolving the doubts that arise in the application of legal norms presupposes the performance of an interpretive activity.
Thus it is necessary to consider what is the best interpretation of art. 3, no. 1 of the CIUC, in light, first, of the literal element, that is to say that which aims to detect the legislative thought that is objectified in the norm, to verify whether the same contemplates a presumption, or whether it determines, in a definitive manner, that the passive subject of the tax is the owner who appears in the registry.
The question that arises is, in the case sub judice, whether the expression "considering as" used by the legislator in the CIUC, instead of the expression "presuming", which was what appeared in the statutes that preceded the CIUC, will have removed the nature of "presumption" from the legal provision in question.
In our view and contrary to what the AT argues, the answer must necessarily be negative, since from the analysis of our legal order it is clearly drawn that the two expressions have been used by the legislator with equivalent meaning, whether at the level of rebuttable presumptions, whether in the framework of irrebuttable presumptions, therefore nothing enables the extraction of the conclusion sought by the Tax Authority by a mere semantic reason.
In fact, this occurs in varied legal norms that enshrine presumptions using the verb "consider", of which the following are indicated, merely by way of example:
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within the scope of civil law - no. 3 of art. 243 of the Civil Code, when it establishes that "it is always considered in bad faith the third party who acquired the right after the registration of the action of simulation, when such registration takes place";
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also within the scope of industrial property law the same occurs, when art. 59, no. 1 of the Industrial Property Code provides that "(…) inventions whose patent has been requested during the year following the date on which the inventor leaves the company, are considered made during the execution of the employment contract (…)";
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and, also still, within the scope of tax law, when nos. 3 and 4 of art. 89-A of the LGT provide that it is incumbent upon the taxpayer the burden of proof that the declared income corresponds to reality and that, if such proof is not made, it is presumed ("is considered" in the letter of the Law) that the income is that which results from the table contained in no. 4 of the said article.
This conclusion of there being total equivalence of meanings between the two expressions, which the legislator uses indifferently, satisfies the condition established in art. 9, no. 2 of the Civil Code, since the minimum correspondence is ensured for purposes of determining the legislative thought.
It is important, next, to submit the norm in question to the other elements of logical interpretation, namely, the historical element, the rational or teleological element, and the systematic element.
Discoursing on interpretive activity, FRANCESCO FERRARA says that this "is the most difficult and delicate operation to which the jurist can dedicate himself, and demands fine handling, refined sense, happy intuition, much experience and perfect mastery not only of positive material, but also of the spirit of a certain legislation. (…) Interpretation must be objective, balanced, without passion, sometimes daring, but not revolutionary, acute, but always respectful of the law" (Cfr. Essay on the Theory of Interpretation of Laws, translation of MANUEL DE ANDRADE, (2nd ed.), Arménio Amado, Editor, Coimbra, 1963, p. 129).
As BAPTISTA MACHADO refers, "the legal provision presents itself to the jurist as a linguistic utterance, as a set of words that constitute a text. To interpret obviously consists in drawing from this text a certain sense or content of thought.
The text admits multiple senses (polysemy of text) and frequently contains ambiguous or obscure expressions. Even when apparently clear at first reading, its application to concrete cases of life frequently gives rise to unforeseen and unpredictable interpretation difficulties. Besides which, although apparently clear in its verbal expression and bearing only one sense, there is still the need to account for the possibility that verbal expression has betrayed the legislative thought – a phenomenon more frequent than may appear at first glance" (Cfr. Introduction to Law and to the Discourse of Legitimacy, pp. 175/176).
"The purpose of interpretation is to determine the objective sense of the law, the vis potestas legis. (…) The law is not what the legislator wanted or wanted to express, but solely that which it expressed in the form of law. (…) On the other hand, the legal command has an autonomous value that may not coincide with the will of the artisans and drafters of the law, and may lead to unexpected and unforeseen consequences for the legislators. (…) The interpreter must seek not what the legislator wanted, but what appears objectively desired in the law: the mens legis and not the mens legislatoris (Cfr. FRANCESCO FERRARA, Essay, pp. 134/135).
To understand a law "is not only to seize in a mechanical manner the apparent and immediate sense that results from verbal connection; it is to inquire deeply into the legislative thought, to descend from the verbal surface to the intimate concept that the text encloses and to develop it in all its possible directions" (loc. cit., p. 128).
With the aim of unveiling the true sense and scope of legal texts, the interpreter makes use of interpretive factors which are essentially the grammatical element (the text, or the "letter of the law") and the logical element, which, in turn, subdivides into the rational (or teleological) element, the systematic element, and the historical element. (Cfr. BAPTISTA MACHADO, loc. Cit., p. 181; J. OLIVEIRA ASCENSÃO, The Law – Introduction and General Theory 2nd Ed., Calouste Gulbenkian Foundation, Lisbon, p. 361).
Among us, it is article 9 of the Civil Code (CC) that provides the rules and fundamental elements for correct and adequate interpretation of norms.
The text of no. 1 of article 9 of the CC begins by saying that interpretation should not be limited to the letter of the law, but reconstruct, from it, the "legislative thought".
On the expression "legislative thought" BAPTISTA MACHADO tells us that article 9 of the CC "did not take a position in the controversy between subjectivist doctrine and objectivist doctrine. It is proven by the fact that it refers neither to the 'will of the legislator' nor to the 'will of the law', but rather points to the scope of interpretive activity the discovery of 'legislative thought' (art. 9, 1). This expression, intentionally colorless, means exactly that the legislator did not want to commit itself" (loc. cit., p. 188).
In the same sense, PIRES DE LIMA and ANTUNES VARELA speak in annotation to article 9 of the CC (Cfr. Annotated Civil Code – vol. I, Coimbra ed., 1967, p. 16).
And on no. 3 of article 9 of the CC that author refers: "(...) this no. 3 thus proposes to us a model of ideal legislator that enshrined the most correct solutions (more correct, just or reasonable) and knows how to express itself correctly. This model clearly bears the characteristics of objectivism, for it does not take the concrete legislator (so often incorrect, hasty, unfortunate) as the point of reference, but an abstract legislator: wise, foreseeing, rational and just (...)" (loc. cit. p. 189/190).
Immediately after this distinguished Professor draws attention to the fact that no. 1 of article 9, refers to three more elements of interpretation the "unity of the legal system", the "circumstances in which the law was elaborated" and the "specific conditions of the time in which it is applied" (loc. cit, p. 190).
As to the "circumstances of the time in which the law was elaborated", BAPTISTA MACHADO explains that this expression "(...) represents what has traditionally been called the occasio legis: the circumstantial factors of a political, social and economic order that determined or motivated the legislative measure in question (...)" (loc. cit., p. 190).
With respect to the "specific conditions of the time in which it is applied" this author says that this element of interpretation "has decidedly an actualist connotation (loc. cit., p. 190) in which it coincides with the opinion expressed by PIRES DE LIMA and ANTUNES VARELA in the annotations to article 9 of the CC.
With respect to the "unity of the legal system", BAPTISTA MACHADO considers this the most important interpretive factor: "its consideration as a decisive factor would always be imposed upon us by the principle of coherent or axiological evaluation of the legal order" (loc. cit., p. 191).
It is also this author who tells us, with respect to the literal or grammatical element (text or "letter of the law") that this "is the starting point of interpretation. As such, it has from the outset a negative function: that of eliminating those senses that do not have any support, or at least some correspondence or resonance in the words of the law.
But it also has a positive function, in the following terms: if the text admits only one sense, it is that the sense of the norm – with the caveat, however, that it can be concluded on the basis of other norms that the wording of the text betrayed the thought of the legislator" (loc. cit., p. 182).
Referring to the rational or teleological element, this author says that it consists "in the reason for the law (ratio legis), in the end aimed at by the legislator in elaborating the norm. The knowledge of this end, especially when accompanied by knowledge of the circumstances (political, social, economic, moral, etc.,) in which the norm was elaborated or the political-economic-social situation that motivated the legislative decision (occasio legis) constitutes a subsidy of the greatest importance for determining the sense of the norm. It suffices to recall that the clarification of the ratio legis reveals to us the assessment or weighing of the various interests that the norm regulates and, therefore, the relative weight of those interests, the choice among them expressed by the solution that the norm expresses" (loc. cit., pp. 182/183).
It is still BAPTISTA MACHADO who tells us, now with respect to the systematic element (context of law and parallel provisions) that "(...) this element comprises the consideration of other provisions that form the complex normative of the institute in which the norm being interpreted is integrated, that is, that regulate the same matter (context of law), as well as the consideration of legal provisions that regulate parallel normative problems or related institutes (parallel provisions). It further comprises the systematic place that belongs to the norm being interpreted in the overall system, as well as its consonance with the spirit or intrinsic unity of the entire legal order.
This interpretive subsidy is based on the postulate of the intrinsic coherence of the system, namely on the fact that the norms contained in a codification obey in principle a unitary thought (...)" (loc. cit., p. 183).
As JOSEF KOHLER teaches, cited by MANUEL DE ANDRADE "(...) in particular we must take into account the interconnection of the diverse laws of the country, because a fundamental requirement of all sound legislation is that the laws adjust to one another and do not result in a jumble of disconnected provisions (...)" (Essay, p. 27).
Now, through the analysis of the historical element, the conclusion is extracted that, from the entry into force of Decree-Law 59/72, of 30 December, the first to regulate the matter, to Decree-Law no. 116/94, of 3 May, the last to precede the CIUC [cfr Law no. 22-A/2007, with the amendments of Law 67-A/2007 and 3-B/2010], the presumption was enshrined that the passive subjects of IUC are the persons in whose name the vehicles were registered at the date of their assessment.
It is verified, therefore, that tax law has, from always, had the objective of taxing (for the case that now interests us) the true and effective owner and user of the vehicle, with it appearing indifferent the use of one or another expression which, as we have seen, have in our legal order a coincident sense.
The same can be said when we make use of elements of interpretation of a rational or teleological nature.
In fact, the current and new framework of vehicle taxation enshrines principles that aim to subject vehicle owners to bearing the losses from damage to roads and the environment caused by these, as is grasped from the tenor of art. 1 of the CIUC.
Now, the consideration of these principles, namely, the principle of equivalence, which deserve constitutional protection and enshrinement in community law, and are also recognized in other branches of the legal order, determines that the aforementioned costs be borne by the real owners, the causers of the referred damages, which entirely removes an interpretation that aimed to prevent the presumed owners from making proof that they are no longer such because the ownership is in the legal sphere of another.
Thus, also, from the interpretation performed in light of elements of a rational and teleological nature, heeding what the system's rationality guarantees and the purposes aimed at by the new CIUC, it is clear that no. 1 of art. 3 of the CIUC enshrines a rebuttable legal presumption.
In light of the foregoing, it is important to conclude that the ratio legis of the tax points toward the direction that the actual owner-users of vehicles be taxed, therefore the expression "considering as" is used in the normative in question in a sense similar to "presuming", reason for which there is no doubt that a legal presumption is enshrined.
On the other hand, article 73 of the LGT provides that "(…) the presumptions enshrined in the norms of tax incidence always admit proof to the contrary, therefore they are rebuttable (…)".
Thus being, enshrining article 3, no. 1 of the CIUC a presumption juris tantum [and, therefore, rebuttable], the person who is inscribed in the registry as owner of the vehicle and who, for that reason, was considered by the Tax Authority as the passive subject of the tax, may present elements of proof aiming to demonstrate that the holder of ownership, at the date of the tax-triggering event, is another person, to whom ownership was transferred.
b. Whether the presentation of vehicle sales invoices constitutes an apt means for proof of sale of a motor vehicle
The second question that is important to analyze is that relating to the adequacy of motor vehicle sales invoices as a means of proof of sale of these vehicles.
Let us see:
Motor vehicle purchase and sale contracts have a consensual basis and without subjection to special formalities (Cfr articles 219 and 408-1, of the Civil Code).
Invoices have essentially the formalities provided for in article 36, of the CIVA and 5 of DL no. 198/90.
The presumption of truthfulness that invoices contain may be rebutted by AT in light of the provisions of article 75-2, of the LGT.
On the other hand, the ownership of motor vehicles is subject to mandatory registration (cfr. art. 5-1 and 2, of DL no. 54/75, of 12/2). The obligation to proceed with registration falls upon the buyer - the active subject of the fact subject to registration (cfr. art. 8-B – 1, of the Property Registry Code, applicable to the Vehicle Registry by virtue of art. 29, of DL no. 54/75, of 12/2, combined with art. 5-1/a), of that latter statute).
However, the Vehicle Registry Regulations contain a special regime, in force since 2008, for entities that, by virtue of their commercial activity, proceed regularly with the transmission of ownership of motor vehicles. According to that regime, which is established in art. 25-1/d), of DL no. 55/75, of 12/2 (version resulting from DL no. 20/2008, of 31/1), the registration may be promoted by the seller, by means of a request signed only by him.
IUC is legally configured, as was seen, to function in integration with the vehicle registry, which is inferred, from the outset, from the cited art. 3-1, of the C.I.U.C., a norm where it is established that the passive subjects of the tax are the owners of the vehicles, adding further that they are considered as such the natural or legal persons, of public or private law, in whose name the same are registered.
The rebuttal of the legal presumption obeys the rule contained in art. 347, of the C. Civil, pursuant to which full legal proof can only be contradicted by means of proof that shows the fact about which it is not true. Which means that it is not sufficient for the opposing party to oppose mere counter-proof - which is intended to cast doubt on the facts (cfr. art. 346, of the C. Civil) that make the presumed facts doubtful; on the contrary, it must show that the presumed fact is not true, in such a way that there remains no uncertainty that the facts resulting from the presumption are not real.
Now both the invoice (as well as the debit note) constitute accounting documents drawn up within the company and destined for outside. The invoice should be visualized as the accounting document through which the seller sends to the buyer the general conditions of the transaction carried out. In turn, the debit note consists of the document in which the issuer communicates to the recipient that the latter owes it a certain pecuniary amount. Both documents appear in the phase of settlement (which frequently does not coincide with the effective payment) of the amount to be paid by the buyer. Thus, although not making proof of the effective payment of the price by the same buyer, they constitute proof of that same transaction, that is, of the purchase and sale carried out. Purchase and sale which can moreover be concretized, with reservation of ownership for the seller until payment of the price, without such preventing that the obligation of IUC incumbent upon the buyer.
It is thus concluded by the admission of proof of the sale of a motor vehicle through the demonstration of the existence of issuance of a valid invoice.
Subsumption
Having analyzed the elements brought to the proceeding by the Claimant and the facts established, the conclusion is extracted that it was not truly the owner of the vehicles to which the assessments in question relate, because it transferred, at the date on which the respective IUC was due, the ownership of the vehicles, pursuant to the law of civil law.
These documentary elements, constituted by copies of the respective sales invoices still without mention of the registrations, enjoy the presumption of truthfulness conferred upon them by the aforementioned art. 75, no. 1 of the LGT, having thus adequacy and sufficient force to rebut the presumption that supported the assessments made on the basis exclusively, as the Law provides, on the vehicle registry.
Yet, as was seen, contrary to the understanding of AT, the registration of ownership in the name of the taxpayer does not prevent this from demonstrating that this situation does not correspond to the reality at the date of the vehicle's registration or at its anniversary (article 4-1 and 2, of the CIUC).
These effective operations of transmission or rebuttal of apparent ownership, are opposable to the Tax and Customs Authority, because, although facts subject to registration only produce effects with respect to third parties when registered, in light of the provisions of art. 5, no. 1 of the Property Registry Code [applicable by referral of the Vehicle Registry Code], the Tax Authority is not a third party for purposes of registration, since it is not found in the situation provided for in no. 2 of the said art. 5 of the Property Registry Code, applicable by force of the Vehicle Registry Code, that is, has not acquired from a common author rights that are incompatible with one another.
Thus it is that, in summary, the vehicle registry, in the economy of the CIUC, represents mere rebuttable presumption of the passive subjects of the tax.
In the case, the claimant succeeded, with complete success, in rebutting that presumption and demonstrating that the reality of the registry was a mere appearance of that same reality, that is, the registered owner was not the real owner, the passive subject of IUC.
In these circumstances, the aforementioned and now challenged assessments should be annulled and, consequently restituted to the Claimant, by the Tax and Customs Authority, the respective amounts thus wrongfully collected and set forth in the aforementioned and documented acts of assessment and payment.
c. Whether indemnity interest is owed to be paid by AT in the event that, for purposes of taxation under IUC, the ownership of the vehicle appearing in the vehicle registry has the nature of a rebuttable presumption (and is rebutted)
This concerns determining whether, pursuant to article 24, no. 5, of the RJAT, the request for payment of indemnity interest in favor of the Claimant (Cfr. art. 43 of the LGT and 61 of the CPPT), should be upheld.
In this respect, the arbitral decision issued in proceeding no. 26/2013-T, of 19/7/2013 (which dealt with a situation similar to that now under consideration) is supported, namely, that "(...) the right to indemnity interest to which the aforementioned norm of the LGT refers presupposes that tax has been paid in an amount greater than what is due and that such derives from an error, of fact or of law, imputable to the services of AT. [...] even if it is recognized that the tax paid by the claimant is not due, because it is not the passive subject of the tax obligation, determining, in consequence, its refund, it is not seen that, at its origin, is found the error imputable to the services, that determines such a right [to indemnity interest] in favor of the taxpayer. Indeed, in promoting the official assessment of IUC considering the claimant as the passive subject of this tax, AT merely gave effect to the norm of no. 1 of art. 3 of the CIUC, which, as abundantly referred to above, imputes such quality to the persons in whose name the vehicles are registered." (Cfr also in this same sense, e.g., the arbitral tax decisions issued in CAAD proceedings no. 170/2013-T, of 14/2/2014, 136/2014-T, of 14/7/2014, 230/2014-T, of 22/7/2014 and 140/2014-T, of 29/8/2014.
That is: the Tribunal considers that the reasons for annulment are not based on error imputable to the services, since the Respondent issued the assessments taking into account the information it had available, not being responsible, nor able to be held responsible, for their updating or non-conformity. Thus, the prerequisites listed in article 43 of the LGT are not met.
d. Whether, should the claim be upheld, AT should bear the costs
Payment of costs at the end of the proceeding, as a rule, falls to the losing party, in the proportion in which it loses.
This will not be the case, however, if, despite losing, this party did not give rise to the action.
It was, for example, the case cited by AT of the decision issued in proceeding no. 72/2013-T, in which the cause of the proceeding was the failure to present documents by the winning passive subject.
The situation of these proceedings is quite different in that the rebuttal of the presumption contained in the vehicle registry had already been demonstrated, without success, in the context of gracious complaint.
Consequently, AT must bear the entire costs.
III DECISION
In accordance with the foregoing, this Arbitral Tribunal agrees to:
I) Find the requests for declaration of illegality of the dismissal of the Gracious Complaint and of the IUC and compensatory interest self-assessments subject matter of these proceedings and identified above to be well-founded;
II) Revoke the act of dismissal of that complaint and annul the aforementioned assessments;
III) Find the request for restitution of the amounts paid corresponding to the aforementioned assessments, in the total amount of €99,732.89, to be well-founded and condemn the Tax and Customs Authority to reimburse them;
IV) Find the request for payment of indemnity interest by the Tax and Customs Authority to be unfounded; and
V) Condemn the Tax and Customs Authority in the costs of this proceeding.
Value of the Proceeding
In accordance with the provisions of articles 306, no. 2 of the CPC, article 97-A, no. 1, paragraph a), of the CPPT and article 3, no. 2 of the Arbitration Costs Regulation for Tax Proceedings, the value of the proceeding is fixed at €99,732.89.
Costs
Pursuant to article 22, no. 4, of the RJAT, and in accordance with Table I attached to the Arbitration Costs Regulation for Tax Proceedings, the amount of the costs is fixed at €2,754.00.
Notify, register, and, in due course, file the proceeding.
Lisbon, 4 October 2017
The Collective Arbitral Tribunal
José Poças Falcão
(President)
António Alberto Franco
(Member)
Luís Menezes Leitão
(Member)
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