IUC Subjective Incidence: Arbitral Tribunal Annuls 594 Vehicle Tax Assessments (2009-2013)

Arbitration Decision

The arbitrators, Dr. José Pedro Carvalho (arbitrator-chair), Professor Doctor Glória Teixeira and Dr. Álvaro Caneira, appointed by the Deontological Council of Administrative Arbitration to form the Arbitral Tribunal, constituted on 02-06-2017, agree as follows:

I. Report

1. On 27-03-2017, A…, legal entity no.…, with registered office in…, …, …-… Porto Salvo, came, pursuant to the provisions of articles 2.º, n.º 1, paragraph a), and 10.º, n.º 1, paragraph a), of Decree-Law n.º 10/2011, of 20/01, which approved the Legal Framework for Tax Arbitration (RJAT), and articles 1.º and 2.º of Ministerial Order n.º 112-A/2011, of 22/03, to submit a petition for constitution of an Arbitral Tribunal, in which the REVENUE AND CUSTOMS AUTHORITY (AT) appears as the Respondent.

2. The Petitioner challenges the decision of the Head of Division of the Large Taxpayers Unit (AT), of 23-12-2016, issued pursuant to delegation of competence conferred by Decision n.º 12729/2015 (DR, 2.ª, n.º 222, of 12.11.2015), which dismissed the petitions for official review properly submitted against 594 assessments of Unique Vehicle Tax (IUC) and compensatory interest (JC), relating to the years 2009 to 2013, inclusive, requesting the tribunal to declare the illegality of said express dismissal decision (cfr. Doc. 1) as well as the illegality of the acts of assessment of IUC and JC, subject to the same petitions for official review, in the total amount of € 83,678.14, identified in the annex to the petition (cfr. Doc. 3 and attached list), with its consequent annulment and reimbursement of the tax improperly paid, plus the corresponding indemnitary interest, calculated in accordance with legal terms.

3. The Petitioner further requests the condemnation of the Respondent to pay the costs of the proceedings.

4. The Petitioner opted for non-appointment of an arbitrator.

5. The petition for constitution of the arbitral tribunal was accepted by the President of CAAD and automatically notified to the Revenue and Customs Authority on 31-03-2017.

6. Pursuant to the provisions of paragraph a) of n.º 2 of article 6.º and paragraph b) of n.º 1 of article 11.º of the RJAT, as amended by article 228.º of Law n.º 66-B/2012, of 31/12, the Deontological Council appointed as arbitrators of the collegial arbitral tribunal Dr. José Pedro Carvalho, Professor Doctor Glória Teixeira and Dr. Álvaro Caneira, who communicated their acceptance of the appointment within the applicable timeframe.

7. On 18-05-2017, the Parties were duly notified of that appointment, having expressed no will to refuse the appointment of the arbitrators, in accordance with the combined provisions of article 11.º, n.º 1, paragraphs a) and b), of the RJAT and of articles 6.º and 7.º of the Deontological Code.

8. Accordingly, in compliance with the provision of paragraph c) of n.º 1 of article 11.º of the RJAT, as amended by article 228.º of Law n.º 66-B/2012, of 31/12, the collegial arbitral tribunal was constituted on 02-06-2017.

9. In response to what was requested, the Revenue and Customs Authority (AT) stated that this petition for arbitral pronouncement should not be granted, expressing the understanding that the impugned tax acts should be maintained in the legal order and, accordingly, the tribunal should pronounce itself for the acquittal of the respondent entity.

10. On 12-10-2017, the meeting provided for in article 18.º of the RJAT took place. As the Parties stated they had nothing further to add, evidence was produced through the witnesses cited by the Petitioner.

11. Upon completion of witness testimony, the Parties were invited to state whether they wished to submit written arguments, and for this purpose a period of 15 days was granted, which, for the Respondent, began to run from the notification of the submission of the Petitioner's arguments.

12. In compliance with the provision of article 18.º, n.º 2, of the RJAT, the Tribunal decided that the final decision will be issued within 30 days after the submission of arguments by the Respondent.

13. The Parties submitted arguments within the period set by the Tribunal.

II. Preliminary Issues

1. The Arbitral Tribunal is regularly constituted and is materially competent, in accordance with paragraph a) of n.º 1 of article 2.º of Decree-Law n.º 10/2011, of 20/01.

2. The Parties have legal personality and capacity, are legitimate and are legally represented (cfr. art.º 4.º and n.º 2 of art.º 10.º of Decree-Law n.º 10/2011 and art.º 1.º of Ministerial Order n.º 112/2011, of 22/03).

3. The proceedings do not suffer from defects that would invalidate them and no issues were raised that would prevent the consideration of the merits of the case.

III. Cumulation of Claims

1. Considering the existence of a direct relationship between the tax assessments whose legality is questioned in this proceeding, nothing prevents the joint consideration of the tax acts in question, given that, in view of what is alleged and the documentation submitted, it is found that, in essence, the potential merit of the petition depends on the same circumstances of fact and on the interpretation and application of the legal norms relating to the subjective scope of the IUC.

2. Given that, therefore, essentially the same circumstances of fact and the application of the same legal norms concerning the subjective scope of the IUC are in question, the cumulation of claims is legal, as provided for in article 3.º of the RJAT.

3. Indeed, the cited provision, as well as article 104.º of the CPPT, provide that the cumulation of claims is admissible "when the merit of the claims depends essentially on the consideration of the same circumstances of fact and on the interpretation and application of the same principles or rules of law."

4. It is noted that the said legal norms do not require full identity of the impugned acts nor the coexistence, alongside the common grounds, of a specific ground for annulment of any or some of the impugned acts.

5. In the present case, there are tax acts relating to the IUC, involving a large number of motor vehicles, and, in legal terms, the application of the legal norms relating to the subjective scope of this tax.

6. In these terms, considering the identity of the tax facts, of the tribunal competent to decide and of the factual and legal grounds invoked, it is concluded, in view of the provisions of articles 3.º of the RJAT and 104.º of the CPPT, that nothing prevents the cumulation of claims.

IV. Factual Matters

1. Based on the documentary elements that form part of this proceeding and on the testimony of the witness cited by the Petitioner, B…, which gave them clear context within the Petitioner's operational system, this Tribunal formed a conviction regarding the following factual elements which are considered entirely proven:

23.1. The Petitioner is a commercial company whose business purpose is the sale of automobiles and their respective parts and accessories.

23.2. In the context of its activity, it proceeds to import, into Portuguese territory, all motor vehicles of the C… brand.

23.3. The vehicles are acquired from D… by means of prior request from the concessionaires, submitted electronically directly to the manufacturer.

23.4. The need for vehicle imports derives from orders placed directly by the concessionaires with the Petitioner, so there are no sales of vehicles to the Petitioner and from it to them without the respective purchase order.

23.5. The vehicles imported into Portuguese territory are immediately invoiced by the Petitioner to the concessionaires and immediately delivered to their facilities, except for vehicles intended for the Autonomous Regions of the Azores and Madeira which are stored in the warehouse of a logistics company.

23.6. Upon importation of the vehicles, the Petitioner, through an associated official representative, requests the assignment of the respective registrations.

23.7. Given that, at the time of sale, the vehicles transferred are not yet registered in Portugal, they are identified, in the respective invoice, by the indication of the corresponding chassis number.

23.8. Only after sale to the concessionaires does the Petitioner, as a registered operator, bear the corresponding Vehicle Tax, which it passes on to the purchasers, then promoting the respective registration in Portugal.

23.9. It thus results that at the moment when the vehicles are registered, the Petitioner had already transferred the ownership of the vehicles to third parties.

23.10. The situation described above covers the vehicles identified in the list attached to this petition for arbitral pronouncement as Doc. 5, which is hereby considered fully reproduced, to which, in the assessments now impugned, corresponds to the total amount of € 83,678.14, of IUC and compensatory interest.

23.11. With respect to the vehicles in the situation referred to above, the respective sales invoices are presented as evidence (attached, collectively, as Doc. 6) as well as a list in which all the assessments now impugned are related.

23.12. The Petitioner, although it paid the tax and compensatory interest that were assessed to it, filed petitions for official review of the assessments in question, pursuant to article 78.º, n.º 1, of the LGT, on the ground that, as it was not the owner of the vehicles to which it referred at the date of tax due, it was not the obligor of the corresponding tax obligation (cfr. Doc. 4).

23.13. The said petition for official review was dismissed by express decision of the Head of Division of the Large Taxpayers Unit of the AT, issued in the exercise of delegated competence (Decision 12,729/2015 – DR, 2.ª, n.º 222, of 12.11.2015), after the Petitioner had been afforded the opportunity to exercise the right of prior hearing.

23.14. The said decision was notified through Official Letter n.º…, of 25-12-2016, from the Division of Management and Tax Assistance (DGAT) of the Large Taxpayers Unit.

V. Matters of Law

1. The Petitioner bases the petition for arbitral pronouncement, essentially, on the grounds of the illegality of its qualification as the obligor of the IUC, with respect to the vehicles and tax periods that it identifies in documents attached to the petition for arbitral pronouncement, considering the fact that the ownership of the vehicles was transferred to third parties before the date of their registration in Portugal;

2. According to the Petitioner's allegation, although the vehicles in question were registered in its name at the Motor Vehicle Registry Office, it was not the effective owner at the date of occurrence of the facts which determine the tax obligation, given that they had already been sold to the respective concessionaires, as evidenced by the invoices issued, which it presents as evidence.

3. Indeed, in view of the documentary evidence in the file proving the facts alleged, the Petitioner, in the context of its business activity, proceeds to import into Portuguese territory new vehicles which, at a time prior to their respective registration, it transfers to its concessionaires, this fact being proven by a copy of the respective invoice.

4. However, by force of the applicable legal norms, the registration of the vehicles in question is carried out in the name of the Petitioner, although, at the moment when it is effected, the Petitioner is not its owner.

5. This follows from the combined reading of articles 117.º, n.º 4, of the Road Traffic Code - which imposes on the person, singular or collective, who proceeds to admission, importation or introduction for consumption in national territory, the obligation to request the registration of the vehicles - and 24.º, n.º 1, of the Motor Vehicle Registry Regulation, which provides that the initial registration of ownership of imported, admitted, assembled, constructed or reconstructed vehicles is based on the respective request.

6. From the said norms it follows, therefore, that the Petitioner, as a registered operator who proceeds to import new vehicles into national territory, necessarily appears in the respective initial registration as their owner, although at the moment when it is effected, the ownership of them has already been transferred to third parties.

7. From the foregoing, the Respondent concludes that, "given that the Petitioner requested the issuance of a registration certificate, with the same registered in its name, the requirements of the tax event of the IUC are met, as well as its due date, the Petitioner being the obligor of the tax."

8. Differently, the Petitioner understands that the norm of subjective scope of the said tax, set forth in article 3.º of its Code, establishes a legal presumption of ownership, capable of being rebutted by contrary proof.

9. The issue at hand is, therefore, the interpretation of article 3.º, n.º 1, of the CIUC, in the version in force at the time of the facts, to determine whether it establishes, or not, a presumption regarding qualification as owner, and consequently, as the obligor of this tax, of the person, singular or collective, in whose name the vehicle ownership is registered and, if it is concluded affirmatively, its rebuttal based on the evidentiary elements that comprise it.

On the Subjective Scope of the IUC

1. Notwithstanding the fact that the IUC Code establishes as a structural 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 [2], the said Code chooses, with respect to subjective scope, the vehicle owner, considering as such the person in whose name it is registered (art. 3.º, n.º 1, of the CIUC, in the original wording of Law n.º 22-A/2007, of 29/06).

2. Not generally attributing special relevance to the actual use of vehicles, the legislator does not, however, fail to consider such fact in specific situations involving its presumptive and potential use, equating to owners, financial lessees, purchasers with reservation of ownership, as well as other holders of option to purchase rights by force of a lease contract (art.3.º, n.º 2, of the CIUC).

3. The scope norm, by referring to the elements of the motor vehicle registry, does not distinguish between the initial registration of the vehicle and subsequent registrations: the obligor of the tax is the owner of the vehicle, being considered as such the person, singular or collective, in whose name the vehicle is registered.

4. It is, therefore, on the interpretation of the norm of n.º 1 of article 3.º that, as already mentioned, the different positions expressed by the Petitioner and the Respondent are evident.

5. According to the Petitioner, the said norm, in the wording in force at the time of occurrence of the tax facts to which the questioned assessments relate, establishes a presumption of ownership, based on motor vehicle registration, rebuttable under general terms and, in particular, by virtue of the provision of article 73.º of the General Tax Law.

6. Differently, the Respondent understands that, by establishing the CIUC the passive obligor status as well as the tax event of the tax obligation, by reference to the elements contained in the motor vehicle registry, as follows from articles 3.º and 6.º of its Code, the Petitioner being the one who requested the issuance of the registration certificate and the vehicles being registered in its name in the tax periods to which the questioned assessments relate, "the requirements of the tax event of the IUC are met, as well as its due date, the Petitioner being the obligor of the tax."

7. This matter has been the subject of numerous arbitral decisions which, repeatedly and uniformly, have pronounced themselves to the effect that the norm of n.º 1 of article 3.º of the CIUC, of the original wording of Law n.º 22-A/2007, of 29/06, establishes a presumption, rebuttable, under general terms and, in particular, by virtue of the provision of article 73.º of the LGT.[3] This is the approach which is adopted and will be followed closely.

8. Indeed, with the exception of the provision of n.º 2, regarding situations of sale with reservation of ownership and leases that assume the nature of financing, article 3.º of the CIUC, in the wording in force at the time of occurrence of the tax facts to which the impugned assessments relate, provides that the obligors of this tax are the owners of the vehicles, being considered as such the persons in whose names the vehicles are registered.

9. The recourse to motor vehicle registry as a structuring element of the system of assessment of this tax is evident throughout the whole of its Code. Mention should be made, in particular, of its article 6.º relating to the definition of the tax event of the tax obligation, whose n.º 1 provides for it to be constituted by the ownership of the vehicle, "as attested by the registration in national territory". From this provision it follows that motor vehicles that are not, nor should be, registered in Portuguese territory, are only covered by the objective scope of this tax if they remain there for a period exceeding 183 days, as provided in n.º 2 of the same article. It is, therefore, a norm which, resorting to the registration element, simultaneously establishes the tax event of the tax and its respective tax connection. It is also from the elements of the motor vehicle registry that the moment of the beginning of the tax period and constitution of the tax obligation is derived and, in general, all elements necessary for the assessment of the tax in question, as, moreover, was well emphasized in the response prepared by the AT.

10. However, from the dependence of the IUC taxation regime on motor vehicle registry, one cannot immediately conclude that the norm of subjective scope, in the segment in which it considers as owner the person in whose name the vehicle is registered, does not constitute a presumption of scope.

11. It will therefore be necessary to resort to other interpretive elements, with special relevance of the legal notion of presumption.

12. According to the notion set forth in article 349.º of the Civil Code, presumptions are the inferences which the law or the judge draws from a known fact to establish an unknown fact. Presumptions are means of proof, having as their function the demonstration of the reality of the facts (art. 341.º of the Civil Code). Thus, whoever has a legal presumption in their favor is excused from proving the fact to which it leads (art. 350.º, n.º1, of the Civil Code). However, presumptions, except in cases where the law prohibits it, may be rebutted, by contrary proof (art. 350.º, n.º 2, of the Civil Code). In the case of presumptions of tax scope, these are always rebuttable, as expressly provided for in article 73.º of the LGT.

13. Presumptions may be explicit or merely implicit in the text of the law.

14. Indeed, in the definition of the subjective scope of the ICI, ICA and IMV, taxes which the current IUC came to replace, this was the expression used by the legislator. In the context of the abolished taxes, it is provided that "the tax is due by the owners of the vehicles, being presumed as such, until proof to the contrary, the persons in whose names they are registered or recorded" [4]

15. Similarly, article 3.º, n.º 1, of the Regulation of Circulation and Haulage Taxes, approved by Decree-Law n.º 116/94, of 3/05, provides that the obligors of these taxes are "the owners of the vehicles presumed as such, until proof to the contrary, the natural or legal persons in whose names they are registered."

16. With respect to the IUC, the legislator chose to use a different formulation of the norm of subjective scope. Like the abolished taxes, it continues to attribute to the owners of the vehicles the status of obligors. However, it abandons the expression "being presumed as such, until proof to the contrary, the persons in whose names they are registered" in favor of "being considered as such the persons (...) in whose names they are registered".

17. Contrary to the position expressed by the Respondent, we understand that this is a mere semantic question, which does not in the slightest alter the content of the norm in question, and for two reasons: For there to be a legal presumption, it is necessary that the norm establishing it conforms to its legal concept, set forth in article 349.º of the Civil Code, it being irrelevant for this purpose whether it is explicit, revealed by the use of the expression "presumed" or merely implicit[5].

18. It is, therefore, in the sense of the legal concept of presumption and in respect of the constitutional principles of equality and tax capacity that the legislator attributes full effect to the presumption derived from motor vehicle registry, accepting it as such in the definition of the subjective scope of this tax established in n.º 1 of article 3.º of the CIUC.

19. Furthermore, Decree-Law n.º 54/75, of 12/02, which governs the registration of motor vehicles, not providing any norm regarding the constitutive character of motor vehicle ownership registration, establishes, in n.º 1 of its article 1.º that motor vehicle registry aims only to give publicity to the legal situation of the goods. In accordance with article 7.º of the Real Estate Registry Code, subsidiarily applicable to motor vehicle registry, by reference to article 29.º of that diploma, it provides that registry only "(...) constitutes presumption that the right exists and belongs to the registered holder, in the precise terms in which the registry defines it."

20. Pronouncing itself on this matter, the STJ, in a judgment of 19-02-2004, issued in process n.º 3B4369, concludes that "(...) registration does not have constitutive effect, because it is intended to give publicity to the registered act, functioning (only) as a mere presumption, rebuttable (presumption "juris tantum") of the existence of the right (arts. 1.º, n.º 1, and 7.º, of the CRP84 and 350.º, n.º2, of the Civil Code) as well as of the respective ownership, in the terms contained therein (...)".

21. Thus, following the reiterated arbitral jurisprudence regarding identical situations, one cannot but understand that the expression "being considered as such" contained in the said norm constitutes a legal presumption, and that this is rebuttable, under general terms, and, in particular, by virtue of the provision of article 73.º of the LGT which provides that presumptions enshrined in the norms of tax scope always admit contrary proof.

On the Rebuttal of the Presumption

1. Presumptions of tax scope may be rebutted through the contradictory procedure proper provided for in article 64.º of the CPPT or, alternatively, through the means of administrative complaint or judicial impugnation of the tax acts that are based on them.

2. In the present case, the Petitioner did not use that proper procedure, having instead opted for this petition for arbitral decision which, thus, constitutes a proper means for rebutting the presumption of subjective scope of the IUC on which the tax assessments whose annulment constitutes its object are based, since it is a matter that falls within the material competence of this arbitral tribunal (arts. 2.º and 4.º of DL 10/2011).

3. To rebut the presumption derived from the motor vehicle registry registration, the Petitioner offers, as a means of proof, the invoices issued with reference to the transfer of the vehicles to which the questioned assessments relate (Doc. 6 and attached list).

4. Pronouncing itself on the documentary evidence presented, the Respondent considers that "...although this is not understood – which is only by way of academic hypothesis admitted – and accepting that rebuttal of the presumption is admissible in light of the jurisprudence already established in this arbitration center, it would still be necessary to assess the documents submitted by the Petitioner and their probative value with a view to such rebuttal."

5. In the view of the Respondent, "The invoices submitted by the Petitioner are not apt to prove the celebration of a synallagmatic contract as is the purchase and sale, as such documents do not reveal by themselves an essential and unequivocal declaration of will (i.e., acceptance) on the part of the purported purchasers."

6. In support of this thesis, the Respondent cites process 63/2014-T of the CAAD in which, although with a dissenting vote, the Arbitral Tribunal considered invoices to be "unilateral and internal documents, to which jurisprudence has recognized very reduced value to prove the existence of a synallagmatic contract."

7. In the same sense as the insufficiency of invoices to overcome the presumption contained in n.º 1 of article 3.º of the CIUC, also cites the arbitral decisions issued in processes no. 150/2014-T and 220/2014-T.

8. As well as is extracted from the position of the Respondent regarding the evidence produced, grounded in the reasoning of the cited arbitral decisions, it would be insufficient to rebut the presumption enshrined in the norm of tax scope, defined on the basis of ownership, as appears from motor vehicle registry.

9. Not being, however, this the understanding of the Tribunal, it is necessary to assess the evidence produced by the Petitioner to determine whether it is sufficient to rebut the presumption derived from the registry which, in the sphere of subjective scope, is accepted for purposes of the IUC.

10. For this, it is important to bear in mind that, in the situation under analysis, there are purchase and sale contracts which, relating to movable property and not being subject to any special formalities (Civil Code, art. 219.º), operate the corresponding transfer of real rights (Civil Code, art. 408.º, n.º 1).

11. In the case of contracts involving the transfer of ownership of movable goods by payment of a price, they have, as essential effects, among others, the delivery of the thing (Civil Code, arts. 874.º and 879.º).

12. However, where a purchase and sale contract is concerned which has for its object a motor vehicle, in which registration is mandatory, its proper performance presupposes the issuance of the declaration of sale necessary for inscription in the registry of the corresponding acquisition in favor of the purchaser, as has been understood by the jurisprudence of superior courts.[6]

13. Such declaration, relevant for registry purposes, may constitute proof of the transaction, but does not constitute the only or exclusive means of proof of such fact.

14. For registry purposes, neither any special formality is required, merely the submission to the competent entity of a request subscribed by the purchaser and confirmed by the seller, who, through a declaration of sale confirms that the ownership of the vehicle was acquired by him through an oral purchase and sale contract (vd. Motor Vehicle Registry Regulation, art. 25.º, n.º 1, paragraph a)).

15. Notwithstanding these being the rules arising from the provisions of civil law relating to the formal regime of transfer of movable goods and, being the case, of their respective registration, one cannot but also bear in mind that, in the situation under analysis, we are dealing with commercial transactions, effected by a business entity in the context of the activity that constitutes its business purpose.

16. In that context, the company is bound by the observance of specific accounting and tax norms, in which invoicing assumes special relevance.

17. Firstly, by force of tax norms, the entity transferring the goods is obliged to issue an invoice for each transfer of goods whatever the quality of the respective purchaser (CIVA, art. 29.º, n.º 1, paragraph b).

18. Also in accordance with the provisions of tax norms, the invoice must comply with a determined form, detailed in articles 36.º of the VAT Code and article 5.º of Decree-Law n.º 198/90, of 19/06.

19. It is on the basis of that document issued by the supplier of the goods that the purchaser, when it is an economic operator - as is the case in the vast majority of situations to which the present proceeding refers - will deduct the VAT to which it is entitled (CIVA, art. 19.º, n.º 2) and record the expense of the operation (CIRC, arts. 23.º, n.º 6 and 123.º, n.º 2).

20. For its part, it is also on the basis of the invoicing issued by it that the supplier of the goods should record the respective income, as arises from the provision of paragraph b) of n.º 2 of article 123.º of the CIRC.

21. As long as they are issued in the legal form and constitute elements supporting the entries in accounting organized in accordance with commercial and tax legislation, the data contained therein are covered by the presumption of truthfulness to which article 75.º, n.º 1, of the LGT refers.

22. Indeed, the said presumption covers not only the books and accounting records, but also the respective supporting documents, as, moreover, is a settled understanding of the tax administration itself [7] and established jurisprudence of superior courts [8]

23. The presumption of truthfulness of commercial invoices issued in accordance with legal terms may, however, be rebutted whenever the operations to which they refer do not correspond to reality, it being sufficient for this that the Tax Administration collects and demonstrates founded indicia of such fact (LGT, art. 75.º, n.º 2, al. a). [9]

24. In the present case, the Respondent has not impugned, nor raises any doubt, regarding the operations titled by the invoices presented by the Petitioner.

25. Considering, therefore, the relevance attributed by tax legislation to invoices issued, in accordance with legal terms, by commercial companies in the context of their business activity and the presumption of truthfulness of the operations titled by them, one cannot fail to consider that they constitute, by themselves and in this case, sufficient proof of the transfers invoked by the Petitioner, following, in this matter, the majority arbitral jurisprudence. [10]

26. Considering, thus, the transfer of the right of ownership of the vehicles in question to be documentarily proven, it remains only to determine the date on which, according to the respective invoice, the same will have occurred, bearing in mind that the due date of the tax, with respect to new land vehicles, occurs on the first day of the tax period, which begins on the date of registration, as provided in article 6.º, n.º3, of the CIUC, this being the moment when the tax legal relationship is defined.

27. On the basis of the documents that form part of this proceeding (Doc. 6 and attached list) it is found that, as of the due date of the tax, the vehicles identified therein were no longer the property of the Petitioner by virtue of their having been transferred to third parties by it.

28. In view of the foregoing, it is concluded that there is no legal basis for the acts of assessment of IUC and compensatory interest with respect to the vehicles and periods identified in the annex to the petition for arbitral pronouncement.

29. In these terms, considering the presumption of ownership derived from motor vehicle registry, accepted in article 3.º of the CIUC - in the wording in force at the time of the facts to which the assessments in question relate - to have been rebutted, the assessments identified in a list attached to this petition for arbitral pronouncement should be annulled, in the total amount of € 83,678.14, on the ground of illegality and error in the presuppositions on which they are based.

On the Right to Indemnitary Interest

1. Besides the revocation of the decision dismissing the petitions for official review and annulment of the assessments of tax and compensatory interest, and consequent reimbursement of the amounts improperly paid, the Petitioner further requests that it be recognized the right to indemnitary interest, pursuant to articles 43.º and 100.º of the LGT.

2. Article 100.º of the LGT provides that "The tax administration is obliged, in case of total or partial merit of administrative complaints or appeals, or of judicial proceedings in favor of the obligor, to the immediate and full reconstitution of the situation that would have existed if the illegality had not been committed, including the payment of indemnitary interest, in the terms and conditions provided for in law."

3. Now, pursuant to the provision of n.º 1 of article 43.º, indemnitary interest shall be due "when it is determined, in administrative complaint or judicial impugnation, that there was error attributable to the services from which resulted payment of the tax debt in an amount greater than legally due."

4. In this particular, besides the administrative and judicial means referred to in the transcribed norms, we understand that, as arises from n.º 5 of article 24.º of the RJAT, the right to the mentioned interest may be recognized in the arbitral proceeding and, thus, the petition is decided.

5. The right to indemnitary interest to which the norms of the LGT referred to above allude presupposes that there has been payment of tax in an amount greater than due and that such derive from error, of fact or of law, attributable to the services of the AT, which manifestly occurs in this arbitral proceeding.

6. However, the annulment of the assessments only occurred by way of the impugnation of the dismissal of the petitions for official review submitted by the Petitioner in September 2016, by which article 43.º thereof is applicable to it al. c) of n.º 3 of article 43.º of the LGT: "3 - Indemnitary interest is also due in the following circumstances: (…) - c) When the revision of the tax act at the initiative of the obligor takes place more than one year after its request, except if the delay is not attributable to the tax administration."

7. The fact that the AT decided before the expiration of a period of one year (about three months after the petitions for review) is not, in the understanding of this Arbitral Tribunal, a circumstance preventing the right to indemnitary interest claimed by the Petitioner, in that in that setting the AT did not revise the tax acts, instead forcing the Petitioner to appeal from the dismissal to this Tribunal.

8. Indeed, it is long-established jurisprudence that indemnitary interest is due whenever the AT decides favorably to the obligor's claim, after the expiration of that one-year period counting from the petition for review, as it will also be due when more than one year elapses after the petition for review because the obligor is forced to resort to judicial proceedings to obtain a decision favorable to its claim, by virtue of the AT (within or outside that period) having refused to revise the act. This is what occurs in the case of the Petitioner who only after resorting to this arbitration sees its claim granted.

9. Thus, the Petitioner has the right to indemnitary interest, but only such interest as shall be due from one year after the submission of the petitions for official review and until the date of reimbursement to the Petitioner of the amounts of the annulled assessments.

VI - Decision

In these terms, and with the grounds set forth, the Arbitral Tribunal decides:

a) To grant the petition for declaration of illegality of the dismissal of the petitions for official review, determining, in consequence, its annulment;

b) To grant the petition for arbitral pronouncement with respect to the annulment of the assessments of tax and compensatory interest, as regards the tax periods and vehicles identified in a list attached to this petition for arbitral pronouncement;

c) To grant the petition in what concerns the recognition of the right to indemnitary interest that shall be due from one year after the submission of the petitions for official review and until the date of reimbursement to the Petitioner of the amounts of the annulled assessments.

d) To condemn the Respondent to pay the costs of these proceedings.

Case Value: € 83,678.14

Costs: Pursuant to article 22.º, n.º 4, of the RJAT, and in accordance with Table I attached to the Regulation of Costs in Tax Arbitration Proceedings, the amount of costs is set at € 2,754.00.

Lisbon, 4 December 2017,

The arbitrators, Dr. José Pedro Carvalho (arbitrator-chair), Professor Doctor Glória Teixeira and Dr. Álvaro Caneira (reporting arbitrator).

[1] In this sense, see STA, judgment of 16.11.2011, Proc. 608/11.

[2] See Sérgio Vasques, "Special Consumption Taxes", Almedina, 2000 and Explanatory Memorandum of the Bill no. 118-X, which gave rise to Law n.º 22-A/2007, of 29/05 (reform of automobile taxation).

[3] In this sense, Arbitral Decisions of 19.7.2013, Proc. 26/1013-T, of 10.9.2013, Proc. 27/2013-T, of 15.10.2013, Proc. 14/2013-T, of 5.12.2013, Proc. 73/2013-T, of 14.2.2014, Proc. 170/2013-T, of 30.4.2014, Proc. 256/2013-T, of 2.5.2014, Proc. 286/2013, of 16.6.2014, Proc. 289/2013-T, of 14.7.2014, Proc. 43/2014-T, of 6.6.2014, Proc. 294/2013-T, of 15.9.2014, Procs. 63/2014-T and 220/2014 and, more recently, referring to situations with identical factual characteristics to those of the present proceeding, Arbitral Decisions of 13.9.2017, Proc. 173/2017-T and of 4.10.2017, Proc. 185/2017-.

[4] See article 3.º, n.º 1 of the Regulation of the Municipal Tax on Vehicles, approved by Decree-Law n.º 143/78, of 12 June.

[5] Cfr. Jorge de Sousa, CPPT, 6th Edition, Áreas Editora. Lisbon, 2011, pags. 586 and STA, judgments of 29.2.2012 and of 2.5.2012, Procs. 441/11 and 381/12.

[6] Cfr. STJ, judgments of 23.3.2006 and of 12.10.2006, Procs. 06B722 and 06B2620.

[7] Cfr. Opinion of the Center for Tax Studies, endorsed by decision of the Director-General of Taxes, of 2 January 1992, published in Tax Science and Technique no. 365.

[8] Cfr. STA, judgment of 27.10.2004, Proc. 0810/04, TCAS, judgment of 4.6.2013, Proc. 6478/13 and TCAN, judgment of 15.11.2013, Proc. 00201/06.8BEPNF, among others.

[9] Cfr. STA, judgments of 24.4.2002, Proc. 102/02, of 23.10.2002, Proc. 1152/02, of 9.10.2002, Proc. 871/02, of 20.11.2002, Proc. 1428/02, of 14.1.2004, Proc. 1480/03, among many others.

[10] In this sense, cf., among others, Arbitral Decisions of 19.7.2013, Proc. 26/2013-T, of 10.9.2013, Proc. 27/2013-T, of 15.10.2013, Proc. 14/2013-T, of 5.12.2013, Proc. 73/2013-T, of 14.2.2014, Proc. 170/2013-T, of 30.4.2014, Proc., 256/2013-T, of 2.5.2014, Proc. 289/2013-T, of 6.6.2014, Proc. 294/2013-T, of 25.6.2014, Proc. 42/2014, of 6.7.2014, Proc. 52/2014-T, of 15.9.2017. Proc. 173/2017-T and of 4.10.2017, Proc 185/2017-T.