IUC Subjective Incidence: Vehicle Owner Tax Liability After Lease Transfer | CAAD 219/2014-T

ARBITRAL DECISION

This decision is rendered in accordance with the old orthography

I. Report

1. A, S.A., a legal person no. ..., with registered office in ... Lisbon, requested the constitution of an arbitral tribunal in tax matters, with a view to the annulment of the assessment acts for the Single Vehicle Circulation Tax (IUC) for the years 2010, 2011 and 2012 and for the motor vehicles identified by their respective registration number in the list annexed to the request for arbitral decision, which is hereby considered fully reproduced. As a consequence of said annulment, it requests the reimbursement of the amount which it considers unduly paid, in the total amount of €4,035.49, plus the compensatory interest that may be due under article 43 of the General Tax Code (LGT).

2. As grounds for the request, the Applicant alleges, in summary, that, although the vehicles were registered in its name on the date to which the tax facts giving rise to the disputed assessments pertain, it was not the actual owner of the vehicles in question, since, within the scope of its business activity, it had already transferred the ownership thereof.

3. In response to what was requested, the Tax and Customs Authority (AT) expressed itself in the sense of the lack of merit of the present request for arbitral decision, maintaining in the legal system the impugned tax acts and, in accordance therewith, for the dismissal of the defendant entity.

4. The arbitral tribunal was duly constituted on 12-05-2014.

5. The positions of the parties were clearly established from the outset in the initial pleadings (request for arbitral decision and response), positions which have long since become repetitive within the scope of national tax arbitration. Moreover, the case contains all the (documentary) elements necessary and sufficient for the tribunal to decide, whereby there was no need to convene the meeting provided for in article 18 of the RJAT.

6. The parties have legal personality and capacity and have standing (articles 4 and 10, no. 2, of the RJAT, and article 1 of Administrative Ruling no. 112-A/2011, of 22/03).

7. There are no procedural defects and no prior questions or exceptions were raised, whereby nothing prevents judgment on the merits, the present case thus being in a position for final decision to be rendered therein.

II. Factual Matters

1. With relevance for the assessment of the questions raised, the following factual elements stand out:

8.1. The Applicant is a credit institution in whose activity is comprised, with special relevance, financing of the motor vehicle sector, through the conclusion of financial leasing contracts with a view to the acquisition, by companies and individuals, of motor vehicles;

8.2. Within the scope of its activity, it concludes with its clients financial leasing contracts for motor vehicles, at the end of which it transfers the ownership thereof to the respective lessees or to third parties indicated by them.

8.3. The Applicant was notified of official assessments of IUC, relating to the tax periods and vehicles identified in Annex A and collection notes (Documents nos. 1 to 21), which are hereby considered fully reproduced.

8.4. The Applicant made voluntary payment of the tax to which the various assessments refer between 11 and 19 December 2013, benefiting from a waiver of compensatory interest, under Decree-Law no. 151-A/2013, of 31/10.

8.5. However, the Applicant expresses its disagreement with respect to the aforementioned assessment acts, in that the vehicles on which IUC payment fell were not its property on the date of the occurrence of the tax-generating event, a fact which it proves through the invoices issued (Documents nos. 22 to 42).

III. Joinder of Claims

1. Considering the existence of a direct relationship between the tax assessments whose illegality it questions, the Applicant opted to request the joint assessment of the tax acts in question.

2. Taking into account the identity of the tax facts, of the tribunal competent for the decision and of the factual and legal grounds invoked, nothing prevents, in accordance with the provisions of article 3 of the RJAT and article 104 of the CPPT, the intended joinder of claims.

IV. Matters of Law

1. In the request for arbitral decision the Applicant submits to the assessment of this tribunal the legality of the acts of assessment of IUC relating to the periods of 2010, 2011 and 2012 and to the vehicles which it identifies in the list annexed to said request, invoking the circumstance that, on the date to which the tax facts originating them pertain, it was not the owner of the vehicles and, consequently, did not assume the status of the taxable person to whom the tax was assessed.

2. On the definition of the subjective scope of the IUC, diametrically opposed positions between the AT and the Applicant are evident from the outset: for the former, the taxable person of this tax is the person in whose name the vehicle is registered; whereas for the latter, the incidence rule establishes a presumption, derived from registration, which can be rebutted in accordance with the general terms of law and, in particular, by virtue of the provisions of article 73 of the LGT.

3. Thus, with respect to the status of taxable person of the tax obligation imputed to it, the Applicant alleges that, on the date of the occurrence of the tax facts, it was not the owner of the vehicles to which the disputed assessments pertain, as they had already been sold to the respective lessees or to third parties indicated by them, within the scope of financial leasing contracts.

4. However, as the registration of the identified vehicles was not updated, the Applicant continued to appear therein as owner, a situation which was maintained on the date when the disputed tax assessments were made.

5. According to the AT's understanding, expressed in its respective response, it is sufficient that the vehicle be registered in the name of a particular person for that person to qualify as the taxable person of the IUC tax obligation.

6. Indeed, it follows from article 3, no. 1, of the CIUC, that the taxable persons are the owners of the vehicles, being considered as such the persons in whose name they are registered. Under no. 3 of the same article, financial lessees are equated to owners, as well as acquirers with retention of title and, in general, any other holders of purchase option rights by virtue of a leasing contract.

7. With relevance for the decision to be rendered in the present case, the question to be analysed centres, firstly, on the interpretation of the rule of no. 1 of that article 3 of the CIUC, in order to determine whether the rule of subjective incidence therein inscribed admits, or not, that the person in whose name the vehicle is registered in the Motor Vehicle Registry can demonstrate, through the means of proof admitted by law, that notwithstanding such fact, he is not the owner of the vehicle in the period to which the tax pertains and thus remove the tax obligation that falls upon him.

8. In sum, the question is whether such a rule establishes a legal presumption of tax incidence, susceptible to rebuttal, in general terms, as the Applicant contends, or whether, differently, as the AT understands, "the tax legislator intended expressly and deliberately that they be considered as owners, lessees, acquirers with retention of title or holders of the purchase option right in long-term leasing, the persons in whose name (the vehicles) are registered."

Being this the central question to be decided in the present request for arbitral decision, it is important to analyse in greater detail the positions in confrontation.

Position of the Applicant.

1. On this matter and as grounds for the request for arbitral decision, the Applicant alleges, relying on the already extensive case law of this Arbitral Tribunal and on a legal opinion which it attaches to the request, that:

a) On the dates to which the tax facts of the IUC giving rise to the assessments in question pertain, it was not the owner of the vehicles and, consequently, does not assume the status of taxable person to whom the tax was assessed;

b) The vehicles to which the said assessments pertain were leased by it, through financial leasing contracts and, upon the termination thereof, were sold to the respective lessees or to third parties indicated by them, at a moment prior to the occurrence of the tax-generating event.

c) Whereby, "... once the ownership of a particular vehicle has been transferred, it is to its new owner (even if not yet inscribed in the motor vehicle registry as such) that the obligation to assess the IUC falls."

Position of the Respondent.

1. In response to what was alleged by the Applicant, the AT responded to the effect that "the interpretation accepted by the Applicant is notoriously wrong, this party incurring in error resulting from "not only a biased reading of the letter of the law, but also from the adoption of an interpretation that does not take into account the systematic element, violating the unity of the regime established throughout the CIUC and, more broadly, throughout the legal-fiscal system and flows further from an interpretation that ignores the rationale of the regime established in the article at issue, and moreover, throughout the CIUC."

2. According to the Respondent, "The tax legislator in establishing in article 3, no. 1, who are the taxable persons of the IUC, established expressly and intentionally that these are the owners (...) being considered as such the persons in whose name the same are registered."

3. In defence of this point of view, the Respondent emphasizes that "the legislator did not use the expression 'are presumed' as it could have done". It also points out the circumstance that "the fiscal normative is replete with provisions analogous to that established in the final part of no. 1 of art. 3, in which the fiscal legislator, within its freedom of legislative conformation, expressly and intentionally, establishes what must be considered legally for purposes of incidence, of income, of exemption, of determination and of periodization of taxable profit, for purposes of residence, of location, among many others."

4. As an example, among others, it refers to the rule of subparagraph a) of no. 2 of article 2 of the CIMT, in which the tax legislator does not presume that "there is onerously transferable for purposes of no. 1 of article 2 of the CIMT, in the execution of a promise contract for the acquisition and alienation of immovable property in which it is stipulated in the contract or subsequently that the promisee purchaser can assign its contractual position to a third party." In this case, "the legislator expressly and intentionally assimilates this contract to an onerous transfer of property for purposes of IMT". In the same manner, in the case of article 17 of the CIRC, the legislator also does not establish that the net surpluses of cooperatives are presumed as net result of the period but that these are considered as such. After referring to the fact that a large part of the income tax incidence rules have as underlying rationale determining what must be considered as income for purposes of this tax, one would have to conclude that by using the expression "is considered" the fiscal legislator would have established a presumption in practically all the income tax incidence rules which would be removed precisely because accounting prescribes solutions different from the CIRC, being exactly the legislator's purpose to remove the accounting rules.

5. Following this reasoning, the Respondent concludes that "it is imperative to conclude that, in the case of the present arbitral decision proceedings, the legislator established expressly and intentionally that they are considered as such (as owners...) the persons in whose name the same (the vehicles) are registered, since this is the interpretation that preserves the unity of the legal-fiscal system. Whereby, "to understand that the legislator established here a presumption would be unequivocally to carry out an interpretation against the law."

6. On the other hand, appealing to the systematic element, the Respondent understands that "the solution advocated by the Applicant is intolerable, the understanding championed by it finding any support in the law." This is because, in the same sense as provided for in no. 1 of article 3 of the CIUC, "article 6 of the CIUC establishes, under the heading 'Tax-Generating Event and Exigibility', in its no. 1, that 'The tax-generating event of the tax is constituted by the ownership of the vehicle, as attested by the registration or certificate in the national territory.' That is, 'the moment from which the tax obligation is constituted presents a direct relationship with the issuance of the registration certificate, in which must appear the facts subject to registration. In the same sense, the legislative solution adopted by the tax legislator in no. 2 of article 3 of the CIUC operates, by making the equiparations established therein coincide with the situations in which the motor vehicle registry requires their respective registration'."

7. The Respondent further maintains that "Such a position is still evident in the circumstance that the Motor Vehicle Registry to which the Tax Administration has or may have access, and the certificate in which must appear the acts subject to registration, whose presentation may be required by the same Administration from the interested party, contain all the elements intended for the determination of the Taxable Person, without the need for access to contracts of a private nature that confer such Rights, enumerated by the CIUC as constitutive of the Juridical Situation of Taxable Person of this tax. In the absence of such registration, naturally, the Owner will be notified to comply with the corresponding tax obligation, as the Tax Administration, taking into account the current configuration of the Legal System, will not have to proceed with the assessment of the Tax based on elements that do not appear in registries and public documents and, as such, authentic ones. In these terms, the failure to update the registration, in accordance with the provisions of article 42 of the Motor Vehicle Registry Regulation, will be imputable in the legal sphere of the Taxable Person of the IUC and not in that of the State, as the active subject of this Tax."

8. Beyond the grounds exposed, the Respondent further considers it relevant to note that "the interpretation conveyed by the Applicant is shown to be contrary to the Constitution."

9. Defending that "The always acclaimed principle of contributory capacity is not the only nor the principal fundamental principle that informs the tax system" and that "Alongside this principle we find others with the same constitutional dignity, such as the principle of trust and legal certainty, the principle of efficiency of the tax system and the principle of proportionality", the Respondent considers that it is necessary, "therefore, that in the interpretive task of article 3 of the CIUC the principle of contributory capacity be articulated, or if you prefer tempered, with those other principles."

Hence concluding that "the interpretation proposed by the Applicant, an interpretation that ultimately devalues the registry reality to the detriment of an 'informal reality' and insusceptible of minimal control by the Respondent, and offensive of the basilar principle of trust and legal certainty that must inform any legal relationship, here including the tax relationship."

1. Exposed, in summary and with partial transcription, the positions of the Applicant and the Respondent, they are clearly defined:

• for the Applicant, the subjective incidence of the IUC rests on a presumption of ownership, derived from the motor vehicle registry, susceptible to rebuttal in legal terms; and

• for the Respondent, the CIUC rule does not establish any presumption, expressing understanding to the effect that the legislator defined as the taxable person of this tax, expressly and intentionally, the owner of the vehicle identified in its respective registry.

Subjective Incidence of the IUC.

1. With the exception of the provisions of no. 2, relating to situations of sales with retention of title and leases that assume the nature of financing, article 3 of the CIUC establishes that the taxable persons of this tax are the owners of the vehicles, being as such considered the persons in whose name the vehicles are registered.

2. The resort to the motor vehicle registry as a structuring element of the system of assessment of this tax is evident throughout its respective Code. Specifically, its article 6 relating to the definition of the tax-generating event of the tax obligation, whose no. 1 provides that it is constituted by the ownership of the vehicle, as attested by the registration or certificate in the national territory. From this provision it follows that motor vehicles which are not, nor should be, registered in the Portuguese territory are only covered by the objective incidence of this tax if they remain therein for a period exceeding 183 days, as provided for in no. 2 of the same article. It is, therefore, a rule which, resorting to the registration element, establishes, simultaneously, the tax-generating event of the tax and the respective tax connection. It is, also, from the elements of the motor vehicle registry that the moment of the beginning of the taxation period and constitution of the tax obligation is extracted and, in a general manner, all elements necessary for the assessment of the tax in question, as, for that matter, is well emphasized in the response prepared by the AT.

3. However, from the dependence of the IUC taxation system on the motor vehicle registry one cannot extract, as an immediate conclusion, that the rule of subjective incidence, in the segment in which it considers as owner the person in whose name the vehicle is registered, does not constitute a presumption of incidence. There will thus be a need to resort to other interpretative elements, with the special relevance of the legal notion of presumption.

Notion of Presumption.

1. According to the notion contained in article 349 of the Civil Code, presumptions are the inferences that the law, or the judge, draws from a known fact to establish an unknown fact. Presumptions constitute means of proof, having this as its function the demonstration of the reality of facts (article 341 of the Civil Code). Thus, whoever has in his favour a legal presumption is excused from proving the fact to which it leads (article 350, no. 1, of the Civil Code). However, presumptions, except in cases where the law forbids it, may be rebutted, by proof to the contrary (article 350, no. 2, of the Civil Code). In the case of presumptions of tax incidence, these are always rebuttable, as expressly provided for in article 73 of the LGT.

Presumption and Fiction.

1. Alongside presumptions, used in tax law mainly as a means of preventing the possibility of fraud and evasion or for reasons of simplification and practicability of tax laws, the legislator also resorts, with some frequency, to fictions. Unlike presumption, which starts from a known fact to establish an unknown fact, fiction, on the other hand, "is translated into a legal process that considers a situation or a fact as distinct from reality in order to assign it legal consequences"[1] There is, therefore, a notable difference between one and the other of these figures, used, with some frequency, in the rules of tax codes and laws. This difference, which is not marked in the reasoning of the AT's position, will be particularly relevant in the assessment of the present case.

2. Taking as reference the exemplification presented by the Respondent in support of its thesis, we could consider the case of no. 2 article 17 of the CIRC, which for purposes of this tax, determines that "the net surpluses of cooperatives are considered as net result of the period." Not ignoring the legislator of the CIRC that cooperatives, by force of their respective principles and the legal regime applicable to them, cannot have as their purpose the achievement of profit, it imputes to those surpluses a nature distinct from reality, in order to assign it a legal consequence, namely that of net result of the period for purposes of applying the rules of determination of taxable profit of companies.

3. On the other hand, the existence, in parallel, of presumptions and fictions in the rules of legal tax incidence is, moreover, more evident, for example, in article 2 of the CIMT, referred to in the AT's response. According to the body of no. 3 of this article "It is also considered that there is a case for onerous transfer for purposes of no. 1 (the rule that defines the general rule of incidence of this tax, consisting of the onerous transfer of the right of property over immovable property) in the execution of the following acts or contracts:

a) Execution of a promise contract for the acquisition and alienation of immovable property in which it is stipulated in the contract or subsequently that the promisee purchaser can assign its contractual position to a third party."

and

e) Assignment of contractual position or resale arrangement, by the promisee purchaser in a promise contract for acquisition and alienation, with the final contract coming to be concluded between the original promisee alienator and the third party."

1. In the first of the referred cases, one is faced with a fiction, as the legislator does not ignore that the possibility of assignment of contractual position in a promise contract does not imply the transfer of the right of property, object of the general incidence of the aforementioned municipal tax. But, for tax purposes, it attributes the corresponding consequences to it. As for the second case - resale arrangement, to which subparagraph e) of the same number refers - one is faced with a situation somewhat more complex, but which, according to the consistent case law of the superior courts, translates into a presumption.

2. How is this conclusion reached, if both rules have as their purpose and effects to tax as transfers of property of immovable property realities that are not? The answer is, precisely, in the resort to the legal concept of presumption. The rule of al. e) of no. 3 of article 2 of the CIMT, as regards the "resale arrangement" was already provided for, in identical terms, in paragraph 2 of article 2 of the previous Real Estate Transfer Tax Code: the promisee purchaser who would arrange, with a third party, the sale of the immovable property which he had promised to acquire would be subject to the tax, based on the presumption that the property had been delivered to him and that he had acted on it as an owner, through the assignment of his contractual position in that contract, but only if the transfer contract came to be realized between the original promisee seller and that third party. In this case, the legislator created the presumption of economic transmission (delivery), covered by the incidence of the tax, whenever the promisee purchaser acted, before a third party and with the consent of the original promisee seller, as a true owner, arranging the resale of the property in question. It is the existence of the "legal delivery" - delivery of the property object of the promise contract - that the rule presumes, in order to tax it. And here too, the legislator starts from known facts - the contractual position and the juridical transmission of the property to a third party - to establish an unknown fact, the resale arrangement. A presumption which is rebuttable, by virtue of the provisions of article 73 of the LGT.[2]

Explicit and Implicit Presumptions.

1. The Respondent maintains that the fiscal legislator, "within its freedom of legislative conformation" expressly and intentionally determines that those in whose name the vehicles are registered be considered as owners, not using the expression "are presumed" as such, as it could have done.

2. Indeed, in the definition of the subjective incidence of the ICI, ICA and IMV, taxes which the current IUC came to replace, that was the expression used by the legislator. Within the scope of the abolished taxes, it is established that "the tax is owed by the owners of the vehicles, being presumed as such, until proof to the contrary, the persons in whose name the same are registered or matriculated"[3]

3. In the same sense, article 3, no. 1, of the Regulation of Vehicle Circulation and Haulage Taxes, approved by DL no. 116/94, of 03/05, establishes that the taxable persons of these taxes are "the owners of the vehicles presuming themselves as such, until proof to the contrary, the natural or legal persons in whose name the same are registered."

4. As regards the IUC, the legislator opted to use a different formulation of the rule of subjective incidence. Just as in the abolished taxes, it continues to attribute to the owners of the vehicles the status of taxable persons. However, it abandons the expression "presuming themselves as such, until proof to the contrary, the persons in whose name the same are registered" in favour of "being considered as such the persons (...) in whose name the same are registered".

5. Differently from the position expressed by the AT, we understand that one is faced with a mere semantic question, which does not alter in the least the content of the rule in question and for two reasons: In order for one to be faced with a legal presumption, it is necessary that the rule which establishes it conform to its respective legal concept, contained in article 349 of the Civil Code, being for such purposes irrelevant that the same be explicit, revealed by the use of the expression "are presumed" or merely implicit.[4] On the other hand, the freedom of conformation of the legislator is limited by fundamental principles enshrined in the Constitution of the Republic, of which, with relevance for the present case, the principle of equality stands out. In the tax field, this principle translates itself into the generality and abstraction of the norm that creates the essential elements of the tax, in accordance with the contributory capacity of each one. According to what is extracted from the Constitutional Court decision no. 343/97, of 29-04-97 "Taxation in conformity with the principle of contributory capacity will imply the existence and maintenance of an effective connection between the tax obligation and the economic presupposition selected as the object of the tax, requiring, therefore, a minimum of logical coherence of the diverse concrete cases of tax provided for in the law with the corresponding object thereof".

6. It is in the sense of the legal concept of presumption and in respect of the constitutional principles of equality and contributory capacity that the legislator attributes full effectiveness to the presumption derived from the motor vehicle registry by accepting it, as such, in the definition of the subjective incidence of this tax established in no. 1 of article 3 of the CIUC.

7. Moreover, Decree-Law no. 54/75, of 12/02, which regulates the registration of motor vehicles, not providing any rule regarding the constitutive character of the registration of motor vehicle property, establishes, in no. 1 of its article 1, that motor vehicle registration aims only to give publicity to the juridical situation of the goods. In accordance with article 7 of the Real Estate Registry Code, suppressively applicable to motor vehicle registry, by referral of article 29 of that statute, it determines that registration only "(...) constitutes a presumption that the right exists and belongs to the registered holder, in the precise terms in which the registration defines it."

8. Pronouncing itself on this matter, the STJ, in Decision of 19-02-2004, delivered in Process no. 3B4369, concludes that "(...) the registration does not have constitutive effect, as 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, no. 1, and 7, of the CRP84 and 350, no. 2, of the Civil Code) as well as of the respective ownership, in the terms thereof contained (...)".

9. Thus, following the reiterated arbitral case law[5] relating to identical situations, one cannot fail to understand that the expression "being considered as such" contained in said rule, configures a legal presumption, and that this is rebuttable, in general terms, and, in particular, by virtue of the provisions of article 73 of the LGT which determines that presumptions established in the rules of tax incidence always admit proof to the contrary.

Rebuttal of Presumptions.

1. Presumptions of tax incidence may be rebutted through the adversarial procedure proper provided for in article 64 of the CPPT or, alternatively, by means of gracious claim or judicial impugnation of the tax acts which are based thereon.

2. In the present case, the Applicant did not utilize that proper procedure, having instead opted for the present request for arbitral decision which, thus, constitutes an appropriate means for rebutting the presumption of subjective incidence of the IUC on which the tax assessments whose annulment constitutes its object are based, as it is a matter which falls within the scope of the material competence of this arbitral tribunal (articles 2 and 4 of DL 10/2011).

3. To rebut the presumption derived from the inscription of the motor vehicle registry, the Applicant offers, as a means of proof, the invoices issued with reference to the transmission of the vehicles to which the disputed assessments pertain (Documents nos. 22 to 42).

4. Pronouncing itself on the documentary proof presented, the Respondent alleges that:

"The invoices (by themselves) do not constitute an appropriate document to prove the sale of the vehicle in question, since the same is nothing more than a document unilaterally issued by the Applicant.

• The invoices (by themselves) are not apt to prove the conclusion of a synallagmatic contract such as purchase and sale, as that document does not reveal by itself an indispensable and unequivocal declaration of will (i.e., acceptance) by the purported purchaser,

• Indeed, there are not lacking cases of issuance of invoices relating to transmissions of goods and/or provisions of services which never came to be realized.

• The rules of the motor vehicle registry (as yet) have not reached the point where an invoice unilaterally issued by the Applicant can replace the Motor Vehicle Registry Request, moreover a document approved by official model,"

1. If well drawn from the position of the Respondent as to the proof produced, it would be insufficient to remove the tax incidence defined based on the ownership, as it appears in the registry, which, in coherence with the substantive position assumed by it, would only be removed as a function of timely updating of the registry itself.

2. Not being this the understanding of the tribunal, it is important to evaluate the proof produced by the Applicant in order to determine whether it is sufficient to rebut the presumption derived from the motor vehicle registry which, in the plane of subjective incidence, is accepted for purposes of the IUC.

3. For that purpose, it is important to bear in mind that, in the situation under analysis, one is faced with purchase and sale contracts which, relating to movable things and not being subject to any special formalism (Civil Code, art. 219), operate the corresponding transfer of real rights (Civil Code, art. 408, no. 1).

4. In the case of contracts which involve the transmission of the ownership of movable goods, by means of the payment of a price, those have, as essential effects, among others, that of delivering the thing (Civil Code, arts. 874 and 879).

5. However, being in question a purchase and sale contract which has as its object a motor vehicle, in which registration is mandatory, its timely performance presupposes the issuance of the declaration of sale necessary for the inscription in the registry of the corresponding acquisition in favour of the purchaser, as has been understood by the case law of the superior courts.[6] Such declaration, relevant for purposes of registration, may constitute proof of the transaction, but is not the only or exclusive means of proof of the transaction.

6. For registration purposes, no special formalism is likewise required, it being sufficient the presentation to the competent entity of a request subscribed by the purchaser and confirmed by the seller, which, through a declaration of sale confirms that the ownership of the vehicle was acquired by him through an oral purchase and sale contract (see Motor Vehicle Registry Regulation, art. 25, no. 1, subparagraph a)).

7. Notwithstanding these being the rules flowing from the provisions of civil law, relating to the informality of the transmission of movable things and, being the case, of the respective registration, one cannot fail to also take into account that, in the situation under analysis, we are faced with commercial transactions, effected by a business entity within the scope of the activity which constitutes its corporate purpose.

8. In that scope, the company is bound by compliance with specific accounting and tax rules, in which invoicing assumes special relevance.

9. Immediately, by virtue of tax rules, the entity transmitting the goods is obliged to issue an invoice with respect to each transmission of goods, regardless of the status of the respective purchaser (CIVA, art. 29, no. 1, subparagraph b)).

10. Also in accordance with the provisions of tax rules, the invoice must comply with a certain form, detailed in articles 36 of the VAT Code and article 5 of Decree-Law no. 198/90, of 19/06.

11. 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 case refers - will deduct the VAT to which it is entitled (CIVA, art. 19, no. 2) and account for the cost of the operation (CIRC, arts. 23, no. 6 and 123, no. 2).

12. For its part, it is also on the basis of the invoicing issued that the supplier of the goods should account for the respective income, as flows from the provisions of subparagraph b) of no. 2 of article 123 of the CIRC.

13. Provided they are issued in legal form and constitute elements supporting the accounting 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, no. 1, of the LGT refers.

14. Indeed, said presumption covers not only the books and accounting records, but also the respective supporting documents, as, for that matter, constitutes settled understanding of the Tax Administration itself[7] and the firm case law of the superior courts.[8]

15. The presumption of truthfulness of commercial invoices issued in accordance with the legal terms may, however, be removed whenever the operations to which they refer do not correspond to reality, it being sufficient, for that purpose, that the Tax Administration gather and demonstrate founded indicia of that fact (LGT, art. 75, no. 2, al. a)).[9]

16. In the present case, although the Respondent affirms, generalizing, that there is no lack of cases of issuance of invoices referring to operations which never occurred, it raises no doubt as to the operations evidenced by the invoices presented by the Applicant.

17. Considered, therefore, the relevance attributed by tax legislation to invoices issued, in accordance with the legal terms, by commercial companies within the scope of their business activity and the presumption of truthfulness of the operations evidenced by them, one cannot fail to consider that the same constitute, by themselves, sufficient proof of the transmissions invoked by the Applicant.

18. Considering, thus, proven by documents the transmission of the right of ownership of the vehicles in question, it is only necessary to determine, case by case, the date on which, according to the respective invoice, the same will have occurred, taking into account that the exigibility of the tax occurs on each anniversary of the date of registration, as provided for in article 6, no. 3, of the CIUC, being that the moment at which the tax relationship is defined.

19. On the basis of the documents which form part of the present case - namely the respective administrative case and invoicing issued by the Applicant - it is verified that, on the date of the exigibility of the tax, the vehicles identified in Annex A and the assessment notes annexed to the request had been transacted, at the end of leasing contracts, the ownership thereof having been transferred to the respective lessees or to third parties indicated by them. However, even if such circumstance did not occur, the taxable persons of the tax obligation would always be the respective lessees, equated to owners, as provided for in no. 2 of article 3 of the CIUC.

20. In these terms, the presumption of ownership derived from the motor vehicle registry accepted in no. 1 of article 3 of the CIUC, with respect to the vehicles and periods to which the disputed assessments pertain, is considered rebutted.

V - Request for Compensatory Interest

1. Along with the annulment of the assessments, and consequent reimbursement of the amounts unduly paid, the Applicant further requests that it be granted the right to compensatory interest, under article 43 of the General Tax Code.

2. Indeed, in accordance with the provisions of no. 1 of the aforementioned article, compensatory interest is owed "when it is determined, in gracious claim or judicial impugnation, that there was error attributable to the services from which results payment of the tax debt in an amount higher than that legally due." Beyond the means referred to in the rule transcribed, we understand that, as flows from no. 5 of article 24 of the RJAT, the right to the mentioned interest can be recognized in the arbitral proceedings and, thus, we rule on the request.

3. The right to compensatory interest to which the aforementioned LGT rule alludes presupposes that tax has been paid in an amount higher than that due and that such flows from error, whether of fact or of law, attributable to the services of the AT.

4. In the present case, although it is recognized that the tax paid by the Applicant is not due, as it is not the taxable person of the tax obligation, determining, in consequence, the respective reimbursement, it is not seen that, at its origin, is found the error attributable to the services, which determines such a right in favour of the taxpayer.

5. In this way, in promoting the official assessment of the IUC considering the Applicant as the taxable person of this tax, the AT merely limited itself to giving effect to the rule of no. 1 of article 3 of the CIUC, which, as abundantly referred to above, imputes such status to the persons in whose name the vehicles are registered.

6. As has also been concluded, said rule has the nature of a legal presumption, from which flows, for the AT, the right to assess the tax and demand it from those persons, without the need to prove the facts which lead to it, as expressly provided for in no. 1 of article 350 of the Civil Code.

7. The Applicant did not raise, with the Tax Administration, any procedure intended to rebut that presumption, specifically by invoking the special procedure provided for in article 64 of the Code of Tax Procedure and Process. On the other hand, although the vehicles were leased under financial leasing contracts, effect was not given to the provisions of article 19 of the CIUC.

VI - Decision

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

a) To judge the request for arbitral decision well-founded, in what concerns the rebuttal of the presumption of subjective incidence of the IUC, with respect to the vehicles to which the assessments identified in Annex A of the request for arbitral decision pertain, determining their annulment and consequent reimbursement of the amounts unduly paid.

b) To judge the request unfounded in what respects the recognition of the right to compensatory interest in favour of the Applicant.

Value of the case: €4,035.49.

Costs: Under article 22, no. 4, of the RJAT, and in accordance with Table I annexed to the Regulation of Costs in Tax Arbitration Proceedings, I hereby fix the amount of costs at €612.00, at the charge of the respondent (AT).

Lisbon, 26 September 2014,

The Arbitrator, Álvaro Caneira.

[1] See Francisco Rodrigues Pardal, "The Use of Presumptions in Tax Law", in Tax Science and Technique no. 325-327. page 20.

[2] In this sense, see, among others, STA, Decisions of 21.4.2010, 3.11.2010, 2.5.2012 and 6.6.2012, Processes 924/09, 499/10, 895/11 and 903/11, respectively.

[3] See article 3, no. 1 of the Regulation of Municipal Tax on Vehicles, approved by Decree-Law no. 143/78, of 12 June.

[4] Cf. Jorge de Sousa, CPPT, 6th Edition, Áreas Editora. Lisbon, 2011, pages 586 and STA, Decisions of 29.2.2012 and 2.5.2012, Processes 441/11 and 381/12.

[5] See Arbitral Decisions of 19.7.2013, 10.9.2013, 15.10.2013, 5.12.2013 and 14.2.2014, delivered, respectively, in Processes 26/2013-T, 27/2013-T, 14/2013-T, 73/2013-T and 170/2013-T.

[6] See STJ, Decisions of 23.3.2006 and 12.10.2006, Processes 06B722 and 06B2620.

[7] See Opinion of the Tax Studies Centre, ratified by order of the Director-General of Taxes, of 2 January 1992, published in Tax Science and Technique no. 365.

[8] See STA, Decision of 27.10.2004, Process 0810/04, TCAS, Decision of 4.6.2013, Process 6478/13 and TCAN, Decision of 15.11.2013, Process 00201/06.8BEPNF, among others.

[9] See STA, Decisions of 24.4.2002, Process 102/02, 23.10.2002, Process 1152/02, 9.10.2002, Process 871/02, 20.11.2002, Process 1428/02, 14.1.2004, Process 1480/03, among many others.