Summary
Full Decision
ARBITRAL DECISION
I – REPORT
Bank A…, SA, taxpayer number …, with headquarters at …Street, …, LISBON, hereinafter designated as Claimant, filed a request for the constitution of an arbitral tribunal in tax matters and a request for an arbitral ruling, under the provisions of Articles 2(1)(a) and 10(1)(a), both of Decree-Law No. 10/2011, of 20 January (Legal Framework for Tax Arbitration, abbreviated as RJAT), requesting the declaration of illegality of six tax assessment acts for the Single Vehicle Tax (IUC), identified in the Attached Table, which is fully reproduced as Annex A and forms an integral part of this Request, issued by the Tax and Customs Authority, relating to the three motor vehicles identified in Annex A, and relating to the years 2010 to 2012, in the total amount of €205.06, as well as the payment of compensatory interest on the amounts paid.
The request for the constitution of the arbitral tribunal was accepted by the President of CAAD and automatically notified to the Tax and Customs Authority on 10-03-2014.
Pursuant to Articles 5(2)(a), 6(1) and 11(1)(a) of the RJAT, the Deontological Council designated the undersigned as arbitrator of the sole arbitral tribunal, who communicated acceptance of the office within the applicable period.
On 23-04-2014, the parties were duly notified of this designation, and did not manifest any wish to refuse the arbitrator's appointment, in accordance with Articles 11(1)(a) and (b) of the RJAT and Articles 6 and 7 of the Deontological Code.
Thus, in compliance with the provisions of Article 11(1)(c) of the RJAT, the sole arbitral tribunal was constituted on 12-05-2014.
By order of 07-09-2014, the tribunal dispensed with the meeting provided for in Article 18 of the RJAT, as well as final arguments.
The arbitral tribunal has been regularly constituted and is materially competent, in light of the provisions of Articles 2(1)(a) and 30(1) of Decree-Law No. 10/2011, of 20 January.
The parties possess legal personality and legal capacity, are legitimate and are represented (Articles 4 and 10(2) of the same statute and Article 1 of Ordinance No. 112-A/2011, of 22 March).
The proceedings are not affected by nullities and no exceptions were raised.
The allegations supporting the Claimant's request for an arbitral ruling are, in summary, as follows:
Claimant's Allegations
11.1 All of these additional tax assessment acts are based on the same facts and, likewise, on the same legal grounds.
11.2 All presuppose the same tax-legal understanding: that, pending the respective financial leasing contracts, the present Claimant, as lessor of the vehicles in question, is responsible for the payment of IUC, rather than the corresponding lessee.
11.3 Considering this identity of tax facts, of facts and grounds of law and, likewise, of the tribunal competent for the decision, and further considering the high number of vehicles and the volume of documentation necessary to substantiate the facts alleged below, the Claimant opted to, under Articles 3 of the RJAT and 104 of the Code of Tax Procedure and Process, aggregate the additional assessments whose legality is contested in a single request for an arbitral ruling.
11.4 Requesting that the Arbitral Tribunal, under the cited provisions and taking into account the principle of procedural economy, issue, within the scope of the present arbitral proceedings, a judgment on the legality of the six tax assessment acts in question, similarly to what has already occurred in arbitral proceedings Nos. 26/2013-T and 27/2013-T, whose decisions have already become final.
11.5 As a preliminary matter, the Claimant alleges its procedural legitimacy to present the request for an arbitral ruling by transfer of the business unit of B…, SA, branch in Portugal, to the present Claimant, in accordance with supporting documents attached.
11.6 A substantial part of its activity is devoted to the conclusion of – among others – financial leasing contracts intended for the acquisition, by companies and individuals, of motor vehicles.
11.7 These contracts generally follow a common script, specific to this type of financing: the Claimant, after being contacted by the customer – who at this stage has already chosen the type of vehicle it wishes to acquire, its characteristics (brand, model, accessories, etc.) and even its price – acquires the vehicle from the supplier indicated by the customer, and subsequently proceeds to deliver it to the customer who assumes the status of lessee.
11.8 During the period to be stipulated in the contract, this lessee maintains the temporary use of the vehicle – which remains the property of the Claimant – by paying remuneration to the Claimant in the form of rent; and may acquire the vehicle at the end of the contract by payment of a residual value.
11.9 A key point of this type of contracts lies in the fact that, under no circumstance, does the use of the acquired automobile belong to the Claimant: the vehicle which is the subject of the contract remains, throughout the duration of the contract, in the exclusive use of the customer/lessee.
11.10 The motor vehicles identified in the list attached as Annex A were given in financial lease by the Claimant to the customers also identified in column L), see the financial leasing contracts attached as documents Nos. 4 to 6.
11.11 This lease was in effect in the year and month in which the obligation to pay the IUC associated with the respective vehicle became due.
11.12 Legal ownership belonged to the Claimant but the respective use and utilization was exclusively of the lessee.
11.13 The Claimant was notified to proceed with the payment of the IUC to which the tax assessments identified in the attached table as Annex A relate.
11.14 That is, the Tax and Customs Authority came to require payment of the IUC, even knowing that financial leasing contracts were in effect on these motor vehicles, as registered with the Property Registry Office.
11.15 For which reason it is obvious that the Claimant could not be responsible for the payment of the IUC which, nevertheless, it paid, for which reason it requests the respective reimbursement.
11.16 Indeed, the responsibility for payment of the IUC does not fall upon the Claimant because, during the lease contract period, it should be considered a charge on whoever actually uses the vehicle, in accordance with the legal arguments that it develops.
Respondent's Reply
12.1 In its Reply, the Tax and Customs Authority contends that there is an exclusive responsibility of one of the taxable persons, which as a rule will be the owner, by virtue of paragraph 1, except in cases where a financial leasing contract, purchase with reservation of ownership, or long-term lease of the vehicle has been concluded (and registered), in which cases, by virtue of paragraph 2, the taxable person for IUC purposes becomes one of the persons indicated therein, and only that person.
12.2 As regards the value of the motor vehicle registration in determining the taxable person for IUC, the TA contends that the Claimant's allegations: a) constitute a biased reading of the letter of the law; b) do not attend to the systematic element, violating the unity of the regime established in the whole of the IUC and, more broadly in the whole legal-fiscal system; and, finally, c) also result from an interpretation that ignores the ratio of the regime established in paragraph 1 of Article 3 of the CIUC.
12.3 The tax legislator, in establishing in Article 3, paragraph 1, who are the taxable persons for IUC, expressly and intentionally established that these are the owners (or in the situations provided for in paragraph 2, the persons mentioned therein), considering as such the persons in whose names they are registered.
12.4 The legislator did not use the expression "presumed" as it could have done, for example, in the following terms: "the taxable persons for the tax are the owners of the vehicles, presumed as such the natural or legal persons, of public or private law, in whose names they are registered".
12.5 Thus, it is imperative to conclude that the legislator established expressly and intentionally that those (as owners or in the situations provided for in paragraph 2, the persons mentioned therein) are to be considered as such the persons in whose names they (the vehicles) are registered, since this is the interpretation that preserves the unity of the legal system.
12.6 In accordance, this understanding has already been adopted by the Jurisprudence of our courts, quoting, to that end, part of the judgment of the Administrative and Tax Court of Penafiel, delivered in Case No. …OBEPNF. (See Articles 32 and 33 of the Reply).
12.7 As to the systematic element of interpretation, the Respondent alleges that the solution advocated by the Claimant is intolerable, finding no legal support for the understanding sustained by it, as results not only from paragraph 1 of Article 31 but also from the provisions of Article 6(1) when it refers to "as evidenced by the registration or entry".
12.8 Finally, in light of the "ratio", one cannot fail to conclude that the tax legislator intentionally and expressly intended that those registered in the name of (the vehicles) be considered as owners, lessees, purchasers with reservation of ownership, or holders of the purchase option right in long-term leases.
12.9 It further adds that the argumentation put forward by the Claimant represents a violation of the principles of trust and legal certainty, the principle of efficiency of the tax system, and the principle of proportionality.
12.10 It further alleges that, should the Claimant's thesis be accepted, Article 3 of the CIUC should also be read in light of Article 19, which establishes that "for purposes of Article 3 of this Code (…) entities that proceed with financial leasing, operational leasing, or long-term lease of vehicles are obligated to provide to the Directorate-General for Taxes the data relating to the identification of the users of the leased vehicles."
12.11 In the present case, the Claimant failed to prove that it communicated to the TA the identification of the users of the leased vehicles, for which reason the procedural costs of the present proceedings shall be its responsibility, since its omission gave rise to the issuance of assessments to the holder of the property right.
12.12 In the same sense, compensatory interest shall not be due, because, even if it is understood that the tax is not owed, there is no error attributable to the service since the TA merely complied with the norm of paragraph 1 of Article 3 of the CIUC.
12.13 Consequently, the Claimant should be condemned to pay the arbitral costs, in line with the decision on a similar matter within the scope of Case No. 72/2013-T of this Arbitration Center.
All having been considered, it behooves us to render a final decision.
A. FACTUAL MATTERS
A.1. Facts Found to be Proved
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The tax assessment acts that are the subject of the present arbitral request were directed to the company Bank A…, SA, with number …, which, by transfer of the business unit of B…,SA – Branch in Portugal (previously designated C…,SA – Branch in Portugal), Tax Identification Number …, assumed the ownership of the contracts previously concluded by this branch (see Annexes B and C attached to the present arbitral request).
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Thus, the Claimant assumed the position of lessor of all leasing contracts that were in effect in the legal sphere of B…,SA – Branch in Portugal, namely the contracts relating to the vehicles identified in Annex A, whose IUC is the subject of an arbitral ruling.
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The motor vehicles identified in the list attached as Annex A were given in financial lease by the Claimant to the customers also identified in column L), see the financial leasing contracts attached to the arbitral request as documents Nos. 4 to 6.
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These leasing contracts were in effect in the year and month in which the obligation to pay the IUC associated with the respective vehicle became due.
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The Claimant was notified to proceed with the payment of the IUC relating to the tax assessments identified in Annex A of the arbitral request.
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The Claimant proceeded to pay the full amount of the aforesaid IUC tax assessments under the provisions of Decree-Law No. 151-A/2013 – Exceptional Regime for the Regularization of Tax and Social Security Debts, being thereby dispensed from payment of the respective compensatory interest.
A.2. Reasoning
The facts mentioned above are proven by the documents and statements of the parties (not contested or challenged), and no other facts considered relevant to the decision at issue in the present proceedings were proven.
There are no unproven facts relevant to the merits of the case.
B. LAW
In light of the positions of the Parties assumed in the arguments presented, the central question is whether, during the term of a financial leasing contract, the quality of taxable person for IUC is assumed by the owner of the vehicle (lessor entity) or the lessee.
This matter has already been abundantly addressed in Tax Arbitration Case Law. See, by way of example, the various decisions of CAAD published at www.caad.org.pt, namely those delivered in cases Nos. 14/2013, 228/2014, 222/2014, 230/2014, and 230/2014. In the present decision we shall follow the understanding and conclusions of those decisions.
For the sake of synthesis and clarity of thought, we adhere, without reservation, to the framework established in the arbitral decision in the scope of Case No. 230/2014-T, which we cite and to which we refer:
"The general and unanimous sense of such case law is to consider that Article 3(1) of the CIUC establishes a rebuttable presumption of ownership based on the entries or registrations contained in the Motor Vehicle Registry Office and/or in the IMTT database as of the date of the taxable event.
That is: when the IUC is assessed on the basis of the entries in the registry or in harmony with the elements contained in the IMTT databases, the taxable person may discharge themselves from payment by demonstrating the non-correspondence between the reality and those entries and elements on which the Tax Authority relied in proceeding with the assessments.
There are no reasons to reverse or alter the essential sense of this case law.
Let us then examine again, and more closely, the question:
Article 3 of the CIUC (Code of the Single Vehicle Tax) provides:
Article 3
Subjective Scope
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The taxable persons for the tax are the owners of vehicles, considered as such the natural or legal persons, of public or private law, in whose names they are registered.
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Financial lessees, purchasers with reservation of ownership, as well as other holders of purchase option rights are equated to owners by virtue of a leasing contract.
On its part, Article 11(1) of the LGT establishes 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 carrying out of an interpretive activity.
It is thus necessary to consider what the best interpretation of Article 3(1) of the CIUC is, in light, first and foremost, of the literal element, that is, that by which one seeks to detect the legislative thought that is objectified in the norm, to verify whether it encompasses a presumption, or whether it determines, in definitively, that the taxable person for the tax is the owner shown in the registry.
The question that arises is, in the case sub judice, whether the expression "considered as" used by the legislator in the CIUC, instead of the expression "presumed", which was what appeared in the statutes that preceded the CIUC, will have removed the nature of a presumption from the legal provision in question.
In our view, and contrary to what the TA learnedly contends, the answer must necessarily be in the negative, since from the analysis of our legal system it is clear that the two expressions have been used by the legislator with equivalent meaning, whether at the level of rebuttable presumptions or within the framework of irrebuttable presumptions, for which reason nothing enables the extraction of the conclusion sought by the Tax Authority based merely on semantic reasoning.
In fact, this is the case in various legal norms that establish presumptions using the verb "consider", of which the following are indicated, merely by way of example:
~ in the realm of civil law - Article 243(3) of the Civil Code, when it establishes that "any third party who acquired the right after registration of the action for nullification of the contract, where such registration takes place, is always considered to act in bad faith";
~ also in the field of industrial property law the same applies, when Article 59(1) of the Industrial Property Code provides that "(…)inventions for which a patent was applied for within the year following the date the inventor leaves the company are considered made during the performance of the employment contract (…)";
~ and, finally, in the field of tax law, when paragraphs 3 and 4 of Article 89-A of the LGT provide that the burden of proof that the declared income corresponds to reality falls on the taxpayer and that, failing that proof, it is presumed ("considered" in the letter of the Law) that the income is that which results from the table contained in paragraph 4 of the said article.
This conclusion that there is complete equivalence of meaning between the two expressions, which the legislator uses indiscriminately, satisfies the condition established in Article 9(2) of the Civil Code, since the minimum of verbal correspondence for purposes of determining the legislative thought is assured.
It is next important 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 a jurist can devote himself, and demands refined treatment, keen sense, felicitous intuition, much experience, and perfect command not only of the positive material, but also of the spirit of a certain legislation. (…) Interpretation must be objective, balanced, without passion, sometimes bold, but not revolutionary, acute, but always respectful of the law" (See Essay on the Theory of Interpretation of Laws, translation by Manuel de Andrade, (2nd ed.), Aménio Amado, Editor, Coimbra, 1963, p. 129).
As Batista Machado states, "the legal provision presents itself to the jurist as a linguistic statement, as a set of words that constitute a text. To interpret evidently consists in drawing from this text a certain meaning or content of thought.
The text can have multiple meanings (polysemy of the text) and frequently contains ambiguous or obscure expressions. Even when apparently clear upon first reading, its application to concrete cases of life often gives rise to unsuspected and unforeseeable interpretative difficulties. Moreover, although apparently clear in its verbal expression and bearing only one meaning, there remains still the possibility that the verbal expression may have betrayed the legislative thought – a phenomenon more frequent than it would appear upon first glance" (See Introduction to Law and Legitimizing Discourse, pp.175/176).
"The purpose of interpretation is to determine the objective meaning of the law, the vis potestas legis.(…) The law is not what the legislator wished or wished to express, but only that which he 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 architects and drafters of the law, and may lead to unforeseen and unexpected consequences for the legislators. (…) The interpreter must seek not that which the legislator wished, but that which appears objectively intended in the law: the mens legis and not the mens legislatoris (See Francesco Ferrara, Essay, pp. 134/135).
To understand a law "is not merely to grasp mechanically the apparent and immediate meaning 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 contains and to develop it in all its possible directions"(loc. cit., p.128).
With the objective of unveiling the true meaning 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, is subdivided into the rational element (or teleological), the systematic element, and the historical element. (See Baptista Machado, Loc. Cit., p. 181; Oliveira Ascensão, 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 the correct and adequate interpretation of norms.
The text of Article 9(1) of the CC begins by saying that interpretation must not be confined to the letter of the law, but must reconstruct from it the "legislative thought".
Regarding the expression "legislative thought," Batista Machado tells us that Article 9 of the CC "did not take a position in the controversy between subjectivist doctrine and objectivist doctrine. This is evidenced by the fact that it makes reference neither to the 'will of the legislator' nor to the 'will of the law', but rather points as the scope of interpretive activity the discovery of the 'legislative thought' (Article 9, section 1). This expression, purposefully colorless, means exactly that the legislator did not wish to commit itself" (loc. cit., p. 188).
In the same sense P. de Lima and A. Varela pronounce themselves, in annotation to Article 9 of the CC (See Civil Code Annotated – vol. I, Coimbra ed., 1967, p. 16 ).
And as to paragraph 3 of Article 9 of the CC, Batista Machado further states: "(…) this paragraph 3 thus proposes to us a model of ideal legislator that enacted the most correct (more correct, just, or reasonable) solutions and knows how to express itself correctly. This model clearly bears objectivist characteristics, since the concrete legislator (so often incorrect, hasty, unhappy) is not taken as a point of reference, but rather an abstract legislator: wise, foresighted, rational, and just" (Work and loc. cit. p. 189/190).
Immediately thereafter this illustrious Master draws attention to the fact that paragraph 1 of Article 9 refers to three more elements of interpretation: "the unity of the legal system," the "circumstances in which the law was enacted," and the "specific conditions of the time in which it is applied" (loc. cit, p. 190).
Regarding the "circumstances of the time in which the law was enacted," Batista Machado further explains that this expression "represents that which is traditionally called the occasio legis: the conjunctural factors of a political, social, and economic order that determined or motivated the legislative measure in question" (loc. cit., p.190).
Relative to the "specific conditions of the time in which it is applied," this element of interpretation "decidedly has a contemporary connotation (loc. cit., p. 190), which coincides with the opinion expressed by P. de Lima and A. Varela, in 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 axiological or value-based coherence of the legal order" (loc. cit., p. 191).
It is also this author who tells us, regarding 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 meanings that have no support, or at least some correspondence or resonance in the words of the law.
But it equally has a positive function, in the following terms: if the text contains only one meaning, that is the meaning of the norm – with the caveat, however, that it may be concluded on the basis of other norms that the wording of the text has betrayed the thought of the legislator" (loc. cit., p. 182).
Referring to the rational or teleological element, this author states that it consists "in the reason for being of the law (ratio legis), in the end pursued 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 enacted or the political-economic-social conjuncture that motivated the legislative decision (occasio legis) constitutes a subsidy of the greatest importance for determining the meaning of the norm. Suffice it to recall that the clarification of the ratio legis reveals to us the valuation 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).
With respect to the systematic element (context of the law and parallel provisions) which "this element comprises the consideration of other provisions that form the complex of norms of the institute in which the norm to be interpreted is integrated, that is, that regulate the same matter (context of the law), as well as the consideration of legal provisions that regulate parallel normative problems or related institutes (parallel provisions). It also comprises the systematic place that belongs to the norm to be interpreted in the overall legal order, as well as its consonance with the spirit or intrinsic unity of the entire legal system.
This interpretive subsidy is based on the postulate of the intrinsic coherence of the legal order, namely in the fact that the norms contained in a code obey in principle a unitary thought" (Batista Machado, loc.cit., p. 183).
"(…) In particular we must take into consideration the interconnection of the various 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 miscellany of disconnected provisions (Joseph Kohler, cited by Manuel de Andrade, in Essay, p. 27).
Descending to the case before us and to the legal and juridical framework that underlies it:
Through the analysis of the historical element, the conclusion is drawn that, from the entry into force of Decree-Law 59/72, of 30 December, the first to regulate this matter, until Decree-Law No. 116/94, of 3 May, the last to precede the CIUC [see Law No. 22-A/2007, with amendments from Law 67-A/2007 and 3-B/2010], a presumption [emphasis added] was established that the taxable persons for IUC were the persons in whose names the vehicles were registered as of the date of their assessment.
It appears, therefore, that the tax law has always had the objective of taxing the true and actual owner and user of the vehicle, it being immaterial the use of one or another expression which, as we have seen, have a coincident meaning in our legal order.
The same applies when we employ elements of interpretation of a rational or teleological nature.
In fact, the current and new framework of vehicle taxation establishes principles aimed at subjecting the owners of vehicles to bear the costs of damages caused by road accidents and environmental harm caused by these vehicles, as may be gathered from the tenor of Article 1 of the CIUC.
Now the consideration of these principles, namely the principle of equivalence, which deserve constitutional protection and recognition in community law, and are also recognized in other branches of the legal order, determines that the aforesaid costs be borne by the real owners, the causers of the aforesaid harms, which entirely excludes an interpretation aimed at preventing the presumed owners from making proof that they are no longer such because ownership lies in the legal sphere of another.
Thus, also, from the interpretation carried out in light of elements of a rational and teleological nature, considering that which the rationality of the system guarantees and the ends pursued by the new CIUC, it is clear that paragraph 1 of Article 3 of the CIUC establishes 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 of taxing the actual owner-users of the vehicles, for which reason the expression "considered as" is used in the normative provision in question in a sense similar to "presumed," for which reason there is no doubt that a legal presumption is established.
(…)
B – Financial Leasing and the Taxable Person for IUC.
As was seen, the law provides that the taxable persons shall be the owners of the vehicles [Article 3(1) of the CIUC], equating to an owner the financial lessee, the purchaser with reservation of ownership, and other holders of purchase option rights.
Returning to the interpretation of the law and to what has been explained above, recognizing, in particular, that the IUC is an environmental and road tax [see Article 1 of the CIUC, aside from other norms of this compendium from which an equal conclusion emerges, such as, for instance, Article 7 (reference to the level of carbon dioxide emissions) and Articles 9 et seq. (addressing the rates, there is constant reference to the level of carbon dioxide emissions)].
It may, therefore, be concluded that the reference of the tax, the taxpayer's ability to pay, is based on the vehicle and, consequently, on whoever uses it.
And if this is so, it makes no sense to tax the financial lessor – the formal owner of the vehicle or a "quasi-owner" but not its economic owner – and to leave out of such taxation whoever truly acts as owner, using the vehicle as his own property, that is, the financial lessee. It is this person who uses or enjoys the vehicle and all the conveniences (and inconveniences…) that it provides.
Through the analysis of the historical element, the conclusion is drawn that, from the entry into force of Decree-Law 59/72, of 30 December, the first to regulate this matter, until Decree-Law No. 116/94, of 3 May, the last to precede the CIUC [see Law No. 22-A/2007, with amendments from Law 67-A/2007 and 3-B/2010], a presumption [emphasis added] was established that the taxable persons for IUC were the persons in whose names the vehicles were registered as of the date of their assessment.
It appears, therefore, that the tax law has always had the objective of taxing the true and actual owner, user (financial lessee, for example) of the vehicle, it being immaterial the use of one or another expression which, as we have seen, have a coincident meaning in our legal order.
The same applies when we employ elements of interpretation of a rational or teleological nature. In fact, the current and new framework of vehicle taxation establishes principles aimed, as was seen, at subjecting the owners of vehicles to bear the costs of damages caused by road accidents and environmental harm caused by these vehicles, as may be gathered from the tenor of Article 1 of the CIUC.
Now the consideration of these principles, namely the principle of equivalence, which deserve constitutional protection and recognition in community law, and are also recognized in other branches of the legal order, determines that the aforesaid costs be borne by the "real owners" and users of the vehicles, the causers of the aforesaid harms, which entirely excludes an interpretation aimed at preventing the presumed owners from making proof that they are no longer such because ownership lies in the legal sphere of another.
Thus, also, from the interpretation carried out in light of elements of a rational and teleological nature, considering that which the rationality of the system guarantees and the ends pursued by the new CIUC, it is clear that paragraph 1 of Article 3 of the CIUC establishes 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 of taxing the actual owner-users-financial lessees of the vehicles, for which reason the expression "considered as" is used in the normative provision in question in a sense similar to "presumed," for which reason there is no doubt that a legal presumption is established."
We further add that this understanding is confirmed by the provision of Article 19 of the CIUC, which determines that entities that proceed with financial leasing, operational leasing, or long-term lease of vehicles are obligated to provide to the Directorate-General for Taxes the data relating to the tax identification of the users of the leased vehicles. That is, the lessor entity should inform the TA of the conclusion, in this case, of financial leasing contracts so that the latter may proceed with the assessment of the tax to the lessee.
In conclusion, if at the date of the occurrence of the taxable event a financial leasing contract is in effect that has as its object a motor vehicle, the taxable person for IUC is not the lessor but, under paragraph 2 of Article 3 of the CIUC, the lessee, because it is this person who has the use of the vehicle, regardless of whether the registration of the property right remains in the name of the lessor.
In conclusion, the requisites necessary for the granting of the request for annulment of the assessments on the grounds of illegality and error in the factual basis are met.
C. Compensatory Interest
The Claimant proceeded to pay the full amount of the aforesaid IUC assessments, for which reason it seeks the reimbursement of these undue amounts, accrued with compensatory interest, at the legal rate, under Articles 43 of the LGT and 61 of the CPPT.
In the case in question, it is manifest that, following the illegality of the tax assessment acts, there is grounds for reimbursement of the tax, by virtue of the aforesaid Articles 24(1)(b) of the RJAT and 100 of the LGT, since this is essential to "restore the situation that would have existed if the tax act subject to the arbitral decision had not been taken."
With respect to compensatory interest, the Claimant failed to prove that it made the communication referred to in Article 19 of the CIUC, for which reason the TA, with the elements and information it had, proceeded with the assessment of the tax, in accordance with the legal provisions, that is, taxing the Claimant on the basis of the elements it knew, namely the ownership of the property shown in the Motor Vehicle Registry.
Consequently, the Claimant is not entitled to compensatory interest, under Article 43(1) of the LGT and Article 61 of the CPPT.
D. DECISION
For these reasons, it is decided in this Arbitral Tribunal:
a) To grant the request for the declaration of illegality of the IUC assessments;
b) To condemn the Tax and Customs Authority to restitution to the Claimant of the amounts paid;
c) To condemn the Tax and Customs Authority to payment of the costs of the proceedings, in the amount of €306.00.
E. Value of the Proceedings
The value of the proceedings is fixed at €205.06, under Article 97-A(1)(a) of the Code of Tax Procedure and Process, applicable by virtue of Articles 29(1)(a) and (b) of the RJAT and paragraph 2 of Article 3 of the Regulations on Costs in Tax Arbitration Proceedings.
F. Costs
The arbitration fee is fixed at €306.00, under Table I of the Regulations on Costs in Tax Arbitration Proceedings, to be paid by the Respondent, since the request was entirely denied, under Articles 12(2) and 22(4), both of the RJAT, and Article 4(4) of the aforesaid Regulations.
The responsibility for costs falls on the losing party because, contrary to what was alleged, the TA could, within 30 days following the date of receipt of the request for the constitution of the Arbitral Tribunal, have proceeded with the revocation of the identified tax assessment acts (Article 13(1) of the RJAT), all the more so since the Claimant attached, with the presentation of the request, copies of the financial leasing contracts.
Notification shall be made.
Lisbon,
18 March 2015
The Arbitrator
(Amândio Silva)
[1] The genesis of the legal relationship of tax presupposes the cumulative verification of the three requisites necessary for its emergence, namely: the real element, the personal element, and the temporal element. (In this sense, see, among many other authors, Freitas Pereira, M.H., Taxation, 3rd Edition, Almedina, Coimbra, 2009.)
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