Summary
Full Decision
ARBITRAL DECISION
The arbitrators Dr. Fernanda Maçãs (arbitrator chairman), Dr. Nunes Barata and Dr. Fernando Araújo (arbitrators members), appointed by the Ethical Council of the Centre for Administrative Arbitration to form the Arbitral Tribunal, agree as follows:
I – Report
The taxpayer company "A…, S.A. – Branch in Portugal", with TAX ID No. … (hereinafter "Claimant"), presented, on April 9, 2017, a request for constitution of a Collective Arbitral Tribunal, pursuant to the combined provisions of articles 2 and 10 of Decree-Law No. 10/2011, of January 20 (Legal Framework for Arbitration in Tax Matters, hereinafter "RJAT"), in which the Tax and Customs Authority (hereinafter "TA" or "Respondent") is the Respondent.
The Claimant comes to impugn the dispatch of December 20, 2016, from the Large Taxpayers Unit (TA), which rejected the Gracious Complaint duly presented against 488 self-assessments of Single Vehicle Circulation Tax (hereinafter "IUC"), referring to the years 2011 to 2015, in the amount of €65,733.74, requesting the declaration of illegality of the Rejection Dispatch expressed and of the liquidation acts subject to complaint. It requests restitution of the entire IUC paid and compensatory interest. It lists two witnesses.
The request for constitution of the Arbitral Tribunal was accepted by the President of CAAD and automatically notified to the TA on April 26, 2017.
Pursuant to the provisions of subparagraph a) of paragraph 2 of article 6 and subparagraph b) of paragraph 1 of article 11 of the RJAT, with the wording introduced by article 228 of Law No. 66-B/2012, of December 31, the Ethical Council appointed the arbitrators of the Collective Arbitral Tribunal, who communicated acceptance of the assignment within the applicable deadline, and notified the parties of this appointment on June 9, 2017.
To support the claim, the Claimant argues, among other things, that:
The interpretation of art. 3 of the CIUC (Single Vehicle Circulation Tax Code), in the wording applicable to the years 2013 and 2014 (not the wording introduced by Decree-Law No. 41/2016, of August 1, which, entering into force on August 2, 2016, is not retroactively applicable), according to which the passive subjects of tax are the owners and those equated to owners, including buyers with reservation of ownership, must be integrated into a broader interpretation of the "ratio legis," particularly that which is embodied in the "principle of equivalence," established in art. 1 of the CIUC, concluding that, notwithstanding the fact that subjective incidence is provided for on mere holders in whose name the vehicles are registered, the main objective is to focus on the owners who effectively use the vehicles in motor circulation, thereby causing an environmental impact that taxation would aim to "internalize," in accordance with the "polluter-pays" principle.
If this "ratio legis" is accepted, the IUC would focus on the owners who, effectively circulating in traffic, caused negative impacts for which the tax would serve as a counterpart; not on those who, having been temporary holders and intervening in that capacity in the registration of the vehicles, nonetheless did not give them the typical use of "polluting circulation."
That is, the IUC, as a circulation tax, would presuppose the use of vehicles in traffic and the "environmental and road cost" caused by such use; it would thus be a peculiar type of tax, a "contribution for greater expense" (see special contributions in art. 4, 3 of the LGT), based on the principle of "equivalence" or "of benefit," discriminating based on the potential for road and environmental damage of which each type of vehicle is capable (arts. 1 and 7 of the CIUC).
Neither the Claimant, nor even the concessionaries to whom it sells the vehicles, would thus be the typical subjects of a circulation tax, because they are not the ones who actually promote such circulation and cause the effects whose "equivalence" determines the taxation in IUC.
Thus, the Claimant would be a subject of the Vehicle Tax (ISV), but not of the IUC; its subjection to ISV would result directly from arts. 3 and 5 of the CISV, but ISV and IUC are distinct taxes, with different incidence rules.
Furthermore, the invoices of sales to the concessionaries attest that at the time of registration of the vehicles they were no longer the property of the Claimant, but were the property of the concessionaries, who are the ones who sell the vehicles to end users, those who circulate and pollute in traffic.
Even more so, being new vehicles, they are acquired as "new" by the end user precisely because, before this acquisition, there was still no effective circulation – and being so, there is no "equivalence" that can justify the imposition of a tax that focuses on circulation and its road and environmental effects.
Notwithstanding the fact that articles 3, 1 and 2, and 6, 1 of the CIUC establish that the owner who is a passive subject of tax is the one in whose name the vehicle is registered or matriculated, the Claimant points to the fact that the IUC is liquidated, in the year of matriculation, within 30 days following the end of the period required for registration (art. 17 CIUC), and that such registration must be requested within 60 days from the issuance of matriculation (pursuant to art. 42, 1 and 2 of the Motor Vehicle Registration Regulation, approved by Decree-Law No. 55/75, of February 12).
Now, the vehicles were no longer the property of the Claimant as of the dates of their respective matriculations, and, therefore, they were not, after those two periods elapsed, at the time of the liquidation of the IUC – as results from the invoices that prove the sale of these vehicles to the concessionaries, and with respect to which the truth is presumed, pursuant to art. 75, 1 of the LGT, constituting a factual impediment to the right to tax.
On the contrary, and against the presumption of legality of the TA's acts, the Claimant invokes art. 100 of the CPPT (General Tax Code of Procedure), pursuant to which doubts about the existence and quantification of the tax act are resolved in favor of the taxpayer, leading to the annulment of the impugned act.
Therefore, concludes the Claimant, if any indication resulting from the registration or matriculation makes presumption of ownership of the vehicles for purposes of incidence of the tax, this presumption is rebuttable with proof that the registration no longer corresponds to actual ownership, either because the purchase and sale, being merely consensual, already produced its real efficacy, or because registration has merely declarative value, as results from arts. 1 and 29 of Decree-Law No. 54/75, of February 12 (amended by Law No. 39/2008, of August 11), with reference to art. 7 of the Land Registration Code.
The Claimant cites abundant jurisprudence, including arbitral jurisprudence, in support of the understanding that said presumption is rebuttable – corresponding to the general principle established in art. 73 of the LGT.
It also emphasizes that, as recognized in the proposals that led to the CIUC, taxation must focus on the actual ownership of the vehicle, and cannot be held hostage to delays that may occur in regularizing the registration of acquisitions and transfers of vehicles, even due to negligence of those, downstream, who have the duty to promote the change of registrations, creating gaps between the registered situation (of the "registered owner") and the real situation (of the "owner-user") – another reason for being able to challenge the presumption created by registration.
Even more so, adds the Claimant, that not only are the sales to concessionaries officially known to the TA, as are the sales by the concessionaries to end customers, so much so that the income generated was taxed under corporate income tax (IRC) – it is not understood how the same supporting documentation serves to support taxation under IRC but not under IUC.
Therefore, the Claimant alleges that, with this disregard for the search for material truth, the TA violated the inquisitorial principle, pursuant to art. 58 of the LGT.
The Claimant contests the TA's position, that the Gracious Complaint would be untimely in some cases, due to exceeding the 2-year deadline provided in art. 131 of the CPPT for complaints against tax self-assessments.
And it adds that, even if the untimeliness were real, the fact that the self-assessments suffer from error attributable to the TA would impose on it the legal duty to convert the Gracious Complaint into a Request for Official Review, pursuant to arts. 48, 1, 52 and 98, 4 of the CPPT, art. 97, 3 of the LGT, art. 19, 3 of Decree-Law No. 135/99, of April 22, and art. 108, 2 of the CPA (Administrative Procedure Code).
The Claimant also invokes its right to compensatory interest, pursuant to arts. 43 and 100 of the LGT, for having paid the impugned self-assessments and for there having been, in its view, error of fact and law by the TA.
The TA submitted its Reply, on September 12, 2017, together with the Administrative File.
The Respondent defended itself by exception, invoking the untimeliness of the request for arbitral pronouncement.
The Respondent begins by alleging the untimeliness of the Gracious Complaint regarding 113 liquidations, due to exceeding the 120-day deadline (art. 102, 1 of the CPPT, ex vi art. 70, 1 of the CPPT) as of the date of presentation of said Gracious Complaint, maintaining that the Claimant cannot base the timeliness of recourse to the Arbitral Tribunal on an untimely Gracious Complaint.
In the Respondent's view, the untimeliness results from the fact that we are dealing with a liquidation charged by the TA, notwithstanding the reference in art. 16 of the CIUC to "self-assessment" – which would preclude recourse to the procedure provided in art. 131 of the CPPT, determining, in its view, subjection to the deadline for presentation of the Gracious Complaint of 120 days, pursuant to arts. 68, 70 and 102 of the CPPT.
Since these are liquidations referring to the period from 2011 to 2015, when the Gracious Complaint was presented on July 22, 2016, that deadline had already expired with respect to some of these liquidations.
Thus, maintains the Respondent, as to those liquidations, the impugnation would have to be presented 90 days after the date of the end of the IUC voluntary payment period, pursuant to the combined terms of art. 10, 1 of the RJAT and 102, 1 and 2 of the CPPT.
A deadline that had already expired on April 9, 2017, the date of presentation of the request for arbitral pronouncement, generating the peremptory exception of untimeliness and the consequent dismissal of the claim, pursuant to art. 576 of the CPC applicable ex vi art. 29 of the RJAT.
In the defense by impugnation, the Respondent begins by contesting the understanding conveyed by the Claimant, according to which not only would it not be responsible for payment of the IUC by not being a passive subject of the tax, but also would constitute a violation of art. 3, 1 of the CIUC subjection to the tax considering only the request for initial registration and the request for matriculation made by the Claimant, because there exists therein nothing but a rebuttable presumption.
The Respondent recalls that, within the scope of art. 17 of the CIUC, a Vehicle Customs Declaration (DAV) is issued for introduction into consumption and liquidation of tax on vehicles that do not have national registration, with this issuance of the DAV being the tax-triggering event for vehicle tax, pursuant to art. 5 of the Vehicle Tax Code (CISV).
On the other hand, matriculation is requested by the entity that carried out the introduction of the vehicle into consumption (art. 117, 4 of the Road Code), with initial property registration based on the request and proof of tax obligations relating to the vehicle (art. 24, 1 of the Motor Vehicle Registration Regulation [RRA, approved by Decree-Law No. 55/75, of February 12]).
All combined with arts. 3, 1, 6 and 17, 1 of the CIUC, it results that the tax obligation arises from the matriculation or registration of the vehicle in national territory, with the tax focusing subjectively on the owner, who is the person in whose name the vehicle is registered, and the tax having to be liquidated, in the year of registration or matriculation, within 30 days after the end of the period required for registration.
Thus, maintains the Respondent, the initial registration of each vehicle is made in the name of the importing entity, as is the Claimant, this importing entity being the one that appears as the owner of the vehicle – resulting from this that it is the passive subject of the tax, pursuant to art. 24 of the RRA and arts. 3 and 6 of the CIUC.
Contrary to the thesis defended by the Claimant, the Respondent insists that art. 3, 1 of the CIUC does not establish a presumption, merely identifies who the passive subjects of the IUC are, establishing who it focuses on subjectively – which it does expressly and intentionally within its freedom of legislative conformation (as must happen in accordance with the autonomy of concepts proper to Tax Law, and to avoid contra legem interpretations that would shake the unity and security of the tax legal system).
Beyond the absence of presumption (preferring the idea that a "legal fiction" was formed in the law), the Respondent further cites art. 6, 1 of the CIUC, which points to the matriculation or registration of the vehicle as proof of ownership, and recalls that the registrations and certificates accompanying the vehicle contain all the elements necessary to identify the passive subject, without need for reference or access to the contracts that grant or transmit rights over the vehicle.
The Respondent observes that, if this were not the case, the taxation of the tax would install an inadmissible bureaucratic complexity, contrary to legal security and certainty, and associated with the need to identify, through underlying contractual relationships, any dissonances regarding the situation described in the registrations – even when these dissonances result from the negligence of individuals in updating, which is their responsibility, the registrations.
This would create a situation that, in summary, would render the very registration useless.
The Respondent further calls attention to the teleological element of the normative framework, namely the intention of the new regime established in the CIUC to tax the owners of vehicles listed in the property registration, regardless of the actual circulation of these vehicles on public roads – effectively transforming a taxation on circulation into a taxation on mere ownership of vehicles.
For the hypothesis of considering that there is only, with the reference to the registrations, a rebuttable presumption, the Claimant questions next in what terms proof likely to generate such rebuttal will be accepted, maintaining that the documents produced by the Claimant do not prove a purchase and sale to the concessionaries, since they are mere invoices, unilateral documents and silent as to the matriculation of the vehicles, and also contain a reservation of ownership clause that leaves unproved whether the transfer of ownership ultimately occurred or not.
Even more so, those invoices would not even be suitable for alteration of the vehicle property registration, not being even admitted for purposes of that registration; so that, by greater reason, they do not serve to rebut the presumption generated by the registration – if presumption is what it is. It may even be, the Respondent concedes, that the invoices prove the repercussion of the tax to the concessionaries; but this repercussion has nothing to do with the transmission of the ownership of the vehicles, and can occur independently of it.
Thus, argues the Respondent, if the understanding pursued by the Claimant were to subsist, even the presumptions that it admits exist would be useless, since they would not dispense the TA from making the specified proof, case by case, as to the actual ownership and use of the vehicles.
Regarding the compensatory interest claimed by the Claimant, the Respondent begins by recalling that it does not fall to it to manage motor vehicle registration, nor does it exercise any control (due to the absence of any declarative obligation) over the transmission of ownership of the vehicles. Thus, the liquidation of IUC is based on information that is not generated by the Respondent herself.
Therefore, if there are dissonances regarding the situation described in the registrations, these dissonances must be attributed to the negligence of individuals in updating, which is their responsibility, the registrations (art. 5, 1, a) of Decree-Law No. 54/75, of February 12, and art. 118, 4 of the Road Code).
Being so, concludes the Respondent, there is no place for compensatory interest, and the very costs must be paid by the Claimant (pursuant to art. 527, 1 of the CPC ex vi art. 29, 1, e) of the RJAT), since it is from the untimely non-compliance with registration rules that the situation resulting in this arbitral process arose.
Specifically regarding the testimonial evidence produced in Cases No. 206/2017-T and 209/2017-T, the Respondent adds that, in its view, it attests that the Claimant was, on the relevant dates, the owner of the vehicles, and therefore responsible for payment of the IUC.
Next, it maintains that the Claimant is the one who requests the registration and matriculation of the vehicles, appearing as the owner for all purposes of subjective incidence of the IUC – an incidence that, in its view, is not based on a presumption, as results from the reading of arts. 3, 1 and 6, 1 of the CIUC.
In its Request of September 26, 2017, the Claimant contests the matter of exception raised by the Respondent, insisting that the Gracious Complaint was presented against IUC self-assessments within the two-year deadline set forth in art. 131, 1 of the CPPT – defending that it is true self-assessments that are at issue, pursuant to arts. 16 to 18 of the CIUC.
The Arbitral Dispatch of October 2, 2017 (supplemented by the Arbitral Dispatch of October 3, 2017) dispensed with the meeting provided for in art. 18 of the RJAT and set a date for the hearing.
The Claimant submitted on October 9, 2017 a Request in which it requests the rescheduling of the date of the hearing, with the Respondent submitting, on October 10, 2017, a request to the same effect.
The Arbitral Dispatch, of October 12, 2017, in response to those two Requests, set a new date for the hearing.
The Respondent submitted, on October 17, 2017, a request in which it requests the use, in the present proceeding, of the evidence produced in Case No. 209/2017-T, as it is the same matter and the same witnesses.
The Arbitral Dispatch, of October 17, 2017, requested of the Respondent the verification of the identity of parties, facts and witnesses between the present proceeding and Case No. 209/2017-T, notifying the Claimant to comment.
The Respondent submitted, on October 20, 2017, a request requesting the annexation to the proceeding of documentation referring to Case No. 209/2017-T, which in its view proves the identities between the two cases and, on October 25, 2017, a request requesting the annexation to the proceeding of documentation in computer format relating to the examination of witnesses in Case No. 209/2017-T.
The Arbitral Dispatch, of October 25, 2017, granted this Request, after which a copy in computer format of the recording of the witness examination that took place in Case No. 209/2017-T was sent to the Parties and the Tribunal.
The Claimant submitted, on October 30, 2017, a request in which not only does it not oppose the annexation to the proceeding of the evidence produced in Case No. 209/2017-T, but also requests that the same happen, for the same reasons, with the evidence produced in Case No. 206/2017-T – while at the same time waiving the hearing of one of the witnesses it listed.
The Respondent submitted, on November 3, 2017, a request in which it manifests its non-opposition to the annexation to the proceeding of the documentation relating to Case No. 206/2017-T, on the condition that it be used cumulatively with the documentation relating to Case No. 209/2017-T.
The Arbitral Dispatch, of November 5, 2017, admitted the annexation to the proceeding of the requested documentation, relating to both Case No. 209/2017-T and Case No. 206/2017-T, after which the documentation relating to Case No. 206/2017-T was sent to the Parties and the Tribunal, namely the record and the copy in computer format of the recording corresponding to the witness examination that took place in that Case.
In the same Arbitral Dispatch, the previously scheduled hearing was cancelled, the Parties were notified for arguments, and December 27, 2017 was set as the deadline for delivery and notification of the arbitral decision. This deadline was extended, to February 27, 2018, by dispatch of December 22, 2017.
The parties submitted written arguments, retaking, in essence, the arguments already made in the previous procedural pleadings.
II. Procedural Sanation
The Collective Arbitral Tribunal was constituted on June 27, 2017; it was constituted regularly and is materially competent, in light of the provisions of arts. 2, paragraph 1, subparagraph a), 5, 6, paragraph 1, and 11, paragraph 1, of the RJAT (with the wording introduced by art. 228 of Law No. 66-B/2012, of December 31).
The Parties have legal personality, legal capacity and standing, pursuant to arts. 4 and 10, paragraph 2, of the RJAT and art. 1 of Ordinance No. 112-A/2011, of March 22.
The TA proceeded with the appointment of its representatives in the proceeding and the Claimant attached a power of attorney, with the Parties thus being properly represented.
The exception relating to the untimeliness of the request for arbitral pronouncement was raised, which will be considered after the factual basis taken as proven is established.
The proceeding does not suffer from any nullities that would prevent consideration of the merits of the case, with the conditions being met for a final decision to be rendered.
III. On the Merits
III.1. Of the Factual Matters
§1. Facts considered proven and with relevance for the decision
The Claimant is the exclusive importing company of all motor vehicles of brand B… for the Portuguese market;
The import needs for the vehicles result from orders placed directly by the concessionaries to the Claimant which, in turn, places the order with C…– the latter being which, in turn, places the production order at the factory, the Claimant importing only new vehicles;
Upon arrival in Portugal, the vehicles are immediately invoiced by the Claimant to the concessionaries and immediately delivered at their facilities, except for the vehicles destined for Madeira and the Azores which are deposited in the warehouse of a logistics company;
Once the vehicles are imported, the official representative associated requests, in the name of the Claimant, the assignment of matriculations to the vehicles;
When the vehicles are sent from the concessionaries to customers, the change of registration of the owner to the name of the end customer is made;
The motor vehicles were registered in the Motor Vehicle Registry Office in the name of the Claimant (PA);
As of the date of the request for matriculations, the vehicles in question had already been invoiced/sold by the Claimant to the concessionaries;
The invoices are silent as to the individual matriculation of each vehicle, since they precede the request for matriculation itself, but contain identifying data for each vehicle (chassis number, engine number);
The Claimant is a passive subject of the Vehicle Tax (hereinafter "ISV"), as a "registered operator" responsible for the introduction of the vehicles into consumption, with the Vehicle Customs Declarations (DAV) or Supplementary Vehicle Declarations (DCV) being issued in its name, which the Claimant then debits to the concessionaries;
On February 22, 2015, notifications were sent to the Claimant for prior hearing, within the scope of 488 official IUC liquidations, including compensatory interest, relating to the years 2011 to 2015, which identified the vehicles on which the liquidations focused and which were registered in the Motor Vehicle Registry Office in the name of the Claimant (see doc 4 attached by the Claimant);
These notifications contain, in relation to each vehicle, among other things, the deadline within which the respective tax had not been paid, indicating that, if the Claimant wished to regularize the situation, by proceeding to the liquidation of the missing tax, it could do so through the tax authority portal;
The Claimant retrieved the collection documents via internet from the tax authority portal for IUC payment, having on February 16, 2015 paid the liquidated IUC, in the total amount of €65,733.74, including compensatory interest (doc 3 attached by the Claimant);
The Claimant presented, on July 22, 2016, a Gracious Complaint (No. …2016…) against IUC self-assessments from 2011, 2012, 2013, 2014, and 2015, of the vehicles identified by their respective matriculation number, in the summary table it attached (PA);
In that Complaint, the Claimant argues, among other things, that, with a view to obtaining certificates of non-indebtedness to the State and Social Security, it has been liquidating the debts it allegedly had regarding IUC (point 4);
The Complaint was the subject of analysis, through Information No. …APT/2016, which contains in an annex the list of vehicles with missing IUC, with 113 liquidations relating to the vehicles marked with an asterisk, in the "untimely" field, in the table (pages 29 to 39 of the PA), which is given, for due purposes, as fully reproduced;
Regarding these 113 liquidations relating to vehicles marked with an asterisk, in addition to substantive reasons, the referred information proposes rejection of the complaint due to untimeliness, in accordance with the provisions of article 131 of the CPPT (doc 2 attached by the Claimant);
Following this Information, a draft rejection decision was presented to the Claimant on November 29, 2016, for purposes of possible exercise of the right to be heard;
After the period for hearing expired, Information No. …-APT/2016 was produced in which the conversion of the draft decision into definitive is proposed, with the Gracious Complaint subsequently being rejected in its entirety, by Dispatch of December 20, 2016, from the Large Taxpayers Unit – TA (doc 1 attached by the Claimant);
The Claimant presented its request for arbitral pronouncement on April 9, 2017.
§2. Facts considered not proven
There are no facts given as not proven with relevance for consideration of the claim.
§3. Reasoning of the factual matters proven and not proven
The position taken by the parties was taken into account, in light of article 110, paragraph 7 of the CPPT, the documentary evidence and the PA attached to the proceeding. Also taken into account was the use of the evidence produced in a hearing, on September 5, 2017, in case No. 209/2017-T, and in case No. 206/2017, in particular the testimony of witness D…, who appeared to testify with impartiality and with knowledge of the facts on which he commented.
III.2. Matters of Law
III.2.1. Preliminary question of untimeliness of the arbitral request
As was said, in the defense, the Respondent alleged the untimeliness of the Gracious Complaint with respect to 113 liquidations, due to exceeding the 120-day deadline as of the date of presentation of said Gracious Complaint, maintaining that the Claimant cannot base the timeliness of recourse to the Arbitral Tribunal on an untimely Gracious Complaint.
In the Respondent's view, the untimeliness results from the fact that we are dealing with a liquidation charged by the TA, notwithstanding the reference in art. 16 of the CIUC to "self-assessment" – which would preclude recourse to the procedure provided in art. 131 of the CPPT, determining, in its view, subjection to the deadline for presentation of the Gracious Complaint of 120 days, pursuant to arts. 68, 70 and 102 of the CPPT.
A deadline that would already be exhausted on April 9, 2017, the date of presentation of the request for arbitral pronouncement, generating the peremptory exception of untimeliness and the consequent dismissal of the claim, pursuant to art. 576 of the CPC applicable ex vi art. 29 of the RJAT.
In opposition, the Claimant argues, among other things, that the gracious complaint was presented against the IUC self-assessments, within the two-year deadline set forth in article 131 of the CPPT. In the Claimant's view, it was the Claimant itself that liquidated and paid the IUC, thus being self-assessments, as results from arts. 16 to 18 of the CIUC.
Let us see.
It is important to emphasize that the litigation regime provided for in the RJAT is merely one of legality, aiming only at the declaration of illegality of acts of the types provided for in subparagraphs a) and b) of paragraph 1 of its article 2. For this reason, the legality of the impugned acts must be assessed as they were practiced, with the reasoning used in them, with other possible justifications that could support other acts, of decisional content totally or partially coincident with the act practiced, being irrelevant. Thus, justifications invoked after the fact, after the end of the tax procedure in which the act whose declaration of illegality is sought was practiced, are irrelevant, including those advanced in the judicial proceeding.
In the case at hand, the immediate object of the arbitral request is the dispatch rejecting the gracious complaint (and the mediate object are the acts of "self-assessment"), and to assess its legality we must adhere to the grounds on which that dispatch was based.
The said dispatch was based, in particular, on Information No. …-APT/2016, where it can be read, regarding the object of the complaint request, that the "(…) Complainant requests, in the affirmative, the reimbursement of the amounts paid in the meantime, embodied in the collection documents identified in the annex, as well as annulment of the corresponding liquidations of compensatory interest, plus compensatory interest."
As to the procedural prerequisites, it can be read in the said information that "the gracious procedure is the proper means to react against the tax acts of "liquidation" in question, pursuant to the provisions of articles 68 and 131 of the CPPT, combined with art. 16 of the CIUC."
Further on it concludes that "this gracious request, presented on June 22, 2016 is, in fact, timely, for some vehicles, and untimely for others, according to the annexed table. For those vehicles in which the request is timely, the same was presented within a deadline consistent with that established in art. 131 of the CPPT."
Therefore, although the said information had not expressly assumed that these were self-assessments, referring only to tax acts of "liquidation," the truth is that the express reference, and acceptance of the deadline established in article 131 of the CPPT, point to that.
Thus, it is only important to ascertain whether the initial term of the two-year deadline begins, as the Claimant argues, with the obtaining of collection documents via the internet, from the tax authority portal, with a view to their payment (operation which the Claimant classifies as "self-assessment") or with the end of the IUC voluntary payment period.
As is known, the jurisprudence of the CAAD is divided as to whether the "liquidation" of the IUC falls within the typology of self-assessment (a circumstance not unrelated to the fact that the legislator has not drawn all the legal consequences, namely as to the nature of the liquidation, in transforming the tax in question, which was an indirect tax, into a direct tax).
In the Arbitral Decision relating to Case No. 116/2014-T it was established, among other things, that: "The answer does not appear univocal, since if from articles 16 and 17 of the CIUC it seems to result in an affirmative conclusion, it must be said, in light of the first normative – and making use of the way in which, in practice, the "liquidation" and obtaining of the unique collection document proceeds –, it is possible to argue that it is an administrative liquidation. And, note it, the existence of learned doctrine is not ignored which, in this regard, understands that we are dealing with self-assessment whenever this takes place via the internet. (…) as BRÁS CARLOS refers, in cases of self-assessment "it is the law that imposes that the liquidation of the tax be made by the taxpayers themselves. This happens, in particular, in the case of IVA and corporate income tax."
"It happens, however, that unlike what happens in the case of corporate income tax – where it is determined that the competence for liquidation is attributed to the passive subject himself, through the submission of the income declaration within the deadlines provided in articles 120 and 122 of the Corporate Income Tax Code, and is based on the taxable income contained therein –, within the scope of the IUC the law expressly attributes the competence for the liquidation of the tax to the Tax Authority (cf. paragraph 1 of article 16 of the CIUC).
"Thus, it can and should be said that, in the case of corporate income tax, the "passive subject, in their respective declarations, applies the law to their specific case, determines their taxable income and the value of the tax owed," the same cannot be done with respect to the IUC, because here the passive subject has no influence on the determination of the taxable matter and the determination of the value of the tax. And let it not be said that such operations can be assimilated to the behavior of the passive subject who, through their reserved area in the tax authority portal, "liquidates" and issues the unique collection document relating to the IUC.
"With effect, in this case, the passive subject, expressing its agreement with the taxable parameters previously and automatically inserted in the motor vehicle registry, executes a mere material act conducive to obtaining the UCD; and not concrete operations of determination of the taxable matter and application of the rate to that with a view to determining the collection. Furthermore, within the scope of the IUC, and unlike what happens in true self-assessment procedures, the passive subject does not proceed with the submission of any tax declaration.
"We believe, for the above reasons, that within the scope of the Single Vehicle Circulation Tax we do not find a true self-assessment, but rather an administrative liquidation stimulated by the passive subject. With effect, being certain that the taxpayer takes part in the process of liquidation/issuance of the UCD, triggering it, such participation does not assume the significant character found, for example, within the scope of corporate income tax or IVA, and therefore should not speak of self-assessment in the strict sense."
Considering the above, even admitting that the behavior of the passive subject when accessing, through their reserved area, the tax authority portal with a view to obtaining the unique collection document relating to the IUC, could be assimilated to a "self-assessment," the truth is that this thesis encounters an insurmountable obstacle as to the date to be considered for purposes of setting the initial term for the counting of the deadline for gracious complaint or other means of administrative or judicial impugnation.
With effect, article 131 of the CPPT states that "In case of error in the self-assessment, impugnation shall necessarily be preceded by a gracious complaint directed to the head of the regional peripheral body of the tax administration, within a period of two years, after the submission of the declaration."
Since the passive subject, within the scope of the IUC, is not obliged to submit any tax declaration, within a specific legal deadline, as happens, for example, with corporate income tax, it is not possible to extract from the law a secure and certain initial term, for the counting of deadlines for administrative impugnations or access to judicial remedies.
Thus, it appears that, whichever thesis is chosen, the secure criterion for fixing the initial term of the deadline under analysis cannot fail to be the end of the voluntary payment period (more properly in the thirty days after issuance of the respective collection note) which, in this case, is established either in the liquidation notes for prior hearing, attached to the proceeding, or in the collection notes that the Claimant retrieved from the Internet.
Otherwise, and following the Claimant's thesis, the initial term would, thus, be dependent on the initiative of the passive subjects, who would proceed to fix, according to their judgment, the beginning of said deadlines.
This orientation would, from the start, create arbitrary situations, by placing compliant passive subjects at a disadvantage regarding the counting of the deadlines for defense of their rights, with serious violation of the principle of equality. On the other hand, it would entail unsustainable consequences in light, among others, of the principles of legality (which reserves to the legislator the fixing of the deadlines and initial terms thereof), as well as those of certainty and security of the law.
From the analysis of the collection documents retrieved by the Claimant from the Internet that served as the basis for the payment of the tax, as well as the document annexed to Information No. …-APT/2016, regarding the liquidations marked in the field "untimely in the table on pages 29 to 39" of the PA, the end of the most recent voluntary payment period relating to the 113 IUC liquidations considered untimely occurred, regarding the majority of vehicles, in 2013 and, regarding some, in the first quarter of 2014.
Thus, even taking into account the two-year deadline, when the Gracious Complaint was presented on July 22, 2016, that deadline had already expired, as results from the said Information (No. …-APT/2016), which served as the basis for the dispatch rejecting the gracious complaint. As results from the facts proven, this information contains in an annex a table with the list of vehicles with missing IUC, with marked with an asterisk the vehicles with respect to which the complaint is untimely (see point 15).
Consequently, the deadline for recourse to the arbitral route regarding those 113 "liquidations" had also already expired on April 9, 2017, the date of presentation of this request, generating the peremptory exception of untimeliness and the consequent dismissal of the claim, pursuant to art. 576 of the CPC applicable ex vi art. 29 of the RJAT.
Finally, the Claimant argues that if the gracious complaint were to be considered untimely, it should have been "converted by the TA into a request for official review, pursuant to article 78 of the LGT, given that the self-assessments in question suffer from error attributable to the TA."
First, it is true that, both in art. 52 and in art. 98, paragraph 4, both of the CPPT, conversion is mentioned, but in cases of error, respectively in the form of the procedure and of the process. Which is manifestly not the case.
On the other hand, it should be emphasized that we are dealing with procedural means that rest on very different premises, and the Claimant does not substantiate what the alleged error attributable to the Respondent consists of.
Thus, the Respondent was not obliged to convert the gracious complaint into a request for official review.
Wherefore, for the reasons stated, the exception raised by the Respondent is well-founded.
III.2.2. Questions to be considered
The central legal question raised by the Claimant revolves around ascertaining the terms of the configuration of the subjective incidence of the IUC in light of the provisions of article 3 of the Single Vehicle Circulation Tax Code (CIUC), namely, the question of whether the subjective incidence rests strictly on the inscription of the ownership of the vehicle in the Motor Vehicle Registry, or whether, conversely, the registry operates only as a presumption of tax incidence, rebuttable, in conformity with the provisions of art. 73 of the General Tax Law. In connection with this is the question of whether, if it is a mere presumption, how can it be rebutted by the passive subject, to whom the burden of proof falls. On this matter there is already abundant and quite defined arbitral jurisprudence expressed in various arbitral decisions.
It should also be noted that, given the merit of the exception raised, the analysis of the claim is henceforth confined to the "liquidations" that were subject to timely complaint and impugnation.
A final question, raised by the Claimant, relates to the right to compensatory interest.
Let us see.
As to the illegality of the IUC liquidations
As to subjective incidence:
It should be stated in advance that the majority arbitral tax jurisprudence on this matter is followed essentially [Cf, in particular, decisions rendered in CAAD cases No. 14/2013, 26/2013, 27/2013, 73/2013, 170/2013, 154/2014, 212/2014 and, more recently, in cases No. 539/2016-T, 580/2016-T, 623/2016-T, 109/2017-T; 145/2017-T, 185/2017-T, all published at www.caad.org.pt].
More specifically, we proceed to reproduce what was established in the Arbitral Decision rendered in Case No. 209/2017-T, since there is identity as to the question of fact and law.
"On this question article 3 of the CIUC (Single Vehicle Circulation Tax Code) provides as follows:
"Article 3
Subjective incidence
1 – The passive subjects of the tax are the owners of the vehicles, being considered as such the natural or legal persons, of public or private law, in whose name the same are registered.
2 – Financial lessees, buyers with reservation of ownership, as well as other holders of purchase option rights by virtue of the lease contract are equated to owners."
As to the interpretation of the legal-tax norm, paragraph 1 of article 11 of the LGT establishes that "in determining the sense 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."
In this conformity, promoting the necessary interpretive activity of the norms in question, there must be a scrutiny of the best interpretation of art. 3, paragraph 1 of the CIUC, in light of the fundamental hermeneutic principles. Thus, and first of all, attention should be paid to the literal element, that is, the one in which it seeks to detect the legislative thought that is objectified in the norm, to verify whether it contemplates a presumption, or whether it determines, definitively, that the passive subject of the tax is the owner who appears in the registry.
The question that arises is whether the expression "considerando-se" (being considered as) used by the legislator in the CIUC, instead of the expression "presumindo-se" (presumed to be), which was what appeared in the diplomas that preceded the CIUC, will have removed the nature of "presumption" from the legal provision in question.
Contrary to what the TA argues, the answer must necessarily be negative, since from the analysis of our legal order it is clearly extracted 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, such that nothing enables the conclusion sought by the Tax Authority for a mere semantic reason.
In truth, this happens in various legal norms that establish presumptions using the verb "consider," of which the following are indicated, merely by way of example:
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within the scope of civil law - paragraph 3 of art. 243 of the Civil Code, when it establishes that "the third party who acquired the right after the registration of the action of simulation is always considered in bad faith, when it has taken place";
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also within the scope of industrial property law the same occurs, when art. 59, paragraph 1 of the Code of Industrial Property provides that "(…) inventions whose patent has been requested during the year following the date on which the inventor leaves the company, are considered to have been made during the execution of the employment contract (…)";
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and, also still, within the scope of tax law, when paragraphs 3 and 4 of art. 89-A of the LGT provide that it is the responsibility of the taxpayer to bear the burden of proof that the declared income corresponds to reality, and, if such proof is not made, it is presumed ("is considered," in the letter of the Law) that the income is what results from the table contained in paragraph 4 of the said article.
This conclusion that there is total equivalence of meanings between the two expressions, which the legislator uses indifferently, satisfies the condition established in art. 9, paragraph 2 of the Civil Code, since the minimum correspondence of verbal expression is ensured for purposes of determining the legislative thought.
Moreover, on this question there is already abundant arbitral jurisprudence, accompanied by the jurisprudence of our superior Courts.
It is, thus, a presumption.
Furthermore, this conclusion is equally reinforced when the other elements of interpretation are revisited, that is, the historical element, the rational or teleological element and the one of a systematic order.
Discussing the interpretive activity, FRANCESCO FERRARA says that this "is the most difficult and delicate operation to which the jurist can devote himself, and requires fine handling, sharp sense, happy 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, bold at times, but not revolutionary, keen, but always respectful of the law" (Cf. Essay on the Theory of Interpretation of Laws, translation by MANUEL DE ANDRADE, (2nd ed.), Arménio Amado, Editor, Coimbra, 1963, p. 129).
As BAPTISTA MACHADO refers, "the legal provision presents itself to the jurist as a linguistic statement, as a set of words that constitute a text. Interpreting consists obviously in extracting from that text a certain meaning or content of thought.
The text carries multiple meanings (polysemy of the text) and frequently contains ambiguous or obscure expressions. Even when apparently clear on first reading, its application to concrete cases of life frequently raises unforeseen and unpredictable interpretation difficulties. Beyond which, even though apparently clear in its verbal expression and carrying only one meaning, there is still the possibility of the verbal expression having betrayed the legislative thought – a phenomenon more frequent than might appear at first sight" (Cf. Introduction to Law and to 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 wanted or wanted to express, but only what 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 consequences unexpected and unforeseen to the legislators. (…) The interpreter must seek not what the legislator wanted, but what appears objectively wanted in the law: the mens legis and not the mens legislatoris (Cf. FRANCESCO FERRARA, Essay, pp. 134/135).
Understanding a law "is not only mechanically grasping the apparent and immediate meaning that results from the verbal connection; it is investigating in depth the legislative thought, descending from the verbal surface to the intimate concept that the text contains and developing 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 the interpretive factors which are essentially the grammatical element (the text, or the "letter of the law") and the logical element, which, in turn, subdivides into the rational (or teleological) element, systematic element and historical element. (Cf. BAPTISTA MACHADO, loc. cit., p. 181; J. 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 the norms.
The text of paragraph 1 of article 9 of the CC begins by saying that interpretation should not be confined to the letter of the law, but should reconstruct, from it, the "legislative thought."
On the expression "legislative thought," BAPTISTA MACHADO tells us that article 9 of the CC "did not take a position in the controversy between the subjectivist doctrine and the objectivist doctrine. It proves it from the fact that it does not refer, neither to the "will of the legislator" nor to the "will of the law," but rather points as the scope of the interpretive activity to the discovery of the "legislative thought" (article 9, paragraph 1). This expression, purposefully colorless, means exactly that the legislator did not want to commit itself" (loc. cit., p. 188).
In the same sense PIRES DE LIMA and ANTUNES VARELA are pronounced in a note to article 9 of the CC (Cf. Annotated Civil Code – vol. I, Coimbra ed., 1967, p. 16). On paragraph 3 of article 9 of the CC that author states: "(...) this paragraph 3 thus proposes to us a model of ideal legislator who has established the most correct (most correct, fair or reasonable) solutions and knows how to express itself correctly. This model clearly displays objectivist characteristics, since the concrete legislator is not taken as a point of reference (often incorrect, hasty, unfortunate) but an abstract legislator: wise, foresighted, rational and just(...)" (loc. cit. p. 189/190).
Immediately after this distinguished Professor calls 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 elaborated," and the "conditions specific to the time in which it is applied" (loc. cit, p. 190).
As to the "circumstances of the time in which the law was elaborated," BAPTISTA MACHADO explains that this expression "(...)represents what has been 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).
Regarding the "conditions specific to the time in which it is applied," this author says that this element of interpretation "has decidedly an actualist connotation (loc. cit., p. 190) in which it coincides with the opinion expressed by PIRES DE LIMA and ANTUNES VARELA in the notes 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 on us by the principle of valuative or axiological 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 start a negative function: to eliminate those meanings that have no support, or at least some correspondence or resonance in the words of the law.
But it also has a positive function, in the following terms: if the text carries only one meaning, it is that meaning of the norm – with the caveat, however, that one can conclude based on other norms that the wording of the text betrayed the thought of the legislator" (loc. cit., p. 182).
Referring to the rational or teleological element, this author says that it consists "in the reason for being of the law (ratio legis), in the purpose sought by the legislator in elaborating the norm. The knowledge of this purpose, especially when accompanied by the knowledge of the circumstances (political, social, economic, moral, etc.,) in which the norm was elaborated or of the political-economic-social conjuncture that motivated the legislative decision (occasio legis) constitutes a subsidy of the greatest importance to determine the meaning of the norm. It is enough to remember that the clarification of the ratio legis reveals to us the assessment or weighing of the various interests that the norm regulates and, therefore, the relative weight of those interests, the choice among them expressed by the solution that the norm expresses" (loc. cit., pp. 182/183).
It is still BAPTISTA MACHADO who tells us, now with respect to the systematic element (context of the law and parallel places) that "(...)this element comprises the consideration of the 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 kindred institutes (parallel places). It also comprises the systematic place that belongs to the norm to be interpreted in the global order, as well as its consonance with the spirit or intrinsic unity of the entire legal order.
This interpretive subsidy rests on the postulate of the intrinsic coherence of the order, namely on the fact that the norms contained in a codification obey in principle a unitary thought(...)" (loc.cit., p. 183).
As JOSEF KOHLER teaches, cited by MANUEL DE ANDRADE "(…) in particular we must take into account the concatenation of the various laws of the country, because a fundamental requirement of all sound legislation is that the laws adjust themselves to each other and do not result in a congeries of disconnected provisions (...)" (Essay, p. 27).
In summary, through the analysis of the historical element, it is concluded that, from the entry into force of Decree-Law 59/72, of December 30, the first to regulate the matter, until Decree-Law No. 116/94, of May 3, the last to precede the CIUC [cf Law No. 22-A/2007, as amended by Law 67-A/2007 and 3-B/2010], the presumption was established that the passive subjects of the IUC are the persons in whose name the vehicles were registered as of the date of their liquidation.
It is noted that tax law has always had, for the case that now interests us, the objective of taxing the true and effective owner and user of the vehicle, by virtue of the principle of equivalence underlying the IUC. Thus, the legislator, in adopting the principle of equivalence, chose to burden the subject using the vehicle in the measure of the cost caused due to the negative externalities caused by motorized vehicles. In the letter of the law only the presumption is established that the owner listed in the Motor Vehicle Registry coincides also with its user and that the registry evidences the reality affecting the use of the vehicle. This policy choice of extra-fiscal nature also justifies the solution set forth in paragraph 2 of article 3 of the CIUC regarding lessees, chosen by the legislator as the subjects burdened with the payment of the tax even during the term of a lease contract from which may not necessarily result the acquisition of ownership of the vehicle. With effect, the current and new framework of motor vehicle taxation establishes principles that aim to subject vehicle owners to bearing the costs of damages caused by road and environmental damage caused by these, as is achieved from the content of article 1 of the CIUC.
The consideration of these principles, in particular, the principle of equivalence, which deserve constitutional protection and establishment in community law, and are also recognized in other branches of the legal order, determines that the aforementioned costs be borne by the real owners, the causers of the said damages, which completely excludes an interpretation that aimed to prevent the presumed owners from proving that they are no longer so because the ownership is in the legal sphere of another.
Thus, also, from the interpretation made in light of the elements of a rational and teleological nature, attentive to what the rationality of the system guarantees and the purposes aimed at by the new CIUC, it is clear that paragraph 1 of article 3 of the CIUC establishes a rebuttable legal presumption.
Therefore, also the interpretation of a rational or teleological nature conducts us to an identical conclusion.
In light of the above, it is important to conclude that the ratio legis of the tax points in the direction of taxing the effective owner-users of the vehicles, so that the expression "considerando-se" is used in the normative in question in a sense similar to "presumindo-se," for which reason there is no doubt that a legal presumption is established.
Finally, but with enormous acuity for the case at hand, article 73 of the LGT establishes that "(…) the presumptions established in the norms of tax incidence always admit proof to the contrary, so that they are rebuttable (…)."
Thus, establishing article 3, paragraph 1 of the CIUC a rebuttable presumption, the person inscribed in the registry as the owner of the vehicle and who, for that reason was considered by the Tax Authority as a passive subject of the tax, can present elements of proof aiming to demonstrate that the holder of the ownership, on the date of the tax event, is another person, to whom the ownership was transferred.
As to the burden of proof and the suitable means of proof to rebut the presumption
The second question that is important to analyze is that of proof. Thus, as to the burden of proof, there is no doubt that it falls to the passive subject to present suitable means to promote the necessary proof for the removal of the presumption. It falls to them to provide "proof to the contrary," that is, proof that they were not the owner as of the date of the tax event. Let us see how this objective might be achieved, which raises the question of the suitability of invoices of sale of motor vehicles as a means of proof of the sale of those vehicles.
On this question, it should first be emphasized that contracts for the purchase and sale of motor vehicles have a consensual basis and are not subject to special formalities (Cf articles 219 and 408-1 of the Civil Code).
Invoices have essentially the formalities provided for in article 36 of the VAT Code and 5 of Decree-Law No. 198/90.
The presumption of truth that invoices contain can be rebutted by the TA in light of the provisions of article 75-2 of the LGT.
On the other hand, the ownership of motor vehicles is subject to mandatory registration (cf. art. 5-1 and 2 of Decree-Law No. 54/75, of 2/12). The obligation to proceed with registration falls to the buyer - active subject of the fact subject to registration (cf. art. 8-B – 1 of the Property Registration Code, applicable to the Motor Vehicle Registry by virtue of art. 29 of Decree-Law No. 54/75, of 2/12, combined with art. 5-1/a) of this latter diploma).
However, the Motor Vehicle Registration Regulation contains a special regime, in force since 2008, for entities that, by virtue of their commercial activity, regularly proceed with the transmission of ownership of motor vehicles. According to this regime, which is established in article 25-1/d) of Decree-Law No. 55/75, of 2/12 (version resulting from Decree-Law No. 20/2008, of 31/1), the registration can be promoted by the seller, through a request signed by him alone.
The IUC is legally configured, as was seen, to function in integration with the motor vehicle registry, which is inferred, from the start, from the cited article 3-1 of the C.I.U.C., a norm where it is established that the passive subjects of the tax are the owners of the vehicles, further adding that they are considered as such the natural or legal persons, of public or private law, in whose name the same are registered.
The removal of the legal presumption is subject to the rule contained in article 347 of the Civil Code, whereby legal presumption can only be contradicted by means of proof that shows the fact that is its object not to be true. This means that it is not enough for the opposing party to present mere counter-proof – which is intended to cast doubt on the facts (cf. art 346 of the Civil Code) that makes the presumed facts doubtful; on the contrary, it must show that the presumed fact is not true, in such a way that there remains no uncertainty that the facts resulting from the presumption are not real.
Now, the invoice constitutes a bookkeeping document prepared within the company and that is intended for the outside, particularly for the TA, from which it extracts all the effects inherent in the assessment for incidence of various taxes. Therefore, unless its falsity is demonstrated, invoices are presumed valid for all legal purposes, and cannot fail to be, only and solely, as a means of proof of the transaction, relevant for purposes of incidence of IUC. In turn, the debit note also consists of the document in which the issuer communicates to the recipient that they owe him a certain pecuniary amount. Both documents appear at the stage of liquidation (which often does not coincide with actual payment) of the amount owed by the buyer. Thus, although not proving the actual payment of the price by the same buyer, they constitute proof of that same transaction, that is, of the purchase and sale carried out. A purchase and sale that may indeed be accomplished, with reservation of ownership for the seller until payment of the price, without such preventing the obligation of IUC from resting on the buyer.
Furthermore, the presumptions of tax incidence can be rebutted through the contradictory procedure proper provided in article 64 of the CPPT, or, alternatively, by means of gracious complaint, review of tax act or judicial impugnation of the tax acts based on them. In the case at hand, the Claimant did not use that proper procedure, instead opting for the request for review of the tax act followed by the arbitral request, and in both invoked and produced proof to demonstrate that it was not the owner of the vehicles as of the date on which the tax event occurred. Therefore, the documents attached to the proceeding, which served as the basis for the established factual basis, in terms of the above reasoning, constitute the proper means to rebut the presumption of subjective incidence of the IUC on which the tax liquidations whose annulment is requested in this proceeding are based.
The tribunal's understanding, upon evaluating the proof produced by the Claimant, in particular with the complement of the testimony of the witnesses it listed, is in the sense of deciding that this proof is sufficient to attest to the sale of all the vehicles contained in the tax liquidations to their respective purchasers, so that at the time of the tax event and of the first property registration carried out it was no longer their owner. In fact, it is to be noted that the TA and now Respondent at no time, neither in the Reply nor in the Arguments attached to the proceeding, questioned this documentation, the actual occurrence of the transmissions or the probative value of the documentation produced, the same that served as the basis for the incidence of other taxes liquidated to the Claimant (for example, VAT and corporate income tax).
It is thus concluded, by the admission of proof of the sale of motor vehicle through the demonstration of the existence of issuance of a valid invoice. Analyzing the elements brought to the proceeding by the Claimant and the facts proven, it is concluded that it was not really the owner of the vehicles to which the liquidations in question referred, having transferred, as of the date on which their respective IUC was due, the ownership of the vehicles, pursuant to the provisions of civil law.
The documentary elements attached to the proceeding enjoy the presumption of truth conferred on them by the aforementioned article 75, paragraph 1 of the LGT, having, thus, suitability and sufficient force to rebut the presumption that supported the liquidations made based exclusively, as the Law provides, on the motor vehicle registry.
These operations of transmission of property apparent are oppositional to the Tax and Customs Authority, because, although the facts subject to registration only produce effects in relation to third parties when registered, in light of the provisions of article 5, paragraph 1 of the Property Registration Code [applicable by referral of the Motor Vehicle Registry Code], the Tax Authority is not a third party for purposes of registration, since it does not find itself in the situation provided for in paragraph 2 of the said art. 5 of the Property Registration Code, applicable by virtue of the Motor Vehicle Registry Code, that is, it did not acquire from a common author incompatible rights.
Thus it is that, in summary, the motor vehicle registry, in the economy of the CIUC, represents a mere rebuttable presumption of the passive subjects of the tax."
Applying the jurisprudence mentioned to the case at hand, it is verified that the Claimant succeeded, with complete success, in rebutting this presumption and demonstrating that the reality of the registry was a mere appearance of that same reality, that is, the registered owner was not the real owner, passive subject of the IUC.
In these circumstances, the mentioned and now impugned liquidations (the ones considered timely) appear to be illegal, suffer the vice of violation of law due to error regarding the factual and legal premises underlying, so that their annulment is required.
As to the request for compensatory interest
At the same time as the declaration of illegality of the decision rejecting the gracious complaint request and annulment of the IUC liquidation acts (relating to the years 2011 to 2015), the Claimant requests the return of the improperly paid tax and that it be recognized the right to compensatory interest, under article 43 of the LGT.
With effect, pursuant to the norm of paragraph 1 of the said article, compensatory interest shall be due "when it is determined, in gracious complaint or judicial impugnation, that there was error attributable to the services resulting in payment of the tax debt in an amount higher than legally due." In addition to the means referred to in the norm that is transcribed, we understand that, as follows from paragraph 5 of article 24 of the RJAT, the right to the aforementioned interest can be recognized in the arbitral process and, thus, the request is considered.
The right to compensatory interest, to which the aforementioned LGT norm alludes, presupposes that improperly paid tax has been paid and that such derives from error, of fact or of law, attributable to the services of the TA.
In the present case, even though it is acknowledged that the tax liquidated to the Claimant is not due, by not being the passive subject of the tax obligation, determining, consequently, the annulment of the liquidations questioned, it is not perceived that, in its origin, there is found error attributable to the services, which determines such a right in favor of the taxpayer.
With effect, in promoting the IUC liquidations considering the Claimant as the passive subject of this tax, the Tax Administration could not proceed in a different manner, merely complying with the norm of paragraph 1 of article 3 of the CIUC, which, as abundantly referred to above, attributes such quality to the persons in whose name the vehicles are registered.
On the other hand, also as already concluded, the said norm has the nature of a legal presumption, from which it follows, for the TA, the right/duty to liquidate the tax and exact it from these persons, without need to prove the facts that lead to it, as expressly provided for in paragraph 1 of article 350 of the Civil Code.
Thus, regarding the liquidation acts, no error attributable to the services occurred, and there is, consequently, no right to compensatory interest derived from their practice.
However, article 100 of the LGT stipulates that "The tax administration is obliged, in case of total or partial merit of complaints or administrative appeals, or of judicial process in favor of the passive subject, to the immediate and full reconstitution of the situation that would exist if the illegality had not been committed, including the payment of compensatory interest, on the terms and conditions provided for in the law."
Thus, such as established, among others, in the Arbitral Decision rendered in cases No. 208/2015-T and 748/2016-T, in deciding the gracious complaint the Respondent should have upheld the Claimant's claim regarding the illegality of the liquidations, and the non-acceptance of the claims is attributable to the Tax and Customs Authority.
With effect, following the jurisprudence set forth in those arbitral decisions, "This case of the Tax and Customs Authority maintaining a situation of illegality, when it should have corrected it, should be framed, by mere declarative interpretation, in paragraph 1 of article 43 of the LGT, for it is a situation in which there is adequate causal nexus between an error attributable to the services and the maintenance of an improper payment and the omission to restore legality when the action that would restore it should be practiced must be equated to the action."
It should, thus, be understood that, from the moment when the deadline for decision of the gracious complaint was completed, compensatory interest began to accrue.
Compensatory interest shall be calculated at the legal rate and paid pursuant to the terms of articles 43, paragraphs 1, and 35, paragraph 10 of the LGT, of article 24, paragraph 1, of the RJAT, of article 61, paragraphs 3 and 4, of the CPPT, of article 559 of the Civil Code and Ordinance No. 291/2003, of April 8 (or other or others that may alter the legal rate).
On the other hand, there is also a place for reimbursement of the tax paid by the Claimant, by virtue of the provisions of the aforementioned articles 24, paragraph 1, subparagraph b), of the RJAT and 100 of the LGT, for this is essential to "reestablish the situation that would exist if the tax act subject of the arbitral decision had not been practiced."
IV - Decision
Whereupon the present Arbitral Tribunal agrees to:
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Judge well-founded the exception of untimeliness of the arbitral request regarding the 113 IUC liquidations, indicated with an asterisk in the table (pages 29 to 39 of the PA), as well as the corresponding liquidations of compensatory interest, dismissing the Respondent from the claim in this part;
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Judge partially well-founded the request for declaration of illegality of the dispatch rejecting the gracious complaint request, of December 20, 2016, from the Large Taxpayers Unit, regarding the remaining liquidations;
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Partially annul the said dispatch;
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Partially annul the IUC liquidations relating to the years 2011 to 2015;
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Condemn the Tax and Customs Authority to pay to the Claimant compensatory interest relating to the improperly paid tax, counted from the date on which the deadline for decision of the gracious complaint was completed, at the legal supplementary rate, until full reimbursement.
V - VALUE OF THE CASE
The value of the case is set at €65,733.74, pursuant to the provisions of article 97-A of the CPPT, applicable ex vi article 29, paragraph 1, subparagraph a), of the RJAT and article 3, paragraph 2, of the Regulation of Costs in Tax Arbitration Processes (RCPAT).
VI - COSTS
The arbitration fee is set at €2,448.00, €563.00 at the charge of the Claimant and €1,885.00 at the charge of the Respondent, since the claim was judged well-founded in 77% of its value, pursuant to Table I of the Regulation of Costs in Tax Arbitration Processes, pursuant to articles 12, paragraph 2, and 22, paragraph 4, both of the Legal Framework for Tax Arbitration, and article 4, paragraph 4, of the aforementioned Regulation.
Let it be notified.
Lisbon, January 8, 2018
The Arbitrators
Maria Fernanda dos Santos Maçãs
(Chairman)
Nunes Barata
Fernando Araújo
[1] The genesis of the tax legal relationship presupposes the cumulative verification of the three necessary conditions 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., Tax Law, 3rd Edition, Almedina, Coimbra, 2009).
[2] Or equated as is the case with financial lessees, buyers with reservation of ownership, as well as other holders of purchase option rights by virtue of the lease contract (article 3-2 of the CIUC).
[3] Under the heading "principle of equivalence" article 1 of the CIUC establishes: "The single vehicle circulation tax obeys the principle of equivalence, seeking to burden the taxpayers in the measure of the environmental and road cost that they cause, in concrete realization of a general rule of tax equality." On the concept of the principle of equivalence, SÉRGIO VASQUES tells us: "In obedience to the principle of equivalence, the tax must be configured in attention to the benefit that the taxpayer derives from the public activity, or in attention to the cost that he imputes to the community by his own activity" (Cf. Special Consumption Taxes, Almedina, 2000, p. 110). And, further on, this Professor explains, regarding motor vehicles: "a tax on motor vehicles based on a rule of equivalence will be equal only if those that cause the same road wear and the same environmental cost pay the same tax; and those that cause different wear and environmental cost pay different tax as well."
[4] It should be noted that buyers of vehicles with reservation of ownership are equated to the passive subjects of the IUC, that is, to the entities referred to in article 1-1 of the CIUC.
[5] ANTUNES VARELA, On Obligations in General, 10th edition, page 528: "Omission, as a pure negative attitude, cannot generate physically or materially the damage suffered by the injured party; but it is understood that omission is the cause of the damage, whenever there is a special legal duty to practice an act which, certainly or very probably, would have prevented the realization of this damage."
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