Summary
Full Decision
ARBITRAL DECISION
I – REPORT
A…, taxpayer no. …, with residence at R. …, S/N, …, …-… …, hereinafter referred to as the Claimant, submitted a request for establishment of an arbitral tribunal in tax matters and a request for arbitral pronouncement, pursuant to the provisions of Articles 2, No. 1 a) and 10, No. 1 a), both of Decree-Law No. 10/2011, of 20 January (Legal Framework for Tax Arbitration, hereinafter abbreviated as RJAT), petitioning for a declaration of illegality of the assessment acts for Vehicle Circulation Tax (IUC) issued by the Tax and Customs Authority, relating to vehicles with registrations …-…-…, …-…-…, …-…-… and …-…-…, identified with the numbers:
a) …, of 2008;
b) …, of 2008;
c) …, of 2009;
d) …, of 2011;
e) …, of 2008;
f) …, of 2009;
g) …, of 2011;
h) …, of 2008;
i) …, of 2009.
The request for establishment of the arbitral tribunal was accepted by the President of CAAD and automatically notified to the Tax and Customs Authority on 19-01-2015.
In accordance with the provisions of Articles 5, No. 2, a), 6, No. 1 and 11, No. 1, a) of the RJAT, the Deontological Council appointed the undersigned as arbitrator of the sole arbitral tribunal, who communicated acceptance of the office within the applicable period.
On 10-03-2015, the parties were duly notified of this appointment and did not manifest their wish to challenge the appointment of the arbitrator, in accordance with the combined provisions of Article 11, No. 1, a) and b) of the RJAT and Articles 6 and 7 of the Code of Ethics.
Therefore, in accordance with the provision of Article 11, No. 1, c) of the RJAT, the sole arbitral tribunal was established on 25-03-2015.
On 04-09-2015, the meeting referred to in Article 18 of the RJAT was held.
The parties submitted written arguments.
The arbitral tribunal was properly constituted and is materially competent, in accordance with the provisions of Articles 2, No. 1, a), and 30, No. 1, of Decree-Law No. 10/2011, of 20 January.
The parties have legal personality and capacity, are entitled to bring proceedings and are represented (Articles 4 and 10, No. 2, of the same decree and Article 1 of Ordinance No. 112-A/2011, of 22 March).
The proceedings do not suffer from nullity and no objections were raised.
The arguments supporting the Claimant's request for arbitral pronouncement are, in summary, as follows:
Claimant's Arguments
10.1 The Claimant was cited, in the capacity of reversed debtor, to proceed with payment of the IUC assessments identified above.
10.2 The vehicles referred to in the assessment acts belonged to company B…, Lda, of which the Claimant is a managing partner.
10.3 It happened that the said vehicles were transferred to third parties on a date prior to the assessments now being challenged, as evidenced by invoices attached with numbers A 558, A 449, A614 and 952.
10.4 The notification of the tax to the transferring company results from the fact that the acquirers did not proceed with the registration of the acquisition of the vehicles.
10.5 Under Article 3, No. 1 of the Single Vehicle Circulation Tax Code (CIUC), "the persons liable to the tax are natural or legal persons, of public or private law, in whose name the said vehicles are registered".
10.6 This provision incorporates a rebuttable presumption that allows proof to the contrary, which is provided by the presentation of the sales invoices.
10.7 Nevertheless, the Claimant further alleges that the Tax Authority would not be entitled to proceed with the assessments relating to the year 2008 due to the effect not only of the statute of limitations for the right to assess, but also of prescription.
10.8 It concludes by requesting the annulment of the IUC assessments that are the subject of the present proceedings.
Response of the Respondent
11.1 In the Response, the Tax Authority considers that the Claimant's allegations should not proceed.
11.2 In fact, the tax legislator, in establishing in Article 3, No. 1 who are the persons liable to the IUC, expressly and intentionally established that these are the owners (or in the situations provided for in No. 2 the persons mentioned there), being considered as such the persons in whose name the said vehicles are registered.
11.3 The legislator did not use the expression "it is presumed" as could have been done, for example, in the following terms: "the persons liable to the tax are the owners of the vehicles, being presumed as such the natural or legal persons, of public or private law, in whose name the said vehicles are registered".
11.4 Therefore, the wording of Article 3 of the CIUC corresponds to a clear choice of legislative policy adopted by the legislator, so that understanding that it establishes a presumption would unequivocally be interpreting against the law.
11.5 In accordance, this understanding has already been adopted by the Jurisprudence of our courts, transcribing, for this purpose, part of the judgment of the Administrative and Tax Court of Penafiel, handed down in Case No. 210/13.0BEPNF. (See Article 21 of the Response)
11.6 Also the systematic element of interpretation demonstrates that the solution advocated by the Claimant is untenable, finding the understanding supported by it no legal support. (Article 22 of the Response)
11.7 Finally, given the "ratio" of parliamentary debates regarding the approval of the present regime, it clearly results that the vehicle tax regime approved establishes that the IUC "came to be owed by the persons who appear in the register as owners of the vehicles" (Article 64).
11.8 Therefore, according to the information attached to the present proceedings, the ownership of the vehicles in question was registered in favour of company B…, Lda., in active situation, so that in accordance with Articles 1 to 6 of the CIUC, all the elements of objective scope, subjective scope and temporal scope of the tax are met, the taxable event and exigibility for assessment of the IUC of the years 2008, 2009 and 2011.
11.9 It further adds that the invoices by themselves do not constitute an appropriate document to prove the sale of the vehicles, since the same is nothing more than a document unilaterally issued by the Claimant.
11.10 In fact, the Claimant made no documentary evidence of receipt of the price or of a request for cancellation of the registration plates.
11.11 Therefore, as established in the arbitral decision No. 220/2014-T cited by the Respondent, mere unilateral documents (the invoices) do not possess sufficient evidentiary value to rebut the presumption contained in the register.
11.12 Moreover, the invoices and cash sales are not authenticated, nor is it proven that the amounts contained therein were accounted for in the accounts.
11.13 As to liability for payment of arbitration costs: it was not the Respondent who gave rise to the filing of the request for arbitral pronouncement, but rather the Claimant who only provided documentary evidence relating to the purported transfer of ownership after the assessment of the tax.
11.14 Consequently, the Claimant should be condemned to pay the arbitration costs, in line with what was decided in a similar matter within Case No. 72/2013-T of this Arbitration Center.
11.15 As to the statute of limitations for the right to assess the IUC for the period of 2008, Article 45, No. 4 of the General Tax Law (LGT) provides that the period of limitation is counted, for periodic taxes, from the end of the year in which the taxable event occurred and, for single-obligation taxes, from the date on which the taxable event occurred.
11.16 In this case, the IUC is unquestionably classified as a periodic tax, given the character of permanence and stability of the taxable event, regardless of its exigibility depending on the registration of the vehicle.
11.17 Therefore, the IUC relating to the period of 2008, the counting of the general period of limitation of four years referred to in Article 45 of the LGT commenced on 01-01-2009 and ended on 31-12-2012.
11.18 It happens that company B…, Lda was notified of the IUC assessment on 30-11-2012, so the alleged statute of limitations did not take effect.
11.19 Finally, the IUC relating to the period of 2008 also did not prescribe, given the period of 8 years provided for in No. 1 of Article 48 of the LGT.
11.20 In this case, the limit provided for in No. 3 of Article 48 regarding the non-production of effects of a possible interrupting event because the citation of the subsidiary liable party occurred after the 5th year following the assessment is not relevant at this date as that period of 8 years is still running.
Having seen all, a final decision must be rendered.
A. FACTS
A.1. Facts Found to be Proven
1 - The Claimant, by verbal contracts of sale and purchase, sold the vehicles identified in the Request for Arbitral Pronouncement.
2 - The vehicles were transferred to the entities identified in the invoices issued, as copies of the same attached to the request for arbitral pronouncement.
3 - The Claimant was cited, within the scope of a reversal proceeding, for payment of the IUC assessments, in the total amount of € 7,009.91, made to the original debtor.
B. ON THE LAW
- On the statute of limitations for the right to assess or prescription of IUC relating to the year 2008
It is necessary, first and foremost, to decide the question of the statute of limitations for the assessment or possible prescription of IUC relating to the period of 2008, since its granting would preclude, as to these, the analysis of the remaining legal questions.
As to the statute of limitations for the right to assess the IUC relating to the period of 2008, Article 45, No. 1 of the LGT establishes that "the right to assess taxes is extinguished if the assessment is not validly notified to the taxpayer within a period of four years…".
For the purposes of beginning the counting of periods, the period of limitation is counted, for periodic taxes, from the end of the year in which the taxable event occurred and, for single-obligation taxes, from the date on which the taxable event occurred.
Now, as alleged by the Respondent, by virtue of its character of permanence and stability throughout the period of the calendar year, the IUC is classified as a periodic tax, so that the counting of the period of limitation commenced on 01-01-2009 and would end on 31-12-2012.
However, since company B…, Lda was notified of the IUC assessment on 30-11-2012, the alleged statute of limitations did not take effect.
The same is to be said as to prescription. Article 48, No. 1 of the LGT provides that tax debts prescribe within a period of 8 years, so that, except for the occurrence of facts that interrupt or suspend the counting of the period (see Article 49 of the LGT), the tax will prescribe on 31-12-2016.
It is therefore not relevant what was invoked by the Claimant regarding the non-production of effects of a possible interrupting event because the citation of the subsidiary liable party occurred after the 5th year following the assessment, because, as stated, the period of prescription, without any consideration of interrupting facts, is still running.
By the foregoing, the alleged statute of limitations for the assessment and prescription of IUC relating to the period of 2008 do not hold.
- On the presumption of ownership
Given the positions of the Parties assumed in the arguments presented, the central question is whether, on the date of the occurrence of the facts giving rise to the tax (Article 3, No. 1 of the CIUC), the owners of the vehicles are not those appearing in the register, will nevertheless these always be considered the persons liable to the IUC, and not as a result be considered the ownership revealed by the register as a rebuttable presumption, or, put another way, whether the norm of subjective scope contained in Article 3, No. 1 of the CIUC establishes or not a presumption.
This matter has already been abundantly dealt with in Tax Arbitral Jurisprudence. See, by way of example, the various decisions of CAAD published at www.caad.org.pt, namely those handed down in Cases Nos. 14/2013, 26/2013, 27/2013, 73/2013, 170/2013, 294/2013 and 216/2014. In the present judgment we will follow the understanding and conclusions of those decisions.
For the sake of synthesis and clarity of thought, we adhere, without reservation, to the framing made in the arbitral decision in Case No. 216/2014-T, which we cite and to which we refer:
"The general and unanimous sense of such Jurisprudence is to consider that Article 3-1 of the CIUC establishes a rebuttable presumption of ownership based on the mentions or registrations contained in the Vehicle Registry Office and/or in the database of the Institute of Mobility and Transport on the date of the taxable event.
That is: once the IUC is assessed on the basis of the registrations in the register or in accordance with the elements contained in the databases of the Institute of Mobility and Transport, the person liable to the tax may relieve himself of payment by demonstrating the non-correspondence between the reality and those registrations and elements upon which the Tax Authority relied to proceed with the assessments.
There are no reasons apparent to reverse or alter the essential sense of this Jurisprudence.
Let us then examine again, and more closely, the question:
Article 3 of the CIUC (Single Vehicle Circulation Tax Code) provides:
Article 3
Subjective Scope
1 – The persons liable to 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 said vehicles are registered.
2 – Financial lessees are deemed to be equivalent to owners, buyers with retention of title, as well as other holders of purchase option rights by virtue of the lease agreement".
On the other hand, No. 1 of Article 11 of the LGT provides that "in the determination of the meaning of tax norms and in the qualification of the facts to which they apply, the general rules and principles of interpretation and application of laws are observed".
Resolving the doubts that arise in the application of legal norms presupposes the performance of an interpretive activity.
It is thus necessary to consider what is the best interpretation of Article 3, No. 1 of the CIUC, in the light, first of all, of the literal element, that is to say that which aims to detect the legislative thought that is embodied in the norm, to verify whether it contemplates a presumption, or whether it definitively determines that the person liable to the tax is the owner who appears in the register.
The question that arises is, in the case sub judice, whether the expression "being considered" used by the legislator in the CIUC, instead of the expression "being presumed", which was what appeared in the decrees that preceded the CIUC, will have removed the nature of presumption from the legal provision in question.
In our view, and contrary to what the Tax Authority learnedly argues, the answer must necessarily be 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, so nothing enables drawing the conclusion sought by the Tax Authority for a mere semantic reason.
In fact, this occurs in various legal norms that establish presumptions using the verb "to consider", of which the following are indicated, merely by way of example:
~ in the field of civil law - No. 3 of Article 243 of the Civil Code, when it establishes that "a third party who acquired the right after the registration of the action of simulation is always considered in bad faith, when the same takes place";
~ also in the field of industrial property law the same applies, when Article 59, No. 1 of the Industrial Property Code provides that "(…) inventions for which a patent has been applied for during the year following the date on which the inventor leaves the company are considered made during the execution of the employment contract (…)";
~ and, finally, in the field of tax law, when Nos. 3 and 4 of Article 89-A of the LGT provide that it is incumbent on the taxpayer the burden of proof that the declared income corresponds to reality and that, if such proof is not made, it is presumed ("is considered" in the letter of the Law) that the income is that which results from the table contained in No. 4 of the said article.
This conclusion that there is full equivalence of meanings between the two expressions, which the legislator uses indifferently, satisfies the condition established in Article 9, No. 2 of the Civil Code, since the minimum of verbal correspondence is ensured for the purposes of determining the legislative thought.
It is important next to submit the norm in question to the other elements of logical interpretation, namely, the historical element, the rational or teleological element and the element of systematic order.
Discoursing on interpretive activity, Francisco Ferrara says that this "is the most difficult and delicate operation to which a jurist can dedicate himself, and it demands fine treatment, keen sense, happy intuition, much experience and perfect mastery not only of the positive material but also of the spirit of a certain legislation. (…) Interpretation must be objective, balanced, without passion, sometimes daring, but not revolutionary, keen, but always respectful of the law" (See Essay on the Theory of Interpretation of Laws, translation by Manuel de Andrade, (2nd ed.), Arménio Amado, Editor, Coimbra, 1963, p. 129).
As Batista Machado says, "the legal provision presents itself to the jurist as a linguistic statement, as a set of words that constitute a text. Interpreting evidently consists of extracting from that text a certain meaning or content of thought.
The text admits 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 often gives rise to unsuspected and unforeseeable difficulties of interpretation. Moreover, although apparently clear in its verbal expression and bearing only one meaning, there is still the possibility that the verbal expression has betrayed the thought of the legislator – a phenomenon more frequent than would appear at first glance" (See Introduction to Law and to Legitimizing Discourse, pp. 175/176).
"The purpose of interpretation is to determine the objective meaning of the law, the force of the law. (…) The law is not what the legislator wished or intended 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 what the legislator wished, but what appears objectively desired in the law: the meaning of the law and not the intent of the legislator" (See Francesco Ferrara, Essay, pp. 134/135).
To understand a law "is not merely to grasp mechanically the apparent and immediate meaning resulting 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 aim of uncovering the true meaning and scope of legal texts, the interpreter has recourse to 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 rational (or teleological) element, systematic element and 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 No. 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", Batista Machado tells us that Article 9 of the CC "did not take a position in the controversy between subjectivist doctrine and objectivist doctrine. Proof of this is the fact that it does not refer, neither to the "will of the legislator" nor to the "will of the law", but rather points to the scope of interpretive activity the discovery of "legislative thought" (Article 9, 1st). This expression, deliberately neutral, means exactly that the legislator did not wish to commit itself" (loc. cit., p. 188).
The same view is expressed by P. de Lima and A. Varela, in annotation to Article 9 of the CC (See Civil Code Annotated – vol. I, Coimbra ed., 1967, p. 16).
And on No. 3 of Article 9 of the CC, Batista Machado further states: "(…) this No. 3 therefore proposes to us a model of ideal legislator who has established the most appropriate solutions (most correct, just or reasonable) and knows how to express itself in a correct manner. This model clearly has objectivist characteristics, for it does not take as a point of reference the concrete legislator (so often incorrect, precipitous, unhappy) but an abstract legislator: wise, foresighted, rational and just" (Work and loc. cit. p. 189/190).
Soon after, this distinguished Master draws attention to the fact that No. 1 of Article 9 refers to three more elements of interpretation "the unity of the legal system", the "circumstances in which the law was drawn up" 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 drawn up", Batista Machado further explains that this expression "represents what is traditionally called the occasio legis: the conjunctural factors of a political, social and economic nature that determined or motivated the legislative measure in question" (loc. cit., p. 190).
With respect to the "conditions specific to the time in which it is applied", this element of interpretation "has decidedly a contemporary connotation (loc. cit., p. 190) which coincides with the opinion expressed by P. de Lima and A. Varela, in the annotations to Article 9 of the CC.
As regards 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 evaluative or axiological coherence of the legal system" (loc. cit., p. 191).
It is also this author who tells us, with respect to the literal or grammatical element (text or "letter of the law"), that this "is the starting point of interpretation. As such, it immediately has a negative function: to eliminate those meanings that do not have any support, or at least some correspondence or resonance in the words of the law.
But it also has a positive function, in the following terms: if the text bears only one meaning, that is the 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 "of the reason for the law (ratio legis), of the purpose pursued by the legislator in drawing up the norm. Knowledge of this purpose, especially when accompanied by knowledge of the circumstances (political, social, economic, moral, etc.,) in which the norm was drawn up or the political-economic-social conjuncture that motivated the legislative decision (occasio legis) constitutes a resource of the greatest importance for determining the meaning of the norm. It suffices to remember that clarification of the ratio legis reveals to us the evaluation or weighing of the various interests that the norm regulates and, therefore, the relative weight of those interests, the choice between them translated by the solution that the norm expresses" (loc. cit., pp. 182/183).
With respect to the systematic element (context of the law and parallel places), this element "comprises the consideration of the other provisions that form the normative complex 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 places). It also comprises the systematic position that the norm to be interpreted has in the overall legal system, as well as its consonance with the spirit or intrinsic unity of the entire legal system.
This interpretive resource is based on the postulate of intrinsic coherence of the system, namely on the fact that the norms contained in a codification obey in principle a unitary thought" (Batista Machado, loc. cit., p. 183).
"(…) In particular we must take into consideration the connection of the various laws of the country, because a fundamental requirement of all sound legislation is that the laws adapt to each other and do not result in a confused mass 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 underlying it:
Through analysis of the historical element, the conclusion is drawn that, since the entry into force of Decree-Law 59/72, of 30 December, the first to regulate this matter, through to Decree-Law No. 116/94, of 3 May, the last to precede the CIUC [see Law No. 22-A/2007, with the amendments of Laws 67-A/2007 and 3-B/2010], a presumption was established [emphasised] that the persons liable to IUC are the persons in whose name the vehicles are registered on the date of their assessment.
It is therefore verified that tax law had, from the outset, the objective of taxing the true and effective owner and user of the vehicle, it being immaterial whether one or another expression is used, which, as we have seen, have in our legal system a coinciding meaning.
The same is to be said when we resort to elements of interpretation of a rational or teleological nature.
In fact, the current and new framework of vehicle taxation establishes principles aimed at subjecting vehicle owners to bearing the costs of damage caused by these vehicles by way of road and environmental damage, as is gleaned from the content of Article 1 of the CIUC.
Now, the consideration of these principles, namely the principle of equivalence, which merit constitutional protection and establishment in community law, and are also recognized in other branches of the legal system, determines that the aforementioned costs are borne by the real owners, the causers of the said damage, which entirely rules out an interpretation aimed at preventing the presumed owners from proving that they are no longer owners because the ownership is in the legal sphere of another[5].
Therefore, also from the interpretation made in the light of elements of a rational and teleological nature, given what the rationality of the system guarantees and the purposes aimed at by the new CIUC, it is clear that No. 1 of Article 3 of the CIUC establishes a rebuttable legal presumption.
In light of the foregoing, it is important to conclude that the rationale of the tax points in the direction of taxing the real owners-users of the vehicles, so that the expression "being considered" is used in the normative provision in question in a sense similar to "being presumed", for which reason there is no doubt that a legal presumption is established.
On the other hand, Article 73 of the LGT provides that "(…) presumptions established in norms of tax scope always admit proof to the contrary, so they are rebuttable (…)".
Therefore, with Article 3, No. 1 of the CIUC establishing a rebuttable legal presumption [and therefore rebuttable], the person who is inscribed in the register as the owner of the vehicle and who, for that reason, was considered by the Tax Authority as the person liable to the tax, may present evidence aimed at demonstrating that the holder of ownership, on the date of the taxable event, is another person, to whom the ownership was transferred.
Having examined the elements brought into the proceedings and the facts proven, the conclusion is drawn that the claimant was not the owner of the vehicles to which the assessments in question relate on the date of their respective taxable events, having in the meantime already transferred the ownership of the vehicle in question, in accordance with civil law.
These operations of transfer of ownership are enforceable against the Tax and Customs Authority, because, although facts subject to registration only produce effects in relation to third parties when registered, given the provision of Article 5, No. 1 of the Property Registry Code [applicable by reference to the 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 No. 2 of the said Article 5 of the Property Registry Code, applicable by force of the Vehicle Registry Code, that is to say: it did not acquire from a common author rights that are incompatible with each other.
In summary and in conclusion:
For the assessment of IUC, the Tax and Customs Authority can only avail itself of the registered reality or that contained in the database of the Institute of Mobility and Transport, if the updating of the legal situation is not proven, namely as to the ownership of the vehicle.
The vehicle register, in the economy of the CIUC, thus represents a mere rebuttable presumption of the persons liable to the tax.
- On the evidence of the transfer of motor vehicles
In light of the foregoing, we conclude that No. 1 of Article 3 of the CIUC establishes a rebuttable presumption, under the terms of Article 73 of the LGT, that the holder of the vehicle register is its owner. In this case, the Claimant must prove, in order to rebut the presumption of Article 3, No. 1 of the CIUC (and even of the Vehicle Register) that she was not the owner of the vehicles in question during the period to which the assessments challenged relate.
To prove that such transfers of ownership took place through contracts of sale and purchase, the Claimant presents copies of invoices.
In its allegations, the Respondent alleges that the invoices, as private and unilateral documents, do not constitute sufficient evidence to rebut the presumption.
We disagree with this understanding.
It cannot fail to be noted, from the outset, that the contract of sale and purchase of a motor vehicle is a verbal contract, not therefore subject to a specific form. From this framework results, inevitably, a special importance of the fiscal document not only for tax purposes but also for civil or other purposes.
In this case, the Claimant presented invoices, issued in accordance with legal requirements, evidencing the sale operation. Invoices constitute, for tax purposes, the documents legally required to prove operations of sales and provision of services, as expressly results from the various tax codes (see the provision of No. 6 of Article 23 of the Corporate Income Tax Code, a) of No. 1 of Article 29 and Article 36 of the Value Added Tax Code and Article 115 of the Personal Income Tax Code).
It would be strange, therefore, that an invoice should constitute, from the perspective of the transferor, sufficient evidence to determine an income from the sale of a vehicle, taxable under the Personal Income Tax (in the organized accounting regime) or Corporate Income Tax, but, conversely, should not constitute sufficient evidence to prove the same transfer, now for purposes of IUC.
This statement does not prevent the Tax Authority from demonstrating that it is a false document because no transfer actually took place (with all the fiscal and criminal consequences).
In this case, there is no evidence or even indications that call into question the presumption of good faith of the taxpayer and of the documents presented, as expressly results from the provision of Article 75 of the General Tax Law.
In conclusion, the necessary conditions are met for the granting of the request for annulment of the assessments, on the basis of illegality and error in the assumptions.
C. DECISION
Therefore, it is decided in this Arbitral Tribunal:
a) To grant the request for declaration of illegality of the IUC assessments identified above, in the total amount of € 7,009.91;
b) To condemn the Tax and Customs Authority to payment of the costs of the proceedings, in the amount of € 612.00.
D. Value of the Proceedings
The value of the proceedings is fixed at € 7,009.91, in accordance with Article 97-A, No. 1, a), of the Code of Tax Procedure and Process, applicable by force of a) and b) of No. 1 of Article 29 of the RJAT and No. 2 of Article 3 of the Regulation of Costs in Tax Arbitration Proceedings.
E. Costs
The arbitration fee is fixed at € 612.00, in accordance with Table I of the Regulation of Costs in Tax Arbitration Proceedings, to be paid by the Respondent, since the request was entirely granted, in accordance with Articles 12, No. 2, and 22, No. 4, both of the RJAT, and Article 4, No. 4, of the said Regulation.
The responsibility for costs rests with the losing party because, contrary to what was alleged, the Tax Authority could have proceeded with the revocation of the identified assessment acts within 30 days following knowledge of the request for establishment of the Arbitral Tribunal (Article 13, No. 1 of the RJAT).
Let notice be given.
Lisbon, 4 November 2015
The Arbitrator
(Amândio Silva)
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