Summary
Full Decision
CLAIMANT: A..., in the capacity of liquidating partner of company B... – National and International Transportation of Goods, Single-Member Ltd.
RESPONDENT: Tax and Customs Authority
Arbitral Decision
I – REPORT
A) The Parties and Constitution of the Arbitral Tribunal
A..., resident at Street …, …, with the NIF …, in the capacity of liquidating partner of company B... – National and International Transportation of Goods, Single-Member Ltd., NIPC …, hereinafter referred to as "Claimant", requested the constitution of an Arbitral Tribunal, pursuant to the provision in subsection a) of paragraph 1 of Article 2 of the Legal Framework for Tax Arbitration, approved by Decree-Law No. 10/2011, of 20 January, hereinafter referred to as "RJAT" and of Articles 1 and 2 of Order No. 112-A/2011, of 22 March, to consider the claim which opposes it to the Tax and Customs Authority, hereinafter designated as "Respondent" or "AT", with a view to the annulment, on the grounds of illegality, of the ex officio assessment of the Unique Vehicle Circulation Tax concerning the year 2011, relating to the vehicle with registration number ..-..-.., in the amount of €324.49, which it attached to the records as document No. 1 annexed to the initial petition and which is hereby fully incorporated by reference.
The request for constitution of the Arbitral Tribunal, presented on 16 December 2013, was accepted by the Honorable President of the CAAD and notified to the Tax and Customs Authority, on 17 December 2013.
The Claimant opted not to appoint an arbitrator, whereupon, pursuant to the provision in paragraph 1 of Article 6 of the RJAT, the undersigned was appointed by the Deontological Council of the Centre for Administrative Arbitration as sole arbitrator. The appointment was accepted and, on 3 February 2014, the parties were notified of the arbitrator's designation, having manifested no intention to refuse the designation.
Thus, in accordance with the provision in subsection c) of paragraph 1 of Article 11 of Decree-Law No. 10/2011, of 20 January, as amended by Article 228 of Law No. 66-B/2012, of 31 December, the Sole Arbitral Tribunal was constituted on 18 February 2014.
On the same date, the AT was notified, in the terms and for the purposes provided in paragraphs 1 and 2 of Article 17 of the RJAT, to present a response within the legal period.
The AT presented its response on 21 March 2014 and on 10 April 2014 the meeting referred to in Article 18 of the RJAT was held, for which a record was drawn up that is attached to the records and is hereby fully incorporated by reference for all legal purposes.
B) THE PETITION FORMULATED BY THE CLAIMANT:
The Claimant formulates this petition for arbitral pronouncement seeking the illegality, with the consequent annulment, of the ex officio assessment of Unique Vehicle Circulation Tax and respective Compensatory Interest, concerning the year 2011, relating to the vehicle with registration number ..-..-.., in the amount of € 324.49, for suffering from a defect of violation of law, alleging in summary the following:
The present Claimant was partner and manager of company B... – NATIONAL AND INTERNATIONAL TRANSPORTATION OF GOODS, SINGLE-MEMBER, LTD (hereinafter referred to as "B...") from the date of its constitution until the date of its dissolution, decided on 25 October 2010, registered on 8 November 2010;
Within the scope of its activity and with a view to pursuing the same, the aforementioned company acquired the vehicle of brand Renault, registration number ..-..-..;
It alleges that, even before the dissolution of the aforementioned company, the Claimant alienated, on 20.08.2010, the vehicle in question, having for that purpose issued the Invoice and Receipt which it attaches as documents Nos. 4 and 5 annexed to the arbitral petition;
On 6 August 2013 the Claimant was notified, in the context of prior hearing and in the capacity of liquidating partner of company B... to pronounce itself on the ex officio assessment of the IUC concerning the year 2011 relating to the vehicle above identified;
The present Claimant exercised its right of hearing, alleged having alienated the vehicle, attached the documents that evidenced the sale, considering, therefore, that it was not obligated to pay the tax.
The AT, in response, considered maintaining the ex officio assessment, by understanding that "the obligation to pay the IUC is directly related to the entity in whose name the registration of the vehicle is registered (… )"
The legal basis of the petition for arbitral pronouncement is founded on Article 1, paragraph 1 of Decree-Law No. 54/75 of 12 February, relating to the registration of motor vehicles, which establishes that "the registration of vehicles has essentially the purpose of publicizing the legal situation of motor vehicles and their trailers with a view to the safety of legal commerce."
The Claimant further alleges that in accordance with Article 7 of the Property Registration Code, applicable by virtue of Article 29 of Decree-Law No. 54/75, of 12 February, the registration only "(…) constitutes a presumption that the right exists and belongs to the person whose name is entered in the register in the precise terms in which the register defines it."
The Claimant further adds that, in its understanding, Article 3 of the Vehicle Tax Code enshrines a norm of subjective incidence that establishes, merely, a rebuttable legal presumption, in conformity with what results, moreover, from the provision in Article 73 of the General Tax Law (LGT).
It further alleges that the registration does not have a constitutive nature of the right of ownership, but only declaratory, hence the registration does not constitute a condition of validity of the transmission of the vehicle from the seller to the buyer.
It concludes by requesting the annulment of the assessment of the IUC and consequently the reimbursement of the said amount to the Claimant.
It further claims the right to accrued interest until effective and full payment.
C – THE RESPONSE OF THE RESPONDENT
The Respondent, duly notified for that purpose, timely presented its response in which it alleged, in summary, the following:
a. The Claimant's position is not well-founded, inasmuch as "the understanding propounded by the Claimant not only incurs a biased reading of the letter of the law, as well as the adoption of an interpretation that does not attend to the systematic element, violating the unity of the regime established throughout the CIUC and, more broadly, throughout the entire fiscal-legal system and further derives from an interpretation that ignores the ratio of the regime established in the article in question, and likewise, throughout the CIUC."
b. It bases its allegation on the provision in paragraphs 1 and 2 of Article 3 of the CIUC, which provide, respectively, that "The passive subjects of the tax are the owners of the vehicles, considering as such the natural or legal persons, of public or private law, in whose name the same are registered" and that the passive subjects of the IUC are "the owners (or in the situations provided for in paragraph 2, the persons therein enumerated), considering as such the persons in whose name the same are registered."
c. The Respondent further alleges that the legislator did not use the expression "are presumed", as it could have done, moreover in similar fashion to what occurs in other legal normatives, exemplifying some situations provided for in law; it understands that the Claimant in cases in which the fiscal legislator uses the expression "is considered", is not establishing a presumption. To understand that the legislator enshrined here a presumption would unequivocally be to effect an interpretation contra legem.
d. It concludes, therefore, that in the case of the present arbitral pronouncement records, the legislator expressly and intentionally established that the persons in whose name the same are registered are to be considered as such, since this is the interpretation that preserves the unity of the fiscal-legal system.
e. Another interpretation would be to ignore the teleological element of interpretation of law: the ratio of the regime established in the article in question, and likewise, throughout the CIUC.
f. It reinforces this allegation by invoking that this is the understanding followed by the jurisprudence of the Administrative and Fiscal Court of Penafiel, within the scope of Case No. 210/13.0BEPNF, which accepted the position upheld by the AT.
g. It concludes, by the lack of merit of the arbitral petition, inasmuch as the tax acts in question do not suffer from any defect of violation of law, "in that in light of the provision in Article 3, paragraphs 1 and 2 of the CIUC and Article 6 of the same code, the Claimant, in the capacity of owner, was the passive subject of the IUC, as attested by the Information relating to the history of the ownership of the vehicles in question, issued by the Motor Vehicle Registration Office."
h. Finally, it further alleges that even if it is understood thus, accepting that it is admissible to elide the presumption in light of even the jurisprudence already established in this Centre of Arbitration, it will still be necessary to assess the evidentiary documents attached by the Claimant, and their value, with a view to eliding the presumption, concluding that the documents attached by the Claimant, in addition to not corresponding to the truth, do not evidence the sale of the vehicle to company C..., LDA, and much less demonstrate that such occurred.
i. The elements of evidence brought by the Claimant are incapable of demonstrating the alleged facts, and much less for purposes of eliding the presumption that it was not the owner of the vehicle at the date of the tax, that is, in the year 2011.
j. In consequence it concludes, once again, by the lack of merit of the arbitral petition, as well as of the petition for indemnificatory interest.
II. QUESTIONS TO BE DECIDED
It is necessary, therefore, to consider and decide the questions at issue.
Given the positions of the Parties assumed in the arguments presented, the central decisive questions are to know:
1st) Concerning the subjective incidence of the IUC, the effects of motor vehicle registration and the eventual existence or not of a rebuttable presumption in this matter;
2nd) Concerning the merit or lack of merit of the petition and the right to payment of indemnificatory interest.
III - PROCEDURAL PREREQUISITES
The Arbitral Tribunal is regularly constituted. It is materially competent, in accordance with Article 2, paragraph 1, subsection a) of Decree-Law No. 10/2011, of 20 January.
The Parties have legal standing and capacity, are legitimate and are legally represented (See Article 4 and 10 paragraph 2 of DL No. 10/2011 and Article 1 of Order No. 112/2011, of 22 March).
Verifying that the requirements provided in paragraph 1 of Article 3 of the RJAT are met, the joinder of petitions for declaration of illegality of the tax acts that are the object hereof is admitted in the present arbitral process.
The process does not suffer from defects that would invalidate it.
Taking into account the administrative tax procedure, the documentary evidence attached to the records, it is now necessary to present the factual matter relevant to the understanding of the decision, which is fixed as follows.
IV - STATEMENT OF FACTS
A) Proven Facts
As factual matter relevant, the present tribunal considers the following facts as established:
The Claimant is a liquidating partner of company "B...", whose main activity consisted of national and international transportation of goods.
Company "B..." acquired the vehicle of brand Renault, registration number ..-..-.., within the scope and for the pursuit of its activity.
On 20 August 2010 company "B..." alienated the vehicle referred to in item b above to company C..., AUTO PARTS COMMERCE, LDA, having issued, for that purpose, Invoice No. 273 and the respective receipt No. 211, attached to the records as documents Nos. 4 and 5 annexed to the arbitral petition.
Company "B..." was dissolved, by decision of 25 October 2010, registered on 8 November 2010.
On 6 August 2013 the Claimant was notified, in the context of prior hearing, in the capacity of liquidating partner of company B..., to pronounce itself on the ex officio assessment of the IUC concerning the year 2011.
f. In the exercise of its right of hearing, it alleged having alienated the vehicle, attached the documents that evidenced the sale, the process was instructed with the documents contained in the respective administrative process.
On the date of the tax event, the motor vehicle referenced in the IUC assessment in question in the present records was still registered in the motor vehicle register in the name of the company represented by the present Claimant.
From the Administrative Process attached to the records by the Tax and Customs Authority, the following facts are further proven:
The ownership of the vehicle registration in question in the present records passed from Company "B..." to the ownership of Company "D... – TRANSPORTATION OF AGRICULTURAL PRODUCTS AND CONSTRUCTION MATERIALS LDA, with the NIPC …, on 05.01.2012, as appears from p. 2 of the PA;
Company D... - TRANSPORTATION OF AGRICULTURAL PRODUCTS AND CONSTRUCTION MATERIALS LDA, acquires the vehicle, on 28.09.2010, by purchase from company E..., Transportation a … Ltd, evidenced by Invoice No. 530, contained in p. 27 of the PA.
To proceed with the registration, the declaration of sale contained in p. 28 and 29 of the PA, dated 03.01.2012, was presented, as appears in p. 28 and 29 of the PA.
In the context of the ex officio assessment procedure, prior hearing of the claimant was promoted and the process was instructed with the documents contained in the respective administrative process.
The Tax and Customs Authority, in the context, decided to maintain the assessment act, as appears from the decision in p. 34 et seq. of the PA.
The unique vehicle circulation tax assessed was paid by the present Claimant.
B) STATEMENT OF PROVEN FACTS
The facts above described were given as proven based on the documents that the Parties attached to the present process, the claimant annexed to the petition formulated and the AT in the Administrative process sent to the records.
C) UNPROVEN FACTS
Not proven that the Claimant alienated the heavy vehicle on 03.01.2012 to company "D... LDA" (in accordance, moreover, with the proven fact in item i.)
There are no other facts given as unproven, since all facts relevant to the assessment of the petition were given as proven.
V – STATEMENT OF LAW
Fixed the factual matter, it is necessary to deal with the relevant questions of law, indicated above, corresponding, in summary, to the questions of illegality raised by the Claimant in the present arbitral petition.
1st - Concerning the subjective incidence of the IUC, the effects of motor vehicle registration and the eventual existence or not of a rebuttable presumption in this matter
The first question to be decided consists in knowing the sense and scope of the norm of subjective incidence contained in Article 3, paragraph 1, of the CIUC and the eventual existence or not of a rebuttable presumption, connected with the question of the legal effects of motor vehicle registration.
On this question, the positions of the parties are summarized as follows: for the Claimant that norm enshrines a rebuttable legal presumption while for the Respondent the interpretation adopted by the Claimant is notoriously wrong and "results from a biased reading of the letter of the law", and from an interpretation that does not attend to the systematic element nor to the ratio legis of the regime established in the CIUC. It is necessary to decide.
Article 3 of the CIUC provides that:
"ARTICLE 3
SUBJECTIVE INCIDENCE
1 – The passive subjects of the tax are the owners of the vehicles, considering as such the natural or legal persons, of public or private law, in whose name the same are registered.
2 – Equated to owners are financial lessees, purchasers with reservation of ownership, as well as other holders of purchase option rights by virtue of the leasing contract".
Paragraph 1 of Article 11 of the LGT establishes that "in determining the sense of fiscal norms and in qualifying the facts to which they apply, the general rules and principles of interpretation and application of laws are observed". The interpretation and application of the legal norm presupposes the performance of an interpretative activity, which must be objective, balanced, and in accordance with the letter and spirit of the law. Any text, and the law is no exception, contains multiple meanings and frequently contains ambiguous or obscure expressions. For that reason, although the letter of the law is "the guiding thread" of the interpreter, it must be interpreted taking into account the underlying objectives, "the ratio" or the motivation of the legislator in establishing the norm in question.
To these elements is added another, of enormous importance, according to which the interpretation of the legal norm must respect the "unity of the legal system", its coherence and intrinsic logic.
Among us, Article 9 of the Civil Code (CC) provides the rules and fundamental elements for the interpretation of the legal norm. With regard to the question under analysis, it is necessary to highlight the contribution of arbitral decisions already made in cases Nos. 14/2013-T, 26/2013-T of 19 July 2013, 27/2013 –T, 217-2013-T of 28 February, among others, revealing a refined reflection on the fundamental questions under consideration.
It is understood that the interpretation of fiscal law must comply with Article 9 of the Civil Code, which begins by stating that interpretation should not limit itself to the letter of the law, but reconstruct from it the "legislative thought". Thus, it has come to be recognized by the Jurisprudence of the Supreme Administrative Court, among others, in the Rulings of 05/09/2012 and 06/02/2013, respectively, case numbers 0314/12 and 01000/12, available at www.dgsi.pt. To these general principles are added the principles contained in the LGT, particularly in Article 73 which establishes that the presumptions contained in norms of fiscal incidence always admit proof to the contrary.
It is, therefore, within this background framework, using the hermeneutic principles fundamentally referred to above, adopted by the Jurisprudence of our superior courts, that we should seek to find the appropriate interpretation to the normatives present.
Thus, the question is whether, in view of the literal tenor of the provision in paragraph 1 of Article 3 of the CIUC, what is the scope of the expression "considering as such", given that in the current version the legislator did not use the term "are presumed" (which was contained in the extinct Vehicle Tax Regulations).
Now, we can easily point out several examples, extracted from the fiscal legal system, in which the legislator opted for the use of the verb "to consider", with a presumptive sense. For that matter, as already stated above, being a norm of fiscal incidence, a rebuttable presumption would never be admissible. As stated by Diogo Leite Campos, Benjamim Silva Rodrigues and Jorge Lopes de Sousa, in the annotation to paragraph 3 of Article 73 of the LGT, "the presumptions in matters of fiscal incidence may be explicit, revealed by the use of the expression is presumed or similar (…). However, presumptions may also be implicit in norms of incidence, particularly of objective incidence, when certain values of movable or immovable property are considered as constituting taxable matter, in situations in which it is not unfeasible to determine the real value". And there are many examples of norms in which the verb "to consider" is used to establish rebuttable presumptions, as occurs with the provision in paragraph 2 of Article 21 of the CIRC, in Article 89-A of the LGT or in Article 40, paragraph 1 of the CIRS among others.
Now, taking into account that the legal system must form a coherent whole, the examples above referred to, as well as the doctrine and jurisprudence indicated, allow us to conclude that it is not only when the verb "to presume" is used that we are faced with a presumption, but also the use of other terms or expressions, such as the term "is considered" may serve as the basis for presumptions.
Given this, it is further important, for the determination of the sense of the norm contained in Article 3 of the CIUC, which being the norm of subjective incidence of the IUC, will have to be interpreted in accordance with the rules provided therein for determination of the passive subject. And, as referred to above, being the literal element the first instrument of interpretation of the legal norm, in search of the legislative thought, it is important to confront it with the other elements of interpretation, particularly the rational or teleological element, the historical element and the systematic element. And, also, in this line of reflection the Tribunal cannot follow the argumentation adduced by the Tax Authority in this matter. Thus, and beginning with the historical element, it is necessary to state that since the origin of the circulation tax, with the entry into force of Decree-Law No. 599/72 of 30 December, a presumption was explicitly enshrined, regarding the passive subjects of the tax as being those in whose name the vehicles were registered or matriculated. That version of the law used the literal expression "presumed as such". However, in view of the purposes of the tax in question, it must be recognized that the use of the expression "is considered", in the current version, contemplates an expression with an effect similar to that one, embodying, equally, a presumption. This same occurs in the formulation contained in paragraph 1 of Article 3 of the CIUC, in which a presumption was enshrined, revealed by way of the use of the expression "considering", of meaning similar and of value equivalent to the expression "presumed", in use since the creation of the tax in question.
The use of the expression "considering" seems to find explanation, only, in the circumstance that it appears more in tune with the reinforcement conferred on vehicle ownership, which became the taxable event, in accordance with the provision contained in Article 6 of the CIUC.
This understanding is the only one that appears adequate and in accordance with the principle of material truth and justice, underlying fiscal relations, with the objective of taxing the real and effective owner and not the one who, by circumstances of diverse nature, is often nothing more than an apparent and false owner for appearing in the motor vehicle register.
For that reason, it must be permitted to the person registered in the motor vehicle register the possibility of presenting sufficient evidentiary elements to demonstrate that the effective owner is, after all, a person different from the one registered, and who initially, and in principle, was presumed to be the true owner. Otherwise, one would accept the supremacy of the formal truth of the register over the material truth, and would admit the gross violation of the fundamental fiscal principles enunciated and, also, of the principle contained in Article 73 of the LGT according to which there are no rebuttable presumptions in matters of fiscal incidence.
To all that has been left exposed above would be added the violation of the principles of legality, proportionality and justice, as well as the inquisitorial principle, enshrined, respectively, in Articles 55 and 58 of the LGT.
Thus, regarding the subjective incidence of the tax, it is to be concluded that there are no alterations relative to the situation previously in force within the scope of the Municipal Tax on Vehicles, Circulation Tax and Haulage Tax, as is, moreover, widely recognized by doctrine, continuing to be valid a rebuttable presumption in this matter.
For that matter, it is possible to extract, yet another argument from the provision in Article 7 of the Property Registration Code (which constitutes the fundamental legal basis in matters of registration of ownership) which provides that "the definitive registration constitutes a presumption that the right exists and belongs to the person registered, in the precise terms in which the register defines it."
Thus, in light of the principle of uniformity and intrinsic coherence of the legal system, no ground appears acceptable for the principle in force in property registration in general to suffer an inflection or even "trampling" unjustified in matters of motor vehicle registration.
These are the reasons why this Tribunal, with due respect, cannot uphold the understanding contained in the sentence handed down by the Administrative and Fiscal Court of Penafiel, within the scope of case No. 210/13.0BEPNF, invoked by the Tax and Customs Authority in the present records, particularly when it states that "the effective ownership and possession of the vehicle is irrelevant for the verification of the subjective and objective incidence and of the taxable event of the tax".
But if any doubt persisted, it would always be said that, regarding the elements of interpretation of a rational or teleological nature, the statement of reasons of the Bill No. 118/X of 07/03/2007, underlying Law No. 22-A/2007 of 29/06, is quite expressive in clarifying that the reform of vehicle taxation is implemented through the displacement of part of the fiscal burden from the moment of vehicle acquisition to the circulation phase and aims to "form a coherent whole" that, although intended for the collection of public revenue, intends that the same be collected "in the measure of the environmental costs that each individual causes to the community", adding, with respect to the tax in question and the different types and categories of vehicles, that "as a structuring and unifying element (…) the principle of equivalence is enshrined, thus making clear that the tax, as a whole, is subject to the idea that taxpayers should be burdened in the measure of the cost they cause to the environment and to the road network, this being the reason for this fiscal figure", further referring, to be "(…) this principle that dictates the burden of vehicles in function of their ownership and until the moment of scrapping (…)".
Thus, the logic and rationality of the new system of vehicle taxation presupposes and aims for a passive subject coinciding with the owner of the vehicle, on the assumption that it is this one, and not another, the real and effective subject causing environmental damage, as results from the principle of equivalence inscribed in Article 1 of the CIUC. This principle of equivalence, which informs the current unique vehicle circulation tax, has underlying the polluter-pays principle, and concretizes the idea, inscribed in it, that whoever pollutes must, for that reason, pay. It is, after all, a matter of addressing the negative environmental externalities that result from the use of motor vehicles, whether assumed by their owners and/or by the users, as costs that only they should bear.
For that reason, the presumption inscribed in Article 3 of the CIUC corresponds to the interpretation most adjusted to the pursuit of the objectives sought by the legislator. Were it not so, one would be accepting the possibility of taxing legal or natural persons without responsibility in the production of any environmental damage, while the real causes of those same damages would not be subject to the tax.
In summary, having traversed all the relevant elements of interpretation, all point in the direction that the expression "considering" has a sense equivalent to the expression "presumed". It is forced to conclude that we are faced with the legal enshrining of a presumption.
In consequence, it results from the provision in paragraph 1 of Article 3 of the CIUC, the enshrining of a legal presumption, which, in view of the provision in Article 73 of the LGT, can only be understood as rebuttable. That is, the passive subjects of the tax are, presumptively, the persons in whose name the vehicles are registered. But this presumption may be set aside or rebutted if, in the context of the assessment procedure underway, it comes to be demonstrated not to be that one the true owner of the vehicle, passive subject of the tax in question.
In the case of the present records, an act of assessment of IUC is in question, concerning the vehicle of brand Renault, with the registration number ..-..-.., corresponding to the year 2011. It is proven in the records that the company represented by the present Claimant, in the capacity of liquidating partner, alienated the said vehicle to Company "C... LDA", on 20.08.2010, having issued the corresponding accounting documents, invoice No. 273 and receipt No. 211, attached to the records.
Subsequent alienations of the same vehicle to other companies followed, as appears from the proven facts in the records, described in points a through i of the proven factuality.
Arriving at this point, it is necessary to clarify the question raised by the Tax Authority, in Article 79 of the Response and reinforced in its oral allegations, namely: "how is it possible that the Claimant alienated the heavy vehicle on 03.01.2012 to company D... – TRANSPORTATION OF AGRICULTURAL PRODUCTS AND CONSTRUCTION MATERIALS, LDA NIPC …, if as per the diligences of proof carried out by the Tax Services of …, such vehicle was sold to that company, not by the Claimant but by company E... – TRANSPORTATION A …, LDA NIPC …, as attested by invoice no. 0530 of 28.09.2010 attached with the Administrative Process at p. 27."
Well, the perplexity raised by the question posed by the AT results from its departing from the assumption of analyzing the content of the declaration of sale attached to the records, based on which the registration in favor of entity D..., LDA was operationalized, in 2012. However, the declaration of sale attached to the records suffers from manifest incongruity and well demonstrates the weaknesses of the registration system in force. If we attend to the declaration of sale attached to the records, it is easy to conclude that it is not trustworthy, does not even reflect the transmission of property of the vehicle proven by the accounting documents attached to the PA and is, instead, well demonstrative of the documentary weaknesses on which the supposed registered truth is based, which, for that very reason, can only be understood as presumptive.
If we analyze, properly, all the accounting documents attached to the Administrative Process, only can one conclude with certainty that:
a) on 20.08.2010 there occurred an alienation of the heavy vehicle in question in the present records, from "B... LDA" (represented by the present Claimant) to company "C... LDA", evidenced by invoice No. 273 and receipt No. 211, attached to the records;
b) on 28.09.2010 company D... - TRANSPORTATION OF AGRICULTURAL PRODUCTS AND CONSTRUCTION MATERIALS LDA, acquires this same vehicle, on 28.09.2010, by purchase from company E..., TRANSPORTATION A … LDA, evidenced by Invoice No. 530, contained in p. 27 of the PA.
It is forced to conclude that, between those two transactions there occurred yet another, that is, the acquisition of the same vehicle by company E..., LDA from C..., LDA, of which there is no document in the records of accounting support that proves it, but one thing is certain D..., LDA acquired the vehicle from E... LDA and not, as the AT alleges, from "B..., LDA". What happens at this point is, only, a misunderstanding by the AT, based on a document, that one yes, which does not offer credibility for not reflecting the material truth of the successive transmissions that occurred, and which is the declaration of sale attached to the PA. Furthermore, on 03.01.2012 the company represented by the present Claimant was dissolved, so the declaration contained in the declaration of sale contained in the records, in the terms in which it appears, manifestly does not correspond to the truth.
The Tribunal cannot accept as trustworthy a document that contains ostensibly false elements, contradicted by the facts proven by the accounting documents contained in the Administrative Process, accepted fiscally, as well as by the facts subject to commercial registration concerning the dissolution of company "B... LDA".
Let us see then: the reality reflected by the declaration of sale which served as the basis for the alteration of the motor vehicle register, in 2012, does not correspond to the material truth that occurred in the chain of transmissions of property of the vehicle. More serious, there further results the circumstance that the same declaration of sale attest a quality in the signature placed by the present Claimant that, at the time of the date placed therein (03.01.2012), this one no longer had, inasmuch as the company it represented was already dissolved since 2010, appearing, since then, for all legal purposes, particularly fiscal, as liquidating partner of the said company. All these incongruities and falsities passed unscathed and permitted the accomplishment of the motor vehicle registration in the circumstances described, which well reflects the weaknesses of the registration system. Furthermore, there is not even control between the mentions contained in the declarations of sale for purposes of motor vehicle registration and those contained in the commercial register, as it would suffice that confrontation and one would easily conclude that that "sale" contained in the declaration could not have occurred on that date, in those terms, between those two companies.
For that matter it is known, although criticizable, the bad use given by commercial practice to these declarations of sale, which, if on one hand may translate some negligence on the part of those interested cannot excuse the public entities, in the exercise of their functions, particularly registral, of reinforcing their formal requirements in the verification of their authenticity.
Thus, what is relevant for this Tribunal are the accounting documents attached to the records that attest the alienations that occurred and considered as proven. Those documents relevantly noted fiscally and not questioned by the Tax Authority.
It is, obviously, also relevant the fact that the company represented by the present Claimant is found dissolved since 25.10.2010, duly registered since 08.11.2010, appearing, since then, the present Claimant as its liquidating partner, facts duly proven in the records and recognized by the Tax Authority itself.
As for the declaration of sale contained in the PA, as stated above, its content is clearly incongruous faced with the material truth proven and, furthermore, contains elements whose truthfulness offers serious doubts, so the Tribunal cannot accept it as trustworthy, particularly with regard to the date placed therein and the quality of the Claimant's signature.
Here is yet another reason, adding to all those already amply explained, to consider that the register only establishes a presumption which may and should be rebutted when the evidence lead us to an unequivocal material truth about the ownership of the vehicle, contrary to that resulting from the register.
Thus, in the concrete case of the records, the proper analysis of the evidentiary elements attached by the Claimant and by the Respondent with the attachment of the PA, permit the Tribunal to consider as rebutted the presumption contained in the motor vehicle register, and to consider that having occurred the alienation of the vehicle in question on 20.08.2010, the company represented by the present Claimant was no longer the passive subject of tax in the period to which the impugned assessment refers, that is, 2011.
From the analysis of the documents attached to the records by the Claimant and Respondent it is possible to conclude that the Tax Authority found itself in the position of having all the informative elements about the concrete situation of the vehicle contained in the impugned tax assessment.
To which is added that the inquisitorial principle, fixed in Article 58 of the LGT, establishes that the tax administration must, in the procedure, carry out all the necessary diligences to the satisfaction of the public interest and the discovery of material truth, not being subordinated to the initiative of the petitioner.
From the analysis of the elements contained in the administrative process, particularly in the context of the exercise of prior hearing of the present Claimant, it is possible to infer that the relevant evidentiary elements for the correct making of the decision were in the position of the AT.
The decision of the AT, however, departed from a presupposition according to which the IUC is owed by the person registered in the motor vehicle register, independently of the subsequent demonstration that ownership belongs to a third party. This is the question, moreover recurrent, of gauging the legal effects of the motor vehicle register in matters of IUC incidence.
However, as is left exposed, the understanding of this Arbitral Tribunal is another, it is that the provision in paragraph 1 of Article 3 enshrines a presumption, this being the interpretation that most is in tune with the principle of material truth that the law imposes.
Regarding the question of the legal value of the register, it is important to note, from the outset, that in general terms the register has a function of publicity. According to paragraph 1 of Article 1 of DL No. 54/75, of 12 February (CRA - in the last version introduced by Law 38/2008 of 11 August), relating to the registration of motor vehicles, it provides that the registration of vehicles has essentially the purpose of publicizing the legal situation of motor vehicles and their trailers, having in view the safety of legal commerce.
It is, furthermore, necessary to take into account that Article 7 of the Property Registration Code (CRP), applicable supplementarily to the motor vehicle register, by virtue of Article 29 of the CRA, provides that "The definitive registration constitutes a presumption that the right exists and belongs to the person registered, in the precise terms in which the register defines it."
Thus, it is forced to conclude that the definitive register constitutes nothing more than the presumption that the right exists and belongs to the person registered, in the exact terms of the register, which is rebuttable, thus admitting proof to the contrary.
And, on this point, in view of the legal function reserved to the register of publicizing the legal situation of the property, it is forced to conclude, in the case of motor vehicles, that it only permits us to presume that there exists the right over those vehicles and that the same belongs to the person registered in the register.
The register does not, therefore, have a constitutive nature of the right of ownership, but only declaratory, hence the register does not constitute a condition of validity of the transmission of the vehicle from the seller to the buyer. Therefore, the acquirers of the vehicles become, thus, owners of those same vehicles by way of the celebration of the corresponding contracts of purchase and sale, by mere effect of the contract, with registration or without it.
This very thing results from the provision in paragraph 1 of Article 408 of the Civil Code, according to which the transfer of real rights over things is determined by mere effect of the contract, one of those effects being the transmission of the thing or the holding of the right (cf. subsection a) of Article 879 of the said Civil Code).
In the case of the present records, the vehicle mentioned in the impugned tax assessment was sold on 20.08.2010, by company "B... LDA", that is, on dates prior to the date of the tax event and the exigibility of the tax. If the acquirent of the vehicle, as its "new" owner, did not promote the registration in its favor, it is presumed, for purposes of paragraph 1 of Article 3 of the CIUC, that the vehicle continues to be the property of the person who sold it and who in the register remains its owner, being, however, certain that such presumption is rebuttable, either by virtue of the established in paragraph 2 of Article 350 of the Civil Code, or in light of the provision in Article 73 of the LGT. Hence, from the moment that the said presumption is set aside, by means of proof to the contrary, the AT cannot persist in considering as the passive subject of the IUC the seller of the vehicle, who, in the register, continues to appear as its owner.
Also after all that has been left exposed is it forced to conclude that the present Claimant proved that on the date of the tax event the company it represented was no longer the owner of the vehicle in question in the present records, whereby it is considered the presumption has been rebutted.
Thus, regarding the rebutting of the presumption, the Claimant, in relation to the proven facts, alleged and proved the necessary and sufficient facts for the setting aside of the presumption, offering for that purpose sufficient documents: invoice and receipt evidencing the alienation of the vehicle. The documents presented are means of proof with sufficient force to rebut the presumption based on the register, as established in paragraph 1 of Article 3 of the CIUC, documents, those, which enjoy, moreover, the presumption of truthfulness provided for in paragraph 1 of Article 75 of the LGT and which the AT did not question or impugn.
The understanding of the AT, embodied in the records, according to which the passive subjects of the IUC are, finally and without admission of proof to the contrary, the persons in whose name the motor vehicles are registered, without considering the evidentiary elements attached to the records, for identification of the effective and true owners of the vehicles, would be to admit the illegal assessment of IUC based on the erroneous interpretation and application of the norms of subjective incidence of the Unique Vehicle Circulation Tax. Such interpretation of the provision in Article 3 of the CIUC is illegal and leads to the practice of illegal assessments of tax on motor vehicles, by error as to the factual and legal presuppositions, which imposes the annulment of the corresponding tax acts.
The Respondent AT is, therefore, not in the right, when it insists that the understanding defended by the Claimant, perspective the enshrining of a presumption in paragraph 1 of Article 3 of the CIUC, based on an interpretation contra legem, resulting from a biased reading of the letter of the law and violating the unity of the legal system.
In consequence of all the above exposed, it results that the assessment is illegal and must be annulled, proceeding, consequently, to the reimbursement to the Claimant of the amount of tax unduly paid.
2nd - REGARDING THE MERIT OR LACK OF MERIT OF THE PETITION AND THE RIGHT TO PAYMENT OF INDEMNIFICATORY INTEREST.
Subsection b) of paragraph 1 of Article 24 of the RJAT provides that the arbitral decision on the merit of the claim for which there is no recourse or challenge binds the tax administration from the end of the period provided for the recourse or challenge, this administration – in the exact terms of the merit of the arbitral decision in favor of the passive subject and until the end of the period provided for the voluntary execution of the sentences of the fiscal judicial courts – being obliged to restore the situation that would exist if the tax act object of the arbitral decision had not been performed, adopting the necessary acts and operations for that purpose.
Such provision is in harmony with the provision in Article 100 of the LGT, applicable to the case by virtue of the provision in subsection a) of paragraph 1 of Article 29 of the RJAT, in which it is established 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 restoration of the situation that would exist if the illegality had not been committed, comprising the payment of indemnificatory interest, in the terms and conditions provided for in the law."
Thus, in the case of the present records, the above-mentioned principles must be applied and, in the sequence of the illegality of the assessment act there must, by virtue of these norms, be a reimbursement of the amount paid, whether as title of the tax paid, whether of the corresponding indemnificatory interest, as a way of achieving the restoration of the situation that would exist if the illegality had not been committed.
Still regarding indemnificatory interest, in view of the provision in Article 61 of the CPPT and the requirements for the right to indemnificatory interest being met, that is, verified the existence of error attributable to the services from which results payment of the tax debt in an amount superior to the legally due, as provided for in paragraph 1 of Article 43 of the LGT, the Claimant has a right to indemnificatory interest at the legal rate, calculated on the sum of €324.49, which will be counted from the date on which the payment was made until full reimbursement of the same sum.
VI - DECISION
In view of the above, this Arbitral Tribunal decides:
A) - To judge the petition for declaration of the illegality of the assessment of IUC, concerning the year 2011, impugned in the present records, as well-founded, annulling, consequently, the corresponding tax act;
B)- To judge the petition for condemnation of the Tax Administration to reimburse the sum unduly paid, in the amount of €324.49, plus indemnificatory interest at the legal rate, counted from the day of the payment made until full reimbursement of the mentioned sum, condemning the Tax and Customs Authority to effect this payment.
Value of the case: In accordance with the provision in Articles 306, paragraph 2 of the CPC (former Article 315, paragraph 2) and 97-A, paragraph 1 of the CPPT and in Article 3, paragraph 2 of the Regulation of Costs in Tax Arbitration Proceedings, the value of the case is set at €324.49.
Costs: In accordance with the provision in paragraph 4 of Article 22 of the RJAT and in accordance with Table I annexed to the Regulation of Costs in Tax Arbitration Proceedings, the amount of costs is set at €306.00, to be borne by the Tax and Customs Authority.
Let it be registered and notified.
Lisbon, 9 June 2014
The sole arbitrator,
(Maria do Rosário Anjos)
[1] In this sense, cf. BAPTISTA MACHADO, Introduction to the Legitimizing Discourse, p. 175 et seq.
[2] In this sense, cf. Afonso, A. Brigas and Fernandes, M. (2009) Tax on Vehicles and Unique Vehicle Circulation Tax, Coimbra Publishers, p. 187
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