Process: 341/2014-T

Date: January 23, 2015

Tax Type: IUC

Source: Original CAAD Decision

Summary

This CAAD arbitration case (341/2014-T) addresses the critical question of IUC (Single Vehicle Tax) liability when vehicle ownership has been transferred but registry records remain unchanged. A financial credit institution challenged €2,384.50 in IUC assessments for 20 vehicles across tax years 2009-2012, arguing it had sold these vehicles before the taxable events occurred and filed registration transfer requests under Article 6 of Decree-Law 20/2008. The central legal controversy concerns the interpretation of Article 3 of the CIUC Code: whether it establishes a rebuttable presumption or an irrebuttable legal fiction regarding vehicle ownership. The Claimant contended that Article 3 creates a rebuttable presumption, allowing proof of actual sale to override registry data, and that purchase-sale contracts have real effects binding on the Tax Authority. The AT countered that the provision creates a legal fiction deeming registered owners as taxpayers regardless of actual ownership, that the invoices provided insufficient proof of valid transfers, and that the registry system requires AT to assess IUC based solely on registered ownership. Additionally, the AT raised a procedural exception claiming 27 assessments were challenged beyond the 3-month deadline under Article 10(1)(a) LRAT and Article 102(1)(a) CPPT. The Claimant disputed this, arguing the limitation period commenced upon notification of gracious objection dismissal, not upon expiration of voluntary payment deadlines. This case establishes important precedent on IUC subjective scope, the evidentiary weight of vehicle registration versus actual ownership documentation, and procedural requirements for tax arbitration challenges involving transferred vehicles in financial leasing contexts.

Full Decision

ARBITRAL DECISION

CAAD: Tax Arbitration

Case No. 341/2014– T

Subject: IUC – subjective scope; legal presumption

I. REPORT

"A" – FINANCIAL CREDIT INSTITUTION, S.A., company with registered office at Rua …, Lot …, …-… Lisbon, holder of the unique registration and identification number for legal persons …, hereinafter simply designated as Claimant, filed a petition for constitution of an arbitral tribunal in tax matters and a request for arbitral pronouncement, pursuant to the provisions of subparagraph a) of section 1 of Article 2 and subparagraph a) of section 1 of Article 10, both of Decree-Law No. 10/2011, of 20 January (Legal Regime for Arbitration in Tax Matters, hereinafter briefly designated as LRAT), petitioning for the declaration of illegality and consequent annulment of the assessment acts for the Single Vehicle Tax (IUC) relating to twenty (20) motor vehicles identified in the request for arbitral pronouncement, referring to the tax years 2009 to 2012, in the total amount of € 2,384.50, as well as reimbursement of the same amount and payment of the corresponding indemnity interest.

To support its petition, it alleges, in summary:

a) The Claimant is a financial institution that, in the course of its activity, enters into long-term rental contracts and financial leasing contracts for motor vehicles;

b) As of the date of the occurrence of the taxable event in question in the present proceedings, the Claimant was not the owner of the motor vehicles on which the paid tax was levied, as these had already been sold;

c) With respect to each of the vehicles whose assessments are at issue in the present proceedings, the Claimant proceeded, in accordance with and for the purposes of the provisions in Article 6 of DL No. 20/2008, of 31 January, to file a request for registration of the transfer of ownership in favour of the purchasers of each of these vehicles;

d) Once the request referred to in c) above was filed, the Claimant was not notified of any opposition presented by the purchasers or of the refusal of the requested registration;

e) Under Article 3 of the CIUC Code, the taxpayers liable to the tax are the owners of the vehicles, and financial lessees, purchasers with retention of title, as well as other holders of purchase option rights by force of a lease contract are deemed to be owners;

f) Section 1 of Article 3 of the CIUC Code contains a rebuttable presumption;

g) Thus, the taxpayer liable to IUC is the owner, even if not registered in the motor vehicle registry, provided that sufficient proof is made to rebut the legal presumption arising from the registry;

h) In the case of the assessments in dispute, the Claimant is not the taxpayer liable to IUC;

i) The purchase and sale contract has real effect;

j) The Tax and Customs Authority (AT) is not a third party for purposes of registration, and therefore cannot rely on the failure to update the property registry in order to challenge the full effectiveness of the purchase and sale contract;

k) The Claimant paid the tax in question in the present proceedings.

The Claimant attached 94 documents and did not call any witnesses.

In the request for arbitral pronouncement, the Claimant opted not to designate an arbitrator, and therefore, pursuant to the provisions of Article 6, section 1 of the LRAT, the undersigned was designated by the Deontological Council of the Administrative Arbitration Center, and the appointment was accepted as legally provided.

The arbitral tribunal was constituted on 24 June 2014.

Notified in accordance with and for the purposes of the provisions in Article 17 of the LRAT, the Respondent presented its defence, making exceptions and opposing the claim, alleging, in summary, the following:

By way of exception:

a) With respect to 27 of the assessments challenged, as of the date of the filing of the petition for constitution of an arbitral tribunal in tax matters and request for arbitral pronouncement, the right to appeal to the arbitral tribunal had already expired, more than 3 months having elapsed since the date limit for payment of the tax in question.

b) Therefore, pursuant to the provisions of Article 10, section 1, subparagraph a) of the LRAT, in conjunction with Article 102, section 1, subparagraph a) of the CPPT, the petition for constitution of the arbitral tribunal with respect to these assessments is out of time, and the Claimant's right to act has expired.

By way of opposing the merits:

a) The legislator expressly and intentionally established that the taxpayers liable to IUC are the owners, being considered as such the persons in whose names the vehicles are registered;

b) Article 3 of the CIUC Code does not establish any presumption of ownership, but rather a true fiction of ownership – the legislator does not say that owners are presumed but that they are deemed to be owners;

c) Although the Claimant alleges that it was not the owner of the vehicles as of the date of the taxable events to which the contested assessments refer, the truth is that the evidence presented by it does not allow the conclusion that the necessary transfer of the vehicles took place;

d) The invoices attached do not constitute proper documentation to prove the sale of the vehicles in question, since they are nothing more than documents unilaterally issued by the Claimant;

e) The failure to register changes in ownership or lease situations in the registry results in the obligation to pay IUC falling on the registered owner, and the AT cannot assess the tax based on elements that do not appear in the registry;

f) The IUC is payable by persons who appear in the registry as owners of the vehicles;

g) The failure to comply with the obligation provided for in Article 19 of the CIUC Code imposes on the Claimant the responsibility for the arbitration costs.

The Respondent did not attach a copy of the administrative file and did not call any witnesses.

Notified of the defence presented by the AT, the Claimant proceeded to make pronouncements on the exception of expiration of rights invoked, defending, in summary, that the alleged expiration does not obtain, on the grounds that the period for challenging the assessments in dispute only began with the notification of the dismissal of the gracious objections presented and not, as the AT contends, with the termination of the period for voluntary payment.

In view of the position assumed by the parties and the absence of any need for additional production of evidence, it was determined that the meeting referred to in Article 18 of the LRAT would not take place, as well as the waiver of presentation of further arguments.

II. ISSUES TO BE DECIDED

In view of the positions assumed by the Parties, as set forth in the arguments presented, it is necessary:

a. To rule on the exception of expiration of rights invoked by the AT with respect to 27 of the assessments challenged;

b. To determine who is the taxpayer liable to IUC when, as of the date of the occurrence of the taxable event, the motor vehicle has already been alienated;

c. To determine what is the legal value of the motor vehicle registry for purposes of the subjective scope of the tax;

d. To determine whether the failure to update the motor vehicle registry allows considering, as taxpayers liable to IUC, the persons in whose names the vehicles are registered;

e. To determine what are the consequences of non-compliance with the provisions of Article 19 of the CIUC Code.

III. STATEMENT OF FACTS

a. Established Facts

With relevance for the decision to be rendered in the present proceedings, the following facts were established as proven:

  1. The Claimant is a financial credit institution;

  2. In the course of its activity, the Claimant grants financing to its clients for the acquisition of motor vehicles;

  3. The Claimant was notified of seventy-one IUC assessment acts relating to twenty motor vehicles and corresponding to the tax years between 2009 and 2012, as set forth in the assessments attached to documents numbers 61 to 77, in the total amount of € 2,384.50;

  4. None of the twenty vehicles to which the assessments now challenged relate belong to categories F or G, referred to in Article 4 of the CIUC Code;

  5. Of the seventy-one assessments challenged, fifty-nine relate to vehicles with respect to which, on the date of the occurrence of the taxable event, the Claimant had issued an invoice of sale to a third party;

  6. With respect to sixteen of the twenty vehicles whose assessments are at issue in the present proceedings, the Claimant proceeded to file a request for registration of the transfer of ownership in favour of the purchasers of each of these vehicles, in accordance with and for the purposes of the provisions in Article 6 of DL No. 20/2008, of 31 January, on a date prior to the date of the occurrence of the taxable event;

  7. The Claimant filed a gracious objection with respect to all the assessments challenged;

  8. With the exception of the objection filed with respect to the assessment made with respect to the vehicle with registration …-…-…, all gracious objections filed came to be subject to a dismissal decision;

  9. The Claimant was notified of the dismissal decisions of the gracious objections filed on 02/04/2014;

  10. The petition for constitution of the arbitral tribunal in tax matters and request for arbitral pronouncement was filed on 16/04/2014;

  11. The Claimant paid the tax assessed by the Respondent and reflected in the assessments now challenged.

b. Unproven Facts

It was not proven that the gracious objection filed with respect to the assessment made with respect to the vehicle with registration …-…-… was subject to a dismissal order.

c. Rationale for the Statement of Facts

The conviction as to the facts established as proven was formed on the basis of the documentary evidence attached by the Claimant, indicated with respect to each point, and whose correspondence to reality was not questioned.

IV. CASE MANAGEMENT

The Arbitral Tribunal is duly constituted and is materially competent.

The parties have legal personality and capacity, are legitimate, and are duly represented.

The proceedings do not suffer from defects that affect their validity.

V. LAW

The statement of facts being fixed, it is now necessary, by reference to it, to determine the applicable law.

First and foremost, it is necessary to consider the exception of expiration of rights invoked by the Respondent.

With respect to this exception, the AT invokes that, with respect to 27 of the assessments challenged, the period for filing a petition for constitution of an arbitral tribunal in tax matters and request for arbitral pronouncement has been exceeded, given the fact that the respective petition was filed after the 3-month period referred to in Article 102, section 1, a) of the CPPT had elapsed.

This is because, with respect to these 27 assessments, according to the AT, the payment deadlines being 04/12/2013 and 11/12/2013, the respective period for challenging these assessments would end on 04/03/2014 and 11/03/2014, respectively.

As the petition for constitution of the arbitral tribunal and request for arbitral pronouncement was filed on 16/04/2014, the indicated three-month period had already been exceeded with respect to these assessments, and therefore the Claimant's right to request its declaration of illegality had already expired.

It concludes, requesting that the petition filed with respect to these 27 assessments be considered out of time.

In its defence, the Claimant invokes that, having filed a gracious objection with respect to all the assessments now challenged, the 15-day period provided for in Article 102, section 2 of the CPPT for the respective challenge is counted from the date of notification of the dismissal decision of the objection and not from the payment deadline.

Therefore, having been notified of the dismissal decision of the gracious objection on 02/04/2014 and the petition for constitution of the arbitral tribunal and pronouncement having been filed on 16/04/2014, there is no out-of-time filing.

It thus concludes, requesting that the exception of expiration of rights invoked be declared unfounded.

It is necessary to decide:

As verified from the established facts, the Claimant filed a gracious objection with respect to all the assessments challenged – cf. point 7 of the established facts.

It is further proven that, with the exception of the objection filed with respect to the assessment made with respect to the vehicle with registration …-…-…, all gracious objections filed were subject to a dismissal order – cf. point 8 of the established facts.

Finally, it is also proven that the Claimant was notified of the dismissal decisions of the gracious objections filed on 02/04/2014 - cf. point 9 of the established facts.

As the present petition for constitution of the arbitral tribunal and request for arbitral pronouncement was filed on 16/04/2014, which is also proven - cf. point 10 of the established facts -, it is manifest that, with the exception of the challenge relating to the assessment made with respect to the vehicle with registration …-…-…, the petition was filed within the 15-day period referred to in Article 102, section 2 of the CPPT.

Therefore, there can be no doubt that, with the exception of the challenge relating to the assessment made with respect to the vehicle with registration …-…-…, the petition was filed in a timely manner.

With respect to the assessment challenged relating to the vehicle with registration …-…-…, the date of notification to the Claimant of the dismissal decision not being demonstrated in the record, it is manifest that the initial calculation of the period for challenging this assessment must be considered to begin from the general period provided in subparagraph a) of section 1 of Article 102 of the CPPT, that is, from the expiration of the period for voluntary payment of the tax liabilities legally notified to the taxpayer.

In this case, the period for voluntary payment of this assessment was 04/12/2013, and as the Claimant failed to prove that the initial calculation of the period for challenge would be otherwise, it must necessarily be considered that this begins from the date limit for voluntary payment of the tax.

It is noted that, in the situation now under consideration, the burden of proof that the initial calculation of the period for challenging this assessment would be, not the period limit for voluntary payment of the tax liability, but rather the date of notification of the dismissal decision of the gracious objection filed, falls on the Claimant – cf. Article 342 of the Civil Code.

Having failed to provide proof of this fact, the decision on this issue must be made against it.

In view of the foregoing, the exception of expiration of rights with respect to the challenge of assessment number 2009 …, made with respect to the vehicle with registration …-…-…, is well-founded, being unfounded with respect to the challenge of the other assessments.

Having ruled on the exception of expiration of rights invoked, we are thus in a position to rule on the merits of the petition, with respect to the assessments whose expiration of the right to challenge has not occurred.

Thus,

Having examined the arguments presented by the Parties, it is easy to see that the central question lies in the interpretation of the provision contained in section 1 of Article 3 of the CIUC Code and, more specifically, in whether it contains or does not contain a legal presumption. This question, as has been emphasized in other decisions, has given rise to extensive case law – also arbitral – which will appropriately be brought here.

Under the heading subjective scope, Article 3 of the CIUC Code provides:

"1. – The taxpayers liable to the tax are the owners of the vehicles, being deemed as such the natural or legal persons, of public or private law, in whose names the same are registered.

  1. – Financial lessees, purchasers with retention of title, as well as other holders of purchase option rights by force of a lease contract are deemed to be owners."

Now, to dispel doubts about the meaning and scope to be given to a particular legal norm implies carrying out an interpretive task that allows extracting from the linguistic statement a concrete meaning or "content of thought"([1]). However, such a task can only be accomplished – thus successfully grasping the vis ac potestas legis – through the use of a concrete method, which is based on literal interpretation, on the one hand, and on logical or rational interpretation, on the other.

It should be recalled that, according to the provisions of section 1 of Article 11 of the General Tax Law, tax norms are interpreted in accordance with the principles of legal hermeneutics commonly accepted, particularly those established, among us, in Article 9 of the Civil Code. Let us proceed.

Literal interpretation presents itself, then, as the first stage of interpretive activity. As FERRARA states, "the text of the law forms the substrate from which the interpreter must depart and on which must rest"([2]).

In fact, since the law is expressed in words, the verbal significance they contain must be extracted from them, according to their natural connection and grammatical rules. However, if the words used by the Legislator are equivocal or indeterminate, it will be necessary to resort to logical interpretation, which attends to the spirit of the provision being interpreted.

Logical interpretation, as it has been peacefully understood by doctrine([3]), is based on the rational element, the systematic element, and the historical element; weighing them and deducing therefrom the value of the legal norm in question.

By rational element must be understood the raison d'être of the legal norm, i.e., the purpose for which the legislator instituted it. The discovery of the ratio legis presents itself, thus, as a factor of undoubted importance for the determination of the meaning of the norm.

It happens, however, that a particular norm does not exist in isolation, but rather coexists with other norms and legal principles in a systematic and complex manner. Thus, it becomes natural that the meaning of a concrete norm becomes clear from the confrontation of this norm with others. As BAPTISTA MACHADO states, "this element comprises the consideration of other provisions that form the complex normative framework of the institute in which the norm to be interpreted is integrated, that is, those 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 further comprises the systematic place that belongs to the norm to be interpreted in the overall legal system, as well as its harmony with the spirit or intrinsic unity of the entire legal system."([4]).

The historical element, for its part, must refer to and include materials connected with the history of the norm, such as "the evolutionary history of the institute, the figure or the legal regime in question (…); the so-called sources of the law, namely the legal or doctrinal texts that inspired the legislator in the elaboration of the law (…); the preparatory work.".

Let us apply, then, what has been said to the case at hand.

Having examined the arguments of Claimant and Respondent, and with respect to the literal element, it is easy to see that the focus of disagreement lies in the expression "(…) being deemed as such (…)", contained in section 1 of Article 3 of the CIUC Code.

The question is asked – as was indeed done in the Arbitral Decision rendered in Case No. 73/2013-T([5]): "Does the fact that the legislator opted for the word "deemed" destroy the possibility of us being in the presence of a presumption?". No. It is the answer that, we believe, is necessary. And let it not be said that such conclusion is contradicted by the circumstance that the legislator did not use the word "presumed", which was used in the old Vehicle Tax Regulation.

Here too we must emphasize what was said in that decision: "examining the Portuguese legal system, we find countless norms that enshrine presumptions using the verb deem, many of which are used in the gerund ("deeming" or even "being deemed"). Examples of this are the norms enumerated below: In the Civil Code, among others, Articles 314, 369 section 2, 374 section 1, 376 section 2, 1629 (…). Also in the tax legal system can the verb "deem" be found, namely the term "is deemed" with a presumptive meaning. And there is added the teaching of LEITE DE CAMPOS, SILVA RODRIGUES and LOPES DE SOUSA which, for the clarity of exposition, is equally transcribed here. Thus, the Authors write that "presumptions in the matter of tax scope can be explicit, revealed by the use of the expression presumed or similar (…). However, presumptions can also be implicit in scope norms, namely objective scope, when certain values of movable or immovable property are considered as constituting taxable matter, in situations where it is not impractical to ascertain the actual value".

In this regard, JORGE LOPES DE SOUSA([6]) notes that in section 1 of Article 40 of the Personal Income Tax Code the expression "presumed" is used, whereas in section 2 of Article 46 of the same statute the word "deemed" is used, with no difference between one and the other expression, both meaning, after all, the same thing: a legal presumption.

And what of section 4 of Article 89-A? Can there be any doubt that this is a presumption? And is such conclusion weakened by the fact that the verb deem is employed there? It does not appear so to us.

Thus, and for what interests us here, it is admissible to equate the verb deem with the verb presume. Indeed, we can be in the presence of a presumption even when the legislator has opted for other verbs, namely the verb deem. In fact, and contrary to what the Respondent argues, it is this conclusion that least impairs the systematic coherence required by the legal system as a whole.

But furthermore: the rational element also authorizes such a conclusion.

Let us refer to the statement of grounds of Proposed Law No. 118/X, of 07/03/2007, which resulted in Law No. 22-A/2007, of 29 June, as it clearly reveals the ratio legis.

The intention was to undertake a "comprehensive and coherent reform of taxes linked to the acquisition and ownership of motor vehicles" in light of the "pressing need to bring clarity and coherence to this area of the tax system and the more pressing need to subordinate it to the principles and concerns of an environmental and energy nature that today mark the discussion of vehicle taxation".

Thus, "the two new taxes now being created, the tax on vehicles and the single vehicle tax, constitute much more than the technical continuation of the figures created in the 70s and 80s that preceded them, aimed predominantly at revenue collection, indifferent to the social cost resulting from motor vehicle circulation. They constitute something different, figures already of the century in which we live, with which we intend, certainly, to collect public revenue, but to collect it in the measure of the cost that each individual provokes to the community."

In a manner consistent with that motivation, the legislator came to enshrine, in Article 1 of the CIUC Code, the principle of equivalence, making it clear "that the tax, as a whole, is subordinated to the idea that taxpayers should be burdened in the measure of the cost they cause to the environment and to the road network, and this is the reason for being of this tax figure. It is this principle that dictates the burdening of vehicles according to their respective ownership and until the moment of scrapping".

It can, indeed, be said that environmental and energy concerns are so significant in the context of IUC that the principle of equivalence shapes not only the taxable base, but also, and above all, the very subjective scope, provided for in Article 3.

Once again the Arbitral Decision rendered in Case No. 73/2013-T is referred to: "Taking into account both the systematic place that the principle of equivalence occupies (Article 1 of the CIUC Code) – systematic element – and the historical element embodied in Proposed Law No. 118/X (source of law), as well as the rational (or teleological) element just analyzed, all point in the direction of the preliminary conclusion that we reached when analyzing the grammatical element, making sense only to conceive in the context of Article 3 of the CIUC Code the expression "being deemed as such" as revealing the presence of a rebuttable presumption (…). In fact, the ratio legis of the tax points rather in the direction of vehicle users being taxed, the economic owner, as DIOGO LEITE DE CAMPOS would say, the actual owners or the financial lessees, for these are those who have the polluting potential that causes environmental costs to the community".

It being established what the legal nature of the provision contained in section 1 of Article 3 of the CIUC Code is, it is now necessary to clarify the question of the subjective scope of the tax when the vehicle, as of the date of the taxable event, has already been alienated.

Once the purchase and sale contract is concluded, the purchaser will be vested, ex contractu, in the position of owner, consequently becoming applicable to him section 1 of Article 3 of the CIUC Code; i.e., the new owner comes to hold, for purposes of IUC, the position of taxpayer liable to the tax.

And such a solution is necessary as of the moment of the perfection of the purchase and sale contract not only because the IUC Code determines it – by stating that the taxpayers liable to the tax are the owners –, but also because of the fact that among us the principle of consensuality applies, which means that the transfer of ownership occurs by mere effect of the contract; as results in the first place from section 1 of Article 408 of the Civil Code. See also, reinforcing what has been said above, subparagraph a) of Article 879 of that statute.

It should be noted that the understanding set forth in the paragraph preceding is unanimously advocated by Doctrine([7]) and Case Law([8]), thus requiring no additional developments.

And what has just been said is relevant to support our position with respect to the legal value of the motor vehicle registry. Let it be recalled, however, that according to the general rule just seen, the transfer of the right occurs ex contractu, without the need for any material act or publicity([9]).

As peacefully accepted by Doctrine and Case Law, in the face of the silence of Decree-Law No. 54/75, of 12 February, regarding the question of the legal value of the motor vehicle registry, it becomes necessary to resort to the discipline of the property registry; an operation moreover authorized by Article 29 of that Decree-Law.

Now, having regard to the Property Registry Code – approved by Decree-Law No. 125/13, of 30 August –, particularly Article 7 thereof, and combining this norm with Article 1 of Decree-Law No. 54/75, it quickly becomes apparent what is the primacy function of the registry (motor vehicle): to give publicity to the legal situation of motor vehicles.

It can thus be stated that the registry does not have constitutive nature, but rather merely declarative, allowing only the presumption of the existence of the right and its ownership. Note: presume and not feign, and thus can be rebutted by proof to the contrary.

And this is so precisely because, in accordance with the provisions of Article 408 of the Civil Code, and except as provided by law, the constitution or transfer of real rights over a determinate thing occurs by mere effect of the contract, with its validity not depending on any subsequent act, e.g., registration in the registry.

In such fashion, inasmuch as the law provides no exception for the purchase and sale contract of a motor vehicle, the real effect produces its effects normally, the purchaser becoming its owner, independently of the registry.

Now, if independently of the registry the purchaser becomes the owner, the registered holder ceases concomitantly to be so; although in the registry he is shown as such.

In this case, and notwithstanding the failure to register, the transfers effected are enforceable against the Respondent, with the latter unable to rely on the provisions of section 1 of Article 5 of the Property Registry Code.

First and foremost because the Respondent is not, for purposes of the provisions in that norm, deemed to be a third party for purposes of registration.

The notion of third parties for purposes of registration is given to us by section 4 of the same Article 5: third parties, for purposes of registration, are those who have acquired from a common author rights incompatible with each other; wherefrom it is fatally concluded that this is manifestly not the case in these proceedings.

Now, although as of the date of the tax assessments the Claimant still appears in the registry as owner of the vehicles, the truth is that it alleges not to be, as of the date of the taxable event, its owner, as it had already alienated them.

Thus, and since the presumption resulting from the registry is, as we have seen, rebuttable by proof to the contrary – proof that is considered to have been carried out through the presentation of the invoices of sale as well as the presentation of proof of the filing of the request for registration of the transfer of ownership –, and it being verified that, with respect to the vehicles in question, the Claimant is not their owner as of the date of the occurrence of the taxable event, it becomes necessary to conclude that the Claimant cannot be deemed the taxpayer liable to the assessed IUC.

Let us pause on the question raised by the Respondent, relating to Article 19 of the CIUC Code, which provides as follows:

"For purposes of the provisions in Article 3 of this Code (…) entities that engage in financial leasing, operational leasing or long-term rental of vehicles are obliged to provide to the General Tax Directorate data relating to the tax identification of the users of the leased vehicles".

The Respondent, asserting that the Claimant failed to comply with the declarative obligation arising from Article 19 of the CIUC Code, comes to assert that from this must be drawn consequences both intra and extraprocessual. The former would result in the Claimant's liability for the arbitration costs inherent in this proceeding; the latter would materialize in the liability of the Claimant on the grounds of a minor tax violation.

It is necessary to note, in abstract terms, that non-compliance with the provisions of Article 19 of the CIUC Code can indeed constitute the minor tax violation provided for in Article 117 of the General Tax Violations Regime. This is not, however, what is being discussed in the present proceedings.

On the side, it will always be said that the cited Article 19 is inserted in Chapter III of the CIUC Code, relating to ancillary obligations, inspection and the minor tax violation regime, and the obligation arising therefrom is merely declarative in nature and has no effect whatsoever on altering the rules of the subjective scope of the tax, provided for in Chapter I under the heading "Principles and General Rules".

And that this is so results also from the fact that Article 19 itself does not provide for this sanction for its non-compliance. Wherefrom is drawn, without any margin for doubt, that the non-compliance with this obligation does not determine, without more, that the taxpayer liable to the tax becomes the lessor.

In summary:

· The provision contained in section 1 of Article 3 of the CIUC Code contains a presumption;

· Being such presumption contained in a provision of tax scope, it will always allow proof to the contrary, as results from Article 73 of the GTL;

· When, as of the date of the occurrence of the taxable event, the motor vehicle has already been alienated, although the right of ownership continues registered in the name of the original owner, the taxpayer liable to IUC is the new owner, provided that the latter rebuts the presumption arising from the registry;

· The transfer of ownership occurs by mere effect of the contract, not requiring any subsequent act;

· The motor vehicle registry does not have constitutive nature, but rather aims to give publicity to the situation of vehicles through rebuttable presumptions of the existence of the right and its respective ownership;

· The AT cannot rely on the absence of updating of the registry to, questioning the effectiveness of the purchase and sale contracts, attribute to the original owner the status of taxpayer liable to IUC and, thus, demand from this party the fulfillment of the tax obligation.

From all that has been set forth results clear the existence of legal grounds for assessment number 2009 …., in the amount of € 29.00.

As for the other assessments challenged, there are no legal grounds for them, thus imposing their annulment, with the other legal consequences.

VI. DECISION

In view of the foregoing, it is decided:

a. To declare out of time the petition for challenge filed with respect to assessment number 2009 …, in the amount of € 32.80;

b. To declare unfounded the petition for declaration of illegality of assessment number 2009 …, in the amount of € 29.00;

c. To declare well-founded the petition for annulment of the other IUC assessment acts challenged, with all legal consequences;

d. To condemn the Respondent to proceed with the reimbursement to the Claimant of the amount incorrectly paid, in the amount of € 2,322.70, plus indemnity interest at the legal rate, counted from the date of the incorrect payments, until full payment to the Claimant of the assessed amounts.

Pursuant to the provisions of section 2 of Article 12 and section 4 of Article 22 of the LRAT and Article 4 of the RCPAT, the amount of costs is fixed at € 612.00 in accordance with Table I attached to the Regulation of Costs in Tax Arbitration Proceedings, of which 2.59% is chargeable to the Claimant and 97.41% to the Respondent.

The amount of the arbitration fee is fixed at € 612.00, in accordance with Table I of the Regulation of Costs in Tax Arbitration Proceedings, pursuant to section 2 of Article 12 and section 4 of Article 22, both of the LRAT, and section 4 of Article 4 of the cited Regulation, to be paid by the Respondent as the losing party.

Register and notify.

Lisbon, 23 January 2015

The Arbitrator,

Alberto Amorim Pereira

Text prepared by computer, in accordance with section 5 of Article 131 of the CPC, applicable by reference to subparagraph e) of section 1 of Article 29 of Decree-Law No. 10/2011, of 20/01.

The preparation of this decision is governed by the old spelling.

([1]) Cf. BAPTISTA MACHADO, JOÃO, Introduction to Law and Legitimating Discourse, Almedina, 1982, p. 175.

([2]) FERRARA, FRANCESCO, Interpretation and Application of Laws, 1921, Rome; Translation by MANUEL DE ANDRADE, Arménio Amado, Editor, Successor – Coimbra, 2nd Edition, 1963, p. 138 et seq.

([3]) See, above all, BAPTISTA MACHADO, JOÃO, op. cit., p. 181.

([4]) BAPTISTA MACHADO, JOÃO, op. cit., p. 183.

([5]) Cf. Arbitral Decision of 5 December 2013, rendered in Case No. 73/2013, p. 21.

([6]) Cf. LOPES DE SOUSA, JORGE, Annotated and Commented Tax Procedure and Process Code, Vol. I, 6th Edition, Áreas Editora, Lisbon, 2011, p. 589.

([7]) See, above all, PIRES DE LIMA and ANTUNES VARELA, Annotated Civil Code, Volumes I and II, Coimbra Editora, 4th Revised and Updated Edition, Annotations to Articles 408 and 79.

([8]) See, inter alios, Judgment of the Supreme Court of Justice of 3 March 1998.

([9]) Cf. EWALD HÖRSTER, HEINRICH, The General Part of the Portuguese Civil Code, Almedina, 2nd Reprint of the 1992 Edition, p. 467.