IUC Tax on Leased Vehicles: Subjective Incidence and Legal Presumptions in CAAD Case 371/2015-T

ARBITRAL DECISION[1]

Claimant – A…, S.A.

Respondent – Tax and Customs Authority

The Arbitrator Dr. Sílvia Oliveira, appointed by the Ethics Council of the Administrative Arbitration Centre (CAAD) to form the Arbitral Tribunal, constituted on 26 August 2015, with respect to the above-identified case, decided as follows:

1. REPORT

1.1

A…, S.A. (hereinafter referred to as "Claimant"), a legal entity bearing number …, with registered office at Rua …, n° …, in Lisbon, filed a request for arbitral decision and constitution of a single Arbitral Tribunal on 9 June 2015, pursuant to the provisions of article 4 and article 10, section 2, of Decree-Law no. 10/2011 of 20 January [Legal Framework for Tax Arbitration (RJAT)], in which the Tax and Customs Authority (hereinafter referred to as "Respondent") is the respondent.

1.2

The Claimant seeks, in the aforementioned request for arbitral decision, that the Arbitral Tribunal shall proceed to "(…) declare the unlawfulness and consequent annulment of the 21 assessment acts relating to the Single Vehicle Circulation Tax (IUC) with respect to the 17 vehicles identified (…)", as well as the "reimbursement of the amount of € 2,318.71, relating to the tax wrongfully paid by the Claimant" and the "payment of compensatory interest, for the deprivation of the aforementioned amount (…)".

1.3

The request for constitution of the Arbitral Tribunal was accepted by His Excellency the President of the CAAD on 11 June 2015 and notified to the Respondent on the same date.

1.4

On 27 July 2015, the Respondent submitted a motion, in accordance with the terms and for the purposes provided for in article 13 of the RJAT, to communicate its intention to proceed with the revocation of the Single Vehicle Circulation Tax (IUC) assessments hereinafter identified, as well as the respective interest, in the total amount of EUR 1,504.91:[2]

1.5

Taking into consideration the intention of partial revocation manifested by the Respondent (see preceding paragraph), the Claimant was notified on 27 July 2015 of the content of a ruling by His Excellency the President of the CAAD, given the circumstances provided for in article 13, section 2 of the RJAT, to pronounce itself on the continuation of the arbitral proceedings relating to the request submitted on 9 June 2015.

1.6

The Claimant, on 5 August 2015, submitted a motion to inform that "without prejudice to accepting expressly and fully the revocation of assessment acts carried out by the Tax and Customs Authority (…), it maintains an interest in the continuation of the present arbitral proceedings (…) with respect to the assessment acts that were not subject to revocation by the Tax Authority" (emphasis added).

1.7

Given that the Claimant did not proceed with the appointment of an arbitrator, in accordance with the provisions of article 6, section 2, letter a) of the RJAT, the undersigned was appointed as arbitrator on 07 August 2015 by the President of the Ethics Council of the CAAD, having the appointment been accepted within the legal timeframe and terms.

1.8

On the same date, the Parties were duly notified of such appointment, and did not manifest any intention to refuse the arbitrator's appointment, in accordance with the combined provisions of article 11, section 1, letters a) and b) of the RJAT and articles 6 and 7 of the Ethics Code.

1.9

Thus, in accordance with the provision in letter c) of section 1 of article 11 of the RJAT, the Arbitral Tribunal was constituted on 26 August 2015, and an arbitral order was issued on the same date, to notify the Respondent to, in accordance with the provisions of article 17, section 1 of the RJAT, submit its answer within a maximum period of 30 days and, if it wished, request the production of additional evidence.

1.10

On 30 September 2015, the Respondent submitted its Answer, having defended itself by challenging and concluded that "the request for arbitral decision should be judged without merit, with the tax assessment acts challenged maintaining their place in the legal system (in particular, those not revoked at an earlier moment before the constitution of the arbitral tribunal), and the Respondent being absolved of the request accordingly".

1.11

On 30 September 2015, an arbitral order was issued directing the Parties to pronounce themselves, within a period of five days, on the possibility:

1.11.1

Of waiver of holding the meeting referred to in article 18 of the RJAT, and,

1.11.2

Of waiver of submission of arguments.

1.12

On 1 October 2015, both Parties submitted motions in response to the content of the arbitral order referred to in the preceding paragraph, to the effect that they did not oppose the waiver, either of holding the meeting referred to in article 18 of the RJAT or of the submission of arguments.

1.13

Accordingly, it was decided by the Arbitral Tribunal, in an order dated 8 October 2015, in accordance with the procedural principles enshrined in article 16 of the RJAT, of the autonomy of the arbitral tribunal in the conduct of proceedings and in the determination of the rules to be observed [letter c)], of cooperation and good faith in proceedings [letter f)] and of the free conduct of proceedings enshrined in articles 19 and 29, section 2 of the RJAT, having also taken into account the principle of limitation of unnecessary acts provided for in article 130 of the Code of Civil Procedure (CPC) [applicable by virtue of the provision in article 29, section 1, letter e) of the RJAT], to waive holding the meeting referred to in article 18 of the RJAT, as well as to waive submission of arguments, with 26 October 2015 being designated as the date for delivery of the arbitral decision.

1.14

In the same order, the Claimant was further warned that "until the date of delivery of the arbitral decision, it should proceed to payment of the subsequent arbitration fee, in accordance with the provisions of section 3 of article 4 of the Regulation of Costs in Tax Arbitration Proceedings and communicate such payment to the CAAD".

1.15

In a motion submitted by the Claimant on 9 October 2015, it requested clarification as to whether it should "proceed to payment of any additional amount (…) as an arbitration fee" having taken into account that it had already proceeded "to payment of the overall arbitration fee corresponding to the current value of the case" [given that the Respondent effected partial revocation, prior to the constitution of the Arbitral Tribunal, of 12 of the 21 IUC assessment acts subject to the request for arbitral decision, the value of the case was reduced from EUR 2,318.71 to EUR 1,504.91].

1.16

Following the motion identified in the preceding paragraph, this Arbitral Tribunal clarified the Claimant, through an arbitral order dated 12 October 2015, that "taking into account the provision of article 4, sections 4 and 5 of the Regulation of Costs in Tax Arbitration Proceedings [by which the fixing of the amount of final costs of the arbitral case (…) is carried out in the arbitral decision to be issued by the arbitral tribunal (…)] and that "the final account is sent to the parties after the finality of the decision and (…) the CAAD will reimburse the taxpayer in the amount owed to it"], it should proceed, until the date of delivery of the arbitral decision (26 October 2015), to payment of the subsequent arbitration fee (which it did on 13 October 2015) (emphasis added).

2. GROUNDS FOR THE CLAIM

2.1

The Claimant seeks, in the request for arbitral decision initially presented, the annulment of "21 assessment acts relating to IUC with respect to the 17 vehicles identified (…)" with the consequent "reimbursement of the amount (…) of wrongfully paid tax (…)" and "the payment of compensatory interest for the deprivation of the aforementioned amount (…)".

2.2

However, having taken into consideration the intention manifested by the Respondent to revoke the assessment acts (tax and interest) identified in paragraph 1.4 above, in the total amount of EUR 1,504.91, all the references presented in the request and described below shall be considered as made only with respect to the non-revoked assessments, whose total value amounts, by difference, to EUR 813.80, and with respect to which the Claimant manifested the intention to proceed with the request for arbitral decision.

Introduction – On the identification of the acts subject to this Request for Arbitral Decision

2.3

The Claimant begins by asserting in its request for arbitral decision that "all these additional tax assessment acts are based on the same facts and (…) on the same legal grounds" because "all of them presuppose the same legal-tax understanding: that, during the validity of the respective financial leasing contracts (…) the entity leasing the vehicles (…) is responsible for the payment of IUC, instead of the corresponding lessee".

2.4

Thus, "considering this identity of tax facts, of factual and legal grounds and (…) of the court competent to decide, (…) given the high number of vehicles and the volume of documentation necessary to prove the facts (…) alleged, the Claimant opted to (…) aggregate the additional assessments whose lawfulness is challenged in a single request for arbitral decision (…), taking into consideration the principle of procedural economy (…)".

Prior Question – On the legitimacy of the Claimant to file this Request for Arbitral Decision

2.5

In this regard, the Claimant states that "some of the acts complained of here were directed at the Claimant (…)" and "the (…) assessment act no. 21 was directed at B… S.A. BRANCH IN PORTUGAL (…), formerly designated as C… - … S.A." which was "a branch in Portugal that (…) was dissolved (…)" and whose "set of assets and liabilities (…) was (…) incorporated into the here Claimant (…)"[3].

2.6

In this manner, the Claimant, having become the holder of all the assets and liabilities that previously belonged to the aforementioned branch, assumed "(…) the position of lessor in all the leasing contracts that were then in force in the legal sphere of B…", "in particular, the contract relating to the vehicle (…) identified in line no. 21 of ANNEX A, whose IUC is here in dispute" for which reason, the Claimant concludes, it is this entity that "holds procedural legitimacy to present the (…) request for arbitral decision".[4]

The relevant factuality

2.7

"The Claimant (…) is a credit institution (…)" and, "among its areas of activity, the financing of the automotive sector assumes special relevance (…)", for which reason "a substantial part of its activity is reconducted to the conclusion (…) of financial leasing contracts intended for the acquisition, by companies and individuals, of motor vehicles".

2.8

The Claimant clarifies that "during the period that may be stipulated in the contract (…)" the "lessee maintains the temporary enjoyment of the vehicle - which remains the property of the Claimant -, through remuneration (…) in the form of rent payments; and may acquire the vehicle at the end of the contract by payment of a residual value".

2.9

Now, according to the Claimant, taking into account that:

2.9.1

"The motor vehicles identified (…) were given in financial lease (…) to the clients also identified there (…)";

2.9.2

The aforementioned "lease (…) was in effect in the year (…) in which the obligation to pay the IUC associated with it fell due (…)";

2.9.3

"The potential for use of these vehicles never belonged to the here Claimant";

It concludes that "(…) it cannot assume (…) the status of taxpayer of the tax that was assessed to it".

The Tax Authority's Grounds

2.10

The Claimant "does not agree and does not accept (…)" the understanding of the Respondent that "(…) the entity leasing a certain motor vehicle is, in light of the Single Vehicle Circulation Tax Code (…) responsible for its payment, that is, is the taxpayer of this tax" because it understands that this is "(…) absolutely unlawful".

On the Law – On the ratio underlying the IUC

2.11

The Claimant argues that underlying the rule of incidence of this tax ("IUC is the tax that aims to burden taxpayers with the environmental and road costs associated with them, in a logic of equivalence and tax equality") "is (…) the presupposition of the potential for use of motor vehicles (…) precisely because one has at its disposal the right to use a vehicle – generating a certain level of pollution, road wear (…), which that taxpayer has an increased potential of causing damage to the environment and infrastructure, damage that justifies (…) its taxation under IUC".[5]

2.12

According to the Claimant, "the weight of the environmental component" was "one of the central points of the comprehensive reform of automotive taxation" carried out in 2007.

2.13

To this extent, "the determining criterion of taxation ceased to be (exclusively) cylinder capacity, and came to be based (…) on indicators of a vehicle's polluting capacity, and it is certain that as a structuring and unifying element of these categories, the principle of equivalence is enshrined, thus making it clear (…) that the tax (…) is subordinated to the idea that taxpayers should be burdened in proportion to the cost they cause to the environment and road network, this being the reason for the existence of this tax figure" (emphasis added).[6]

2.14

Thus, and also citing D…[7], the Claimant concludes that the burden associated with IUC falls "in the first place, on the person or entity that has the potential for use of the said motor vehicle; i.e., that has the potential to produce the pollution that it is intended (…) to discourage", which will be, "in the majority of cases, (…) the owner of the motor vehicle (…)", by being its "(…) principal user (…)" it is "(…) its most easily detectable user (…)".

2.15

In these terms, the Claimant understands that in cases where there is "a mismatch between the conduct that constitutes the reason for the existence of this tax figure (…) and concrete reality (…)", "the ratio underlying the tax under consideration is violated (…)".

2.16

In fact, for the Claimant, in cases where "the owner did not have, does not have, and will never have – while the contract is in effect – the potential for use" of a vehicle, it would not make sense "in light of the teleology that permeates this tax, that the owner be burdened with the duty to pay IUC".[8]

On the Law – On the substantive legitimacy of the lessee

2.17

In this regard, the Claimant states that in cases of financial leasing, "the legislator opted (…) to burden with the tax obligation not the owners, but the individuals to whom it falls to enjoy (…) exclusively the motor vehicles", that is, "the financial lessees (…) or lessee with purchase option".[9]

On the Law – On the financial leasing contract

2.18

In this respect, the Claimant states that "in a financial leasing contract, there is no doubt that the right to use the asset is withdrawn from its respective owner (…) to be integrated into the lessee's sphere" because according to the definition presented by Diogo de Leite Campos, "financial leasing may be defined as a medium or long-term contract directed at financing someone, not through the provision of a sum of money, but through the use of an asset" providing "the lessee not so much the ownership of certain assets, but their possession and use for certain purposes (…)".[10]

On the Law – On the lack of legitimacy of leasing entities to pay IUC

2.19

Thus, in this regard, the Claimant reiterates that "with a financial leasing contract in effect at the time IUC becomes exigible, it is to the lessee, and not to the lessor (…) that the obligation to pay it falls", for which reason it is not "the Claimant the taxpayer of IUC with respect to the financial leasing contracts of which it is a party (…)".[11]

On the Law – On arbitral jurisprudence

2.20

Here, the Claimant states that it has been in line with its understanding that "it has been decided" on the matter of "arbitral decisions issued (…) on this subject, within the scope of tax arbitration".[12]

On the costs of the present arbitral proceedings and compensatory interest

2.21

In this respect, the Claimant understands that, as it is not responsible for the IUC assessments (because it understands that these are "the exclusive and sole responsibility of the Tax Authority"), it is to the Respondent that one should ask for responsibility "for the payment of compensatory interest and for the assumption of arbitral costs".

On the intention not to appoint an Arbitrator

2.22

Finally, the Claimant further states "(…) that it does not intend to appoint an arbitrator" in the course of these proceedings.

3. ANSWER OF THE RESPONDENT

3.1

The Respondent in the answer submitted defended itself by challenging and presented, in summary, the following arguments:

On the error concerning the presuppositions

3.2

In this regard, the Respondent argues that "the Claimant's allegations cannot possibly succeed, because it makes an interpretation and application of the legal norms subsumable to the case sub judice that is notoriously wrong" because "the understanding upheld (…) incurs not only a skewed reading of the letter of the law, but also the adoption of an interpretation that does not attend to the systematic element, violating the unity of the regime enshrined throughout the CIUC and, more broadly, throughout the entire legal-tax system, and further stems from an interpretation that ignores the ratio of the regime enshrined in the article in question, and likewise, throughout the CIUC".

On the subjective incidence of IUC

3.3

In this respect, the Respondent alleges that "the first error underlying the interpretation defended by the Claimant is related to a skewed reading of the letter of the law" (…) because the latter establishes that "the taxpayers of the tax are the owners of the vehicles, being considered as such the persons (…) in whose name the same are registered".

3.4

In these terms, the Respondent continues that "it is imperative to conclude that (…) the legislator expressly and intentionally established that persons in whose name the (…) vehicles are registered are to be considered as (…) owners (…), because this is the interpretation that preserves the unity of the legal-tax system", thus defending the rejection of the establishment of a presumption by the legislator.

3.5

Thus, the Respondent argues that "in the face of this wording it is manifestly not possible to invoke that this is a presumption, as the Claimant argues (…) this being (…) a clear option of legislative policy embraced by the legislator, whose intention (…) was that, for purposes of IUC, those who appear as such in the motor vehicle register are to be considered owners"[13], for which reason, for the Respondent, "article 3 of the CIUC does not contain any legal presumption (…)".

On the interpretation that does not attend to the systematic element, violating the unity of the regime

3.6

The Respondent understands that "from the articulation between the scope of the subjective incidence of IUC and the constitutive fact of the corresponding tax obligation it follows unequivocally that only the legal situations that are subject to registration (…) generate the birth of the tax obligation (…)" and this "is considered exigible on the first day of the taxation period (…)".

3.7

That is, "the moment from which the tax obligation is constituted presents a direct relationship with the issuance of the registration certificate, in which the facts subject to registration must be listed".

3.8

Thus, "in the absence of such registration (…) the owner will be notified to fulfil the corresponding tax obligation, because the Respondent (…) will not have to proceed with the assessment of the tax on the basis of elements that do not appear in registries and public documents and, as such, authentic (…) for which reason the non-updating of the registry will be attributable in the legal sphere of the IUC taxpayer and not in that of the Portuguese State, as the active subject of this Tax".

3.9

The Respondent continues arguing that, "if the position defended by the Claimant were to be accepted (…) the Respondent would have to proceed with the assessment of IUC with respect to that other party identified by the person appearing in the motor vehicle register to whom it had previously assessed the IUC (…)".

3.10

"In turn, after assessing the IUC with respect to that other party, the latter could also allege and prove that in the meantime it had already concluded (…) a financial lease (…) with another third party, but that this one also had not registered (…)", "(…) and so on and so forth (…)", "thus placing (…) in question the expiry deadline of the tax" and, therefore, in the Respondent's view, "such an interpretation cannot at all be accepted".

On the interpretation that ignores the teleological element of interpretation of law

3.11

In this sense, the Respondent alleges that, taking into account the content of the parliamentary debates[14] surrounding the approval of Decree-Law no. 20/2008 of 31 January, "it results unequivocally that IUC is due by the persons who appear in the register as owners of the vehicles", in order to "avoid the problems (…) related to the fact that there are many vehicles not registered in the name of the actual owner".[15]

3.12

In fact, according to the position defended by the Respondent, "the new regime of taxation of IUC substantially altered the regime of automotive taxation, with the taxpayers of the tax becoming the owners appearing in the property register (…)".

3.13

Thus, according to the Respondent, "it is clear that the tax acts in question do not suffer from any defect of violation of law", insofar as in light of the provisions of the applicable legislation, "it was the Claimant, in its capacity as owner appearing in the Motor Vehicle Registry, the taxpayer of IUC".

3.14

Finally, the Respondent further states that "it was always incumbent upon the latter (Claimant) to demonstrate having complied with the ancillary obligation imposed by article 19 of the CIUC"[16].

3.15

Now, according to the Respondent, "the Claimant furnished no proof with regard to the fulfilment of this obligation, as was indeed its responsibility, for which reason necessarily the intended exclusion of article 3 here in question must fail", being "necessary to conclude that (…) it is the taxpayer of the tax".

On the interpretation contrary to the Constitution

3.16

In this regard, the Respondent understands that "the interpretation conveyed by the Claimant is shown to be contrary to the Constitution, insofar as such interpretation results in the violation of the principle of legal certainty, the principle of efficiency of the tax system, and the principle of proportionality".[17]

On the payment of compensatory interest and responsibility for payment of arbitral costs

3.17

In this respect, the Respondent alleges that "the registration of ownership constitutes an essential element in the system of information between the Respondent and other public entities (…) and with the forces of authority (…) with a view to the exchange of information necessary for the assessment and inspection of (…) IUC".

3.18

Thus, "the transfer of ownership of motor vehicles is not susceptible to being controlled by the Respondent, as there is no ancillary obligation of disclosure regarding this matter (…) meaning that IUC is assessed in accordance with the registry information (…) transmitted by the Institute of Records and Notaries".

3.19

In summary, the Respondent alleges that "IUC is not assessed in accordance with information generated by the Respondent itself (…)" for which reason "the Claimant not having cared for the updating of the motor vehicle register (…) it is necessary to conclude that the Claimant did not proceed with the care required of it", leading "(…) the Respondent to limit itself to complying with the legal obligations to which it is bound (…)".[18]

3.20

"Therefore, it was not the Respondent who gave cause to the filing of the request for arbitral decision, but rather the Claimant itself" for which reason, consequently, "the Claimant should be condemned to payment of the arbitral costs arising from this request for arbitral decision (…)".

3.21

In these terms, the Respondent concludes its answer filed to the effect that "the present request for arbitral decision should be judged without merit, with the tax assessment acts challenged maintaining their place in the legal system, (…) and the Respondent being absolved of the request".[19]

4. SANEADOR (PREPARATORY RULING)

4.1

The request for arbitral decision is timely, as it was submitted within the timeframe provided for in letter a), section 1 of article 10 of the RJAT.[20]

4.2

The parties have legal personality and capacity, are legitimate with respect to the request for arbitral decision, and are duly represented, in accordance with the provisions of articles 4 and 10 of the RJAT and article 1 of Ordinance no. 112-A/2011 of 22 March.

4.3

The Tribunal is regularly constituted, in accordance with article 2, section 1, letter a), articles 5 and 6, all of the RJAT, and is competent to rule on the request for arbitral decision filed by the Claimant.

4.4

The joinder of claims is legal, as the prerequisites required in article 3, section 1 of the RJAT are met, that is, the success of the claims depends, essentially, on the appraisal of the same factual circumstances and on the interpretation and application of the same principles or rules of law.

4.5

With respect to the value of the Request for Arbitral Decision, the same initially amounted to EUR 2,318.71, insofar as it concerned the request for "(…) declaration of unlawfulness and consequent annulment of the 21 assessment acts relating to IUC with respect to the 17 vehicles identified (…)", as indicated in paragraph 1.2 above.

4.6

Taking into account the provision of article 306 and article 297, both of the CPC, "by joining multiple claims in the same action, the value is the sum corresponding to the total of the values of all of them", for which reason, in the case being analyzed, where the annulment of IUC assessments for the years 2013 and 2014 is sought for the vehicles identified in the case, the initial value of the claim corresponded to the total of those assessments, that is, EUR 2,318.71.

4.7

However, with the communication made by the Respondent dated 27 July 2015, in accordance with the terms and for the purposes provided for in article 13 of the RJAT, to proceed with the revocation of IUC assessments (tax and interest) identified in paragraph 1.4 above, in the total amount of EUR 1,504.91 [and the respective acceptance of the revocation by the Claimant, as well as the interest manifested with regard to the continuation of these proceedings (see paragraph 1.6 above)], the case continued with respect to the remaining IUC assessments, in the total amount of EUR 813.80 (tax and interest).

4.8

Accordingly, the value of the case is fixed at EUR 813.80, with implications for the amount of final costs of the case, which in accordance with the provision of article 4, section 4 of the Regulation of Costs in Arbitration Proceedings will be fixed by the Arbitral Tribunal in the Decision section.

4.9

No nullities were identified in the proceedings.

4.10

There are no exceptions or prior questions to be ruled upon, for which reason nothing prevents the examination of the merits of the case.

4.11

In these terms, the following shall be the questions to be decided:

4.11.1

Does article 3 of the Single Vehicle Circulation Tax Code establish or not an impugnable presumption with respect to the owners of motor vehicles as taxpayers of the tax, so as to exclude the presumption that those in whose name the same are registered are to be considered as such?

4.11.2

Did the Claimant succeed in demonstrating, as a matter of arbitral procedure, that it was not, as of the date of the IUC assessments subject to this case[21], the taxpayer of the tax, thereby succeeding in impugning the presumption referred to in the preceding paragraph?

4.11.3

Do the IUC assessments made by the Respondent therefore suffer from unlawfulness, in light of the applicable legislation?

5. FINDINGS OF FACT

Established facts

5.1

The Claimant is a credit institution authorized to conduct its activities in Portugal, and is subject to supervision by the Bank of Portugal.

5.2

In the scope of its activities, the Claimant exercises, among others, the activity of consumer financing, by concluding for this purpose financial leasing contracts intended for the acquisition, by companies and individuals, of motor vehicles.

5.3

Thus, the Claimant, in the scope of its activities, was notified in 2015 of the following IUC assessments, as per copies of documents annexed to the case:

5.4

With relevance to the decision on the claim, it is deemed established that there exist Financial Leasing Contracts concluded between the Claimant (lessor) and the respective lessees (as per copies annexed with the Request), in the period to which the IUC assessments relate (2013 and 2014), for each of the vehicles identified in the preceding paragraph (with the exception of the situation referred to in the following paragraph), from which the following information can be extracted, briefly:

5.5

With regard to the IUC assessment no. …, of 26 April 2015, relating to the year 2014, of the vehicle with registration …-…-…, this Tribunal understood that, having taken into account the date of conclusion of the contract (no. 2006….) on 5 July 2006 (Doc. no. 24), the number of payments indicated therein (84 payments, that is, 7 years of contractual validity), as well as the date of registration of the vehicle (June), in accordance with the provision of article 4, section 2 of the Single Vehicle Circulation Tax Code, in the taxation period that began on that date (June 2014), the aforementioned vehicle was no longer covered by the contract (of which a copy was made available by the Claimant), given that the same will have ended in July 2013.[27]

5.6

No other facts capable of affecting the decision on the merits of the claim were established.

Unproven facts

5.7

No facts were found unproven that are relevant to the arbitral decision.

6. LEGAL GROUNDS

On the subjective incidence of IUC

6.1

The issue underlying here will be that of verifying the lawfulness of the nine IUC assessments (not previously revoked by the Respondent) notified to the Claimant and subject to this Request for Arbitral Decision.

6.2

In fact, in the request for arbitral decision the Claimant invokes the circumstance that "(…) as of the date of the genesis of the tax event (…)", the vehicles subject to IUC assessment were leased, "(…) by virtue of the validity of a financial leasing contract (…)" for which reason, the Claimant understands that it was not the taxpayer of IUC.

6.3

In this regard, the Claimant considers itself not to be the taxpayer of the tax that was assessed to it, because in accordance with the provision of article 3, section 1 of the Single Vehicle Circulation Tax Code, there is enshrined an impugnable presumption, that is, one which admits proof to the contrary, in particular, through the demonstration that the motor vehicles at the origin of the IUC assessments were leased to third parties as of the date of the occurrence of the tax event in the years 2013 and 2014.

6.4

To the contrary, the Respondent considered that the provision of article 3, section 1 of the Single Vehicle Circulation Tax Code does not contain any legal presumption and that, on the contrary, it expressly and intentionally established that persons in whose name the vehicles are registered are to be considered as owners.

6.5

In this regard, there will need to be an answer to the question of whether, being in effect, as of the date of the occurrence of the tax event (for each of the vehicles identified in paragraph 5.3 above, with the exception of the situation analyzed above in paragraph 5.5), a financial leasing contract (as per paragraph 5.4 above), who was, for purposes of the provision of article 3, sections 1 and 2 of the Single Vehicle Circulation Tax Code, the taxpayer of IUC – the lessee or the leasing entity, owner of the vehicle, in whose name the registration of the property right is made?

6.6

Now, this being the main question to be decided in these proceedings, it will thus be necessary to determine the subjective incidence of IUC, in accordance with the provision of the respective Code, and to take a position on the aforementioned norm of subjective incidence so as to determine whether or not it establishes a legal presumption.

6.7

However, and before proceeding to interpret the provision of article 3, section 1 of the Single Vehicle Circulation Tax Code, it is relevant to bear in mind the provision of article 11 of the General Tax Law (LGT), insofar as tax norms must be interpreted in accordance with the general principles of interpretation and, as well, the provision of article 9 of the Civil Code which establishes the rules and elements for the interpretation of norms.

6.8

In fact, the interpretative activity is, as Francesco Ferrara refers, "the most difficult and delicate operation to which a jurist can dedicate himself (…)" because "(…) the interpreter must seek not what the legislator wanted, but what in the law appears objectively wanted (…)" (emphasis added).[28]

6.9

Thus, for the same author, understanding the law "is not merely seizing in a mechanical manner the apparent and immediate sense that results from verbal connection; it is to inquire with profundity 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" (emphasis added).[29]

6.10

As Baptista Machado refers[30] "the legal provision presents itself to the jurist as a linguistic utterance, as a set of words that constitute a text. To interpret evidently consists in extracting from that text a certain sense or content of thought. The text allows for multiple meanings (polysemy of the text) and frequently contains ambiguous or obscure expressions (…)" for which reason "(…) although apparently clear in its verbal expression and bearing a single meaning, there is still the need to account for the possibility that the verbal expression has betrayed the legislative thought – a phenomenon more frequent than may appear at first glance" (emphasis added).

6.11

Thus, in order that we may conclude whether article 3, section 1 of the Single Vehicle Circulation Tax Code establishes (i) an impugnable presumption of who should be considered the taxpayer of the tax on the basis of the Motor Vehicle Register or whether (ii) the Legislator intended expressly and intentionally to determine, on the basis of the Motor Vehicle Register, who should be considered the taxpayer of IUC, it is fundamental first to pay attention to the letter of the Law.

6.12

In these terms, in accordance with the provision of article 3, section 1 of the Single Vehicle Circulation Tax Code, "the taxpayers of the tax are the owners of the vehicles, being considered as such the natural or legal persons, of public or private law, in whose name the same are registered" (emphasis added).

Literal element

6.13

Now, in accordance with the literal element of the aforementioned norm, the problem centers on the expression "being considered as such" used by the Legislator (emphasis added).

6.14

In fact, the letter of the Law does not refer to the expression "presumed to be", as was found in the diplomas preceding the present Code, thus making it questionable whether the nature of presumption continues to be present in the norm under analysis.

6.15

In this sense, by way of example, it is verified that in article 243, section 3 of the Civil Code and in articles 45, section 6 and 89-A, section 4 of the LGT, the expression "is deemed" is also used, and yet we are faced with legal presumptions, so that, in accordance with the general norms of interpretation, it is considered that the minimum correspondence is assured verbally for purposes of determining the legislative thought that is objectified in the norm in question.[31]

6.16

And, as Karl Larenz affirms[32], if "the literal sense in most cases is not sufficient as an interpretative criterion, precisely because it still allows for diverse interpretations", it is also true that, if accompanied by other elements, it is quite relevant and indicative of the true sense of the norm in analysis, pointing to the expression "being considered as such" being equivalent to the expression previously used of "presumed to be as such" (emphasis added).

Historical element

6.17

Nonetheless, and still within the scope of the elements of interpretation in accordance with article 9 of the Civil Code, it is also important to consider the historical element.

6.18

In Baptista Machado's view[33], this element "comprises all materials related to the history of the provision, namely: the evolutionary history of the institution, figure or legal regime in question (…); the so-called sources of law, that is the legal or doctrinal texts that inspired the legislator in the preparation of the law (…); the preparatory work" (emphasis added).

6.19

In this context, the legislator, in defining the subjective incidence of the Municipal Tax on Vehicles (IMV), the Circulation Tax (ICI) and the Haulage Tax (ICA), taxes abolished by IUC, established that "the tax is due by the owners of the vehicles, being presumed to be, until proof to the contrary, the persons in whose name the same are registered or matriculated" (emphasis added).

6.20

In these terms, as to this element of interpretation it is demonstrated that the predecessors of the Single Vehicle Circulation Tax Code established a presumption that the registered owners in the Motor Vehicle Registry are taxpayers of IUC.

6.21

With respect to IUC, although it continues to attribute to the owners of vehicles the status of taxpayers, the legislator opted to use a different formulation of the subjective incidence norm, abandoning the expression "(…) being presumed to be, (…)" in favor of the expression "(…) being considered as (…)".

6.22

Accordingly, it is clear that the understanding underlying the provision of that article of the Single Vehicle Circulation Tax Code provides for an impugnable presumption, with respect to which the semantic question in no way alters the interpretative sense of the norm.[34] [35]

6.23

If the understanding profiled in earlier decisions [36] on the same matter is adopted, we understand that it should be concluded that, in fact, article 3, section 1 of the Single Vehicle Circulation Tax Code establishes a presumption, because it is not the substitution of the expression "being presumed" for the expression "being considered" that causes this norm to cease to establish a presumption (emphasis added).

6.24

In fact, we understand that we are faced with a mere semantic question that in no way alters the content of the norm in question, for the following reasons:

6.24.1

For there to be a legal presumption, it is necessary that the norm establishing it be adapted to its respective legal concept (set out in article 349 of the Civil Code), and for this it is irrelevant whether the same is explicit (revealed by the use of the expression "presumed") or merely implicit.[37] [38]

6.24.2

On the other hand, the legislator's freedom of configuration is limited by fundamental principles enshrined in the Constitution of the Portuguese Republic (CRP), in particular, the principle of equality, whose relevance is pertinent in the case under analysis.[39]

6.25

In this regard, "taxation in conformity with the principle of ability to pay will imply the existence and maintenance of an effective connection between the tax payment and the economic presupposition selected as the object of the tax, requiring, for this reason, a minimum of logical coherence of the various hypotheses (…) provided for in law with the corresponding object of the same" (emphasis added).[40]

6.26

It is in the sense of the legal concept of presumption and in respect of the constitutional principles of equality and ability to pay that the legislator attributes full efficacy to the presumption derived from the Motor Vehicle Register, embracing it as such in the definition of the subjective incidence of this tax, established in section 1 of article 3 of the Single Vehicle Circulation Tax Code.

6.27

In fact, with respect to the importance of the Motor Vehicle Register, it is important to note that the register allows for the publication of the legal situation of assets and, as well, to presume that there is a right over those assets and that the same belongs to the holder, as shown in the register.

Rational and teleological element

6.28

Now it falls to us to use the rational or teleological element, which has the greatest importance in determining the sense of the norm under analysis, because, according to the author Menezes Cordeiro[41], "interpretation is today dominated by the teleological factor".

6.29

Thus, with respect to the rational and teleological element, it is important to note that IUC has underlying it the principle of equivalence (enshrined in article 1 of the Code of that tax), a principle that came to embody environmental concerns by establishing that the tax should burden taxpayers with the environmental and road costs caused by automotive circulation, that is, the polluter must pay (a principle that also underlies article 66, section 2, letter h), of the CRP and Community Law).[42]

6.30

As Sérgio Vasques writes[43], "in obedience to the principle of equivalence, the tax should be conformed in attention to the benefit that the taxpayer derives from the public activity, or in attention to the cost that it imputes to the community by its own activity" for which reason "a tax on automobiles based on a rule of equivalence will be equal only if those that cause the same road wear and the same environmental cost pay the same tax; and those that cause different wear and environmental cost pay a different tax also" (emphasis added).

6.31

In fact, what is sought to be achieved through the establishment of the aforementioned principle of equivalence is to make the harm that accrues to the community, stemming from the use of motor vehicles, be assumed by their owner-users as costs that only they should bear.

6.32

Being aware of the dimension of environmental damage caused by motor vehicles, the logic and coherence of the system of automotive taxation in general and of the regime inscribed in the Single Vehicle Circulation Tax Code in particular point to the fact that the polluter must pay, thus associating the tax with environmentally caused damage.

6.33

These are, therefore, concerns of considerable importance in the economy of IUC and that cannot fail to be, coherently, taken into account in the interpretation of article 3, relating to the subjective incidence of that tax.

6.34

In these terms, with the taxation (under IUC) of the actual polluters corresponding to an important objective sought by the law, in light of elements of a rational and teleological character of interpretation, it is necessary to conclude that section 1 of article 3 of the Single Vehicle Circulation Tax Code establishes an impugnable presumption.[44]

6.35

In summary, it is important to emphasize that the aforementioned elements of interpretation, whether those related to literal interpretation, whether those regarding logical elements of interpretation, of a historical nature or of a rational order, all point in the direction that the expression "being considered as such" has a sense equivalent to the expression "presumed to be as such", and should thus be understood that, it is reiterated, the provision of section 1 of article 3 of the Single Vehicle Circulation Tax Code establishes a legal presumption.

6.36

Now, in accordance with the provision of article 349 of the Civil Code, presumptions are the inferences that the law (or the judge) draws from a known fact to establish an unknown fact.

6.37

In this manner, presumptions constitute means of proof, having this as its function the demonstration of the reality of facts (article 341 of the Civil Code), for which reason whoever has a legal presumption in their favor is relieved of the burden of proving the fact to which it leads (article 350, section 1 of the Civil Code).

6.38

However, presumptions, except in cases where the law prohibits it, may be impugned by means of proof to the contrary (article 350, section 2 of the Civil Code) and, in the case of tax incidence presumptions, these are always impugnable, as expressly provided for in article 73 of the LGT.

6.39

In fact, these tax incidence presumptions may be impugned through the appropriate adversarial procedure provided for in article 64 of the Code of Tax Procedure and Process (CPPT) or, alternatively, through the means of gracious claim or judicial challenge of the tax acts based thereon.

6.40

On the establishment in article 3, section 1 of the Single Vehicle Circulation Tax Code of an impugnable presumption, various arbitral decisions have already pronounced themselves in that sense.[45]

6.41

In these terms, the answer that should be given to the question formulated in paragraph 4.11.1 above will be that article 3 of the Single Vehicle Circulation Tax Code does indeed establish an impugnable presumption with respect to the owners of motor vehicles as taxpayers of the tax, so as to be able to exclude the presumption that those in whose name the same are registered are to be considered as such.[46]

On the subjective incidence of the tax during the validity of the financial leasing contract.

6.42

The Legal Framework for Financial Leasing Contracts (governed by Decree-Law no. 149/95 of 24 June, with the amendments subsequently introduced thereto), establishes that it is an obligation of the lessor, among others, "to grant the use of the assets for the purposes to which they are intended".

6.43

On the other hand, the same diploma establishes the obligations of the lessee, in particular, the obligation to "pay the rents", the obligation to "ensure the conservation of the asset and not make an imprudent use thereof", as well as the obligation to "use and enjoy the leased asset".

6.44

Taking into consideration the obligations transcribed above, by way of example, for both parties of a Financial Leasing Contract, it will be possible to conclude that during the validity of a contract of that nature, although the lessor continues as the owner of the asset in question, only the lessee has the exclusive use of the leased asset, using it as if it were the true owner.

6.45

Additionally, it should be noted that the financial lessee is treated as equivalent to an owner, for purposes of the provision of section 1 of article 3 of the Single Vehicle Circulation Tax Code, that is to say, the same is to say that it is the lessee who should be considered the taxpayer of IUC (see article 3, section 2 of that Code).

6.46

Accordingly, the lessor not having, by legal and contractual imposition, the potential for use of the vehicle and the lessee having exclusive use of the automobile, we reiterate the conclusion that, in our view, the ratio legis of the Single Vehicle Circulation Tax Code mandates that, in accordance with the provision of section 2 of its article 3, it be the lessee who is responsible for payment of the tax, since it is the lessee that has the potential for use of the vehicle and causes the road and environmental costs inherent thereto.

6.47

Indeed, the same conclusion is reached when one observes the importance given to the users of leased vehicles, in accordance with the provision of article 19 of the Single Vehicle Circulation Tax Code, in accordance with which, entities that proceed, in particular, to financial lease vehicles are obligated to supply to the Tax Authority (former-DGCI) the identity of the users of the leased vehicles, for purposes of the provision of article 3 of the Single Vehicle Circulation Tax Code.

6.48

In these terms, and giving an answer to the question formulated in paragraph 6.5 above, it is the understanding of this Arbitral Tribunal that if, as of the date of the occurrence of the tax event, there is in effect a Financial Leasing Contract having as its object a motor vehicle, the taxpayer of the tax is not the lessor but rather, in light of the provision of section 2 of article 3 of the Single Vehicle Circulation Tax Code, the lessee, because it is the lessee that has the use of the vehicle and, as such, the inherent polluting potential (regardless of the registration of the property right remaining in the name of the lessor).

On the impugnation of the presumption

6.49

In light of the foregoing, concluding that the taxpayer of the tax is the lessee, if the vehicles subject to IUC assessment are, as of the date of the tax event (in 2013 and 2014), leased under a Financial Leasing Contract and, establishing article 3, section 1 of the Single Vehicle Circulation Tax Code an impugnable presumption, it is still necessary to analyze whether this presumption was actually impugned by the Claimant, as results from the provision of article 73 of the LGT.

6.50

What the Claimant proposes to prove, according to what appears in the proceedings, is that as of the date of the IUC tax event (in 2013 and 2014), the motor vehicles that gave rise to the nine assessment acts subject to the Request for Arbitral Decision were leased under eight Financial Leasing Contracts (identified in paragraph 5.4 above), by annexing for purposes of proof copies of the Financial Leasing Contracts concluded for each of the vehicles identified in paragraph 5.3 above, between the Claimant (lessor) and the respective lessees, duly signed by both parties.[47]

6.51

However, taking into consideration the copies of the contracts that were annexed by the Claimant (as well, whenever necessary, the acts of acknowledgment of the signatures of the parties to the contract in their capacity as lessees), and the circumstance that the Respondent did not raise the question of the falsity of the documents from which the photocopies were extracted, this Tribunal saw no reason to call into question the veracity of the copies and the documents that gave rise thereto (aforementioned), for which reason it deemed established the facts contained therein, as per paragraphs 5.3 and 5.4 above.

6.52

In this regard, given that the impugnation of the legal presumption obeys the rule contained in article 347 of the Civil Code, in accordance with which full legal proof can only be contradicted by means of proof showing that the fact which is its object is not true, taking into account the foregoing, it will be necessary to conclude that the Claimant succeeded in proving that, as of the date of the occurrence of the tax events under analysis (2013 and 2014), the taxpayers of IUC resulting from the assessments in question were the lessees of the respective Financial Leasing Contracts already identified (with the exception of the situation analyzed in paragraph 5.5 above, relating to the IUC assessment no. … of 26 April 2015, relating to the year 2014, of the vehicle with registration …-…-…), for which reason it is understood that the presumption derived from the registration in the Motor Vehicle Register (in favor of the lessor) was impugned with respect to the remaining situations.

6.53

Consequently, the Claimant having demonstrated that, as of the date of the IUC assessments, it was not the taxpayer of the tax with respect to eight of the aforementioned assessments, the answer to the question formulated in paragraph 4.11.2 is affirmative, that is to say, the Claimant succeeded in impugning the presumption of article 3 of the Single Vehicle Circulation Tax Code with respect to the same.

6.54

In this manner, in accordance with the provision of article 16 of the Single Vehicle Circulation Tax Code, the Respondent could not have assessed the tax to the Claimant as the person in whose name the vehicles subject to the assessments were registered (in accordance with the provision of article 3 of the Single Vehicle Circulation Tax Code).

6.55

Accordingly, the answer to the question above formulated in paragraph 4.11.3 is also affirmative, that is to say, the IUC assessments (already identified) made by the Respondent suffer, as a consequence of the foregoing, from unlawfulness and should, for this reason, be annulled.

On the payment of compensatory interest

6.56

In accordance with the provision of section 5 of article 24 of the RJAT, "payment of interest is due, regardless of its nature, in accordance with the terms provided for in the general tax law and in the Code of Tax Procedure and Process", from which it results that an arbitral decision is not limited to examining the lawfulness of the tax act.

6.57

As Jorge Lopes de Sousa refers, "it is within the competencies of the arbitral tribunals functioning within the CAAD the fixing of the effects of the arbitral decision that may be defined in a judicial challenge proceeding, in particular, the annulment of acts to which the declaration of unlawfulness is sought, the condemnation of the Tax and Customs Authority to payment of compensatory interest (…)"[48][49]

6.58

Thus, in tax arbitral proceedings there will be a right to compensatory interest, in accordance with the provision of articles 43, sections 1 and 2, and 100 of the LGT, when it is determined that there was error attributable to the services from which resulted payment of the tax debt in an amount exceeding that legally due (emphasis added), and there is no need for the same to be requested in the petition. [50] [51]

6.59

However, it will be important to pay attention to the provision of the aforementioned articles, insofar as the right to compensatory interest will depend on the verification of an error attributable to the services, from which resulted payment of a tax debt in an amount exceeding that legally due.

6.60

In summary, the right to compensatory interest presupposes that there has been payment of tax in excess of that due and that such fact derives from error (of fact or of law) attributable to the services of the Respondent.

6.61

In the case being analyzed, in promoting the official assessments of IUC by considering the Claimant as the taxpayer of this tax, the Respondent limited itself to complying with the provision of section 1 of article 3 of the Single Vehicle Circulation Tax Code, which, as analyzed above, imputes such status to the persons in whose name the vehicles are registered.

6.62

Now, as concluded above, the aforementioned norm has the nature of a legal presumption, for which reason it follows for the Respondent the right to assess the tax and demand it from the persons in whose name the vehicles are registered, and thus no error attributable to it is apparent.

On responsibility for payment of arbitral costs

6.63

In consonance with the preceding paragraph, and in accordance with the provision of article 527, section 1 of the CPC (ex vi 29, section 1, letter e) of the RJAT), it must be established that the party shall be condemned to costs which caused them or, absent a judgment on the merits, whoever derived benefit from the proceedings.

6.64

In this regard, section 2 of the aforementioned article specifies the expression "caused them", in accordance with the principle of the extent of losing, understanding that the losing party causes the costs of the proceedings in proportion to the extent that it loses.[52]

6.65

In these terms, taking into account the foregoing, with the exception of paragraph 5.5 above, responsibility for arbitral costs should be imputed to the Claimant and the Respondent in proportion to the extent of their respective losses, that is, in 5% and 95%, respectively.

7. DECISION

7.1

In accordance with the provision of article 22, section 4 of the RJAT, "the arbitral decision issued by the arbitral tribunal includes the fixing of the amount and the allocation among the parties of the costs directly arising from the arbitral proceedings".

7.2

In this regard, the basic rule relating to responsibility for procedural charges is that the party causing them shall be condemned, understanding that the losing party causes the costs of the proceedings in proportion to the extent that it loses (article 527, sections 1 and 2 of the CPC in force).

7.3

In the case being analyzed, taking into account the foregoing, the principle of proportionality imposes that responsibility for costs be attributed to the Claimant and the Respondent in proportion to the extent of their respective losses (5% and 95%, respectively), in accordance with the provision of article 12, section 2 of the RJAT and article 4, section 4 of the Regulation of Costs in Arbitration Proceedings.

7.4

In these terms, taking into account the conclusions defined in the preceding Sections, this Arbitral Tribunal decided:

7.4.1

To judge partially with merit the Request for Arbitral Decision submitted by the Claimant, annulling eight of the nine remaining tax acts in the matter of IUC (tax and interest), with the consequences arising therefrom[53];

7.4.2

To judge without merit the request for payment of compensatory interest filed by the Claimant;

7.4.3

To condemn the Claimant and the Respondent to payment of the costs of the present proceedings in proportion to the extent of their respective losses.

Value of the case: In accordance with the provision of articles 306, section 2 of the CPC, article 97-A, section 1 of the CPPT and article 3, section 2 of the Regulation of Costs in Tax Arbitration Proceedings, the value of the case is fixed at EUR 813.80.[54]

In accordance with Table I of the Regulation of Costs of Tax Arbitration Proceedings, the value of the costs of the Arbitral Proceedings is fixed at EUR 306.00, to be borne by the Claimant (5%) and the Respondent (95%), in accordance with article 22, section 4 of the RJAT.

Let it be notified.

Lisbon, 26 October 2015

The Arbitrator

Sílvia Oliveira

[1] The drafting of this decision is governed by the spelling prior to the Orthographic Agreement of 1990, except for transcriptions made.

[2] The total amount indicated in the motion submitted by the Respondent was EUR 1,504.61, thus having a difference of EUR 0.30 (less) in relation to the actual amount resulting from the sum of the tax and interest contained in the IUC assessment notices identified and subject to annulment.

[3] As appears from the copy of documents that the Claimant annexed with the request for arbitral decision (Annex C).

[4] The IUC assessment relating to the year 2014, with respect to the vehicle identified (registration …-…-…) was one of those subject to preliminary revocation by the Respondent (see paragraph 1.4 above), for which reason the respective assessment will no longer be subject to analysis.

[5] In this regard, the Claimant cites Draft Law no. 118/X, which preceded Law no. 22-A/2007, a diploma that promoted the substitution of the defunct Motor Vehicle Tax by the current IUC.

[6] In this respect, the Claimant cites the reasons presented by the then Secretary of State for Tax Affairs at the time of voting on the Draft Law in Parliament.

[7] In an opinion issued at the request of the Portuguese Association of Leasing, Factoring and Renting, a copy of which the Claimant annexed to the case (Annex D).

[8] In this matter, the Claimant cites Baptista Machado, in "Introduction to Law and Legitimizing Discourse", page 186.

[9] Here, and once again, the Claimant cites D… in the aforementioned opinion in footnote 7.

[10] See Essay on Typological Analysis of Financial Leasing Contract, in Bulletin of the Faculty of Law of the University of Coimbra, vol. XXIII, page 10.

[11] In this matter, the Claimant cites Professor Dr. E…, in Opinion issued at the request of the Association of Specialized Credit Institutions (ASFAC), a copy of which was annexed to the proceedings (Annex E), to the effect that "we must consider them (the lessees) as sole taxpayers of that tax, given that there is no legal provision that, directly or indirectly, attributes to the lessors (…)" that responsibility.

[12] In this respect, the Claimant cites various arbitral decisions issued in the matter of tax arbitration, namely, those issued in the context of proceedings no. 14/2013, no. 27/2013-T and no. 73/2013-T, in addition to enumerating many others that "conclude exactly in the same sense".

[13] To reinforce this understanding, the Respondent cites the decision issued in the context of Proceedings no. 210/13.0BEPNF of the Administrative and Tax Court of Penafiel (having annexed a copy of this decision with the Answer submitted), in accordance with which "the failure to register in the name of the new acquirer causes the subjective incidence of IUC (…) to remain in the holder of the property right registered in the Motor Vehicle Registry and be responsible for the assessment and payment of IUC, independently of its actual transfer".

[14] Relating to the session of 12 March 2008.

[15] In the same vein, Recommendation no. 6-B/2012 of the Ombudsman, dated 22 June 2012, is cited, in accordance with which it is stated that "(…) with the approval of Law no. 22-A/2007 of 29 July, a diploma that approved the Single Vehicle Circulation Tax Code and which substantially altered the automotive taxation regime (…) the taxpayers of the tax came to be the owners appearing in the property register, independent of the circulation of the vehicles on the public way (…)" for which reason "at the tax level (…) the Single Vehicle Circulation Tax is due by the persons who appear in the register as owners of the vehicles".

[16] That is, the Claimant having demonstrated that it complied with the provision of that article in accordance with which "(…) entities that proceed to financial lease, operating lease or long-term rental of vehicles are obligated to supply to the Tax Authority the data relating to the identification of the users of the leased vehicles".

[17] In this sense, the Respondent cites the statement of reasons relating to Draft Law no. 118/X, that is, the proposal for comprehensive reform of automotive taxation.

[18] In this regard, the Respondent cites the Arbitral Decision issued in the context of proceedings no. 26/2013.

[19] It should be noted that this concerns, for the reasons already stated, the dismissal of the request for arbitral decision as to the assessment acts of IUC not previously revoked by the Respondent (see paragraph 1.4 above).

[20] It is noted that, being the deadline for voluntary payment of the assessments subject to the request for arbitral decision on 4 June 2015 (as per copies of documents no. 3, 6, 7, 8, 9, 10, 12 and 16 annexed by the Claimant), and the request having been submitted on 26 August 2015, the 90-day period provided for in article 10, section 1, letter a) of the RJAT had not yet elapsed on this date.

[21] And not previously revoked by the Respondent (see paragraph 1.4 above).

[22] All amounts were paid on 28-05-2015, as evidenced by the payment stamp affixed to each of the copies of the assessments annexed to the proceedings by the Claimant.

[23] For this vehicle there are two IUC assessments involved, one relating to the year 2013 and the other relating to the year 2014, as indicated in paragraph 5.3 above.

[24] With copy of document "Recognition with special mentions by similarity" no. …/…, of 25 June 2009.

[25] With copies of documents of acknowledgment of signatures and verification of powers for the act (no. … and no. …), both of 24 July 2008.

[26] With copy of notarial document of acknowledgment of signatures, capacity and powers for the act, dated 31 July 2018.

[27] In this regard, it was further considered that, in accordance with the provision of article 6, section 3 of the Single Vehicle Circulation Tax Code, "the tax is considered exigible on the first day of the taxation period referred to in section 2 of article 4" of that Code.

[28] See Francesco Ferrara, "Interpretation and Application of Laws", 2nd Edition, Coimbra, 1963, pages 134/135.

[29] See Francesco Ferrara, cited work, page 128.

[30] In this regard, see "Introduction to Law and Legitimizing Discourse", pages 175/176.

[31] Note that, with respect to the second legal provision cited, Jorge Lopes de Sousa considers that a rebuttable presumption of notification is involved for purposes of counting the term of extinction of the right of assessment (see "Code of Tax Procedure and Process" Annotated, Vol. I, 6th Edition, Áreas Editora, S.A., Lisbon 2011, page 388).

[32] In this regard, see "Methodology of Legal Science", Calouste Gulbenkian Foundation, 2nd ed., 1969, page 369.

[33] In his work "Introduction to Law and Legitimizing Discourse", page 184.

[34] In this sense, Jorge Lopes de Sousa states that "in the matter of tax incidence, presumptions may be revealed by the expression presumed to be or by similar expression" (in CPPT, 6th Edition, Áreas Editora. Lisbon, 2011, page 589) (emphasis added).

[35] Also in the same sense, A. Brigas Afonso and Manuel Teixeira Fernandes (in "Tax on Vehicles and Single Vehicle Circulation Tax", Coimbra Editora, 2009, page 187) consider that "there were no alterations with respect to the situation that prevailed within the scope of the extinct IMV, ICI and ICA".

[36] In this sense see, in particular, the arbitral decisions issued in proceedings 14/2013-T, 26/2013-T, 27/2013-T, 34/2014-T and 42/2014-T.

[37] In this sense, see Jorge Lopes de Sousa, CPPT, 6th Edition, Áreas Editora. Lisbon, 2011, page 586.

[38] See AC STA Proceedings 441/11, of 29 February 2012 and AC STA Proceedings 381/12, of 2 May 2012.

[39] Indeed, in the tax realm, the principle of equality is translated as the generality and abstraction of the norm that creates the essential elements of the tax in accordance with the ability to pay of each person.

[40] See AC TC Proceedings 343/97, of 29 April.

[41] In this regard, see "Treatise on Portuguese Civil Law I", General Part, Volume 1, 2nd ed., 2000, Almedina, page 557.

[42] With the signature on 7 February 1992 in Maastricht of the Treaty on European Union, the aforementioned principle came to appear as a mainstay of Community policy in the environmental sphere (see article 130-R, section 2).

[43] In "Special Consumption Taxes", Almedina, 2000, pages 110 and 122.

[44] In this regard, according to Francesco Ferrara [in "Interpretation and Application of Laws", 2nd Edition, Coimbra, 1963, page 130, "(…) legal interpretation is by its nature essentially teleological"].

[45] See, in particular, the arbitral decisions issued in proceedings 14/2013-T, 26/2013-T, 27/2013-T, 73/2013-T, 170/2013-T and 67/2014-T and 115/2014-T.

[46] In this regard, see AC TCAS 08300/14, of 19 March 2015, in accordance with which one can read that "IUC is legally configured to function in integration with the motor vehicle register, which is inferred, from the outset, from article 3, section 1 of the Single Vehicle Circulation Tax Code, a norm where (…) a legal presumption is established that the holder of the motor vehicle register is its owner, such presumption being rebuttable by force of article 73 of the LGT" (emphasis added).

[47] It should be noted, however, that the Claimant could have complemented the information provided with a copy of Information issued by the competent Motor Vehicle Registry Office confirming the information relating to the Financial Leasing Contracts annexed and already identified, regarding the ownership of the aforementioned vehicles and the beginning and end of each of the Leases.

[48] See Leite de Campos, Diogo, Silva Rodrigues, Benjamim, Sousa, Jorge Lopes, "General Tax Law - Annotated and Commented", 4th Ed., 2012, page 116).

[49] On compensatory interest one can see from the same Sousa, Jorge Lopes, Interest in tax relations, in "Fundamental Problems of Tax Law", Lisbon, 1999, page 155 et seq).

[50] See AC STA Proceedings no. 1052/04, of 30 November 2004.

[51] See Leite de Campos, Diogo, Silva Rodrigues, Benjamim, Sousa, Jorge Lopes, "General Tax Law - Annotated and Commented", 4th Ed., 2012, page 869).

[52] Thus, the Parties shall be condemned taking into consideration the principle of proportionality, that is to say, responsibility for costs being assigned to them in proportion to the extent to which they are losing parties.

[53] All remaining tax acts in the request are annulled with the exception of the IUC assessment no. … of 26 April 2015, relating to the year 2014, of the vehicle with registration …-…-… for the reasons stated above (see paragraph 5.5).

[54] As per the analysis carried out in paragraphs 4.5 to 4.8 above.