IUC Tax Incidence: Arbitral Tribunal Rules on Review of Vehicle Tax Assessments 2008-2015

ARBITRAL DECISION

The arbitrators, Dr. Fernanda Maçãs (arbitrator-president), Dr. Álvaro Caneira and Dr. Magda Feliciano, appointed by the Deontological Council of the Administrative Arbitration Centre to form the Arbitral Court, constituted on 29 August 2017, agree as follows:

I - REPORT

A…, Lda., legal entity number…, with registered office at Av…, Lot…, …, in Lisbon, hereby requests the declaration of illegality of the dismissal of the application for official review no. …2016… concerning the acts of assessment of Single Circulation Tax (IUC) for the fiscal years 2008 to 2015.

The Applicant accordingly seeks that the illegality of the decision dismissing the application for official review be declared and its right to compensatory interest be recognized.

The Tax and Customs Authority, hereinafter TA, filed a reply by way of exception, arguing the lack of timeliness of the request for arbitral decision and, by way of substantive objection, alleging the lack of merit of the request for arbitral decision.

The holding of the meeting provided for in article 18 of the Legal Framework for Tax Arbitration (RJAT) was dispensed with, given the nature of the matter contained in the file, and the proceedings continued to written pleadings.

The parties presented pleadings and counter-pleadings reiterating the arguments presented in previous procedural documents.

II - PRELIMINARY MATTERS

The Arbitral Court was properly constituted and is competent.

The parties have legal personality and legal capacity, are qualified (articles 4 and 10(2) of the same statute and article 1 of Ordinance No. 112-A/2011, of 22 March) and are properly represented.

The exception of lack of timeliness was raised which must be assessed as a priority matter.

In the reply filed, the TA defends itself by exception that, if verified, leads to dismissal of the case.

The assessment of the exception of lack of timeliness of the request depends on the question of whether the Applicant challenged the act of dismissal of the application for official review submitted or whether, instead, it merely challenges each of the IUC assessment acts individually.

Now, the Applicant clearly identifies in its arbitral petition (articles 1 and 2) the decision dismissing the application for official review, expressly stating "that it does not comply with that decision, which it considers illegal."

It further appears from the arbitral petition that the Applicant challenges the decision dismissing the application for official review submitted, attaching a copy of that decision act.

Having in mind that the act that decided the application for official review is a second-instance act, in which the legality of the identified assessment acts is analyzed, it is considered that the Applicant sufficiently identifies the act which is the object of the arbitral petition as being the decision dismissing the application for official review submitted with reference to the underlying assessment acts.

Consequently, the exception of lack of timeliness of the request raised by the Respondent is not upheld.

Regarding the cumulation of claims, considering the existence of a direct relationship between the tax assessments whose legality is questioned in this proceeding, nothing prevents the joint assessment of the tax acts in question, given that, on the basis of what is alleged and the documents filed, it appears that, essentially, the possible merit of the request depends on the same factual circumstances and on the interpretation and application of legal rules relating to the subjective incidence of IUC.

Thus, being at issue, essentially, the assessment of the same factual circumstances and application of the same legal rules concerning the subjective incidence of IUC, the cumulation of claims is lawful, as admitted under article 3 of the RJAT.

Indeed, the aforementioned provision, as well as article 104 of the Code of Tax Procedure (CPPT), provides that the cumulation of claims is admissible "when the merit of the claims essentially depends on the assessment of the same factual circumstances and the interpretation and application of the same principles or legal rules."

It is noted that the referred legal rules do not require full identity of the challenged acts nor do they require the coexistence, alongside common grounds, of a specific ground for annulment of any or some of the challenged acts.[1]

In this case, tax acts relating to IUC are involved, involving a large number of motor vehicles, and, on the legal plane, the application of legal rules relating to the subjective incidence of this tax.

In these terms, considered the identity of the tax facts, of the court competent for the decision and of the factual and legal grounds invoked, it is concluded, in light of the provisions of articles 3 of the RJAT and 104 of the CPPT, that nothing prevents the cumulation of claims.

The proceedings are not affected by any nullities.

III - FACTUAL MATTER

1. Established Facts

The following facts are considered established:

A) The Applicant's principal activity is to act as a registered operator of B… in Portugal;

B) The Applicant is responsible for promoting the commercialization of motor vehicles bearing the B… brand on national territory, providing to this effect to the B… Group a set of services related to the coordination of marketing activities, support for motor distribution and monitoring of B… after-sales services in Portugal;

C) New motor vehicles of the B… brand are acquired directly from manufacturer C… SA, a company resident in Spain;

D) Each of the vehicles commercialized is sold to the dealer who ordered it, before its admission to Portugal;

E) It is the responsibility of the dealer to deliver the vehicles to the customer after admission and registration;

F) The transmission of B… brand vehicles begins with the execution of a purchase and sale contract between the dealer and its customer;

G) Based on the purchase and sale contract executed between the dealer and its customer, a purchase order is issued by the dealer with B… PT;

H) B… PT, in turn, places that order with factory C… SA;

I) After production of the vehicle, according to the customer's specifications, it is sent to Portugal, with B… PT (registered operator) being responsible for all legal and tax formalities necessary for admission to Portugal;

J) The vehicles subject to the IUC assessment acts contained in the file were subject to purchase and sale with dealers;

K) The Applicant paid the IUC assessment notices identified in the file;

L) The Applicant was notified of the dismissal of the application for official review on 28 March 2017;

M) The request for constitution of the arbitral court was filed on 19 June 2017.

1.1. There are no facts deemed not proven that are relevant to the assessment of the request.

2. Justification of the Factual Matter Established and Not Established

The factual matter deemed established was based on documents filed with the proceedings by the Applicant and on the administrative file.

IV - LEGAL MATTER

The Applicant substantiates the request for arbitral decision, essentially, on the basis of the illegality of its qualification as the passive subject of IUC, concerning the vehicles and taxation periods it identifies in documents attached to the request, considering the fact that the ownership of the vehicles was transferred to third parties even before the date of their registration in Portugal;

According to the Applicant's allegation, although the vehicles in question were registered in its name at the Motor Vehicle Registry Office, it was not their effective owner at the date of occurrence of the facts that determine the obligation of tax, given that those had already been sold to the respective dealers, as evidenced by documentation relating to invoices issued to dealers and their respective payment, duly attached, as evidentiary element, to the application for official review.

Indeed, it appears, from the elements attached to the proceedings substantiating the alleged facts, that the Applicant, within its business activity, proceeds to import into Portuguese territory new vehicles which, at a moment prior to their registration, transfers to its dealers, this fact being proven by a copy of the respective invoicing.

However, by force of the applicable legal rules, the registration of the vehicles in question is carried out in the name of the Applicant, even though, at the moment when it is effected, it is not their owner.

This is what results from the combined reading of articles 117(4) of the Road Code - which assigns to the person, singular or collective, who proceeds to the admission, importation or introduction into consumption on national territory, the obligation to request the registration of vehicles - and 24(1) of the Motor Vehicle Registry Regulation, which provides that the initial registration of ownership of imported, admitted, assembled, constructed or reconstructed vehicles is based on the respective application.

From the aforementioned rules it follows, therefore, that the Applicant, as a registered operator who proceeds to the importation of new vehicles on national territory, necessarily appears in the respective initial registration as their owner, even though at the moment when it is effected, ownership of the same has already been transferred to third parties.

From the foregoing, the Respondent extracts that, "The assignment to the Applicant of a registration certificate constitutes, in accordance with the provisions of article 6 of the IUC Code, the taxable event of the tax, so that, having the Applicant requested the issuance of a registration certificate, with the same registered in the name of this party, the prerequisites of the taxable event of IUC are met, as well as its exigibility, and the Applicant is the passive subject of the tax."

Conversely, the Applicant understands that the rule of subjective incidence of the referred tax, set forth in article 3 of its Code, establishes a legal presumption of ownership, capable of being rebutted by evidence to the contrary.

At issue, therefore, is the interpretation of article 3(1) of the IUC Code, in the wording in effect at the date of the facts, in order to determine whether the same establishes, or not, a presumption as to the qualification as owner, and consequently, as passive subject of this tax, the person, singular or collective, in whose name in the ownership of the vehicle is recorded against, and, if it is concluded in the affirmative, its rebuttal based on the evidentiary elements that constitute it.

On the Subjective Incidence of IUC

Notwithstanding the IUC Code erecting as a structuring principle of this tax the principle of equivalence, understood as compensation for the harmful effects in environmental and energy terms resulting from the circulation of vehicles[2], the referred Code chooses, as to subjective incidence, the vehicle owner, considering as such the person in whose name it is registered (article 3(1) of the IUC Code, in the initial wording of Law No. 22-A/2007, of 29 June).

Not generally according special relevance to the effective use of vehicles, the legislator does not, however, fail to consider such fact in specific situations involving its presumptive and potential use, equating to owners financial lessees, acquirers with reservation of ownership, as well as other holders of option rights to purchase by force of a lease contract (article 3(2) of the IUC Code).

The incidence rule, by referring to elements of the motor vehicle registry, does not distinguish between the initial registration of the vehicle and subsequent registrations: the passive subject of the tax is the owner of the vehicle, considered as such the person, singular or collective in whose name the vehicle is registered.

It is, therefore, on the interpretation of the rule in section 1 of article 3 that, as already mentioned, the different positions expressed by the Applicant and the Respondent become evident.

According to the Applicant, the aforementioned rule, in the wording in effect at the date of occurrence of the tax facts to which the assessments in question relate, establishes a presumption of ownership, based on the motor vehicle registry, rebuttable in accordance with general terms and, in particular, by force of the provisions of article 73 of the General Tax Code.

Conversely, the Respondent understands that, with the IUC Code establishing passive subjection as well as the taxable event of the obligation of tax, by reference to the elements contained in the motor vehicle registry, as follows from articles 3 and 6 of its Code, with the Applicant requesting the issuance of the registration certificate and with the vehicles registered in its name in the taxation periods to which the questioned assessments refer, "the prerequisites of the taxable event of IUC are met, as well as its exigibility, and the Applicant is the passive subject of the tax."

This matter has been the subject of numerous arbitral decisions which, repeatedly and uniformly, have ruled to the effect that the rule in section 1 of article 3 of the IUC Code, in the initial wording of Law No. 22-A/2007, of 29/06, establishes a presumption, rebuttable, in accordance with general terms and, in particular, by force of the provisions of article 73 of the General Tax Code.[3] It is this orientation that is adopted and will be followed closely.

Indeed, except as provided in section 2, concerning situations of sales with reservation of ownership and leases that assume the nature of financing, article 3 of the IUC Code, in the wording in effect at the date of occurrence of the tax facts to which the assessments in question relate, provides that the passive subjects of this tax are the owners of the vehicles, being considered as such the persons in whose name the vehicles are registered.

The resort to the motor vehicle registry as a structuring element of the system for assessment of this tax is evident throughout its Code. Reference is made, in particular, to its article 6 concerning the definition of the taxable event of the obligation of tax, whose section 1 provides that it is constituted by the ownership of the vehicle, "as attested by the registration or registry in national territory." From this provision it follows that motor vehicles that are not, and should not be, registered in Portuguese territory, are only covered by the objective incidence of this tax if they remain there for a period of more than 183 days, as provided in section 2 of the same article. It is, therefore, a rule which, resorting to the registry element, establishes, simultaneously, the taxable event of the tax and the respective tax connection. It is, also, from elements of the motor vehicle registry that the moment of the beginning of the taxation period and constitution of the tax obligation is extracted and, in a general manner, all elements necessary for the assessment of the tax in question, as, moreover, is well emphasized in the response prepared by the TA.

However, from the dependence of the IUC taxation regime on the motor vehicle registry, one cannot extract, as an immediate conclusion, that the rule of subjective incidence, in the segment in which it considers as owner the person in whose name the vehicle is registered, does not constitute a presumption of incidence.

There is, therefore, a need to resort to other interpretative elements, with special relevance to the legal notion of presumption.

According to the notion set forth in article 349 of the Civil Code, presumptions are the inferences which the law or the judge draws from a known fact to establish an unknown fact. Presumptions constitute means of proof, having this the function of demonstrating the reality of facts (article 341 of the Civil Code). Thus, he who has in his favor the legal presumption is excused from proving the fact to which it leads (article 350(1) of the Civil Code). However, presumptions, except in cases where the law prohibits it, may be rebutted, by evidence to the contrary (article 350(2) of the Civil Code). In the case of presumptions of tax incidence, these are always rebuttable, as expressly provided, article 73 of the General Tax Code.

Presumptions may be explicit or merely implicit in the text of the law.

Indeed, in the definition of subjective incidence of Municipal Tax on Vehicles, Commercial Activity Tax and Industrial Property Transfer Tax, taxes which the current IUC came to replace, it was that expression used by the legislator. In the scope of the abolished taxes, it is provided that "the tax is due by the owners of the vehicles, being presumed as such, until proof to the contrary, the persons in whose name the same are registered or recorded"[4]

In the same sense, article 3(1) of the Regulation of Circulation and Haulage Taxes, approved by Decree-Law No. 116/94, of 03/05, provides that the passive subjects of these taxes are "the owners of the vehicles, being presumed as such, until proof to the contrary, the singular or collective persons in whose name the same are registered."

As for IUC, the legislator chose to use a different formulation of the rule of subjective incidence. As in the abolished taxes, it continues to assign to the owners of vehicles the quality of passive subjects. However, it abandons the expression "being presumed as such, until proof to the contrary, the persons in whose name the same are registered" in favor of "being considered as such the persons (...) in whose name the same are registered."

Differently from the position expressed by the Respondent, we understand that one is faced with a mere semantic matter, which does not minimally alter the content of the rule in question and for two orders of reasons: For there to be a legal presumption, it is necessary that the rule which establishes it conforms to its legal concept, set forth in article 349 of the Civil Code, and it is irrelevant for such whether it is explicit, revealed by the use of the expression "are presumed" or merely implicit[5].

It is, therefore, 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 assigns full efficacy to the presumption derived from the motor vehicle registry, embracing it, as such, in the definition of the subjective incidence of this tax established in section 1 of article 3 of the IUC Code.

In addition, Decree-Law No. 54/75, of 12/02, which regulates the registration of motor vehicles, not providing any rule concerning the constitutive character of the registration of motor vehicle ownership, provides, in section 1 of its article 1 that the motor vehicle registry aims only to provide publicity to the legal situation of the property. In accordance with article 7 of the Land Registry Code, subsidiarily applicable to motor vehicle registry, by referral from article 29 of that statute, it is determined that the registry only "(...) constitutes a presumption that the right exists and belongs to the titled holder, in the precise terms in which the registry defines it."

Ruling on this matter, the Supreme Court of Justice, in judgment of 19-02-2004, delivered in case no. 3B4369, concludes that "(...) the registry does not have constitutive effect, as it is intended to provide publicity to the registered act, functioning (merely) as a mere presumption, rebuttable (presumption 'juris tantum') of the existence of the right (articles 1(1) and 7 of the Land Registry Code and 350(2) of the Civil Code) as well as of the respective ownership, in the terms thereof contained (...)".

Thus, following the reiterated arbitral jurisprudence relating to identical situations, one cannot fail to understand that the expression "being considered as such" contained in the referred rule, configures a legal presumption, and that this is rebuttable, in accordance with general terms, and, in particular, by force of the provisions of article 73 of the General Tax Code, which provides that presumptions established in the rules of tax incidence always admit evidence to the contrary.

On the Rebuttal of the Presumption

Presumptions of tax incidence may be rebutted through the contradictory procedure provided for in article 64 of the CPPT or, alternatively, by way of petition for grace or judicial challenge of the tax acts based on them.

In this case, the Applicant did not use that proper procedure, having instead opted for this request for arbitral decision which, thus, constitutes a proper means to rebut the presumption of subjective incidence of IUC on which the tax assessments whose annulment constitutes its object are based, as this is a matter within the material jurisdiction of this arbitral court (articles 2 and 4 of Decree-Law 10/2011).

To rebut the presumption derived from the entry in the motor vehicle registry, the Applicant offers, as a means of proof, the invoicing issued concerning the transmission of the vehicles to which the questioned assessments relate.

Ruling on the documentary evidence presented, the Respondent considers that "commercial invoicing and commercial writings do not constitute full proof."

In the Respondent's view, "... the rules of the motor vehicle registry have not yet reached the point where mere invoices unilaterally issued can replace the request for motor vehicle registry, indeed an officially approved document... Now, invoices do not constitute purchase and sale contracts."

In support of this thesis, the Respondent refers to case 63/2014-T of the CAAD in which, although with a dissenting opinion, the Arbitral Court considered invoices to be "unilateral and internal documents, to which jurisprudence has recognized very little value to prove the existence of a reciprocal contract."

In the same sense of the insufficiency of invoices to overcome the presumption contained in section 1 of article 3 of the IUC Code, it further refers to arbitral decisions delivered in cases nos. 150/2014-T and 220/2014-T.

As is well extracted from the Respondent's position regarding the evidence produced, supported by the justification of the cited judicial decisions, the latter would be insufficient to rebut the presumption established in the rule of tax incidence, defined on the basis of ownership, as it appears from the motor vehicle registry.

Not being, however, such the understanding of the Court, it is important to evaluate the evidence produced by the Applicant in order to determine whether it is sufficient to rebut the presumption derived from the registry which, on the plane of subjective incidence, is embraced for purposes of IUC.

For such, it is important to keep in mind that, in the situation under analysis, one is faced with purchase and sale contracts which, relating to movable things and not being subject to any special formalities (Civil Code, article 219), effect the corresponding transfer of real rights (Civil Code, article 408(1)).

Being contracts involving the transmission of ownership of movable property through the payment of a price, they have, among their essential effects, that of delivering the thing (Civil Code, articles 874 and 879).

However, being a purchase and sale contract having as its object a motor vehicle, in which registration is obligatory, its proper performance presupposes the issuance of the declaration of sale necessary for the entry in the registry of the corresponding acquisition in favor of the buyer, as has been understood by the jurisprudence of the superior courts.[6]

Such declaration, relevant for registration purposes, may constitute proof of the transaction, but does not constitute the sole or exclusive means of proof of such fact.

For registration purposes, no special formality is required, the presentation to the competent entity of an application subscribed by the buyer and confirmed by the seller being sufficient, which, through declaration of sale confirms that the ownership of the vehicle was acquired by that party by verbal purchase and sale contract (see Motor Vehicle Registry Regulation, article 25(1), paragraph a)).

Notwithstanding these being the rules resulting from the provisions of civil law, relating to the informality of the transmission of movable things and, if applicable, their respective registration, one cannot fail to also bear in mind that, in the situation under analysis, we are faced with commercial transactions, carried out by a business entity within the activity that constitutes its corporate purpose.

Within that scope, the company is bound by compliance with specific accounting and tax rules, in which invoicing assumes special relevance.

First and foremost, by force of tax rules, the entity transmitting the goods is obliged to issue an invoice concerning each transmission of goods whatever the quality of the respective acquiror (Value Added Tax Code, article 29(1), paragraph b).

Also in accordance with the provisions of tax rules, the invoice must comply with a certain form, detailed regulated in articles 36 of the VAT Code and article 5 of Decree-Law No. 198/90, of 19 June.

It is on the basis of this document issued by the supplier of the goods that the acquirer, when it is an economic operator - as is the case with most of the situations to which this proceeding refers - will deduct the VAT to which it is entitled (VAT Code, article 19(2)) and record the expense of the operation (Corporate Income Tax Code, articles 23(6) and 123(2)).

For its part, it is also on the basis of the invoicing issued by it that the supplier of the goods should record the respective income, as follows from the provision in paragraph b) of section 2 of article 123 of the Corporate Income Tax Code.

Since they are issued in legal form and constitute supporting documents for entries in accounting kept in accordance with commercial and tax legislation, the information contained in them is covered by the presumption of truthfulness referred to in article 75(1) of the General Tax Code.

Indeed, the referred presumption covers not only books and accounting records, but also their supporting documents, as indeed constitutes peaceful understanding of the tax administration itself[7] and established jurisprudence of the superior courts[8].

The presumption of truthfulness of commercial invoices issued in accordance with legal requirements may, however, be rebutted whenever the operations to which they refer do not correspond to reality, sufficing, for that, that the Tax Administration collect and demonstrate grounded indications of such fact (General Tax Code, article 75(2), paragraph a))[9].

In this case, the Respondent did not challenge, nor does it raise any doubt, concerning the operations evidenced by the invoices presented by the Applicant.

Considered, therefore, the relevance assigned by tax legislation to invoices issued, in accordance with legal requirements, by commercial companies within their business activity and the presumption of truthfulness of the operations evidenced by them, one cannot fail to consider that the same constitute, by themselves, sufficient proof of the transmissions invoked by the Applicant, following, in this matter, the majority arbitral jurisprudence.[10]

Considering, therefore, documentally proven the transmission of the right of ownership of the vehicles in question, there is merely to determine the date on which, according to the respective invoice, the same will have occurred, taking into account that the exigibility of the tax, concerning new terrestrial vehicles, occurs on the first day of the taxation period, which begins on the date of registration, as provided by article 6(3) of the IUC Code, and that is the moment in which the tax legal relationship is defined.

Based on the documents comprising this proceeding, in particular the administrative file filed by the TA, it is verified that, at the date of exigibility of the tax, the vehicles identified therein were no longer the property of the Applicant by reason of having been transmitted by it to third parties.

In light of the foregoing, it is concluded that there is no legal basis for the acts of assessment of IUC and compensatory interest concerning the vehicles and periods identified in the annex to the request for arbitral decision.

In these terms, considering the presumption of ownership derived from the motor vehicle registry embraced in article 3 of the IUC Code - in the wording in effect at the date of the facts to which the assessments in question relate - rebutted, the assessments identified in the list attached to this request for arbitral decision should be annulled, in the total amount of €130,555.24, on the ground of illegality and error in the prerequisites on which they are based.

On the Right to Compensatory Interest

Together with the revocation of the decision dismissing the applications for official review and annulment of the assessments, and consequent reimbursement of the amounts unduly paid, the Applicant further requests that its right to compensatory interest be recognized, under article 43 of the General Tax Code.

Indeed, in accordance with the provision of section 1 of the referred article, compensatory interest will be due "when it is determined, in a petition for grace or judicial challenge, that there was error attributable to the services from which results payment of the tax debt in an amount greater than legally due." In addition to the means referred to in the rule which is transcribed, we understand that, as follows from section 5 of article 24 of the RJAT, the right to the aforementioned interest can be recognized in the arbitral proceeding and thus the request is decided upon.

The right to compensatory interest referred to in the aforementioned General Tax Code rule presupposes that tax has been paid in an amount greater than that due and that this derives from error, of fact or of law, attributable to the services of the TA.

In this case, although it is recognized that the tax assessed to the Applicant is not due, because the Applicant is not the passive subject of the tax obligation, and it is therefore determined that the questioned assessments are annulled, it is not apparent that, in its origin, there is error attributable to the services which determines such right in favor of the taxpayer.

Indeed, in promoting the assessments of IUC considering the Applicant as the passive subject of this tax, the Tax Administration could not proceed in a different manner, merely giving effect to the rule of section 1 of article 3 of the IUC Code, which, as abundantly referred to above, assigns such quality to the persons in whose name the vehicles are registered.

On the other hand, also as has been concluded, the referred rule has the nature of a legal presumption, from which there arises, for the TA, the right/duty to assess and demand the tax from such persons, without need to prove the facts which lead to it, as expressly provided by section 1 of article 350 of the Civil Code.

Not being, thus, the prerequisites met on which the right to compensatory interest is based, cannot, therefore, in this aspect, the request proceed[11].

However, article 100 of the General Tax Code provides that "The tax administration is obliged, in case of total or partial merit of complaints or administrative appeals, or of judicial proceeding in favor of the passive subject, to the immediate and complete restitution of the situation that would have existed if the illegality had not been committed, including the payment of compensatory interest, in the terms and conditions provided for in the law."

In this case, the annulment of the assessments occurred by way of challenging the dismissal of the applications for official review submitted by the Applicant in September 2016, and article 43(3)(c) of the General Tax Code is therefore applicable to it: "3 - Compensatory interest is also due in the following circumstances: (...) - c) When the revision of the tax act by the initiative of the taxpayer is effected more than one year after that request, except if the delay is not attributable to the tax administration."

The fact that the TA decided before the expiry of one year (approximately three months after the applications for review) is not, in the view of this Arbitral Court, a circumstance that bars the right to the compensatory interest claimed by the Applicant, inasmuch as in that context the TA did not revise the tax acts, rather obliging the Applicant to appeal the dismissal to this Court.

Indeed, it is established jurisprudence that compensatory interest is due whenever the TA decides favorably on the taxpayer's claim, after the expiry of that one-year period from the application for revision, and will also be due when more than one year elapses after the application for revision because the taxpayer is obliged to resort to the judicial route to obtain a decision favorable to its claim, by reason of the TA (within or outside that period) having refused to revise the act.[12] This is what occurs in the case of the Applicant which only after resorting to this arbitration sees its claim proceed.

Thus, the Applicant is entitled to compensatory interest, but only that which is due from one year after the submission of the applications for official review and until the date of reimbursement to the Applicant of the amounts of the annulled assessments.

On the other hand, there is also a right to reimbursement of the tax paid by the Applicant, by force of the provisions of the referred articles 24(1)(b) of the RJAT and 100 of the General Tax Code, as this is essential to "reestablish the situation that would have existed if the tax act subject of the arbitral decision had not been carried out".

V - DECISION

In these terms, and with the grounds set out, the Arbitral Court decides:

a) To uphold the request for declaration of illegality of the dismissal of the applications for official review, determining, in consequence, its annulment;

b) To uphold the request for arbitral decision, insofar as it concerns the rebuttal of the presumption of subjective incidence of IUC, with the consequent annulment of the assessments of Single Circulation Tax, concerning the taxation periods and vehicles identified in the list attached to this request for arbitral decision;

c) To uphold the request insofar as it concerns the recognition of the right to compensatory interest that will be due from one year after the submission of the applications for official review and until the date of reimbursement to the Applicant of the amounts of the annulled assessments.

d) To condemn the Respondent in the costs of this proceeding.

VI - Value of the Proceeding

In accordance with the provision of article 315(2) of the Code of Civil Procedure and 97-A(1)(a) of the Code of Tax Procedure and 3(2) of the Regulation of Costs in Tax Arbitration Proceedings, the value of the proceeding is fixed at €130,555.24.

VII - Costs

In accordance with article 22(4) of the RJAT, the amount of costs is fixed at €3,060.00, under Table I attached to the Regulation of Costs in Tax Arbitration Proceedings, to the charge of the Tax and Customs Authority.

Let it be notified.

Lisbon, 14 December 2017.

The Arbitrators

(Fernanda Maças)

(Álvaro Caneira)

(Magda Feliciano)

(The text of this decision was prepared by computer, in accordance with article 131(5) of the Code of Civil Procedure, applicable by referral from article 29(1)(e) of Decree-Law No. 10/2011, of 20 January (RJAT), being its drafting governed by the spelling prior to the Orthographic Agreement of 1990.)

[1] In this sense, see Superior Administrative Court, Judgment of 16.11.2011, Case 608/11.

[2] See Sérgio Vasques, "Special Taxes on Consumption," Almedina, 2000 and Explanatory Memorandum of Bill No. 118-X, which gave rise to Law No. 22-A/2007, of 29/05 (reform of motor vehicle taxation).

[3] In this sense, Arbitral Decisions of 19.7.2013, Case 26/1013-T, of 10.9.2013, Case 27/2013-T, of 15.10.2013, Case 14/2013-T, of 5.12.2013, Case 73/2013-T, of 14.2.2014, Case 170/2013-T, of 30.4.2014, Case 256/2013-T, of 2.5.2014, Case 286/2013, of 16.6.2014, Case 289/2013-T, of 14.7.2014, Case 43/2014-T, of 6.6.2014, Case 294/2013-T, of 15.9.2014, Cases 63/2014-T and 220/2014 and, more recently, referring to identical factual situations to those of this proceeding, Arbitral Decisions of 13.9.2017, Case 173/2017-T and of 4.10.2017, Case 185/2017-.

[4] See article 3(1) of the Regulation of Municipal Tax on Vehicles, approved by Decree-Law No. 143/78, of 12 June.

[5] Cf. Jorge de Sousa, CPPT, 6th Edition, Áreas Editora. Lisbon, 2011, pages 586 and Superior Administrative Court, Judgments of 29.2.2012 and of 2.5.2012, Cases 441/11 and 381/12.

[6] Cf. Supreme Court of Justice, Judgments of 23.3.2006 and of 12.10.2006, Cases 06B722 and 06B2620.

[7] Cf. Opinion of the Tax Studies Centre, endorsed by dispatch of the Director-General of Taxes, of 2 January 1992, published in Tax Science and Technique no. 365.

[8] Cf. Superior Administrative Court, Judgment of 27.10.2004, Case 0810/04, Administrative Court of the North Region, Judgment of 4.6.2013, Case 6478/13 and Administrative Court of the North Region, Judgment of 15.11.2013, Case 00201/06.8BEPNF, among others.

[9] Cf. Superior Administrative Court, Judgments of 24.4.2002, Case 102/02, of 23.10.2002, Case 1152/02, of 9.10.2002, Case 871/02, of 20.11.2002, Case 1428/02, of 14.1.2004, Case 1480/03, among many others.

[10] In this sense, cf., among others, Arbitral Decisions of 19.7.2013, Case 26/2013-T, of 10.9.2013, Case 27/2013-T, of 15.10.2013, Case 14/2013-T, of 5.12.2013, Case 73/2013-T, of 14.2.2014, Case 170/2013-T, of 30.4.2014, Case 256/2013-T, of 2.5.2014, Case 289/2013-T, of 6.6.2014, Case 294/2013-T, of 25.6.2014, Case 42/2014, of 6.7.2014, Case 52/2014-T, of 15.9.2017, Case 173/2017-T and of 4.10.2017, Case 185/2017-T.

[11] In this sense, Arbitral Decisions delivered in Cases 26/2013-T, 170/2013-T, 136/2014-T, 140/2014-T, 230/2014-T and 185/2017-T, among others.

[12] In this sense, Superior Administrative Court, Judgments of 12.12.2006, Case 0918/06 and of 6.2.2013, Case 0839/11.