Summary
Full Decision
ARBITRAL DECISION
I – REPORT
A… – …, SA, taxpayer no. …, with registered office at …, hereinafter designated as the Claimant, filed a petition for establishment of an arbitration tribunal in tax matters and a petition for arbitral pronouncement, pursuant to the provisions of articles 2, no. 1 a) and 10, no. 1 a), both of Decree-Law No. 10/2011 of 20 January (Legal Framework for Arbitration in Tax Matters, hereinafter abbreviated as RJAT), requesting the declaration of illegality of the assessment acts for the Single Circulation Tax (IUC), identified in the Table Annexed to this decision, which is hereby fully reproduced and forms part hereof, issued by the Tax and Customs Authority, relating to the motor vehicles identified in the same Annexed Table, and relating to the years 2009 to 2013, in the total amount of €30,989.59, including compensatory interest, as well as the payment of indemnity interest on the amounts paid.
The petition for establishment of the arbitration tribunal was accepted by the President of CAAD and automatically notified to the Tax and Customs Authority on 28-05-2014.
Pursuant to the provisions of articles 5, no. 2, a), 6, no. 1 and 11, no. 1, a) of the RJAT, the Deontological Council appointed the undersigned as arbitrator of the single arbitration tribunal, who communicated acceptance of the assignment within the applicable period.
On 15-07-2014 the parties were duly notified of this appointment and did not manifest any intention to challenge the appointment of the arbitrator, in accordance with the combined provisions of article 11, no. 1, paragraphs a) and b) of the RJAT and articles 6 and 7 of the Code of Deontology.
Accordingly, in conformity with the provisions of paragraph c) of no. 1 of article 11 of the RJAT, the single arbitration tribunal was constituted on 31-07-2014.
By order dated 02-02-2015, the tribunal dispensed with the hearing provided for in article 18 of the RJAT, as well as final submissions.
The arbitration tribunal was regularly constituted and is materially competent, in accordance with the provisions of articles 2, no. 1, paragraph a), and 30, no. 1, of Decree-Law No. 10/2011 of 20 January.
The parties possess legal personality and capacity, are duly entitled and are represented (articles 4 and 10, no. 2, of the same diploma and article 1 of Ordinance No. 112-A/2011 of 22 March).
The proceedings are free from nullities and no exceptions were raised.
The arguments supporting the Claimant's petition for arbitral pronouncement are, in summary, as follows:
Arguments of the Claimant
10.1 As a preliminary matter, the Claimant alleges that the present petition is timely as it respects the 90-day period provided for in paragraph a) of no. 1 of article 10 of the RJAT, counted from the date of rejection of the administrative objections.
10.2 Regarding the cumulation of claims, the provisions of no. 1 of article 13 of the RJAT are satisfied as the same factual and legal circumstances are essentially involved in the assessment of IUC for the years 2009 to 2013.
10.3 The Claimant is a commercial company engaged in the purchase, sale and rental of machinery and motor vehicles.
10.4 In the exercise of its business, the Claimant offers customers various solutions, namely long-term rental or sale.
10.5 The Claimant was notified to proceed with payment of IUC relating to the assessment acts identified in the Annexed Table.
10.6 However, as of the date of the taxable event, the vehicles were no longer its property (see invoices of sales attached to the administrative objections).
10.7 The purchasers did not, however, proceed with registration of acquisition of the vehicles.
10.8 To avoid tax enforcement proceedings and other costs, the Claimant paid the tax and corresponding compensatory interest, and therefore requests reimbursement thereof.
10.9 Pursuant to article 3, no. 1 of the CIUC, "the passive subjects of the tax are natural or legal persons, of public or private law, in whose name the vehicles are registered."
10.10 This provision contains a rebuttable presumption which allows proof to the contrary.
10.11 In this regard, see the case law of our courts: "The presumption of article 7 of the CRP, applicable to motor vehicle registration, being a presumption iuris tantum, implies an inversion of the burden of proof, placing upon the other party the burden of proving the contrary (articles 347 and 350 of the CC) of the fact serving as the basis of the presumption or of the presumed fact itself" – Decision of the Court of Appeal of Coimbra, of 3 June 2008, available at www.dgsi.pt.
10.12 In the same sense, article 73 of the LGT establishes that the presumptions enshrined in the rules of tax incidence always admit proof to the contrary.
10.13 To rebut this presumption, the Claimant demonstrated that the ownership of the vehicle belongs to a third party, presenting, for this purpose, the invoices of sale of the vehicles and their respective salvage documents.
10.14 From a copy of the invoices it results that the sale of the vehicles took place at a moment prior to when the taxable event occurred and the consequent tax obligation arose (articles 4 and 6 of the IUC).
10.15 The proof was made, as established by article 64 of the CPPT, through the administrative objection.
10.16 The Claimant further invokes Arbitral Decisions nos. 14/2013-T, 26/2013-T, 27/2013-T and 73/2013-T of this CAAD, in which decisions were made in the same sense.
10.17 The Claimant concludes by requesting the annulment of the IUC assessments that are the subject of the present case and the consequent reimbursement of the amounts paid as tax and compensatory interest, as well as the condemnation of the AT to payment of the respective indemnity interest.
Response of the Respondent
11.1 In its Response, the AT contends that the Claimant's arguments: a) constitute a biased reading of the letter of the law; b) do not take account of the systematic element, violating the unity of the regime enshrined throughout the IUC and, more broadly in the entire tax-legal system; and, finally, c) furthermore arise from an interpretation that ignores the ratio of the regime enshrined in no. 1 of article 3 of the CIUC.
11.2 The tax legislator in establishing in article 3, no. 1 who are the passive subjects of IUC, established expressly and intentionally that these are the owners (or in the situations provided for in no. 2 the persons mentioned therein), being considered as such the persons in whose name the vehicles are registered.
11.3 The legislator did not use the expression "it is presumed" as it could have done, for example, in the following terms: "the passive subjects of the tax are the owners of the vehicles, being presumed as such the natural or legal persons, of public or private law, in whose name the vehicles are registered."
11.4 Accordingly, the wording of article 3 of the CIUC corresponds to a clear option of legislative policy adopted by the legislator, and to understand that a presumption is enshrined therein would unequivocally constitute an interpretation contra legem.
11.5 In accordance, this interpretation has already been adopted by the Case Law of our courts, transcribing, for this purpose, part of the judgment of the Administrative and Tax Court of Penafiel, delivered in Case no. ….OBEPNF. (See articles 26 and 27 of the Response)
11.6 Regarding the systematic element of interpretation, the Respondent alleges that the solution advocated by the Claimant is intolerable and finds the understanding supported by it no legal basis. (Article 36 of the Response)
11.7 Finally, given the "ratio," of the parliamentary debates surrounding the approval of the present regime, it clearly results that the motor vehicle taxation regime approved establishes that IUC "came to be owed by the persons who appear in the register as owners of the vehicles" (article 64).
11.8 The Respondent further adds that invoices alone do not constitute proper documentation to prove the sale of the vehicles, since the same is nothing more than a document unilaterally issued by the Claimant.
11.9 Moreover, the invoices and cash sales are not authenticated, nor is it proven that the amounts stated therein were recorded in the accounts.
11.10 Regarding indemnity interest, it alleges that, even if it is understood that the tax is not owed, there is no error attributable to the service because the AT merely complied with the rule of no. 1 of article 3 of the CIUC, and therefore the legal prerequisites granting the right to the requested indemnity interest are not met.
11.11 A similar argument is used regarding liability for payment of arbitration costs: it was not the Respondent who gave rise to filing the petition for arbitral pronouncement but rather the Claimant which only provided documentary evidence regarding the alleged transfer of ownership after the assessment of the tax.
11.12 Consequently, the Claimant should be condemned to payment of the arbitration costs, in line with what was decided in a similar matter within Case no. 72/2013-T of this Arbitration Centre.
Having considered all the foregoing, it is necessary to render a final decision.
A. FACTS
A.1. Facts Established as Proven
1 – The Claimant, through verbal contracts of sale, sold the vehicles identified in the Annex to this Decision;
2 – The vehicles were disposed of to the entities identified in the invoices issued, as copies attached to the administrative file.
3 – The Claimant was notified of the IUC assessments identified in the Annex to this Decision, in the total amount of €30,989.59.
4 – The Claimant proceeded to full payment of the said IUC assessments and compensatory interest.
5 – In the administrative objection proceedings, the Claimant invoked the transfer of ownership of the vehicles, attaching the respective invoices.
6 – In response, the Tax and Customs Authority deemed that the obligation to pay the tax remained.
A.2. Reasoning
The facts mentioned are documentarily proven or were not specifically contested.
Regarding the proof of the sale of the vehicles, the Claimant presented the respective invoice (documents attached to the administrative objection).
The Respondent, in its response, alleged that the invoices were not recorded in the accounts, without having attached the alleged report of the tax inspection to prove this. On the other hand, there is no reference in the file, whether direct, namely in the administrative file, or indirect (referral or citation) to the conduct and conclusions of a tax inspection, but only the presentation of two administrative objections and their respective rejection letters.
Having not made this proof, the acts of sale of the motor vehicles are thus sufficiently proven, regardless of whether or not invoices are sufficient for the completion of commercial registration. For one thing is the elements necessary for the completion of registration, another is proof of the transaction subject to registration.
Also, it must be noted that the contract of sale of a motor vehicle is a verbal contract, therefore not subject to any specific form.
Finally, we further add that invoices constitute, for tax purposes, the legally required documents to prove operations of sales and provision of services, as expressly results from the various tax codes (see the provisions of no. 6 of article 23 of the Corporate Income Tax Code, paragraph b) of no. 1 of article 29 and article 36 of the VAT Code and article 115 of the Personal Income Tax Code).
It would be strange, therefore, if an invoice constitutes, from the perspective of the transferor, sufficient proof to establish income from the sale of a vehicle, taxable under Personal Income Tax (in the organized accounting regime) or Corporate Income Tax, but, conversely, does not constitute sufficient proof to establish the same transfer, now for purposes of IUC.
This assertion does not preclude the AT from demonstrating that it is a fraudulent document by virtue of non-existence of any transfer (with all its tax and criminal consequences), but, in the present case, there is no proof or even indications that call into question the presumption of good faith of the taxpayer and the documents presented, as expressly results from article 75 of the General Tax Law.
B. ON THE LAW
Given the positions of the Parties assumed in the arguments presented, the central issue is whether, on the date of occurrence of the taxable events (article 3, no. 1 of the CIUC), if the owners of the vehicles are not those appearing in the register, will it nonetheless be these persons who will always be considered the passive subjects of IUC, with the consequence that the ownership revealed by the register will not be considered a rebuttable presumption, or, put differently, whether the rule of subjective tax incidence contained in article 3, no. 1 of the CIUC establishes or does not establish a presumption.
This matter has already been abundantly addressed in Tax Arbitration Case Law. See, by way of example, the various decisions of CAAD published at www.caad.org.pt, namely those delivered in Cases nos. 14/2013, 26/2013, 27/2013, 73/2013, 170/2013, 294/2013 and 216/2014. In the present decision we shall follow the understanding and conclusions of those decisions.
For the sake of synthesis and clarity of thought, we adhere without reservation to the framework established in the arbitral decision in Case no. 216/2014-T, which we cite and to which we refer:
"The general and unanimous sense of such Case Law is to consider that article 3-1 of the CIUC establishes a rebuttable presumption regarding the ownership of property based on the entries or registrations contained in the Motor Vehicle Register Office and/or in the IMTT database as of the date of the taxable event.
That is: once IUC is assessed on the basis of the entries in the register or in accordance with the elements contained in the IMTT databases, the passive subject can relieve himself of payment obligation by demonstrating the non-correspondence between the reality and those entries and elements upon which the Tax Authority relied to proceed with the assessments.
There are no grounds to reverse or alter the essential sense of this Case Law.
Let us then examine, again and more closely, the issue:
Article 3 of the CIUC (Single Circulation Tax Code) provides:
Article 3
Subjective Tax Incidence
1 – The passive subjects 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.
2 – Financial lessees, acquirers with reservation of ownership, as well as other holders of purchase option rights by virtue of the leasing contract are assimilated to owners."
On the other hand, no. 1 of article 11 of the LGT establishes that "in determining the meaning of tax rules and in the qualification of the facts to which they apply, the general rules and principles of interpretation and application of laws are observed."
Resolving the doubts that arise in the application of legal norms presupposes the performance of an interpretive activity.
It is thus necessary to consider what is the best interpretation[1] of article 3, no. 1 of the CIUC, in light, firstly, of the literal element, that is the one by which one seeks to detect the legislative thought that is embodied in the norm, to verify whether it contemplates a presumption, or whether it definitively determines that the passive subject of the tax is the owner who appears in the register.
The issue that arises is, in the case sub judice, whether the expression "being considered" used by the legislator in the CIUC, rather than the expression "being presumed," which was what appeared in the decrees that preceded the CIUC, will have removed the nature of presumption from the legal provision in question.
In our view and contrary to what the AT wisely argues, the answer must necessarily be negative, since from the analysis of our legal system it clearly emerges that the two expressions have been used by the legislator with equivalent meaning, whether at the level of rebuttable presumptions or in the framework of conclusive presumptions, and therefore nothing enables us to draw the conclusion sought by the Tax Authority on a mere semantic basis.
In fact, this occurs in various legal norms that establish presumptions using the verb "to consider," of which the following are indicated merely by way of example:
~ in the field of civil law - no. 3 of article 243 of the Civil Code, when it provides that "a third party who acquired the right after the registration of the action of simulation is always considered to be in bad faith, where such registration occurs";
~ also in the field of industrial property law the same occurs, when article 59, no. 1 of the Industrial Property Code provides that "(…) inventions whose patent was applied for during the year following the date on which the inventor left the company are considered to have been made during the performance of the employment contract (…)";
~ and, finally, in the field of tax law, when nos. 3 and 4 of article 89-A of the LGT provide that the burden of proof is on the taxpayer that the declared income corresponds to reality and that, if such proof is not made, it is presumed ("is considered" in the letter of the Law) that the income is what results from the table contained in no. 4 of said article.
This conclusion that there is complete equivalence of meanings between the two expressions, which the legislator uses indifferently, satisfies the condition established in article 9, no. 2 of the Civil Code, since the minimum correspondence of verbal expression is assured for purposes of determining the legislative thought.
It is important, next, to submit the norm in question to the other elements of logical interpretation, namely, the historical element, the rational or teleological element and the systematic element.
Discoursing on interpretive activity, Francisco Ferrara says that this "is the most difficult and delicate operation that a jurist can undertake, and demands fine handling, keen sense, felicitous intuition, much experience and perfect command not only of the positive material, but also of the spirit of a particular legislation. (…) Interpretation must be objective, balanced, without passion, sometimes bold, but not revolutionary, acute, but always respectful of the law" (See Essay on the Theory of Interpretation of Laws, translation by Manuel de Andrade, (2nd ed.), Amênio Amado, Publisher, Coimbra, 1963, p. 129).
As Batista Machado states, "the legal provision presents itself to the jurist as a linguistic statement, as a set of words that constitute a text. To interpret obviously consists in drawing from that text a certain meaning or content of thought.
The text admits multiple meanings (polysemy of the text) and frequently contains ambiguous or obscure expressions. Even when apparently clear upon first reading, its application to concrete cases in life often gives rise to unforeseen and unpredictable interpretive difficulties. Besides, even though apparently clear in its verbal expression and bearing only one meaning, one must still account for the possibility that the verbal expression has betrayed the legislative thought – a phenomenon more frequent than would appear at first sight" (See Introduction to Law and Legitimizing Discourse, pp. 175/176).
"The purpose of interpretation is to determine the objective meaning of the law, the vis potestas legis. (…) The law is not what the legislator wanted or wished to express, but only that which he expressed in the form of law. (…) On the other hand, the legal command has an autonomous value that may not coincide with the will of the artificers and drafters of the law, and may lead to unforeseen and unexpected consequences for the legislators. (…) The interpreter must seek not what the legislator wanted, but what in the law appears objectively intended: the mens legis and not the mens legislatoris" (See Francesco Ferrara, Essay, pp. 134/135).
To understand a law "is not merely to mechanically grasp the apparent and immediate sense resulting from verbal connection; it is to inquire deeply into the legislative thought, to descend from verbal surface to the intimate concept that the text contains and to develop it in all its possible directions" (loc. cit., p. 128).
With the objective of unveiling the true meaning and scope of legal texts, the interpreter makes use of interpretive factors that are essentially the grammatical element (the text, or the "letter of the law") and the logical element, which, in turn, is subdivided into rational (or teleological) element, systematic element and historical element. (See Baptista Machado, Loc. Cit., p. 181; Oliveira Ascensão, The Law – Introduction and General Theory 2nd Ed., Calouste Gulbenkian Foundation, Lisbon, p. 361).
Amongst us, it is article 9 of the Civil Code (CC) that provides the rules and fundamental elements for the correct and adequate interpretation of norms.
The text of no. 1 of article 9 of the CC begins by saying that interpretation should not be confined to the letter of the law, but should reconstruct from it the "legislative thought."
Regarding the expression "legislative thought," Batista Machado tells us that article 9 of the CC "did not take a position in the controversy between the subjectivist doctrine and the objectivist doctrine. This is evidenced by the fact that it does not refer, either to the "will of the legislator" or to the "will of the law," but rather points as the scope of the interpretive activity the discovery of "legislative thought" (article 9, 1st). This expression, deliberately neutral, means precisely that the legislator did not wish to commit itself" (loc. cit., p. 188).
To the same effect P. de Lima and A. Varela opine in an annotation to article 9 of the CC (See Civil Code Annotated – vol. I, Coimbra ed., 1967, p. 16).
And regarding no. 3 of article 9 of the CC, Batista Machado further states: "(…) this no. 3 proposes to us, therefore, a model of an ideal legislator who has enacted the most appropriate solutions (most correct, just or reasonable) and knows how to express itself correctly. This model clearly has objectivist characteristics, since it does not take as a point of reference the concrete legislator (so often incorrect, hasty, unfortunate) but an abstract legislator: wise, prudent, rational and just" (Work and loc. cit. p. 189/190).
Immediately following, this distinguished Master draws attention to the fact that no. 1 of article 9 refers to three additional elements of interpretation: the "unity of the legal system," the "circumstances in which the law was elaborated," and the "specific conditions of the time at which it is applied" (loc. cit, p. 190).
As to the "circumstances of the time in which the law was elaborated," Batista Machado further explains that this expression "represents what is traditionally called the occasio legis: the conjunctural factors of a political, social and economic order that determined or motivated the legislative measure in question" (loc. cit., p. 190).
Regarding the "specific conditions of the time at which it is applied," this element of interpretation "decidedly has an updatist connotation (loc. cit., p. 190), which coincides with the opinion expressed by P. de Lima and A. Varela in the annotations to article 9 of the CC.
With respect to the "unity of the legal system," Baptista Machado considers this the most important interpretive factor: "(…) its consideration as a decisive factor would always be imposed upon us by the principle of axiological or value-based coherence of the legal order" (loc. cit., p. 191).
It is also this author who tells us, regarding the literal or grammatical element (text or "letter of the law"), that this "is the starting point of interpretation. As such, it immediately falls to it a negative function: to eliminate those meanings that have no support, or at least any correspondence or resonance in the words of the law.
But it also falls to it a positive function, in the following terms: if the text admits only one meaning, that is the meaning of the norm – with the caveat, however, that one can conclude on the basis of other norms that the wording of the text betrayed the thought of the legislator" (loc. cit., p. 182).
Referring to the rational or teleological element, this author says that it consists "of the reason or rationale for the law (ratio legis), of the purpose pursued by the legislator in elaborating the norm. The knowledge of this purpose, especially when accompanied by knowledge of the circumstances (political, social, economic, moral, etc.,) in which the norm was elaborated or the political-economic-social conjuncture that motivated the legislative decision (occasio legis) constitutes a subsidy of the greatest importance for determining the meaning of the norm. It suffices to recall that the clarification of the ratio legis reveals to us the evaluation or weighing of the diverse interests that the norm regulates and, therefore, the relative weight of those interests, the choice between them expressed by the solution that the norm conveys" (loc. cit., pp. 182/183).
With respect to the systematic element (context of the law and parallel provisions), which "this element comprises the consideration of the other provisions that form the complex normative framework of the institute in which the norm to be interpreted is integrated, that is, which regulate the same matter (context of the law), as well as the consideration of legal provisions that regulate parallel normative problems or related institutes (parallel provisions). It further comprises the systematic place that belongs to the norm to be interpreted in the global legal order, as well as its consonance with the spirit or intrinsic unity of the entire legal order.
This interpretive subsidy is based on the postulate of the intrinsic coherence of the legal order, namely on the fact that the norms contained in a codification are governed as a principle by a unitary thought" (Batista Machado, loc.cit., p. 183).
"(…) In particular we must take into account the interweaving of the various laws of the country, because a fundamental requirement of all sound legislation is that the laws adjust to one another and do not result in a jumble of disconnected provisions (Joseph Kohler, cited by Manuel de Andrade, in Essay, p. 27).
Turning to the case before us and to the legal and juridical framework that underlies it:
Through analysis of the historical element, one draws the conclusion that, from the entry into force of Decree-Law 59/72 of 30 December, the first to regulate this matter, until Decree-Law No. 116/94 of 3 May, the last to precede the CIUC [see Law No. 22-A/2007, as amended by Laws 67-A/2007 and 3-B/2010], a presumption has been enshrined [emphasized] that the passive subjects of IUC are the persons in whose name the vehicles were registered as of the date of their assessment.
It is thus verified that tax law has, from the outset, had the objective of taxing the true and actual owner and user of the vehicle, it being immaterial whether one or the other expression is used, which, as we have seen, have in our legal order a coinciding meaning.
The same is true when we resort to elements of interpretation of a rational or teleological nature.
Indeed, the current and new framework of motor vehicle taxation establishes principles aimed at subjecting the owners of the vehicles to bearing the losses due to damages caused to traffic and the environment by them, as is evident from the content of article 1 of the CIUC.
Now the consideration of these principles, in particular, the principle of equivalence, which merit constitutional protection and are enshrined in community law, and are also recognized in other branches of the legal order, determines that the aforementioned costs be borne by the true owners, the causers of said damages, which entirely precludes an interpretation aimed at preventing the presumed owners from proving that they no longer are such by virtue of the property being in the legal sphere of another[5].
Thus, also from the interpretation made in light of elements of a rational and teleological nature, having regard to what the rationality of the system guarantees and the purposes pursued by the new CIUC, it clearly results that no. 1 of article 3 of the CIUC establishes a rebuttable presumption in law.
In light of the foregoing, it is important to conclude that the ratio legis of the tax points in the direction of taxing the actual owner-users of the vehicles, and therefore the expression "being considered" is used in the normative provision in question in a sense similar to "being presumed," and therefore there is no doubt that a legal presumption is enshrined.
On the other hand, article 73 of the LGT establishes that "(…) the presumptions enshrined in the rules of tax incidence always admit proof to the contrary, and therefore are rebuttable (…)".
Accordingly, establishing article 3, no. 1 of the CIUC a presumption iuris tantum [and therefore rebuttable], the person who is inscribed in the register as owner of the vehicle and who, for that reason, was considered by the Tax Authority as the passive subject of the tax, may present evidence aimed at demonstrating that the holder of the property, on the date of the taxable event, is another person, to whom the property was transferred.
Having analyzed the evidence carried into the proceedings and the facts established as proven, one draws the conclusion that the petitioner was not the owner of the vehicles to which the assessments in question relate as of the date of the respective taxable events, by virtue of having previously transferred ownership of the vehicle in question, in accordance with civil law.
These operations of transfer of ownership are enforceable against the Tax and Customs Authority, inasmuch as, although the facts subject to registration only produce effects against third parties when registered, in light of the provisions of article 5, no. 1 of the Land Registration Code [applicable by cross-reference from the Motor Vehicle Registration Code], the Tax Authority is not a third party for purposes of registration, since it does not find itself in the situation provided for in no. 2 of said article 5 of the Land Registration Code, as made applicable through the Motor Vehicle Registration Code, that is: it has not acquired from a common author rights incompatible with one another.
In conclusive summary:
For the assessment of IUC, the Tax and Customs Authority can only avail itself of the registered reality or that contained in the IMTT database if the obsolescence of the legal situation, in particular as to the ownership of the vehicle, is not proven.
Motor vehicle registration, in the economy of the CIUC, thus represents mere rebuttable presumption of the passive subjects of the tax.
In conclusion, the prerequisites necessary for the acceptance of the petition for annulment of the assessments, on grounds of illegality and error in the prerequisites, are met.
C. Indemnity Interest and Arbitration Costs
The Claimant proceeded to full payment of the said IUC assessments, and therefore requests reimbursement of such amounts owed, increased by indemnity interest, at the legal rate, in accordance with article 43 of the LGT and 61 of the CPPT.
In the case at hand, it is manifest that, following the illegality of the assessment acts, reimbursement of the tax is warranted, by virtue of said articles 24, no. 1, paragraph b), of the RJAT and 100 of the LGT, as this is essential to "restore the situation that would exist if the tax act that is the subject of the arbitral decision had not been practiced."
As concerns indemnity interest, it is equally clear that, contrary to what alleged by the Respondent, the error is not attributable to the Claimant, from the moment when, in administrative objection proceedings, it informed that it was no longer the owner of the vehicle. From this moment on, one is faced with an error in the legal prerequisites, attributable to the Tax Administration.
Consequently, the Claimant is entitled to indemnity interest, under article 43, no. 1 of the LGT and article 61 of the CPPT, calculated on the amount improperly paid, from the date of rejection of the administrative objections until the full reimbursement of such amount.
For the same reasons, liability for costs is that of the losing party because, contrary to what alleged, the AT could have proceeded with revocation of the assessment acts identified when it became aware of the administrative objection or within 30 days following notification of the petition for establishment of the Arbitration Tribunal (article 13, no. 1 of the RJAT).
D. DECISION
Accordingly, it is decided in this Arbitration Tribunal:
a) To uphold the petition for declaration of illegality of the assessments identified in paragraphs a) and b) of article 13 of the petition for arbitral pronouncement and corresponding additional assessments of compensatory interest, in the total amount of €30,989.59;
b) To condemn the Tax and Customs Authority to reimburse the Claimant the amounts paid, with indemnity interest from the date of presentation of the administrative objection until the full reimbursement of the undue tax;
c) To condemn the Tax and Customs Authority to payment of the costs of the proceedings, in the amount of €1,836.00.
E. Value of the Case
The value of the case is fixed at €30,989.59, in accordance with article 97-A, no. 1, a), of the Code of Tax Procedure and Process, made applicable by virtue of paragraphs a) and b) of no. 1 of article 29 of the RJAT and no. 2 of article 3 of the Regulation on Costs in Tax Arbitration Proceedings.
F. Costs
The arbitration fee is fixed at €1,836.00, in accordance with Table I of the Regulation on Costs in Tax Arbitration Proceedings, to be paid by the Respondent, since the petition was entirely upheld, in accordance with articles 12, no. 2, and 22, no. 4, both of the RJAT, and article 4, no. 4, of the said Regulation.
Notify the parties.
Lisbon
1 April 2015
The Arbitrator
(Amândio Silva)
ANNEXED TABLE
[1] The genesis of the legal relationship of tax presupposes the cumulative verification of the three prerequisites necessary for its arising, namely: the real element, the personal element and the temporal element. (In this sense, see, among many other authors, Freitas Pereira, M.H., Taxation, 3rd Edition, Almedina, Coimbra, 2009).
Frequently Asked Questions
Automatically Created