IUC Subjective Incidence: Annulment of Tax on Stolen Vehicles with Declared Total Loss (CAAD 413/2014-T)

TAX ARBITRAL DECISION

Tax Arbitral Decision

CAAD – Tax Arbitration

Case No. 413/2014-T

Claimant – A…, Lda., Tax Registration Number: …

Respondent – Tax and Customs Authority (AT)

Subject – Single Circulation Tax Assessment (IUC)

Designated Arbitrator – Maria de Fátima Alves

1 REPORT

1.1 – A…, Lda., Tax Registration Number: …, Claimant in the tax procedure, above and separately referenced, hereinafter denominated "Claimant," came, invoking the provisions of Article 10 of Decree-Law No. 10/2011, of January 20 (hereinafter RJAT), in Articles 132 and 99 et seq. of the Code of Tax Procedure and Process (CPPT) and in paragraphs 1 and 2, subparagraph d) of Article 95 of the General Tax Law (LGT), to request the constitution of the Singular Arbitral Court, with a view to:

• The annulment of the assessment acts relating to the Single Circulation Tax (hereinafter designated as IUC), referring to the years: 2009; 2010; 2011 and 2012 concerning the vehicles listed in the Claim procedures, attached to the Request for Arbitral Ruling, being considered the documents from pages 08/38 to 38/38 of document No. 32 as being Annex I, mentioned in Article No. 20 of the operative provisions of the Initial Petition;

• The reimbursement of the total amount of € 3,344.63, plus the respective indemnatory interest provided for in Articles 43 of the LGT and Article 61 of the CPPT.

1.2 Under the terms of the provisions of subparagraph a) of paragraph 2 of Article 6 and subparagraph b) of paragraph 1 of Article 11 of Decree-Law No. 10/2011, of January 20, in the wording introduced by Article 228 of Law No. 66-B/2012, of December 31, the Deontological Council designated as sole arbitrator Maria de Fátima Alves, who communicated the acceptance of the assignment within the applicable period;

• On July 23, 2014, the parties were duly notified of this designation, and did not manifest any intention to challenge the arbitrator's designation, in accordance with the combined provisions of Article 11, paragraph 1, subparagraphs a) and b) of the RJAT and Articles 6 and 7 of the Deontological Code;

• Wherefore, the arbitral tribunal was constituted on August 7, 2014, as provided for in subparagraph c) of paragraph 1 of Article 11 of Decree-Law No. 10/2011, of January 20, in the wording introduced by Article 228 of Law 66-B/2012, of December 31.

1.3 The Claimant, in substantiating its request for arbitral ruling, states, in summary, the following:

• The vehicles to which the single circulation tax assessed relates were not, at the date of the tax events, the property of the Claimant, the latter not being the passive subject of the tax, a fact that precludes any subjective liability for its payment;

• The Claimant bases its position on the fact that the taxed motor vehicles were stolen and their total loss was declared by the respective insurance companies on dates prior to the dates of the tax obligations;

• Invoking the legal duty of said insurance companies to proceed with the cancellation of the respective registrations with the competent road authorities, from those same dates;

• Highlighting the fact that when delivering to the insurance companies all the necessary documentation for them to proceed with the cancellation of the registrations with the competent authorities and, like so many other situations, the Claimant trusted that they would proceed in accordance with their legal obligations;

• Wherefore, it was with great surprise that only when notified by AT did it learn that said insurance companies had not proceeded in accordance with the law and that ownership of the stolen motor vehicles remained registered in favor of the Claimant;

• Proof that the Total Loss Declarations of the vehicles subject to taxation were issued between the years 2002 and 2007 and that they are sufficient proof to verify that the IUC tax was improperly assessed, cf. documents attached to the administrative complaints (contained in the PA), which are hereby fully reproduced for all legal purposes;

• Furthermore, the paid IUC tax, corresponding to the years 2009 to 2012 concerning vehicles that were declared as total loss, have already had their respective registrations cancelled and the documentary proof presented by the Claimant in the present proceedings was the possible proof to obtain, given the enormous lapse of time between the issuance of the attached documents and the notification by AT, being to consider that many of the situations already have almost 10 (ten) years of temporal distance;

• Evidencing that the documents attached to the proceedings are Total Loss Declarations issued and communicated by the insurance companies that attest: that the motor vehicles, sub judice, were stolen without their recovery being achieved and that, for this reason, the same declared their total loss in accordance with the insurance contracts concluded with the Claimant.

• Given the facts presented, ownership of the said vehicles cannot, therefore, be imputed to the Claimant, removing it from being the passive subject of the tax, in light of the letter and spirit of Article 3 of the Single Circulation Tax Code (hereinafter designated as CIUC);

• It is to be considered that the registration of vehicles at the competent Motor Vehicles Registration Office is not a condition of transmission of ownership, since such registration aims only to give publicity to the legal situation of the goods, as results, in particular, from the provisions of Article No. 1 of Decree-Law No. 54/75, of February 12;

• Wherefore, taxation relating to the CIUC cannot focus solely on who is registered as the owner of the vehicles but rather on their effective owners.

1.4 The Respondent, Tax and Customs Authority (hereinafter designated as AT), proceeded with the attachment of the Tax Administrative File and presented a response, from which it appears that the tax acts in question do not suffer from any defect of violation of Law, pronouncing itself for the lack of merit of the claim and for the maintenance of the questioned assessment acts, defending, summarily, the following:

• The passive subjects of the single circulation tax are the persons who appear in the registration as owners of the vehicles, as provided in paragraph 1 of Article 3 of the CIUC, which in the case, sub judice, is verified with respect to the Claimant;

• Verifying that the registration of the vehicles is in the name of a particular person for that person to embody the position of passive subject of the IUC tax obligation;

• That, notoriously, the interpretation that the Claimant makes of the provisions of Article 3 of the CIUC is wrong, in that it incurs in a "biased interpretation of the letter of the law" and in the adoption "of an interpretation that does not attend to the systematic element, aiming at the unity of the regime established throughout the CIUC and, more broadly, throughout the entire legal-fiscal system," the Claimant further following an "interpretation that ignores the rationale of the regime established in the article in question and, likewise, throughout the entire CIUC."

1.5 The meeting provided for in Article 18 of the RJAT was held on October 30, 2014, where it was decided, by the Court, with the agreement of the parties, to dispense with the examination of witnesses;

• The Court decided, having heard the parties and with their agreement, the presentation in writing of final arguments within 10 days;

• At that meeting, it was consensually verified that there was no exception susceptible of being appreciated and decided before proceeding with the claim;

• The Court, in compliance with the provisions of Article 18, paragraph 2 of the RJAT, designated until December 17, 2015, for the purpose of issuing the arbitral decision.

2 ISSUES TO BE DECIDED

2.1 Given the above, relative to the presentation of the parties and the arguments presented, the main issues to be decided are the following:

• The allegation made by the Claimant relating to the material assessment of the assessment acts, relating to the years 2009, 2010, 2011, 2012, concerning the IUC on the vehicles above referenced in the PA;

• The incorrect interpretation and application of the rules on subjective incidence of the single circulation tax assessed and collected, which constitutes the central issue to be decided in the present proceeding;

• The legal value of the registration of motor vehicles.

3 FACTUAL GROUNDS

3.1 In matters of fact, relevant to the decision to be rendered, this Court considers as established, in light of the elements existing in the proceedings, the following facts:

• The Claimant presented Declarations of total loss of the motor vehicles in question, corresponding to the moment prior to the taxation period – cf. documents attested by the corresponding insurance companies attached in the administrative complaints (contained in the PA) which are hereby fully reproduced for all legal purposes;

• Unaware of the fate of said vehicles and the fact that the insurance companies did not issue "de-registration" of the registrations of the stolen automobiles.

3.1.1 SUBSTANTIATION OF FACTS PROVEN

• The facts deemed proven are based on the Declarations of Total Loss of the vehicles in question, expressed by the corresponding Insurance Companies, attached in the administrative complaints (contained in the PA) which are hereby fully reproduced for all legal purposes.

3.1.2 FACTS NOT PROVEN

• There are no facts deemed as not proven, given that all facts deemed relevant to the assessment of the claim were proven.

4 LEGAL GROUNDS

4.1 The Court is materially competent and is regularly constituted, in accordance with Articles 2 paragraph 1, subparagraph a), 5 paragraph 2, subparagraph a), 6 paragraph 1, 10 paragraph 1, subparagraph a) and paragraph 2 of the RJAT:

• The parties enjoy legal capacity and standing and are legitimate, ex vi, Articles 4 and 10, paragraph 2, of the RJAT and Article No. 1 of Ordinance No. 112-A/2011, of March 22;

• The proceeding is not affected by any nullities;

• There is a preliminary issue on which the Court should rule.

PRELIMINARY ISSUE

1st – Arising from the arbitral meeting held under Article 18 of the RJAT, on October 30, 2014, the Court notified the Claimant and the Respondent to present, successively, written arguments;

2nd – Consequently, the illustrious Representative of AT communicated to the proceedings that the Claimant presented said written arguments one day late, as it presented them on November 11, 2014, when it should have presented them on November 10, 2014;

3rd – Therefore, it presented one day late;

4th – As the Tax Arbitration Law (RJAT) does not stipulate in this sense, but refers subsidiarily to the Code of Civil Procedure, Article 3-A, paragraph 2 of the RJAT, added by Article 229 of Law No. 66-B/2012, of December 31, in force since January 1, 2013;

5th – The Legislator establishes, in paragraph 5 of Article 139 of the CPC, that acts may be performed beyond the deadline, up to three days, having as consequence the payment of a fine;

6th – In this context, the arguments of the Claimant were accepted, in accordance with the above-mentioned terms (cf. Ruling, of December 16, 2014);

7th – The Illustrious Respondent presented its arguments within the appropriate time (January 8, 2015).

Given the facts, the present Decision was extended in accordance with paragraph 2 of Article 21 of the RJAT, to March 10, 2015.

4.2 The claim object of the present proceeding is the declaration of annulment of the IUC assessment acts relating to the identified motor vehicles in the proceeding.

4.2.1 Condemnation of AT to reimburse the amount of tax relating to such assessments in the amount of € 3,344.63;

4.2.2 Condemnation of AT to payment of indemnatory interest on the same amounts.

4.3 According to AT's understanding, it is sufficient that in the registration, the vehicle appears as property of a particular person, for that person to be the passive subject of the tax obligation.

4.4 The factual matter is fixed, as stated in paragraph 3.1 above, being necessary now to determine the applicable law to the underlying facts, in accordance with the issues to be decided, identified in paragraph 2.1 above, and it is certain that the central issue in question in the present proceedings, relative to which there are absolutely opposed understandings between the Claimant and AT, consists in knowing whether paragraph 1 of Article 3 of the CIUC establishes or does not establish a rebuttable presumption.

4.5 Everything analyzed and, taking into account, on the one hand, the positions of the parties in confrontation, mentioned in points 1.3 and 1.4 above and, considering, on the other hand, that the central issue to be decided is whether paragraph 1 of Article 3 of the CIUC establishes or does not establish a legal presumption of tax incidence, it is necessary, in this context, to appreciate and render a decision.

5 ISSUE OF INCORRECT INTERPRETATION AND APPLICATION OF THE SUBJECTIVE INCIDENCE RULE OF THE IUC

5.1 Considering it to be undisputed in doctrine that in the interpretation of tax laws the general principles of interpretation apply fully which will be, merely and naturally, limited by the exceptions and particularities dictated by the law itself which is the object of interpretation. This is an understanding that has come to deserve acceptance in the General Tax Laws of other countries and which also came to have a place in Article 11 of our General Tax Law, which, moreover, has been frequently highlighted by jurisprudence.

It is consensually accepted that with a view to grasping the sense of the law, interpretation resorts, a priori, to reconstructing legislative thought through the words of the law, which means seeking its literal sense, valuing it and assessing it in light of other criteria, with the so-called elements of a logical, rational or teleological nature and of a systematic order intervening:

• With respect to the interpretation of tax law, jurisprudence is to be considered, namely the Judgments of the STA of September 5, 2012, case No. 0314/12 and of February 6, 2013, case 01000/12, available at www.dgsi.pt, the importance of the provision of Article 9 of the Civil Code (CC), as a fundamental element of legal hermeneutics;

• Article 3, paragraph 1 of the CIUC provides that "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 the name of whom the same are registered";

• The formulation used in the aforesaid article resorts to the expression "considering-se" which raises the question of whether such expression can be attributed a presumptive sense, equating it to the expression "presuming-se," these being expressions frequently used with equivalent senses;

• As Jorge Lopes de Sousa teaches, in Code of Tax Procedure and Process, Annotated and Commented, Volume I, 6th Edition, Área Editora, SA, Lisbon 2011, p. 589, that in matters of tax incidence, presumptions may be revealed by the expression "presume-se" or by similar expression, mentioning therein various examples of such presumptions, referring to the one contained in Article 40, paragraph 1 of the CIRS, in which the expression "presume-se" is used and the one contained in Article 46, paragraph 2, of the same Code, in which use is made of the expression "considers-se," as an expression with an effect similar to that and likewise embodying a presumption;

• In the legal formulation set forth in paragraph 1 of Article 3 of the CIUC, in which a presumption was established, revealed by the expression "considering-se," of meaning similar and of equivalent value to the expression "presuming-se," in use since the creation of the tax in question;

• The use of the expression "considering-se" aimed at nothing more than the establishment of a more marked and clear approximation between the passive subject of the IUC and the effective owner of the vehicle, which is in tune with the reinforcement given to the ownership of the vehicle, which came to constitute the taxable event, in accordance with Article 6 of the CIUC;

• The relevance and interest of the presumption in question, which historically was revealed through the expression "presuming-se" and which now serves itself of the expression "considering-se," resides in the truth and justice that, by this means, is conferred to fiscal relations and which embody fundamental fiscal values, permitting the taxation of the real and effective owner and not of the one who, by circumstances of a different nature, is often merely an apparent and false owner. If the case were not to be thus considered, not admitting and taking into account the presentation of evidential elements destined to demonstrate that the effective owner is, after all, a person different from the one appearing in the registration and who, initially and in principle, was supposed to be the true owner, those values would be objectively postponed.

5.2 It is also to be considered the principle of equivalence, inscribed in Article 1 of the CIUC, which has underlying the polluter-pays principle and concretizes the idea inscribed therein that whoever pollutes must, therefore, pay. The aforementioned principle has constitutional basis, in that it represents a corollary of the provision of subparagraph h) of paragraph 2 of Article 66 of the Constitution, having also basis in Community law, whether at the level of original law, Article 130-R of the Maastricht Treaty (Treaty on European Union, of February 7, 1992), where the aforementioned principle came to be included as the foundation of Community Policy in the environmental domain and which aims to hold responsible those who contribute to the harms that arise for the community, resulting from the use of motor vehicles, to be assumed by their owners-users as costs that only they should bear.

5.3 Given the facts above described, it is important to emphasize that the aforementioned elements of interpretation, whether those related to literal interpretation, supported by the legally used words, whether those relating to logical elements of interpretation, of a historical nature or of a rational order, all point in the direction that the expression "considering-se" has a sense equivalent to the expression "presuming-se," and thus it should be understood that the provision in paragraph 1 of Article 3 of the CIUC establishes a legal presumption which, in light of Article 73 of the LGT, where it is established that "Presumptions established in rules of tax incidence always admit proof to the contrary," will necessarily be rebuttable, which means that the passive subjects are, in principle, the persons in the name of whom such vehicles are registered. These persons, identified in these conditions, are therefore those to whom AT must necessarily direct itself;

• But it will be in principle, given that within the framework of mandatory prior hearing, in light of the provision of subparagraph a) of paragraph 1 of Article 60 of the LGT, the tax relationship may be reconfigured, validating the initially identified passive subject or redirecting the proceeding toward the one that will be, after all, the true and effective passive subject of the tax in question.

• The taxpayer has the right to be heard, through prior hearing (José Manuel Santos Botelho, Américo Pires Esteves and José Cândido de Pinho, in Code of Administrative Procedure, Annotated and Commented, 4th edition, Almedina, 2000, annotation 8 of Article 100).

• The prior hearing which must naturally be concretized at the moment immediately preceding the assessment proceeding, corresponds to the proper place and time to, with certainty and security, identify the passive subject of the IUC.

6 ON THE LEGAL VALUE OF REGISTRATION

6.1 Regarding the legal value of registration, it is important to note what is established in paragraph 1 of Article 1 of Decree-Law No. 54/75, of February 12 (variously amended, the last being by Law No. 39/2008, of August 11), when it provides that "the registration of vehicles has essentially the purpose of giving publicity to the legal situation of motor vehicles and their trailers, with a view to the security of legal commerce":

• Article 7 of the Land Registry Code (CRP), applicable, subsidiarily, to the registration of automobiles, by force of Article 29 of the CRA, provides that "The definitive registration constitutes a presumption that the right exists and belongs to the registered holder, in the precise terms in which the registration defines it";

• The definitive registration constitutes nothing more than a rebuttable presumption, admitting, therefore, contrary evidence, as flows from the law and jurisprudence has been signaling, and can be seen, among others, in the Judgments of the STJ No. 03B4369 of February 19, 2004 and No. 07B4528, of January 29, 2008, available at: www.dgsi.pt;

• Therefore, the function legally reserved to registration is on the one hand to publicize the legal situation of the goods, in the case at hand, of the vehicles and, on the other hand, it permits us to presume that the right exists over those vehicles and that it belongs to the holder, as such registered in the registration, it does not have a constitutive nature of the property right, but only declarative, wherefore registration does not constitute a condition of validity of the transmission of the vehicle from seller to buyer;

• The acquirers of vehicles become owners of those same vehicles by way of the conclusion of the corresponding purchase and sale contracts, with or without registration;

• In this context, it is worth recalling that, in light of the provision of paragraph 1 of Article 408 of the CC, the transfer of real rights over things, in the case sub judice, motor vehicles, is determined by the mere effect of the contract, and in accordance with the provision in subparagraph a) of Article 879 of the CC, among the essential effects of the purchase and sale contract, the transmission of the thing is prominent;

• Given the foregoing, it becomes clear that the legislative thought points toward the understanding that the provision in paragraph 1 of Article 3 of the CIUC establishes a presumption "juris tantum," consequently rebuttable, permitting thus that the person who, in the registration, is inscribed as owner of the vehicle, may present elements of proof destined to demonstrate that such ownership is inserted in the legal sphere of another person, to whom ownership was transferred.

7 THE PRESUMPTION OF ARTICLE 3 OF THE CIUC AND THE DATE ON WHICH THE IUC IS PAYABLE

7.1 THE PRESUMPTION OF ARTICLE 3 OF THE CIUC

• AT considers that the presumption that exists in paragraph 1 of Article 3 of the CIUC is a result of an interpretation contra legem, resulting from a biased reading of the letter of the law and, therefore, violative of the unity of the legal system, however, and with due respect, the understanding of jurisprudence goes in the direction that the existence of a legally rebuttable presumption should be considered, and consequently serves the values and interests questioned, whether at the level of material tax justice or at the level of the environmental purposes aimed at by the IUC;

• Regarding the unity of the legal system, it is important to note all that was mentioned above, namely, regarding the rationale of Article 1 of the CIUC; regarding the norms and principles of the LGT; regarding the relevant norms applicable to the registration of motor vehicles, regarding the interpretation that best serves and achieves the mentioned unity and ensures the connection of those same norms, considering the legal presumption that is set forth in Article 3 of the CIUC.

7.2 DATE ON WHICH THE IUC IS PAYABLE

• The IUC is a tax of periodic taxation, whose periodicity corresponds to the year that begins on the date of registration or on each of its anniversaries, in accordance with the provisions of paragraphs 1 and 2 of Article 4 of the CIUC;

• It is payable in accordance with paragraph 3 of Article 6 of the aforementioned Code;

• Being to note that, as to the assessment of the IUC taxed to the Claimant on the vehicles above referenced, in the years 2009 to 2012, they are not to be considered, because at the time of the tax events the vehicles no longer belonged to it, as the said vehicles were stolen from the Claimant from the year 2002 to 2007, cf. the Total Loss Declarations, expressed by the corresponding insurance companies, attached to the administrative complaints (contained in the PA) which are hereby fully reproduced for all legal purposes.

7.2.1 Regarding the burden of proof, Article 342, paragraph 1 of the CC stipulates "it falls upon the one who invokes a right to make proof of the constitutive facts of the alleged right";

7.2.2 Also Article 346 of the CC (counter-evidence) determines that "to the evidence produced by the party on whom the burden of proof falls, the other party may oppose counter-evidence with respect to the same facts, destined to render them doubtful; if it succeeds, the issue is decided against the party burdened with the proof." (As affirms Anselmo de Castro, A., 1982, ED. Almedina Coimbra, "Civil Declaratory Procedural Law," III, p. 163, "when one of the parties bears the burden of proof, it suffices for the other party to oppose counter-evidence, this being evidence destined to render doubtful the facts alleged by the first."

Thus, in the case of the proceedings, what the Claimant has to prove, in order to rebut the presumption that flows from both Article 3 of the CIUC and the Motor Vehicle Registration itself, is that the Claimant was not the owner of the vehicles in question during the period to which the impugned assessments refer. It proposes to prove, as results from the proceedings, that the ownership of the vehicles did not belong to it in the periods to which the assessments refer. Presenting, thus, the respective Total Loss Declarations, expressed by the corresponding insurance companies, since the motor vehicles were stolen from it, cf., documents attached to the Administrative Complaints, contained in the PA, which are hereby fully reproduced for all legal purposes.

7.3 REBUTTAL OF THE PRESUMPTION

• The Claimant, as referred to in 3.1., with respect to the facts proven, alleged, with the purpose of rebutting the presumption, not to be the owner of the vehicles at the time of the occurrence of the tax events, offering for this purpose the following documents:

• Total Loss Declarations of the stolen vehicles;

• In this manner, the ownership of the said vehicles no longer belonged to it, and could not, therefore, enjoy their use, from 2007, a date prior to that in which the IUC was payable, thus embodying means of proof with sufficient and adequate force to rebut the presumption founded in the registration, as provided for in paragraph 1 of Article 3 of the CIUC, documents which enjoy the presumption of truthfulness provided for in paragraph 1 of Article 75 of the LGT. It follows from this that on the date in which the IUC was payable, the one who held the ownership of the motor vehicles was not the Claimant.

8 OTHER ISSUES RELATING TO THE LEGALITY OF THE ASSESSMENT ACTS

• Regarding the existence of other issues relating to the legality of the assessment acts, taking into account that it is inherent in the establishment of an order of knowledge of defects, as provided for in Article 124 of the CPPT, that proceeding from the request for arbitral ruling based on defects that prevent the renewal of the impugned assessments, becomes prejudiced, because useless, the knowledge of other defects, it does not appear necessary to know of the other issues raised.

9 REIMBURSEMENT OF THE TOTAL AMOUNT PAID

• Under the terms of the provision of subparagraph b) of paragraph 1 of Article 24 of the RJAT and, in accordance with what is established therein, the arbitral decision on the merit of the claim for which no appeal or challenge is available, binds the tax administration from the end of the period provided for appeal or challenge, and this must, in the exact terms of the merit decision of the arbitral ruling in favor of the passive subject and until the end of the period provided for the spontaneous execution of sentences of tax judicial courts, "Restore the situation that would exist if the tax act subject to the arbitral decision had not been practiced, adopting the acts and operations necessary for this purpose."

• These are legal mandates that are in complete harmony with the provision of Article 100 of the LGT, applicable to the case, ex vi, the provision of subparagraph a) of paragraph 1 of Article 29 of the RJAT, in which it is established that "The tax administration is obliged, in case of total or partial merit of claims or administrative appeals or legal proceedings in favor of the passive subject, to the immediate and full restoration of the situation that would exist if the illegality had not been committed, with the payment of indemnatory interest corresponding, in accordance with the terms and conditions provided for by law."

• The case contained in the present proceedings, raises the manifest application of the aforementioned norms, in that as a consequence of the illegality of the assessment acts referenced in this proceeding, there must, by force of these norms, be place for the reimbursement of the amounts paid, whether as title of the tax paid, whether of the corresponding compensatory interest, as a way of achieving the restoration of the situation that would exist if the illegality had not been committed.

10 THE RIGHT TO INDEMNATORY INTEREST

• The declaration of illegality and consequent annulment of an administrative act confers upon the addressee of the act the right to the reintegration of the situation in which the same would be found prior to the execution of the annulled act.

• In the scope of the assessment of the tax, its annulment confers upon the passive subject the right to the restitution of the tax paid and, as a rule, the right to indemnatory interest, in accordance with paragraph 1 of Article 43 of the LGT.

• However, it has been the sanctioning understanding of the Higher Courts (Judgment of the STA of May 22, 2014, case No. 245/13), "the judicial annulment of an assessment act based on the violation of the principle of participation, by AT not having taken into account the elements furnished by the taxpayer in the exercise of prior hearing, does not imply the existence of any error regarding the factual or legal presuppositions of the assessment act, wherefore there is no right to indemnatory interest in favor of the taxpayer," provided for in paragraph 1 of Article 43 of the LGT.

• Wherefore the Claimant does not have the right to indemnatory interest on the amount of tax paid concerning the annulled assessment.

11 DECISION

Given the foregoing, this Arbitral Court decides:

• To find the claim for declaration of illegality of the IUC assessment, concerning the years: 2009, 2010, 2011, 2012, regarding the motor vehicles identified in the present proceeding, meritorious, and consequently annul the corresponding tax acts;

• To find the claim for condemnation of the Tax Administration for reimbursement of the amount improperly paid, in the amount of 3,344.63 euros, meritorious, condemning the Tax and Customs Authority to effect these payments.

VALUE OF THE PROCEEDING: In accordance with the provisions of Articles 306, paragraph 2 of the CPC and 97-A, paragraph 1 of the CPPT and Article 3, paragraph 2 of the Costs Regulation in Tax Arbitration Proceedings, the value of the proceeding is fixed at 3,344.63 €.

COSTS: In accordance with paragraph 4 of Article 22 of the RJAT, the amount of costs is fixed at € 612.00, in accordance with Table I, attached to the Costs Regulation in Tax Arbitration Proceedings, to be borne by the Tax and Customs Authority.

Notify the parties.

Lisbon, March 9, 2015

The Arbitrator

Maria de Fátima Alves

(the text of the present decision was prepared by computer, in accordance with Article 131, paragraph 5 of the Code of Civil Procedure, applicable by referral of Article 29, paragraph 1, subparagraph e) of Decree-Law 10/2011, of January 20 (RJAT), its drafting being governed by current spelling)