Summary
Full Decision
ARBITRAL DECISION
I – Report
1.1. A..., S.A., legal entity no. ..., with registered office at ... Street, ...-... Lisbon (hereinafter referred to as the "Claimant"), having been notified of 3 acts of additional IUC (Single Circulation Tax) assessments (identified in the list "Annex A"), relating to 3 vehicles and concerning the year 2015, filed on 2/10/2017 a request for the constitution of an arbitral tribunal and for an arbitral decision, pursuant to the provisions of Article 2, no. 1, al. a), and Articles 10 et seq. of Decree-Law no. 10/2011, of 20/1 (Legal Framework for Arbitration in Tax Matters, hereinafter referred to only as "RJAT"), in which the Tax and Customs Authority (AT) is requested, with a view to the "declaration of illegality of the 3 acts of assessment relating to the IUC in question, concerning the 3 vehicles identified [...], the reimbursement of the amount of €137.54, relating to the tax and compensatory interest improperly paid by the Claimant [and] the payment of compensatory interest, for the deprivation of the aforementioned amount of €137.54, pursuant to Article 43 of the General Tax Law."
1.2. On 14/12/2017, the present Sole Arbitral Tribunal was constituted.
1.3. Pursuant to Article 17, no. 1, of the RJAT, the AT was served, as the respondent party, to submit a reply. The AT submitted its reply on 25/1/2018, arguing for the total lack of merit of the claimant's request.
1.4. By order of 9/2/2018, the Tribunal considered, pursuant to Article 16, als. c) and e), of the RJAT, that the meeting required by Article 18 of the RJAT was dispensable and that the case was ready for decision. The date of 21/2/2018 was also set for the pronouncement of the arbitral decision.
1.5. The Arbitral Tribunal was duly constituted, is materially competent, the case does not suffer from defects that would invalidate it, and the Parties have legal standing and capacity, proving to be legitimate.
II – Submissions of the Parties
2.1. The Claimant now alleges, in its initial petition, that: a) "underlying these proceedings there is, essentially, a single question: whether the circumstance that the transfer of the vehicles identified in the table attached as Annex A to their former lessees (or, in specific cases, to third parties indicated by them), at the end of the leasing contract, was not registered with the Motor Vehicle Registry, makes that transfer inopposable to the AT, for purposes of proceeding with the collection of the tax from its former owner"; b) "the responsibility for proceeding with payment of the IUC whose assessment is being contested does not fall, nor has it ever fallen, to the Claimant"; c) "as case law (especially arbitral case law) has highlighted, not even during the validity of a financial leasing contract should the leasing entity be considered the taxable person for IUC. Thus, a fortiori, it will be even less so after the termination of the leasing contract and the exercise, by the leasing entity, of its right to acquire the asset at the residual value. For in this circumstance, the lessee becomes also owner of the vehicle in question, and the provisions of no. 1 of Article 3 of the IUC Code begin to apply to it"; d) "from the moment the lessee acquires the vehicle, it is only to them, now as owner thereof, that the obligation to pay the IUC and other associated charges falls"; e) "thus, the assessments made in the sphere of the Claimant would only be understood [...] if everything were to function for the AT as if no transfer had taken place, since it had not been registered. In this scenario, it is necessary to determine whether the argument should proceed that the failure to register the transfer carried out between the Claimant and the lessees makes it inopposable to the AT"; f) "«being a matter concerning payment of IUC, and the Tax Administration not falling within the concept of third party for purposes of registration, since it does not acquire from the same transferor rights wholly or partly incompatible with the rights of the buyer, it is readily concluded that it cannot shelter itself in the absence of registration of the transfer to demand payment of the tax owed by the former owner, whether this is a lessor or any other person or entity.»"; g) "«In summary, once a purchase and sale contract of the leased vehicle is concluded in favor of the lessee, the latter acquires ownership thereof by the mere effect of the contract, and, concomitantly, the quality of taxable person for IUC, now no longer as a lessee holding a purchase option, but as owner in full title. If the owner does not immediately proceed to register the ownership in their name, it is presumed that the ownership continues to belong to the seller (Article 7 of the Motor Vehicle Registry Code), but this presumption is relative, that is, it can be rebutted by contrary proof. Only third parties for purposes of registration who act in good faith can avail themselves of the absence of registration to (attempt to) acquire rights over the unregistered asset. However, the Tax Administration does not meet the legal requirements of the concept of third party for purposes of registration (provided in Article 5, no. 4, of the Motor Vehicle Registry Code), and therefore cannot demand from the seller payment of the tax owed by the buyer (owner) from the moment the presumption of Article 7 is rebutted by proof of the respective sale.»"; h) "the considerations above set out – which the Claimant subscribes to in their entirety, without reservation – necessarily lead to the conclusion that the AT cannot use the argument of the failure to register the transfer to come and demand the unpaid tax from the Claimant here"; i) "the failure to register does not affect the validity of the purchase and sale contract but only its effectiveness, and even this, only against third parties acting in good faith for purposes of registration; a qualification that the AT undoubtedly does not assume in the case in question. It is therefore concluded that the registration of acquisition of motor vehicles with the Motor Vehicle Registry is not a condition for the transfer of ownership, nor does it affect its validity"; j) "for this reason, the assessments made in the sphere of the Claimant must be considered illegal and consequently annulled, which, in this forum, is expressly requested"; l) "the invoices attached by the Claimant appear to be sufficient to prove the transfer of the motor vehicle in question, and moreover enjoy the presumption of veracity to which reference was made above"; m) "[the] assessments are the exclusive and sole responsibility of the AT, which, therefore, cannot fail to be liable for the payment of compensatory interest and for the assumption of arbitral costs."
2.2. The Claimant concludes that there should be declared the "illegality of the 3 acts of assessment relating to the IUC in question, concerning the 3 vehicles identified [...], the reimbursement of the amount of €137.54, relating to the tax and compensatory interest improperly paid by the Claimant [and] the payment of compensatory interest, for the deprivation of the aforementioned amount of €137.54, pursuant to Article 43 of the General Tax Law."
2.3. For its part, the Respondent alleges, in its reply, that: a) there is a "skewed reading of the letter of the law" on the part of the claimant; b) this interpretation "does not take into account the systematic element, violating the unity of the regime established throughout the CIUC"; c) the Claimant's interpretation "ignores the ratio of the regime established in the article in question and, moreover, throughout the CIUC"; d) "the tax legislator, in establishing in Article 3, no. 1, who are the taxable persons for IUC, expressly and intentionally established that these are the owners (or in the situations provided for in no. 2, the persons there mentioned), being considered as such the persons in whose name they are registered"; e) "if one were to understand that by using the expression 'is considered' the legislator would have established a presumption, practically all rules of incidence in the context of IRC would be set aside precisely because accounting prescribes solutions different from those of the IRC Code, this being exactly the legislator's aim to set aside such accounting rules. If this were the case, all useful effect of said rules would be frustrated"; f) "in these terms, it is imperative to conclude that, in the case of the present arbitral proceedings, the legislator expressly and intentionally established that those [as owners or in the situations provided in no. 2, the persons mentioned there] are considered as such the persons in whose name they [the vehicles] are registered, since this is the interpretation that preserves the unity of the legal-tax system"; g) "in light of this wording it is manifestly not possible to invoke that this is a presumption, as the Claimant argues. It is, rather, a clear option of legislative policy adopted by the legislator, whose intention, within its legislative discretion, was that, for purposes of IUC, those who appear as such in the motor vehicle registry be considered owners"; h) "in summary, Article 3 of the CIUC contains no legal presumption"; i) "also the systematic element of interpretation of law demonstrates that the solution advocated by the Claimant is intolerable, finding the understanding endorsed by the latter no support in law"; j) "even if we admitted that, from the perspective of the rules of civil law and property registration, the absence of registration does not affect the acquisition of the quality of owner and that registration is not a condition of validity of contracts with real effects, pursuant to those established in the CIUC (which in the case in question constitutes special law, which, under general law principles, derogates the general norm), the tax legislator intentionally and expressly wanted those to be considered as owners, financial lessees, acquirors with retention of title, or holders of purchase option rights in long-term rental, the persons in whose name the vehicles are registered"; l) "in light of a teleological interpretation of the regime established throughout the CIUC, the interpretation advocated by the Claimant to the effect that the taxable person for the tax is the actual owner, regardless of the registration of this quality not appearing in the motor vehicle registry, is manifestly wrong. And it is a wrong interpretation insofar as it is the very ratio of the regime established in the CIUC that constitutes clear proof that what the tax legislator intended was to create a tax based on taxation of the owner of the vehicle as it appears in the motor vehicle registry"; m) "the tax acts in question do not suffer from any defect of violation of law, insofar as in light of the provisions of Article 3, nos. 1 and 2, of the CIUC and Article 6 of the same code, it was the Claimant, in the capacity of owner, the taxable person for IUC"; n) "if one were to accept that the rebuttal of the presumption is admissible in light of the case law already established in this center of arbitration, it would still be necessary to evaluate the documents attached by the Claimant and their evidentiary value with a view to such rebuttal"; o) "would the financial leasing contracts and the invoices constitute sufficient proof to undermine the (supposed) legal presumption established in Article 3 of the CIUC? Clearly not [...]. The invoices are not capable of proving the celebration of a synallagmatic contract such as purchase and sale, since such documents do not by themselves reveal an indispensable and unequivocal declaration of intent (i.e., acceptance) on the part of the purported acquirors"; p) "the Claimant did not attach documentary evidence of receipt of payment when it could and should have done so, that is, in the request for the arbitral decision, and is now precluded from the possibility of doing so at a later moment"; q) "in summary, the Claimant failed to prove the purported transfer of the vehicles in question"; r) "if the interpretation conveyed by the Claimant were accepted, then it would be shown to be contrary to the Constitution, insofar as such interpretation results in the violation of the principle of trust, the principle of legal certainty, the principle of efficiency of the tax system and the principle of proportionality"; s) "the transfer of ownership of motor vehicles is not capable of being controlled by the Respondent, since there is no accessory declarative obligation as to this matter, unlike the control that can be carried out, for example, by way of prior payment of Municipal Tax on Transfer of Immovable Property in the matter of transfer of real estate. This means, therefore, that the IUC is assessed in accordance with registry information duly transmitted by the Institute of Registry and Notaries. In other words, the IUC is not assessed in accordance with information generated by the Respondent itself"; t) "consequently, the Claimant should be condemned to payment of the arbitral costs arising from the present request for arbitral decision, pursuant to Article 527/1 of the CPC ex vi Article 29/1-e) of the RJAT [...]. The same reasoning applies with respect to the request for condemnation to payment of compensatory interest formulated by the Claimant"; u) "from everything set forth above it is clear that the tax acts in question are valid and legal, because in conformity with the legal regime in force at the date of the tax facts, and therefore, in the case in question, there was no error attributable to the services. Thus, the legal prerequisites that confer the right to compensatory interest are not present."
2.4. The Respondent concludes that "the request for arbitral decision should be judged without merit, maintaining in the legal order the tax assessment acts impugned and absolvng, accordingly, the Respondent of the request."
III – Proven Facts, Unproven Facts, and Respective Justification
3.1. The following facts are considered proven:
i) A substantial part of the activity of the Claimant relates to the celebration of financial leasing or leasing contracts intended for the acquisition of motor vehicles.
ii) The vehicles identified in the list of "Annex A" attached to the proceedings (and whose license plates are contained therein and are hereby reproduced) were given in financial leasing by the claimant to the customers also identified there (cf. contracts contained in documents 4 to 6 attached to the proceedings).
iii) On the date of termination of the aforementioned contracts, the lessees of said vehicles decided to exercise their purchase option, as legally and contractually provided for. As is demonstrated by the analysis of the sales invoices attached as documents 7 to 9 attached to the proceedings, the lessees became owners of the vehicles in question, having proceeded to payment of the respective residual value.
iv) In light of the aforementioned list of "Annex A", it is ascertained, in summary, that, at the date of:
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assessment 2015... of 2015 (month of registration November), the lessee and (new) owner of "vehicle 1" was B... (cf. date of sale indicated) – cf. documents 4 and 7 attached to the proceedings;
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assessment 2015..., of 2015 (November), the lessee and (new) owner of "vehicle 2" was "C..., Lda." (cf. date of sale indicated) – cf. documents 5 and 8;
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assessment 2015..., of 2015 (November), the lessee and (new) owner of "vehicle 3" was D... (cf. date of sale indicated) – cf. documents 6 and 9.
v) The Claimant was notified to proceed with payment of the IUC relating to the acts of additional assessment identified in the table contained in "Annex A", the amounts in question having been paid, in the global amount of €137.54, as attested by the payment receipts attached as documents 1 to 3.
vi) In disagreement with said additional assessments, the Claimant herein filed the present request for arbitral decision on 2/10/2017.
3.2. There are no unproven facts relevant to the decision of the case.
3.3. The facts considered pertinent and proven (cf. 3.1) are founded on the analysis of the positions set out by the parties and the documentary evidence attached to the proceedings.
IV – On the Law
In the present case, there are four disputed legal questions: 1) whether Article 3 of the CIUC contains a presumption and whether such presumption was rebutted; 2) whether, as the AT argues, the interpretation of the Claimant does not take into account the systematic and teleological elements of interpretation of law; 3) whether, as the AT also argues, "the interpretation conveyed by the Claimant [...] shows itself to be contrary to the Constitution"; and 4) whether the requested compensatory interest is owed. A final note will address the question of responsibility for payment of arbitral costs.
Let us proceed, then.
1) and 2) The first two legal questions converge in the direction of the interpretation of Article 3 of the CIUC, which makes it necessary to: a) determine whether the rule of subjective incidence, contained in Article 3, establishes or does not establish a presumption; b) determine whether, considering that this rule establishes a presumption, such violates the "unity of the regime," or disregards the systematic element and the teleological element; c) determine – assuming the presumption exists (and that it is a rebuttable presumption) – whether the presumption was rebutted.
a) Article 3, nos. 1 and 2, of the CIUC, has the following wording, which is reproduced here:
"Article 3 – Subjective Incidence
1 - The taxable persons for 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 - Equated to owners are financial lessees, acquirors with retention of title, as well as other holders of purchase option rights by force of the leasing contract."
The interpretation of the cited legal text is, naturally, essential for the resolution of the case under analysis. To this extent, it appears necessary to resort to Article 11, no. 1, of the General Tax Law (LGT), and, by cross-reference, to Article 9 of the Civil Code (CC).
Now, pursuant to said Article 9 of the CC, interpretation proceeds from the letter of the law and aims, through it, to reconstruct the "legislative thought." This is to say (regardless of the objectivism-subjectivism debate) that literal analysis is the basis of the interpretive task and the systematic, historical, or teleological elements are guides to orientation of said task.
The literal apprehension of the legal text in question does not generate – even if the separation of this from the determination, even if minimal, of the respective meaning is highly debatable – the notion that the expression "is considered as such" means something different from "is presumed as such." In fact, we would hardly find authors who, in a pre-understanding task of said legal text, would instinctively reject the identity between the two expressions.
Confirming the indistinction (both literal and of meaning) of the words "considering" and "presuming" (presumption), see, for example, the following articles of the Civil Code: 314, 369, no. 2, 374, no. 1, 376, no. 2, and 1629. And, with special interest, the case of the expression "is considered," contained in Article 21, no. 2, of the IRC Code. As Diogo Leite Campos, Benjamim Silva Rodrigues, and Jorge Lopes de Sousa note, with respect to said article of the IRC Code: "beyond this rule showing that what is at issue in the taxation of capital gains is to determine the real value (market value), the limitation to the determination of real value resulting from the rules for determining the taxable value provided in the Tax Code cannot fail to be considered as a presumption in the matter of incidence, whose rebuttal is permitted by Article 73 of the LGT" (General Tax Law, Annotated and Commented, 4th ed., 2012, pp. 651-2).
b) These are merely some examples that allow us to conclude that it is precisely for reasons related to the "unity of the legal system" (the systematic element) that one cannot affirm that only when the verb "presume" is used is one dealing with a presumption, given that the use of other terms or expressions (literally similar) can also serve as the basis for presumptions. And, among these, the expressions "is considered as" or "considering as" assume, as has been seen, prominence.
If literal analysis is only the basis of the task, it naturally appears essential to evaluate the text in light of the other elements (or subelements of the so-called logical element). In this regard, the AT argues that "also the systematic element of interpretation of law demonstrates that the solution advocated by the Claimant is intolerable, finding the understanding endorsed by the latter no support in law," and "in light of a teleological interpretation of the regime established throughout the CIUC, the interpretation advocated by the Claimant [...] is manifestly wrong."
It is therefore warranted to ascertain whether the interpretation that considers the existence of a presumption in Article 3 of the CIUC collides with the teleological element, i.e., with the purposes (or with the sociological relevance) of what was intended with the rule in question. Now, such purposes are clearly identified at the beginning of the CIUC: "The single circulation tax obeys the principle of equivalence, seeking to burden taxpayers in the measure of the environmental and road cost that they cause, in realization of a general rule of tax equality" (cf. Article 1 of the CIUC).
What can be inferred from this Article 1? It can be inferred that the close connection of the IUC to the principle of equivalence (or principle of benefit) does not allow the exclusive association of the "taxpayers" mentioned there to the figure of owners but rather to the figure of users (or economic owners). As was well noted in the Arbitral Decision of process no. 73/2013-T: "in fact, the ratio legis of the tax [IUC] rather points in the direction of taxing the users of vehicles, the «economic owner» in the words of Diogo Leite de Campos, the actual owners or the financial lessees, since these are the ones who have the polluting potential causing environmental costs to the community."
Indeed, if the said ratio legis were otherwise, how could one understand, for example, the obligation (on the part of entities that proceed with the leasing of vehicles) – and for purposes of the provisions of Article 3 of the CIUC and Article 3, no. 1, of Law no. 22-A/2007, of 29/6 – to provide to the General Tax Directorate (DGI) data concerning the tax identification of the users of said vehicles (cf. Article 19)? Is it that where it says "users," one should rather read, disregarding the systematic element, "owners with registration in their name"...?
c) From the foregoing it is concluded that limiting the taxable persons of this tax only to the owners of vehicles in whose names they are registered – ignoring situations in which these no longer coincide with the actual owners or actual users of the same – constitutes a restriction that, in light of the purposes of the IUC, does not find a basis for support. And, even if the AT argues that the "option [...] adopted by the legislator [...] was that, for purposes of IUC, those who appear as such in the motor vehicle registry be considered owners," it is necessary to bear in mind that such registry, in light of what was said above, generates only a rebuttable presumption, i.e., a presumption that can be set aside if contrary proof is presented. In this sense, see, for example, the Decision of the Southern Administrative Court of 19/3/2015, case no. 8300/14: "The [...] Article 3, no. 1, of the CIUC, establishes a legal presumption that the holder of the motor vehicle registry is its owner, such presumption being rebuttable."
It would, moreover, be unjustified to impose a species of irrebuttable presumption, since, without an apparent reason, one would be imposing a (admittedly debatable) formal truth to the detriment of what could actually be proven; and, on the other hand, would be setting aside the duty of the AT to comply with the inquisitorial principle established in Article 58 of the LGT, i.e., the duty to take the necessary steps for a correct determination of the factual reality upon which its decision must be based (which means, in the present case, the determination of the actual and effective owner of the vehicle).
Furthermore, if the seller were not permitted to rebut the presumption contained in Article 3 of the CIUC, one would be benefiting, without a plausible reason, acquirors who, in possession of correctly filled out and signed purchase contract forms, and enjoying the advantages associated with their condition of owners, sought to exempt themselves, by way of a "formalist registration," from payment of tolls or fines.
In this regard, it is also worth noting that vehicle registration does not have constitutive effect, functioning, as previously stated, as a rebuttable presumption that the holder of the registration is, effectively, the owner of the vehicle. In this sense, see, for example, the Decision of the Supreme Court of Justice of 19/2/2004, case no. 03B4639: "Registration does not have constitutive effect, since it is intended to give publicity to the registered act, functioning (only) as a mere presumption, rebuttable (presumption «juris tantum») of the existence of the right (Articles 1, no. 1 and 7, of the Motor Vehicle Registry Code and 350, no. 2, of the Civil Code) as well as of the respective ownership, all in accordance with its contents."
In the same sense, the Arbitral Decision of 15/10/2013, handed down in process no. 14/2013-T, referred in terms that are endorsed here: "the essential function of the motor vehicle registry is to give publicity to the legal situation of vehicles, registration not having constitutive effect, functioning (only) as a mere rebuttable presumption of the existence of the right, as well as of the respective ownership, all in accordance with its contents. The presumption that the registered right belongs to the person in whose name it is entered can be rebutted by contrary proof. Not meeting the AT the requirements of the concept of third party for purposes of registration [a circumstance that could prevent the full efficacy of the purchase and sale contracts concluded], it cannot avail itself of the absence of updating of the registration of the property right to put in question the full efficacy of the purchase and sale contract and to demand from the seller (former owner) payment of the IUC owed by the buyer (new owner) from the moment the presumption of the respective ownership is rebutted through sufficient proof of the sale."
Now, it is verified, in the case under analysis, that the rebuttal of said presumption, through the presentation of contrary proof (cf. Article 73 of the LGT and Article 350, no. 2, of the Civil Code), was carried out, given that the sales invoices were presented (cf. documents 7 to 9), as well as the financial leasing contracts (cf. documents 4 to 6).
Even if those invoices were not accompanied by any proof of payment (but it is also true that no element was presented in these proceedings in a manner that would allow, in a well-founded way, to doubt the veracity thereof), the presentation and analysis of the leasing contracts allows one to conclude – as occurred, for example, in the recent Arbitral Decision of 24/11/2017, handed down in process no. 430/2017-T – that "such contracts give rise to the presumption of transfer of ownership and use of the vehicles in question, [whereby it is] understood [...] that the responsibility for payment of IUC is imputable to the lessees of said vehicles and not to the Claimant, as results from the provisions of Article 3, no. 2, of the IUC Code, the corresponding assessment acts being annulled."
Note also that, despite what has been said about the absence of a payment receipt, the invoices attached to the proceedings nonetheless constitute proof of the facts alleged by the Claimant. Indeed, as is well put, for example, in the recent Arbitral Decision of 18/12/2017, handed down in process no. 425/2017-T: "provided that [the invoices are] issued in the legal form and constitute elements supporting the accounting entries in accounting organized in accordance with commercial and tax legislation, the data contained therein are covered by the presumption of veracity to which Article 75, no. 1, of the LGT refers. Considering, therefore, the relevance attributed by tax legislation to invoices issued, in accordance with legal requirements, by commercial enterprises in the scope of their business activity and the presumption of veracity of the operations titled by them, it cannot fail to be considered that the same can constitute, in themselves, sufficient proof of the transfers invoked by the Claimant."
In this same sense, see also, for example, the recent Arbitral Decision of 8/1/2018, handed down in process no. 258/2017-T: "The setting aside of the legal presumption obeys the rule contained in Article 347 of the Civil Code, pursuant to which full legal proof can only be contradicted by means of proof showing that the fact that is its subject is not true. This means that it is not sufficient for the opposing party to merely present counter-proof – which is intended to cast doubt on the facts (cf. Article 346 of the Civil Code) that make the presumed facts doubtful; rather, it must show that the presumed fact is not true, so that no uncertainty remains that the facts resulting from the presumption are not real. Now, the invoice is a accounting document prepared within the enterprise and intended for the exterior, notably for the AT, from which it extracts all the effects inherent in the assessment for the incidence of various taxes. Therefore, unless its falsity is demonstrated, invoices are presumed valid for all legal purposes, it cannot fail to be so, solely and exclusively, as a means of proof of the transaction, relevant for purposes of IUC incidence. [...]. It is thus concluded, by the admission of proof of the sale of a motor vehicle through the demonstration of the existence of issuance of a valid invoice. [...]. The documentary elements attached to the proceedings enjoy the presumption of veracity conferred on them by the aforementioned Article 75, no. 1, of the LGT, thus having sufficiency and force adequate to rebut the presumption that supported the assessments carried out based exclusively, as the Law provides, on motor vehicle registration. These operations of apparent transfer of ownership are opposable to the Tax and Customs Authority, since, although facts subject to registration only produce effects in relation to third parties when registered, in light of the provisions of Article 5, no. 1, of the Motor Vehicle Registry Code [applicable by cross-reference to the Motor Vehicle Registry Code], the Tax Authority is not a third party for purposes of registration, since it is not in the situation provided in no. 2 of said Article 5 of the Motor Vehicle Registry Code, applicable by force of the Motor Vehicle Registry Code, that is, it did not acquire from a common author rights that are incompatible with each other." (Italics in original.)
In light of the foregoing, and taking into account the elements brought to these proceedings and (also) identified above, it is considered that the Claimant rebutted the presumption contained in Article 3 of the CIUC – and therefore, consequently, the acts of IUC assessment here impugned must be annulled.
3) It is concluded, considering the foregoing [cf. 1) and 2)], that there was no interpretation "contrary to the Constitution," contrary to what is alleged by the Respondent in points 109 to 117 of its reply.
4) It now falls to evaluate, under Article 24, no. 5, of the RJAT, the request for payment of compensatory interest in favor of the claimant (Article 43 of the LGT and 61 of the Code of Tax Procedure).
In this regard, the Arbitral Decision of 19/7/2013, handed down in process no. 26/2013-T (decision relating to a situation similar to that under consideration), appropriately noted: "The right to compensatory interest to which the aforementioned norm of the LGT refers 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 AT. [...] even if it is recognized that the tax paid by the claimant is not owed, because it is not the taxable person of the tax obligation, determining, in consequence, the respective reimbursement, it is not seen that, in its origin, is found the error attributable to the services, which determines such right [to compensatory interest] in favor of the taxpayer. In fact, in proceeding with the official assessment of the IUC considering the claimant as the taxable person of this tax, the AT merely complied with the norm of no. 1 of Article 3 of the IUC Code, which, as above abundantly noted, imputes such quality to the persons in whose name the vehicles are registered."
Taking this justification into account, with which we agree, it is concluded, also in the present case, for the lack of merit of the aforementioned request for payment of compensatory interest.
Responsibility for Payment of Arbitral Costs
The Respondent argues, in point 131 of its reply, that "the Claimant [should] be condemned to payment of the arbitral costs," given that "from everything set forth above it is clear that the tax acts in question are valid and legal, because in conformity with the legal regime in force at the date of the tax facts, and therefore, in the case in question, there was no error attributable to the services." (cf. point 134 of said reply).
Now, in this regard, it is necessary to bear in mind that, as is well noted in the Arbitral Decision of 6/10/2014 (in process no. 241/2014-T), "the law is strict in imputing responsibility for payment of costs to the party that is condemned, in light of the provisions of nos. 1 and 2, of Article 527 of the Code of Civil Procedure, applicable by force of Article 29, no. 1, letter e), of the RJAT." (In the same sense, see, for example, the Arbitral Decision of 4/11/2014, in case no. 231/2014-T, or the Arbitral Decision of 17/11/2014, in case no. 171/2014-T.)
In the case of these proceedings, having proceeded the request of the Claimant [cf. above], it is concluded that the Respondent is wholly responsible for payment of the costs.
V – DECISION
In light of the foregoing, it is decided:
– To judge the request for arbitral decision well-founded, with the consequent annulment, with all legal effects, of the IUC assessments impugned and the reimbursement of the amounts improperly paid.
– To judge the request without merit insofar as it concerns the recognition of the right to compensatory interest in favor of the claimant.
The value of the case is fixed at €137.54 (one hundred thirty-seven euros and fifty-four cents), pursuant to Article 32 of the Code of Administrative Proceedings and Article 97-A of the Code of Tax Procedure, applicable by force of the provisions of Article 29, no. 1, als. a) and b), of the RJAT, and Article 3, no. 2, of the Regulation of Costs in Arbitration in Tax Matters (RCPAT).
Costs to the charge of the respondent, in the amount of €306.00 (three hundred six euros), pursuant to Table I of the RCPAT, and in compliance with the provisions of Articles 12, no. 2, and 22, no. 4, both of the RJAT, and the provision of Article 4, no. 5, of the cited Regulation.
Notify.
Lisbon, 21 February 2018.
The Arbitrator
(Miguel Patrício)
Text prepared by computer, in accordance with the provisions of Article 131, no. 5, of the Code of Civil Procedure, applicable by cross-reference of Article 29, no. 1, letter e), of the RJAT.
The drafting of the present decision is governed by the spelling prior to the Orthographic Agreement of 1990.
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