Summary
Full Decision
ARBITRATION DECISION
I. - REPORT
A - PARTIES
The company A... - FINANCIAL CREDIT INSTITUTION, SA, designated as "Claimant", with registered office at Rua..., Lot..., in Lisbon, with the corporate identification number..., appellant in the tax proceedings above and marginally referenced, has, invoking the provisions of articles 2, paragraph 1, subparagraph a) of the Legal Framework for Tax Arbitration, approved by Decree-Law no. 10/2011, of 20 January (hereinafter LFTA), and articles 1 and 2 of Ordinance no. 112-A/2011, of 22 March, requested the constitution of a single arbitral tribunal, for the purpose of deciding the following claim brought against the Tax and Customs Authority, hereinafter designated as "Respondent" or "TA".
B - CLAIM
1 - The request for constitution of the arbitral tribunal was accepted by the Honourable President of CAAD on 02 September 2016 and, on that same date, notified to the TA.
2 - The Claimant did not proceed to appoint an arbitrator, whereupon, pursuant to paragraph 1 of article 6 of the LFTA, the undersigned, on 10-11-2016, was designated by the Ethics Council of the Centre for Administrative Arbitration as arbitrator of a Single Arbitral Tribunal, having accepted in the terms legally provided.
3 - The Parties were, on 10-11-2016, duly notified of such designation, having manifested no intention to refuse it, in accordance with subparagraphs a) and b) of paragraph 1 of article 11 and articles 6 and 7 of the Ethics Code.
4 - In these circumstances, in compliance with the provisions of subparagraph c) of paragraph 1 of article 11 of Decree-Law no. 10/2011, of 20 January, as amended by article 228 of Law no. 66-B/2012, of 31 December, the arbitral tribunal was regularly constituted on 25-11-2016.
5 - On 22 February 2017, the Arbitral Tribunal, pursuant to article 16, subparagraph c) of the LFTA (Decree-Law no. 10/2011, of 20 January), and having regard to the content of the order issued on 14 February 2017, considered it unnecessary to hold the meeting provided for in article 18 of the aforesaid legal instrument.
6 - The Claimant requests that the present Arbitral Tribunal:
a) - Declare the unlawfulness of the order of 29-04-2016 of the Chief of the Division (substituting) of Administrative Justice, of the Finance Directorate of Lisbon, which dismissed the administrative complaint no. ... 2015/...;
b) - Declare the unlawfulness and consequent annulment of the assessments relating to the Single Circulation Tax (hereinafter designated as SCT) and the compensatory interest (CI) associated therewith, relating to the years 2011 to 2015, as identified in the case file, concerning the vehicles, equally identified in the case file, which are hereby deemed fully reproduced;
c) - Order the TA to refund the sum of € 8,580.10, corresponding to the total amount paid for SCT and CI, relating to the years and vehicles aforementioned;
d) - Order the Tax and Customs Authority to pay both indemnification interest relating to the amounts illegally assessed and paid, and the costs of the proceedings.
C - GROUNDS OF THE CLAIM
7 - The Claimant, in the substantiation of its request for arbitral decision, asserts, in summary, the following:
8 - That it is a financial institution, specializing in the branch of automobile financing, within whose corporate purpose is inscribed, namely, the conclusion with its clients of Long-Term Contracts (ALD), Short-Term Rental Contracts (renting) and Financial Leasing Contracts (leasing);
9 - That, in this context, it concluded with its clients vehicle rental contracts with promise of sale and financial leasing contracts, vehicles which it acquires, as new vehicles, from national importers of ... and ...;
10 - That, upon notification to exercise its right to prior hearing, it came to know that it still formally appeared as owner of the automobiles at issue in the case file, to which 87 assessments of SCT relating to the years 2011 to 2015 corresponded, whose value totalled the sum of € 8,580.10;
11 - That, although it was surprised by the aforesaid assessments and although it disagreed with them, it proceeded to pay the single circulation tax subject to assessment;
12 - That, on 05-08-2015, it filed an Administrative Complaint against 87 assessments of SCT, with the total value of € 8,580.10, relating to the years 2011 to 2015, having then supported such Complaint with a file relating to each of the vehicles under analysis, comprising both copies of financial leasing contracts and operational leasing contracts with promise of sale, and invoices for the sale of the vehicles.
13 - That the Administrative Complaint was, by order of 29-04-2016, of the Finance Directorate of Lisbon, dismissed;
14 - That in all contracts concluded by it, of financial leasing and vehicle rental without driver with promise of sale, the users of the corresponding vehicles are clearly identified, to which, or to third parties, after the termination of the contracts, it transferred the ownership of such vehicles for a residual value;
15 - That on the dates of the due date of the SCT, relating to the vehicles at issue in the case file, it was no longer, in some cases, its owner and, in other cases, was a financial lessor or lessor in operational leasing contracts with promise of sale, and in no case was it the subject to such tax;
16 - That the sales of the vehicles occurred precisely on the dates on which the corresponding invoices were issued, which document and demonstrate the sale of such vehicles at a moment prior to the date of the due date of the SCT, and that, after the completion of such sales, it never resumes ownership of the vehicles;
17 - That the SCT, although having the objective of raising revenues, also aims to tax the environmental costs that each individual causes to the community, the unification of such objectives being ensured by the principle of equivalence established in article 1 of CIUC, which, being fundamental in the context of SCT taxation, makes clear that taxpayers should be burdened in the measure of the impacts they cause to the environment and road network, thus enshrining the polluter-pays principle;
18 - That the principle was established in the CIUC that the polluter must pay, associating the tax to the environmental and road damage caused by the effective use of vehicles;
19 - That it was never the actual polluter and cause of environmental damage, in that it merely leased the vehicles at issue or sold them, in cases where the leasing contracts had already terminated;
20 - That paragraph 1 of article 3 of the CIUC establishes a rebuttable legal presumption, and that, in view of the provisions of paragraph 2 of the aforesaid article, financial lessees and holders of vehicle rental contracts without driver, with promise of sale, are the subjects liable for the tax;
21 - That, after the termination of the aforesaid contracts, it proceeds to transfer the ownership of the respective vehicles to the corresponding lessees or to third parties, a transfer that takes place by mere effect of the contracts and that is supported in the respective sales invoices;
22 - That, in any of the aforementioned contracts concluded with its clients, although the lessor continues to be the owner of the vehicles, only the lessees and the holders of the purchase and sale option, in the case of vehicle rental contracts without driver with promise of sale, have the exclusive enjoyment of the vehicles, being the potential causes of road and environmental damage;
23 - That the registration of acquisition of motor vehicles has no constitutive value, in that it merely aims to publicize the legal situation of the vehicles, constituting the same a presumption that the registration exists and belongs to the registered holder, but such presumption is rebuttable;
24 - That even in cases where the buyer (new owner of the vehicle) does not provide for the registration of its property right, it is presumed that such right continues to be that of the seller, but such presumption may be rebutted;
25 - That considering as subjects liable for SCT only the owners of vehicles in whose names they are registered, without taking into account situations where such registrations no longer coincide with the real owners or actual users thereof, constitutes a restriction which, in light of the purposes of the SCT, finds no basis for support;
26 - That the TA, contrary to what was incumbent upon it, in light of the inquisitorial principle, did not undertake any diligence aimed at discovering the material truth, regarding the real situation of the vehicles at issue, demonstrating total lack of interest in seeking that truth, having merely limited itself to considering the information contained in the databases.
27 - That, in situations identical to those of the present case file, the jurisprudence of CAAD has come to recognize the reason of the taxpayer, indicating in that direction, namely, the Arbitration Decision issued on 20.05.2015, in Case no. 688/2014-T; the Arbitration Decision issued in Case no. 374/2015-T; the Arbitration Award issued on 21.11.2014, in Case no. 250/2014-T; the Arbitration Award issued on 26.10.2015, in Case no. 7/2015-T and the Arbitration Award issued in Case no. 49/2015-T.
D - RESPONDENT'S ANSWER
28 - The Respondent, the Tax and Customs Authority, (hereinafter designated as TA), presented its Answer, on 09-01-2017, in which it understands that the allegations of the Claimant cannot, in any way, proceed, inasmuch as the financial leasing contracts which it alleges to have concluded by it were not reported, in the terms established in article 19 of the CIUC, nor can the argument proceed that the Claimant was not liable for SCT in cases where it alleges it is no longer owner of the vehicles on the dates on which the obligation to assess the aforesaid tax became due. (see articles 7 to 27 of the Answer)
29 - On the other hand, it considers that the Claimant makes an interpretation and application of the legal norms applicable to the case, manifestly erroneous,
30 - Which reveal an understanding that incurs not only in a skewed reading of the letter of the law, but also in an interpretation that does not take into account the systematic element, violating the unity of the regime established throughout the CIUC and, more broadly, throughout the entire legal-fiscal system, further resulting from an interpretation that ignores the ratio of the regime established in paragraph 1 of article 3 of the CIUC. (see articles 28 and 29 of the Answer)
31 - It states that the tax legislator in establishing, in article 3, paragraph 1 of the CIUC, who are the subjects liable for SCT expressly and intentionally established that these are the owners (or in the situations provided for in paragraph 2 the persons mentioned therein), being considered as such the persons in whose names they are registered. (see article 40 of the Answer)
32 - It emphasizes that the legislator did not use the expression "it is presumed" as it could have done, for example, in the following terms: "the persons liable for the tax are the owners of vehicles, and it is presumed that such persons are the natural or legal persons, of public or private law, in whose names they are registered". (see article 41 of the Answer)
33 - It considers that the wording of article 3, paragraph 1 of the CIUC corresponds to a clear choice of legislative policy adopted by the legislator, whereby understanding that a presumption is established therein would unequivocally constitute an interpretation against the law. (see articles 50, 51 and 52 of the Answer)
34 - It states that the aforementioned understanding has already been adopted by the jurisprudence of our courts, transcribing for that purpose part of the sentence of the Administrative and Tax Court of Penafiel, issued in Case no. 210/13.OBEPNF. (see article 54 of the Answer)
35 - On the systematic element of interpretation, it considers that the solution advocated by the Claimant is intolerable, finding the understanding supported by it no legal basis. (see article 56 of the Answer)
36 - On the ignorance of the "ratio" of the regime, the TA considers that, in light of a teleological interpretation of the regime established throughout the SCT Code, the interpretation advocated by the Claimant in the sense that the subject liable for SCT is the actual owner, regardless of not appearing in the motor vehicle register the registration of such status, is manifestly wrong. (see article 79 of the Answer)
37 - It adds that the CIUC carried out a reform of the vehicle taxation regime in Portugal, substantially altering the automobile taxation regime, with the subjects liable for the tax becoming the owners appearing in the property register, regardless of the circulation of vehicles on the public road. (see article 86 of the Answer)
38 - It also considers that the interpretation conveyed by the Claimant shows that the Constitution is being violated, in that the same translates into violation of the constitutional principles of confidence and legal certainty, the efficiency of the tax system and proportionality. (see articles 117 and 119 of the Answer)
39 - It adds that the invoices presented by the Claimant, as proof of the sale of the vehicles, are not capable, by themselves, of proving the conclusion of a synallagmatic contract such as purchase and sale. (see article 98 of the Answer)
40 - Finally, it states that it was not the Respondent who gave rise to the filing of the request for arbitral decision, but rather the Claimant, and consequently, the Claimant should be condemned to pay the arbitration costs "in accordance with article 527/1 of the New Civil Procedure Code by virtue of article 29/1-e) of the LFTA", also emphasizing that the legal requisites allowing for the calculation of indemnification interest, whose request was formulated by the Claimant, are not met. (see articles 138 to 143 of the Answer)
41 - It considers, in conclusion, that, given all the arguments adduced, the tax acts in issue are valid and legal, and the request for arbitral decision underlying the present proceedings should be judged unfounded, the tax assessment acts being maintained in the legal order, and the Respondent entity should accordingly be absolved from the claim.
E - QUESTIONS TO BE DECIDED
42 - It is therefore necessary to assess and decide.
43 - In view of the above, relative to the positions of the Parties and the arguments presented, the main questions to be decided are whether:
a) - The subjective tax rule contained in article 3, paragraph 1 of the CIUC establishes or does not establish a presumption.
b) - What is the legal value of motor vehicle registration in the context of the CIUC, particularly for purposes of the subjective scope of this tax.
c) - If, on the date the tax becomes due, a financial leasing contract or a vehicle rental contract without driver with promise of sale is in effect, for purposes of the provisions of article 3, paragraphs 1 and 2 of the CIUC, the subject liable for SCT is the lessee or the lessor entity, in whose name the ownership of the vehicle is registered.
d) - If, under a financial leasing contract or a vehicle rental contract without driver with promise of sale, on the date the tax becomes due, the vehicle has already been previously alienated although the property right of same remains registered in the name of its previous owner, for purposes of the provisions of article 3, paragraph 1 of the CIUC, the subject liable for SCT is the previous owner or the new owner.
e) - Whether the documents presented, relating to the rental and sale of the vehicles identified in the case file, are capable of providing proof of the rental and purchase and sale of such vehicles.
F - PROCEDURAL REQUIREMENTS
44 - The Arbitral Tribunal is regularly constituted and is materially competent, pursuant to subparagraph a) of paragraph 1 of article 2 of Decree-Law no. 10/2011, of 20 January.
45 - The Parties have legal personality and capacity, are legitimate and are legally represented (see article 4 and paragraph 2 of article 10 of Decree-Law no. 10/2011 and article 1 of Ordinance no. 112/2011, of 22 March).
46 - The proceedings do not suffer from defects that would invalidate them.
47 - Having regard to the documentary evidence attached to the case file, and the information recorded in the tax administration proceedings, it is now necessary to present the factual matter relevant to understanding the decision, as is fixed in the terms set out below.
II - LEGAL GROUNDS
G - FACTUAL GROUNDS
48 - In matters of relevant fact, this tribunal finds the following facts to be established:
49 - The Claimant is a financial institution, specializing in the branch of automobile financing, within whose corporate purpose is inscribed, namely, the conclusion, with its clients, of Long-Term Contracts (ALD), Short-Term Rental Contracts (renting) and Financial Leasing Contracts (leasing);
50 - In the context of its activity, it concluded, with its clients, financial leasing contracts and vehicle rental contracts without driver with promise of sale;
51 - The single circulation tax subject to assessment, relating to the vehicles identified in the case file, was paid by the Claimant;
52 - The Claimant, on 05-08-2015, filed an Administrative Complaint against 87 assessments of SCT, with the total value of € 8,580.10, relating to the years 2011 to 2015, having then supported such Complaint with a file relating to each of the vehicles under analysis, comprising both copies of financial leasing contracts and vehicle rental contracts without driver with promise of sale, and sales invoices for the vehicles;
53 - The Administrative Complaint, after substantial analysis, at the Finance Directorate of Lisbon - Administrative Justice Division, that is, after reconsideration of the legality of the assessment acts targeted, was, by order of 29-04-2016, of the Chief (substituting) of the aforesaid Division, dismissed;
54 - The Claimant, as proof of the aforesaid leasing contracts and the aforementioned sales, in order, namely, to rebut the presumption which it understands to be established in paragraph 1 of article 3 of the CIUC, attached, namely, both copies of the aforementioned contracts, and invoices relating to the corresponding and alleged sales of the vehicles;
55 - In the contracts concluded by the Claimant, whether financial leasing contracts, whether vehicle rental contracts without driver with promise of sale, the users of the corresponding vehicles are identified;
56 - The sales of the vehicles identified in the case file, occurring after the termination of the aforesaid contracts, are documented and supported, namely, in the corresponding invoices attached to the case file;
57 - On the dates the SCT became due, relating to the vehicles identified in the case file, the Claimant, in some cases, was a financial lessor or lessor in vehicle rental contracts without driver with promise of sale, and, in other cases, was no longer its owner;
58 - The TA did not undertake, namely in compliance with the inquisitorial principle, any diligence aimed at discovering the material truth, regarding the real situation of the vehicles at issue in the case file.
SUBSTANTIATION OF PROVEN FACTS
59 - The facts found to be proven are based on the documents attached to the case file by the Claimant, whose authenticity was not questioned by the Respondent, and whose conformity with reality was not challenged.
FACTS NOT PROVEN
60 - There are no facts found to be not proven, given that all facts considered relevant to the assessment of the claim were proven.
H - LEGAL GROUNDS
61 - The factual matter is fixed, and it is now necessary to proceed to its legal subsumption and determine the law applicable to the underlying facts, in accordance with the questions to be decided enumerated in paragraph 43.
62 - The decisive question in the present case file, regarding which there are absolutely opposed understandings between the Claimant and the TA, is translated into whether the subjective tax rule contained in paragraph 1 of article 3 of the CIUC establishes or does not establish a rebuttable presumption.
63 - The positions of the parties are known. Indeed, for the Claimant, the provisions of paragraph 1 of article 3 of the CIUC establish a rebuttable legal presumption, understanding that, in view of the provisions of paragraph 2 of the aforesaid article, financial lessees and holders of vehicle rental contracts without driver, with promise of sale, are the subjects liable for the tax;
64 - The Respondent, for its part, considers that the tax legislator, in establishing in article 3, paragraph 1 of the CIUC who are the subjects liable for SCT, determined, expressly and intentionally, that these are the owners (or in the situations provided for in paragraph 2, the persons mentioned therein), being considered as such the persons in whose names they are registered. (see article 40 of the Answer)
I - INTERPRETATION OF THE SUBJECTIVE TAX RULE CONTAINED IN PARAGRAPH 1 OF ARTICLE 3 OF THE CIUC
65 - On this question, that is, whether the subjective tax rule contained in paragraph 1 of article 3 of the CIUC establishes a presumption, it should be noted that the jurisprudence established at CAAD points in the direction that the said rule establishes a legal presumption. Indeed, from the first Decisions issued on this matter, in the year 2013, among which may be mentioned, namely, those issued in the context of Cases nos. 14/2013-T, 26/2013-T and 27/2013-T, to the most recent, which may be indicated as Decisions issued in the context of Cases no. 69/2015-T and no. 79/2015-T, passing through numerous Decisions issued in the year 2014, of which Decisions issued in Cases nos. 34/2014-T, 120/2014-T and 456/2014-T are mentioned, by way of mere example, all point to the understanding that paragraph 1 of article 3 of the CIUC establishes a rebuttable legal presumption.
In this regard, consideration should also be given to the understanding contained in the Decision of the Central Administrative Court of the South, issued on 19-03-2015, Case 08300/14, available at: www.dgsi.pt, which supports the said jurisprudence, when it expressly states therein that article 3, paragraph 1 of the CIUC "[...] establishes a legal presumption that the holder of the motor vehicle registration is its owner, and such presumption is rebuttable by virtue of article 73 of the LGT".
This is an understanding which we wholly support and which we consider, without further ado, as valid and applicable in the present case, thus not considering it necessary to make further developments, given the abundant reasoning contained in the aforementioned Decisions and in the said Decision.
66 - This being the understanding which, regarding article 3, paragraph 1 of the CIUC, is wholly adopted by this tribunal, it is nevertheless important to point out the lack of merit that assists the Respondent, when, in articles 117 and 119 of its answer, it alleges that the interpretation which goes in the direction of understanding that a rebuttable legal presumption is established in paragraph 1 of article 3 of the CIUC violates the constitutional principles of confidence and legal certainty, the efficiency of the tax system and proportionality.
Let us then assess that question.
Let us see,
- On the principle of proportionality, it is first necessary to emphasize that the same, insofar as it is materially inherent to the regime of rights, freedoms and guarantees, inscribing itself in their defense, aims, in essence, to discipline the action of the Public Administration in order that its activity, in its relationship with individuals, be guided by the choice of the most evenly adequate measures for the pursuit of the public interest.
As Professor Freitas do Amaral teaches, in Curso de Direito Administrativo, Vol II, Almedina, 2002, pp. 127/128 et seq, the "principle of proportionality constitutes a constitutive manifestation of the principle of the Rule of Law", with the idea being "[...] strongly anchored that, in a democratic Rule of Law state, the measures of the public powers must not exceed what is strictly necessary for the realization of the public interest".
The principle of proportionality, adds the aforesaid Professor, ibidem, p.129, means that "[...] the limitation of private goods or interests by acts of the public powers must be adequate and necessary for the concrete purposes that such acts pursue, as well as tolerable when confronted with those purposes".
With regard to the principle of proportionality, it should also be noted what J. J. Gomes Canotilho and Vital Moreira tell us, in CONSTITUIÇÃO DA REPÚBLICA PORTUGUESA, ANOTADA, VOLUME I, 4th Edition, 2007, Coimbra Editora, pp. 392/393, when they consider that the aforesaid principle is breakable into three sub-principles, namely: "[...] a) principle of suitability (also designated as principle of suitability); b) principle of necessity (also called principle of necessity or indispensability); c) principle of proportionality in the strict sense, which means that the restrictive legal means and the ends obtained must be in a "just measure", preventing the adoption of restrictive legal measures that are disproportionate, excessive, in relation to the ends obtained [...]".
The aforesaid sub-principles have, all of them, a common denominator, which is that of just balance and permanent coherence between the purposes of the law and the means adopted to achieve such purposes, which, in the circumstance and attempting the transposition of the said principle to the case of the case file, will require answering the question of what is the adequate interpretation of paragraph 1 of article 3, in view of the pursuit of the legal purposes provided for in article 1 of the CIUC, which translate into the fiscal burdening of the actual owners of motor vehicles (and not, necessarily, of those appearing in the register) in the measure of the environmental and road cost they cause.
As Professor J. J. Gomes Canotilho states in Direito Constitucional e Teoria da Constituição, Almedina - Coimbra, 1998, pp. 264 et seq, the most important field of application of the principle of proportionality or prohibition of excess, which has constitutional basis in articles 18, paragraph 2 and 266, paragraph 2 of the CRP, "[...] is that of the restriction of rights, freedoms and guarantees by acts of the public powers. However, the logical field of application of the principle of proportionality extends to conflicts of legal goods of any kind." The administration, adds the aforesaid author, idem, "[...] must always observe, in each concrete case, the requirements of the prohibition of excess [...]".
In this same direction points the jurisprudence, namely the decision of the STA of 01-07-1997, Case no. 041177, available at: www.dgsi.pt, when it considers that the principle of proportionality in the broad sense, comprises the congruence, the suitability or the adequacy of the means or measure to achieve the legally proposed end and, in the strict sense, encompasses the prohibition of excess.
The principle of proportionality is a corollary of the principle of justice, which means and implies that in its action the Public Administration must harmonize the specific public interest it is responsible for pursuing with the legitimate rights and interests of individuals possibly affected by its acts, interests and rights which, in the case at hand, are reduced to the non-taxation in SCT of persons who are no longer owners of the vehicles and who, consequently, in no way contribute to the effectuation of any road and environmental cost.
What matters is to balance the legal purposes and the means to pursue them, and, within a framework of weighing, to identify the most adequate means for that purpose, which, in the case, translate into the interpretation adopted by the arbitral tribunal.
It will be said, moreover, that the understanding that the said paragraph 1 of article 3 of the CIUC establishes a rebuttable legal presumption corresponds to the only interpretation that coherently accords with the said principle of equivalence, and which is in line with the principles of justice and proportionality.
The interpretation that understands that a rebuttable legal presumption is established in paragraph 1 of article 3 of the CIUC is, therefore, the only one that makes it possible to ensure the pursuit of the purposes intended by the law - to burden the owners of motor vehicles in the measure of the environmental and road cost they cause, - as established in article 1 of the CIUC, which means that the subjects liable for SCT are, presumably, the persons in whose names the vehicles are registered, that is, the aforesaid subjects liable are, in principle, and only in principle, the persons in whose names such vehicles are registered, there being, therefore, no other interpretation capable of achieving the said legal purposes, only thus, it is reaffirmed, are the said principles of proportionality and justice shown to be fulfilled.
The contrary understanding, that is, the one considered by the TA, which interprets paragraph 1 of article 3 of the CIUC as not establishing a rebuttable legal presumption, understanding that the subjects liable for SCT are, in finality, the persons in whose names the vehicles are registered, insofar as it leads to the imposition of a tax burden on those who may no longer be the owner of the vehicle in question and who, in this way, does not pollute, moving away from tax subjection those who, in reality, are the effective cause of the environmental and road damage resulting from the use of vehicles of which they are the real owners, evidences that the legally prescribed purposes would not, in any way, be achieved, thus not respecting the principle of equivalence which, within the framework of the CIUC, has an absolutely structuring function. Such understanding, that is indeed not shown, in these circumstances, to be in tune with the principle of proportionality.
The interpretation adopted here takes, absolutely, into account the principle of proportionality, when, contrary to what is understood by the Respondent, it considers that the definitive registration does not have constitutive force because it is intended to give publicity to the registered act, functioning only as a mere rebuttable presumption of the existence of the right and when, in homage to that principle, it heeds the principle of equivalence, as a fundamental element of the CIUC.
- As to the efficiency of the tax system, it will be said that the efficiency of the Administration in general, or of the TA in particular, in the current sense, will correspond to the capacity/work methodology oriented towards the optimization of the work performed or the services provided, which means producing the maximum, in quantity and quality, with the minimum of costs and means, having nothing to do with the observance of legally established principles and with respect for the rights of citizens, whether in the capacity of taxpayers or not.
In technical terms, it will be said that the principle of efficiency of the tax system, is commonly held, in the domain of tax procedure, as a corollary of the principle of proportionality, which as is known, imposes an adequate proportion between the legal purposes and the means chosen to achieve those purposes, or, as stated by Diogo Leite Campos, Benjamim Silva Rodrigues and Jorge Lopes de Sousa, in Lei Geral Tributária, Anotada e Comentada, 4th Edition 2012, Encontro de Escrita, Lda, Lisbon, p. 488, in the annotations to article 55 of the LGT, it is a principle that obliges "[...] the tax administration to refrain from imposing on taxpayers obligations that are unnecessary to satisfy the purposes it seeks to pursue".
In this framework, the aforesaid principle of efficiency of the tax system will mean the capacity to achieve legally fixed objectives with the minimum of means, which will also have nothing to do with respect for the rights of citizens, nor with the necessity to observe other principles to which the tax administration must subordinate its activity, namely the inquisitorial principle and the discovery of material truth, and the application of the aforementioned principle of efficiency obviously cannot be made, whether to the detriment of the rights of citizens, whether by the absence of observation of the legal purposes. [1]
- As to the principle of legal certainty and confidence, it should be noted, first of all, that the latter principle, that of confidence, is a concretization of the principle of good faith, which, having consecration in our legal system, since 1996, has come to have express constitutional inscription, as contained in paragraph 2 of article 266 of the CRP, where it is established that "The organs and agents of the administration are subordinated to the Constitution and the law and must act, in the exercise of their functions, with respect for the principles of equality, proportionality, justice, impartiality and good faith". (emphasis added)
With regard to good faith, it should be noted what Professor Freitas do Amaral states, when, in Curso de Direito Administrativo, Vol. II, Almedina, 2002, pp. 135/136, citing Professor V. Fausto de Quadros, tells us that "[...] the Public Administration is obliged to comply with good faith in its relations with individuals. Moreover: it should even give, also there, the example to individuals of the observance of good faith, in all its manifestations, as the essential nucleus of its ethical behavior. Without that, one could never affirm that the State (and with it other public entities) is a person of good".
On the other hand, the principle of confidence is also held as a consequence of the principle of legal certainty, indissociable from the Rule of Law, which, having to guarantee a minimum of certainty in the rights of persons and in the legal expectations created for them, is generative of confidence of citizens in the legal protection of the Public Administration.
Regarding the principles of legal certainty and protection of confidence, Professor J. J. Gomes Canotilho tells us in Direito Constitucional e Teoria da Constituição, Almedina - Coimbra, 1998, p. 250 et seq, that the said principles are closely associated, being considered that "[...] legal certainty is connected with objective elements of the legal order - guarantee of legal stability, security of orientation and realization of law - while the protection of confidence is more related to the subjective components of security, namely the calculability and predictability of individuals in relation to the legal effects of acts of the public powers". In any case, adds the aforesaid Professor, idem, that the "[...] general principle of legal certainty in the broad sense (thus encompassing the idea of protection of confidence) can be formulated as follows: the individual has the right to be able to rely on the fact that to his acts or to public decisions incident on his rights, positions or legal relationships grounded in existing and valid legal norms are linked the legal effects foreseen and prescribed by those same norms".
It follows from this doctrine that persons, when alienating their vehicles, must be assured that, if they proceed to sell the vehicles of which they are owners, and such vehicles are not registered in the name of the purchasers, the legal effects resulting therefrom will be those foreseen and resulting from the legal norms in force and their adequate interpretation in light of the legal purposes of those same norms, which, in the present case, leads this arbitral tribunal to consider the existence of a rebuttable presumption established in paragraph 1 of article 3 of the CIUC and that only persons who cause road and environmental costs should be taxed.
The best way to, in the case of the case file, guarantee legal certainty, in the broad sense, is, thus, that concretized through the interpretation made by the arbitral tribunal, when it considers that a rebuttable legal presumption is established in paragraph 1 of article 3 of the CIUC, allowing any citizen who proceeds to sell, to a third party, a motor vehicle, the possibility of demonstrating that, at the time the SCT became due, he was no longer its owner nor responsible for the payment of that tax.
- Beyond what has been stated above, it will also be necessary to know whether the interpretation adopted by the arbitral tribunal, in addition to not conflicting with any of the referenced principles, is directly and substantively inscribed in the context of the constitutional order.
With regard to the interpretation of law in light of the Constitution, or interpretation in conformity with the Constitution, Professor Jorge Miranda tells us, in Manual de Direito Constitucional, TOMO II, Introdução À Teoria da Constituição, 2nd edition, Coimbra Editora, 1987, p. 232 et seq, that what is at stake, first of all, is to "[...] take into account, within the systematic element of interpretation, that which relates to the Constitution. Indeed, each legal provision must not only be grasped in the set of provisions of the same law and each law in the set of the legislative order; it must also be considered in the context of the constitutional order [..]". (emphasis added)
The understanding that considers that a rebuttable legal presumption is established in paragraph 1 of article 3 of the CIUC is supported by various elements of interpretation, among which may be mentioned the systematic element, insofar as interpretation in conformity with the Constitution implies that within the systematic element of interpretation, that which relates to the Constitution is taken into account.
On the aforementioned systematic element it should be noted as follows:
a) In the understanding of BAPTISTA MACHADO, in Introdução ao Direito e ao Discurso Legitimador, p. 183, the systematic element "[...] comprises the consideration of other provisions that form the complex of norms of the institution in which the rule to be interpreted is integrated, that is, that regulate the same matter (context of the law), as well as the consideration of legal provisions that regulate parallel normative problems or related institutions (parallel places). It also comprises the systematic place that belongs to the rule to be interpreted in the global legal system, as well as its consonance with the spirit or intrinsic unity of the entire legal system".
b) It is known that a legal principle, in the case the principle of equivalence, does not exist in isolation, rather it is bound by an intimate nexus with other principles that integrate, at the more global level, the respective legal system, in the case, with the other principles embodied in the system inscribed in the CIUC, and with other principles constitutionally established. In that sense, each article of a given legal instrument, in the case the CIUC, will only be understandable if we situate it, both before the other articles that follow or precede it, and before the constitutional order.
c) With regard to the organization of the CIUC, environmental concerns were decisive in having the aforementioned principle of equivalence inscribed from the outset in the first article of the said Code, which necessarily leads to the subsequent articles, insofar as they are grounded in such principle, being influenced by it. This is what occurred, namely, with the tax base, which came to be constituted by various elements, particularly those relating to pollution levels, and with the tax rates, established in articles 9 to 15, which were influenced by the environmental component, and, naturally, also with the subjective scope itself, provided for in article 3 of the CIUC, which cannot escape the aforementioned influence.
d) The said principle of equivalence, as noted by Sérgio Vasques, in Os Impostos Especiais de Consumo, Almedina, 2001, p. 122 et seq, implies that "[...] the tax must correspond to the benefit that the taxpayer derives from the public activity; or to the cost that the taxpayer imputes to the collectivity by his own activity". The aforementioned author adds, idem, that "Thus, a tax on automobiles based on a rule of equivalence will be equal only if those who cause the same road wear and the same environmental cost pay the same tax; and those who cause different wear and environmental cost, pay different tax as well." For that reason, as the cited author also states, idem, the implementation of the principle of equivalence dictates special requirements "[...] regarding the subjective scope of the tax [..]."
The aforementioned principle that informs the current Single Circulation Tax, is inscribed in the environmental concerns established in paragraph 2, subparagraph a) of article 66 of the CRP and in the necessity of, - with a view to ensuring the right to the environment, within the framework of sustainable development, - to "Prevent and control pollution and its effects and harmful forms of erosion", concerns which are, manifestly, considered in the interpretation adopted by this arbitral tribunal.
On the other hand, the provision in subparagraph h) of paragraph 2 of article 66 of the Constitution, when it establishes that, within the framework of sustainable development, it is incumbent upon the State to "ensure that fiscal policy harmonizes development with environmental protection and quality of life", entails, as a corollary, the polluter-pays principle, which concretizes the idea, inscribed therein, that he who pollutes must, for that reason, pay, thus being the interpretation which here is defended in perfect accordance with the constitutional order.
e) It is also worth leaving a brief note, merely to raise the question of why the rules contained in article 9 of the Civil Code bind the interpreter of ordinary legislation, given that the said Code does not occupy any prominent place in the legal system.
To this question Professor Jorge Miranda responds, ibidem, p. 230, when he considers that the "[...] conclusion to which one tends is that rules such as these are valid and effective, not because they are contained in the Civil Code - for the latter does not occupy any prominent place in the legal system - but, directly, as such, for translating a legislative will, not contradicted by any other provisions, regarding the problem of interpretation (which are not only technical-legal) of which they care."
The aforementioned author adds, idem, that "rules on these matters may be considered substantially constitutional and it would not even be repugnant to see them raised to the Constitution in the formal sense."
With regard to the problems of interpretation and its rules, as we can gather from Professor José de Oliveira Ascensão, in O Direito, Introdução e Teoria Geral, 2nd edition, Fundação Calouste Gulbenkian, 1980, pp. 352/353, the imperative character of these rules and their binding nature for the interpreter should be underlined.
The interpretation that this arbitral tribunal makes of paragraph 1 of article 3 of the CIUC and the criteria that, for that purpose, it considered, from the literal element, to the systematic element, passing through the historical and rational (or teleological) element, do not thus collide with any constitutional principles.
Paragraph 1 of article 9 of the CC provides that the search for legislative thought should take "[...] especially into account [...]the unity of the legal system, the circumstances in which the law was elaborated and the specific conditions of the time in which it is applied", circumstances and conditions which, today more than ever, are of sensitivity for the environment and respect for questions related to it, and which are shown to be inscribed in the constitutional legal order.
Thus, given what has been stated, it does not appear, with due respect, that the TA has merit, in that the interpretation here considered, as being the only one capable of respecting the legal purposes, does not violate any of the principles in question, that is, the principles of confidence and legal certainty, the efficiency of the tax system and proportionality, and, on the other hand, such interpretation is express and substantively in conformity with the principles inscribed in the Constitution.
In these circumstances, it is not seen that the interpretation made by this arbitral tribunal, on paragraph 1 of article 3 of the CIUC, contends with any norms or constitutional principles in force.
J - ACQUISITION OF PROPERTY OF THE VEHICLE AND THE VALUE OF REGISTRATION
67 - First of all, it should be added, given what will, expressly, be stated below on the value of registration, that the purchasers of vehicles become owners of those same vehicles through the transfer of the respective ownership, with or without registration.
68 - There are three articles of the Civil Code that are important to take into account, regarding the acquisition of the ownership of a motor vehicle. They are, first, article 874, which establishes the notion of purchase and sale contract, as "[...]the contract by which the ownership of a thing, or another right, is transferred, through a price"; article 879, in whose subparagraph a) is established, as essential effects of the purchase and sale contract, "the transfer of ownership of the thing or the holding of the right" and article 408, which is titled real effect contracts, and establishes in its paragraph 1, that "the constitution or transfer of real rights on a determined thing takes place by mere effect of the contract, save the exceptions provided for in law". (emphasis added)
We are, indeed, in the domain of contracts with real effect, which means that their conclusion causes the transfer of real rights, in the case, motor vehicles, determined by mere effect of the contract, as expressly follows from the norm previously mentioned.
69 - With regard to the said contracts with real effect, it should be noted the teachings of Pires de Lima and Antunes Varela, when, in annotations to article 408 of the CC, tell us that "These contracts called real (quoad effectum), for having as immediate effect the constitution, modification or extinction of a real right (and not merely the obligations aimed at that result) are distinguished from the so-called real contracts (quoad constitutionem), which require the delivery of the thing as an element of their formation (see articles 1129, 1142 and 1185) ".
We are, thus, facing contracts in which the ownership of the thing sold is transferred, without more, from the seller to the buyer, having, as cause, the contract itself.
70 - Also from the jurisprudence, namely from the Decision of the STJ no. 03B4369 of 19/02/2004, available at: www.dgsi.pt, it is understood that, in view of the provision in article 408, paragraph 1, of the Civil Code, "the constitution or transfer of real rights on a determined thing takes place by mere effect of the contract, save the exceptions provided for in law". This is the case of the contract of purchase and sale of a motor vehicle (articles 874 and 879 subparagraph a) of the Civil Code), which does not depend on any special formality, being valid even when concluded in verbal form - see Decision of the STJ of 3-3-98, in CJSTJ, 1998, year VI, Volume I, p. 117". (emphasis added)
71 - Given that the purchase and sale contract, in view of what has been stated, has a real nature, with the aforementioned consequences, it is necessary to consider, also, the legal value of the motor vehicle registration subject to that contract, insofar as the transaction of the said property is subject to public registration.
72 - It establishes, indeed, paragraph 1 of article 1 of Decree-Law no. 54/75, of 12 February, relating to the registration of motor vehicles, that "The registration of vehicles has essentially as its purpose to publicize the legal situation of motor vehicles and their trailers, with a view to the security of legal commerce". (emphasis added)
73 - Making clear, in view of the said norm, what is the purpose of the registration, there is, however, no clarity, within the scope of the said Decree-Law, about the legal value of that registration, it being necessary to consider article 29 of the aforementioned legal instrument, relating to the registration of motor vehicle ownership, when it provides that "The provisions relating to land registration shall be applicable, with the necessary adaptations, to the registration of automobiles, [...]". (emphasis added)
74 - In this framework, in order for us to attain the sought knowledge of the legal value of motor vehicle property registration, it is necessary to take into account what is established in the Land Registration Code, approved by Decree-Law no. 224/84, of 06 July, when it provides in its article 7 that "the final registration constitutes a presumption that the right exists and belongs to the registered holder in the precise terms in which the registration defines it". (emphasis added)
75 - The combination of the provisions in the articles previously mentioned, particularly that established in paragraph 1 of article 1 of Decree-Law no. 54/75, of 12 February and in article 7 of the Land Registration Code, makes it possible to consider, on the one hand, that the fundamental function of registration is to publicize the legal situation of vehicles, allowing, on the other hand, to presume that the right exists and that such right belongs to the holder in whose favor it is registered, in the precise terms in which it is defined in the registration.
76 - Thus, the final registration constitutes nothing more than the presumption that the right exists and belongs to the registered holder, in the exact terms of the registration, but a rebuttable presumption, admitting, therefore, counterproof, as follows from the law and jurisprudence has been pointing out, and in this regard, reference may be made to, among others, the Decisions of the STJ nos. 03B4369 and 07B4528, respectively of 19/02/2004 and 29/01/2008, available at: www.dgsi.pt.
77 - The function legally reserved for registration is, thus, on the one hand, to publicize the legal situation of goods, in the case, vehicles and, on the other hand, to allow us to presume that the right on those vehicles exists and that the same belongs to the holder, as such inscribed in the registration, which means that the registration does not have a constitutive nature of the property right, but only a declarative one, hence the registration does not constitute a condition of validity of the transfer of the vehicle from the seller to the buyer.
78 - Thus, if the purchasers of the vehicles, as their "new" owners, do not promote, from the outset, the adequate registration of their right, it is presumed, for purposes of article 7 of the Land Registration Code and paragraph 1 of article 3 of the CIUC, that the vehicles continue to be the property of the person who remains in the register as their owner, such person being the subject liable for the tax, being certain, however, that such presumptions are rebuttable, whether by force of the provisions of paragraph 2 of article 350 of the CC, or in light of the provision in article 73 of the LGT. Hence, from the moment when the presumptions in question are set aside, by means of proof of the respective transfer, the TA cannot persist in considering the vehicle transferor as the subject liable for SCT, who continues to appear in the register as its owner, but rather the ex-lessees, as purchasers of the vehicles.
L - TAX SUBJECT FOR SCT DURING THE VALIDITY OF FINANCIAL LEASING CONTRACTS OR VEHICLE RENTAL CONTRACTS WITHOUT DRIVER WITH PROMISE OF SALE
79 - It is first necessary to note that the Legal Framework for Financial Leasing Contracts, approved by Decree-Law no. 149/95, of 24 June, with the last amendment introduced by Decree-Law no. 30/2008, of 25 January, provides in its article 9 that the obligations of the lessor include, namely, those of granting the enjoyment of the property for the purposes for which it is intended and that of selling the property to the lessee, if the latter so wishes, at the termination of the contract, as respectively established in subparagraphs b) and c) of paragraph 1 of the said article.
80 - On the other hand, in view of what is established in article 10 of the said legal instrument, namely in subparagraphs a) of its paragraphs 1 and 2, we learn that the obligations of the lessee include paying the rents and using and enjoying the leased property, which means that, during the validity of a financial leasing contract having a vehicle as its object, only the lessee has its exclusive enjoyment.
81 - The obligations of the lessee, in light of the said norms, clearly point in the direction that it is such a contractual party that has the exclusive enjoyment of the vehicle subject to the financial leasing contract, being the one who uses it as if he were the true owner of such property.
82 - The lessor is the formal owner of the vehicle, having, consequently, no potential pollution responsibility, which means that the damage that affects the community, resulting from the use of motor vehicles should be assumed by its real users, as costs that only they should bear. The financial lessee, being equated to an owner in the sense of being liable for the tax (article 3, paragraphs 1 and 2 of the CIUC), has the full use and enjoyment of the vehicle, as legally established, so he is its true user and effective generator of environmental damage, and should therefore be liable for the corresponding tax, and this is the understanding that should be derived from paragraph 2 of article 3 of the CIUC, which, in our view, makes perfect sense. It is a matter of concretizing and giving useful meaning to the principle of equivalence, which informs and forms the current CIUC, a principle which concretizes the idea, underlying the polluter-pays principle, that he who pollutes must, for that reason, pay.
83 - On the other hand, the similarity and recognized affinities of the vehicle rental contract without driver with promise of sale, with the financial leasing contract, should be emphasized, especially when, as occurs in the present case, the said rental contract is also integrated by a purchase and sale promise contract of the vehicle, providing for the final transfer of the ownership of the said property to the lessee, that is, when the corresponding contract expires.
84 - In either of the said cases, lessees are considered as subjects liable for the tax. Indeed, the financial lessee is expressly provided for in paragraph 2 of article 3 of the CIUC, as being the subject liable for SCT, and the lessee, within the framework of a vehicle rental contract without driver with promise of sale, is equally provided as the subject liable for the said tax, insofar as such contract is subsumable to the third hypothesis of the cited rule, when therein reference is made to "[...] other holders of purchase option rights by virtue of the leasing contract".
85 - In view of what has just been stated, it is our understanding that, if a financial leasing contract or a vehicle rental contract without driver with promise of sale is in effect, on the date the tax becomes due, having a motor vehicle as its object, the subjects liable for such tax are, in light of the provision in paragraph 2 of article 3 of the CIUC, the lessees, and not the lessor, it being important to note in this regard the provision in article 19 of the CIUC, when, precisely, for purposes of article 3 of the said Code, that is, for purposes of the subjective scope, it imposes on the entities that proceed to financial leasing, operational leasing or long-term rental of vehicles the obligation to provide to the TA the data relating to the tax identification of the users of the leased vehicles, which, namely, reveals that, for purposes of the said scope, it was intended to ascertain who are, in fact, the real users of the leased vehicles, so that they, and not others, should bear the single circulation tax, which, moreover, is shown to be in total harmony with the principle of equivalence, as a structuring principle of the CIUC.
86 - Having reached this point, it is necessary to state that, with respect to vehicles with the license plates ...-... -...; ...-... -...; ...-... -...; ...-... -...; ...-... -...; ...-... -...; ...-... -...; ...-... -...; ...-... -...; ...-... -...; ...-... -...; ...-... -...; ...-... -... and ...-... -..., subject to financial leasing contracts, the date the SCT became due occurred during the validity of those contracts, the payment thereof not being the responsibility of the Claimant, but rather of the respective lessees, as, as previously stated, subjects liable for the tax.
87 - As for vehicles with the license plates ...-... -...; ...-... -...; ...-... -...; ...-... -...; ...-... -...; ...-... -...; ...-... -...; ...-... ...; ...-... -...; ...-... -...; ...-... -... and ...-... -..., subject to vehicle rental contracts without driver with promise of sale, it is also verified that the date the SCT became due occurred during the validity of those same contracts, the payment thereof not being, equally, the responsibility of the Claimant, but rather of the respective lessees, as subjects liable for the tax.
88 - The contracts (copies) to which reference is made in the two preceding articles, and which are attached to the case file, appear to be suitable means and with sufficient force to provide proof of the status of lessees, for purposes of the provision in paragraph 2 of article 3 of the CIUC, that is, for purposes of their binding to the payment of the tax in question. There are no elements that would allow us to understand that the data inscribed in such contracts do not correspond to the contractual truth, and it is also certain that the law, in the case, paragraph 1 of article 75 of the LGT, attributes to such documents a presumption of truthfulness.
89 - The TA, when it understands that, in this case, the Claimant is the subject liable for SCT, without duly considering the provision in paragraph 2 of article 3 of the CIUC, nor taking into account the validity of the financial leasing contracts and vehicle rental contracts without driver with promise of sale, on the date the SCT became due, is proceeding to the illegal assessment of such tax, based on the erroneous interpretation and application of the said subjective scope rule of the Single Circulation Tax, which constitutes the practice of a tax act lacking legality due to error regarding the factual and legal premises, which leads to the annulment of the corresponding tax acts, for violation of law.
M - TAX SUBJECT FOR SCT WHEN VEHICLE SUBJECT TO FINANCIAL LEASING CONTRACTS OR VEHICLE RENTAL CONTRACTS WITHOUT DRIVER WITH PROMISE OF SALE IS ALIENATED
90 - The transfers of vehicles at issue in the case file had as purchasers the persons who, in the corresponding financial leasing contracts, or vehicle rental contracts without driver with promise of sale, appeared as lessees or as promissory buyers, and the said sales occurred before the dates relating to the date the SCT became due.
91 - The alienation of the vehicles referenced in the case file occurred, in some cases, during the validity of the aforementioned contracts and, in others, after the termination of those contracts, and in any of the situations, the dates of the aforementioned sales relate to moments prior to those of the due date of the single circulation tax, it thus not being the responsibility of the Claimant to pay such tax, given that, in view of what was previously stated, it was not, in these circumstances, the subject liable for the tax.
N - MEANS OF PROOF PRESENTED
ON FINANCIAL LEASING CONTRACTS AND VEHICLE RENTAL CONTRACTS WITHOUT DRIVER WITH PROMISE OF SALE
92 - With regard to financial leasing contracts and vehicle rental contracts without driver with promise of sale, which were in effect on the date the tax became due, numbering fourteen and twelve respectively, it should be understood that such contracts are suitable means and with sufficient force to provide proof of the status of lessees, for purposes of the provision in paragraph 2 of article 3 of the CIUC, that is, for purposes of their binding to the payment of the tax in question. There are no elements that would allow us to understand that the data inscribed in such contracts do not correspond to the contractual truth, and it is also certain that the law, in the case, paragraph 1 of article 75 of the LGT, attributes to such documents a presumption of truthfulness.
ON THE INVOICES
93 - As written form is not legally required for the transfer of ownership of motor vehicles, proof of such transfer may be made by any means, namely by testimonial or documentary means, in the latter being included, namely, the invoices relating to the sales of the vehicles.
94 - With regard to invoices, as probative documents of the sale of motor vehicles, it cannot be left unnoticed what is established in paragraph 2, article 2 of Decree-Law no. 177/2014, of 15 December, when it considers invoices as documents that indicate the actual purchase and sale of vehicles.
95 - On the other hand, it is also important to recall the provisions in subparagraph b) of paragraph 1 of article 29; in paragraph 5 of article 36 and in paragraphs 1 and 2 of article 40, all of the VAT Code, as amended by Decree-Law no. 197/2012, of 24 August, from which it appears that only the invoice, the receipt-invoice and the simplified invoice embody recognized documents for purposes of the transfer of goods or the provision of services.
96 - The Claimant, as a means of proof that it proceeded to the sale of the vehicles, as identified in the present proceedings, on a date prior to that of the due date of the tax, attached, in addition to the already mentioned contracts (copies), both invoices and documents relating to their payment, as well as receipt-invoices relating to the alleged sales which, in some cases, exhibit the reference to their processing by computer and, in other cases, the indication that they were processed by a Certified Program, identified by no. 436/AT.
97 - It should, moreover, be emphasized that nothing allows us to consider that any of such documents, namely the invoices presented, as support of the sales of the vehicles at issue in the case file, do not have correspondence with the sales that, allegedly, were completed.
98 - It will be said, even, that, in the case of the case file, given the economic activity of the Claimant, as it has already been referenced, it will not be strange, quite the contrary, that following the aforementioned contracts the transfer of ownership of the vehicles identified in the case file be concretized, showing the said invoices to be wholly adapted to the aforementioned business reality, being absolutely plausible the sale of the vehicles that the invoices presented aim to prove, not identifying, in any way, elements that embody any simulated contract, rather allowing to conclude we are before invoices that reproduce the real and true sale of the vehicles to the persons indicated therein.
99 - The combination of the various documents presented allows the tribunal the understanding, with a high degree of probability and plausibility, that the alienation of the vehicles at issue to the corresponding lessees was concretized. In this regard, it is worth noting what Jorge Lopes de Sousa writes, in Código de Procedimento e de Processo Tributário, Anotado e Comentado, Volume II, 6th Edition, Áreas Editora, SA, Lisbon, 2011, p. 256, in annotations to article 115 of the said Code, when citing ALBERTO DOS REIS, refers that sufficient proof leads to a judgment of certainty; not of logical, absolute, material certainty, in most cases, but of certainty sufficient for the practical needs of life, of certainty called historical-empirical. That is, what is formed on the basis of sufficient proof is, normally, a judgment of probability, but of probability raised to such a high degree that it is as much as is needed for the reasonable requirements of social security.
100 - In summary, the proof of the sale of the vehicles in question, from the attachment to the case file of the documents that are left mentioned, appears reasonable and proportional, especially, taking into account the corporate purpose of the Claimant, centered on the activity of financing operations for the acquisition of automobiles, and on the conclusion of the corresponding financial leasing contracts and vehicle rental contracts without driver with promise of sale, it thus not being strange, quite the contrary, that, as has already been noted, following the aforementioned contracts, the transfer of ownership of the vehicles identified in the case file to the corresponding lessees be concretized.
101 - The invoices in question (copies), relating to the sales of the vehicles, insofar as they enjoy the presumption of truthfulness conferred on them in paragraph 1 of article 75 of the LGT, it being incumbent on the TA, in view of the provision in article 75, paragraph 2 of the LGT, within the framework of the founded and objective reasons which it might have, to demonstrate that the information inscribed therein does not correspond to reality, allow for the conclusion of the actual transfer of the title of the vehicles, constituting sufficient means of proof to rebut the presumptions at issue in the case file, that is, the presumption established in article 7 of the Land Registration Code and that established in paragraph 1 of article 3 of the CIUC, which means that, at the date when the tax was due, the Claimant was not the owner of the vehicles in question, not being the subject liable for the tax in question.
102 - It is, finally and finally, necessary to recall that, in situations identical to those of the present case file, the jurisprudence of CAAD has come to be inclined towards the Request for Arbitral Decision underlying the present Case, identifying itself with that direction, namely, the Arbitration Decision issued on 20.05.2015, in Case no. 688/2014-T; the Arbitration Decision issued in Case no. 374/2015-T; the Arbitration Award issued on 21.11.2014, in Case no. 250/2014-T; the Arbitration Award issued on 26.10.2015, in Case no. 7/2015-T and the Arbitration Award issued in Case no. 49/2015-T.
103 - In these circumstances, the vehicles referenced in the case file as having been alienated, within the framework of their respective financial leasing contracts and vehicle rental contracts without driver with promise of sale, are considered as sold, in the terms already stated, on dates prior to the dates of their respective SCT assessments, and thus, it should be considered that the Claimant, in relation to such vehicles, was not, on the date to which the assessments in question relate, the subject liable for the tax in question, and thus it cannot but be considered that the legal presumption established in paragraph 1 of article 3 of the CIUC has been rebutted.
104 - The TA, when it understands that the subjects liable for SCT are, in finality, the persons in whose names the motor vehicles are registered, without considering that article 3, paragraph 1 of the CIUC establishes a presumption, nor taking into account the probative elements that were presented to it, as results, namely, from the tax administration proceedings, is proceeding to the illegal assessment of SCT, in relation to the vehicles aforementioned, based on the erroneous interpretation and application of the subjective scope rules of the Single Circulation Tax, contained in the said article 3 of the CIUC, which constitutes the practice of tax acts lacking legality due to error regarding the factual and legal premises, determining the annulment of the corresponding tax acts, for violation of law.
O - REFUND OF THE AMOUNT PAID AND INDEMNIFICATION INTEREST
105 - In accordance with the provision in subparagraph b) of paragraph 1 of article 24 of the LFTA, and in compliance with what is established therein, the arbitral decision on the merits of the claim with respect to which there is no recourse or challenge binds the tax administration from the end of the period provided for recourse or challenge, and the latter - in the exact terms of the merits of the arbitral decision in favor of the subject liable and until the end of the period provided for the voluntary execution of the sentences of tax courts - "Shall restore the situation that would have existed if the tax act subject to the arbitral decision had not been performed, adopting the acts and operations necessary for such purpose." (emphasis added)
106 - These are legal commands that are in total harmony with the provision in article 100 of the LGT, applicable to the case by virtue of the provision in subparagraph a) of paragraph 1 of article 29 of the LFTA, in which it is established that "The tax administration is obliged, in the event of total or partial success of complaints or administrative appeals, or judicial proceedings in favor of the subject liable, to the immediate and full reconstitution of the situation that would have existed had the illegality not been committed, comprising the payment of indemnification interest, in the terms and conditions provided for in law." (emphasis added)
107 - The case contained in the present case file raises the manifest application of the aforementioned rules, given that following the illegality of the assessment acts, referenced in this proceeding, there must, by force of those rules, be a refund of the amounts paid, whether for tax or for compensatory interest, as a way to achieve the reconstitution of the situation that would have existed had the illegality not been committed, amounts which in the case of the case file total € 8,580.10, corresponding to the assessments relating to the vehicles aforementioned.
108 - As to the indemnification interest, it appears manifest that, in view of what is established in article 61 of the Tax Procedure Code and the requirements being met for the right to indemnification interest, that is, there being verified the existence of error attributable to the services which results in the payment of the tax debt in an amount higher than that legally due, as provided for in paragraph 1 of article 43 of the LGT, the Claimant is entitled to indemnification interest at the legal rate, calculated on the amount of € 8,580.10.
CONCLUSION
109 - In the circumstantial framework that has been made reference to, the TA, in practicing the assessment acts at issue in the present proceeding, based on the idea that article 3, paragraph 1 of the CIUC does not establish a rebuttable presumption, and that the Claimant is, in the cases provided for in paragraph 2 of the said article, the subject liable for the tax, makes an erroneous interpretation and application of this rule, committing an error regarding the legal premises, which constitutes violation of law.
110 - On the other hand, because the TA, at the date of the occurrence of the tax events, considered the Claimant the owner of the vehicles referenced in the present proceeding, considering it, as such, the subject liable for the tax, when such ownership, in relation to the vehicles in question, was no longer inscribed in its legal sphere, basing itself, thus, on factual matter divergent from the actual reality, commits an error regarding the factual premises, and therefore violation of law.
III - DECISION
111 - Wherefore, having regard to all the above, this Arbitral Tribunal decides:
-
To annul the decision issued in the framework of the administrative complaint referenced in the case file, with the number ... - 2015/...;
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To rule favorably, as proven, on the grounds of violation of law, the request for arbitral decision as far as the annulment of the assessment acts for SCT and compensatory interest to which the Claimant's request refers, relating to the years 2011 to 2015, which total € 8,580.10, as identified in the case file, concerning the vehicles identified in the proceedings;
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To annul, consequently, both the assessment acts for SCT, and the assessment acts for the compensatory interest associated therewith, relating to the years 2011 to 2015, concerning the vehicles, as identified in the case file;
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To order the TA to refund the sum of € 8,580.10, relating to SCT and compensatory interest which were paid, relating to the years 2011 to 2015, as well as to the payment of indemnification interest at the legal rate, calculated from the date of payment of the aforementioned sum, until its full refund;
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To order the TA to pay the costs of the present proceedings.
VALUE OF THE PROCEEDINGS
In compliance with the provision in articles 306, paragraph 2 of the CPC (formerly 315, paragraph 2) and 97-A, paragraph 1 of the Tax Procedure Code and article 3, paragraph 2 of the Regulation of Costs in Tax Arbitration Proceedings, the value of the proceedings is fixed at € 8,580.10.
COSTS
In accordance with the provision in article 12, paragraph 2, at the end, in article 22, paragraph 4, both of the LFTA, and in article 4 of the Regulation of Costs in Tax Arbitration Proceedings and in Table I, which is attached thereto, the amount of total costs is fixed at € 918.00.
Notify.
Lisbon, 03 February 2017
The Arbitrator
António Correia Valente
(The text of the present decision was prepared by computer, in accordance with article 131, paragraph 5 of the Civil Procedure Code (formerly 138, paragraph 5), applicable by virtue of article 29, paragraph 1, subparagraph e) of Decree-Law no. 10/2011, of 20 January (LFTA), its drafting being governed by orthography prior to the Orthographic Agreement of 1990.)
[1] See the study on the matter, prepared by Professor Carlos Pestana Barros, in Ciência e Técnica Fiscal, 2005, no. 416, pp. 105-126
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