IUC Subjective Incidence and Legal Presumptions: Annulment of Tax on Exported Vehicles (CAAD 620/2015-T)

ARBITRAL DECISION

1 REPORT

1.1

A..., S.A.; the NIP: ... (duly identified in the respective case files), Claimant in the tax procedure, above and outside referenced, hereinafter, denominated "Requesting Party", came, invoking the provision in paragraph a) of no. 1 of article 2, articles 3 and 10 of Decree-Law no. 10/2011, of January 20 (hereinafter RJAT) and, of no. 1 of article 102 and of paragraph a) of article 99, both, of the Tax Procedure and Process Code (CPPT) and in numbers 1 and 2 paragraph d) of article 95 of the General Tax Law (LGT), to request the constitution of the Singular Arbitral Tribunal, with a view to:

• The annulment of the acts of assessment relating to the Single Motor Vehicle Tax (hereinafter designated as IUC), referring to the year 2010 concerning vehicles listed in the Gracious Claim process, attached to the Request for Arbitral Opinion, cf., copies of documents nos. 1 to 21, the contents of which are reproduced in full for all legal purposes;

• The reimbursement of the total value of € 52,858.51, plus the respective compensatory interest provided for in no. 1 of article 43 of the LGT and in article 61 of the CPPT.

1.2

Pursuant to the provision in paragraph a) of no. 2 of article 6 and of paragraph b) of no. 1 of article 11 of Decree-Law no. 10/2011, of January 20, in the wording introduced by article 228 of Law no. 66-B/2012, of December 31, the Deontological Council appointed Maria de Fátima Alves as sole arbitrator, who communicated her acceptance of the assignment within the applicable time period:

• On November 23, 2015, the parties were duly notified of this appointment, and did not manifest the will to refuse the appointment of the arbitrator, in accordance with the combined terms of article 11 no. 1 paragraphs a) and b) of the RJAT and of articles 6 and 7 of the Deontological Code,

• Whereby, the arbitral tribunal was constituted on December 15, 2015, in accordance with what is provided in paragraph c) of no. 1 of article 11 of Decree-Law no. 10/2011, of January 20, in the wording introduced by article 228 of Law 66-B/2012, of December 31;

• Upon the Response of the Respondent (TA), on February 19, 2016, the same requested the waiver of the meeting, under article 18 of the RJAT;

• Consequently, the meeting was waived under article 18 of the RJAT and it was determined that the Arbitral Decision be delivered on April 12, 2016.

1.3

The Requesting Party has as its business purpose the trade in automobiles - Imports/exports, whereby, in the substantiation of its request for arbitral opinion, it affirms, in summary, the following:

• The Requesting Party "within the scope of its activity, imports vehicles which, for commercial and contractual reasons, established with manufacturers, sometimes registers in Portugal, but which are subsequently sold and shipped to other Member States of the European Union or, in certain cases, exported to third States";

• As well as, "imports, also, vehicles which, sometimes, are registered and subsequently sold to Rent-a-Car companies, to its concessionaire companies and to end customers";

• Now, "with respect to the year 2010, the Requesting Party imported, in the exercise of its commercial activity, 40 vehicles that were registered and subsequently invoiced before the end of the legally granted time period for registration and shipped/exported to other Member States of the European Union/third States" (cf., docs. 11 and 12, attached to the PI);

• verifying, thus, that the vehicles did not enter into road circulation in the interest, on account of, or by virtue of the detention, possession or ownership of the Requesting Party;

• All the more so, since, pursuant to no. 1 of article 42 of Decree-Law no. 54/75, of February 12, "the mandatory registration must be requested within 60 days from the date of the fact" and,;

• In accordance with no. 2 of the same article 42, "In the case of initial registration of ownership, the time period referred to in the previous number is counted from the date of the assignment of the registration";

• Disposing, the taxpayer, of the time period of 60 days to register the vehicles in question, the Requesting Party, sold and invoiced the 40 vehicles, before the end of the time period for registration, as described in the probative documents, nos. 11 and 12;

• Because, before, the tax proved to be exigible, the Requesting Party exported them to other Member States of the European Union and third States;

• Despite, the fact that they were registered in Portugal, they were the same exported and invoiced before the moment of the tax exigibility, which means, before the end of the legally granted time period for registration;

• There is to consider, also, that the Requesting Party exported to another Member State of the European Union and third State (cf., doc. 14 and 15, attached to the PI) 4 vehicles, which it had imported, and which were transferred and invoiced within the time period for the assessment and payment of the Single Motor Vehicle Tax;

• In any case, the Requesting Party that transferred and invoiced the cited vehicles within the time period of 30 days legally granted for the assessment and payment of the Tax (CIUC);

• There is to consider, further, that the Requesting Party sold, 131 vehicles to Rent-a-Car companies, within the time period of 60 days, legally, assigned for the registration, after the assignments of the respective registrations, in accordance with doc. 16, contained in the PI;

• Sold, also, to Rent-a-Car companies, until the end of the 90-day time period, which in accordance, with what is provided in article 17 of the CIUC: in the year of the vehicle's registration, the tax is assessed by the tax subject within 30 days after the end of the 60-day time period for its registration, a time period that begins with the assignment of the registration;

• Sold and transferred, in the same year of 2010, 190 vehicles to its concessionaire companies and three vehicles to end customers (cf., docs 18 and 19, attached to the PI), within the time period of 60 days from the assignment of the registration, which is to say, within the time period, legally, provided for the registration of the respective vehicles;

• All of the Requesting Party's exposition, with respect to, the exigibility of the Single Motor Vehicle Tax, is based on what is provided in no. 2 of article 42 RRA, combined with what is provided in no. 1 of article 17 of the CIUC.

• It follows from the foregoing that the vehicles, to which the single motor vehicle tax assessed refers, were not, at the date of the tax events, property of the Requesting Party, it not being, the same, tax subject of the tax, fact that deprives it of any subjective responsibility for its payment;

• The Requesting Party bases its position on the fact that the taxed motor vehicles have already been sold to third parties, cf., as described by the sales invoices, attached to the Gracious Claim, contained in the PA, which are given as fully reproduced for all legal purposes;

• Given the facts presented, the property of the referred vehicles cannot be attributed to the Requesting Party, and it cannot be the tax subject of the tax, in face of the letter and spirit of article 3 of the Single Motor Vehicle Tax Code (hereinafter designated as CIUC);

• It is a fact that no. 1 of article 3 of the CIUC, considers the ownership of the motor vehicle, the person in whose name the same is registered, however, in the case "sub judice", the completion and transmission of the Customs Declaration of Vehicle (DAV), by part of the Requesting Party, in the quality of Registered Operator and the presentation of the request of the registration certificate does not proceed nor is it confused with the tax-generating event of the Single Motor Vehicle Tax;

• Being that, the registrations of the vehicles in the competent Motor Vehicle Registry, is not a condition of transmission of ownership, since such registration aims, solely, to give publicity to the legal situation of the goods, as results, namely, from what is provided in article no. 1 of Decree-Law no. 54/75, of February 12;

• Whereby tax taxation relating to the CIUC cannot only fall upon whoever appears in the registry as owner of the vehicles, there must be considered their actual owners.

1.4

The Respondent, the Tax and Customs Authority (hereinafter designated as TA), proceeded to join the Tax Administrative Process and presented a Response, from which it is gathered that the tax acts, in dispute, do not suffer from any defect of violation of Law, pronouncing itself for the inadmissibility of the respondent and for the maintenance of the controversial assessment acts, defending, summarily the following:

• The tax subjects of the single motor vehicle tax are the persons who appear in the registry as owners of the vehicles, as provided in no. 1 of article 3 of the CIUC, which in the case, sub judice, is verified with respect to the Requesting Party;

• Verifying, for such, that the registration of the vehicles is in the name of a certain person so that the same corporizes the position of tax subject of the IUC tax obligation;

• That notoriously is wrong the interpretation that the Requesting Party makes of what is provided in article 3 of the CIUC, to the extent that it incurs in a "biased interpretation of the letter of the law" and in the "adoption" of an interpretation that does not attend to the systematic element, violating the unity of the regime established in all of the CIUC and, more broadly, in all of the legal-tax system", following, further, the Requesting Party, an "interpretation that ignores the ratio of the regime established in the article, in question and, as well as in all of the CIUC".

2 QUESTIONS TO BE DECIDED

2.1

Given the exposition in the previous numbers, with respect to the written exposition, of the parties and, to the arguments presented, the main questions to be decided are the following:

• The challenge made by the Requesting Party relating to the material challenge of the assessment acts, with respect to the year 2010, referring to the IUC on the vehicles above referenced in the PI;

• The wrong interpretation and application of the rules of subjective incidence of the single motor vehicle tax assessed and collected, which constitutes, the central question to be decided in the present process;

• The legal value of the registration of motor vehicles.

3 FACTUAL GROUNDS

3.1

On matters of fact, relevant to the decision to be rendered, the present Tribunal deems as established, given the elements existing in the case files, the following facts:

• The Requesting Party presented probative elements of the motor vehicles in question, corresponding to the moment before the taxation period – cf. copies of sales invoices of the vehicles to their respective owners, and copies of accounting extracts, attached in the gracious claim (contained in the PA, docs. nos. 1 to 20) which are given as fully reproduced for all legal purposes.

3.1.1 SUBSTANTIATION OF PROVEN FACTS

• The facts given as proven are based on the sales invoices to third parties, attached in the gracious claim (contained in the PA, and attached to the PI, Dºs nos. 1 to 20), which are given as fully reproduced for all legal purposes.

3.1.2 UNPROVEN FACTS

• There are no facts given as unproven, given that all facts considered as relevant for the appreciation of the request were proven.

4 LEGAL GROUNDS

3.2

The Tribunal is materially competent and is regularly constituted, pursuant to articles 2 no. 1, paragraph a), 5 no. 2, paragraph a), 6 no. 1, 10 no. 1, paragraph a) and no. 2 of the RJAT:

• The parties enjoy personality and judicial capacity and are legitimate, ex vi, articles 4 and 10, no. 2, of the RJAT and article no. 1 of Ordinance no. 112-A/2011, of March 22;

• The process does not suffer from nullities;

• There being no preliminary question on which the Tribunal should pronounce itself.

• The request, object of the present process is the declaration of annulment of the IUC assessment acts relating to the motor vehicles better identified in the case files.

3.2.1

Condemnation of the TA to the reimbursement of the amount of the tax relating to such assessments in the amount of € 52,858.51;

3.2.2

Condemnation of the TA to the payment of compensatory interest on the same amount.

3.3

According to the understanding of the TA, it is enough that in the registry, the vehicle appears as property of a certain person, for that person to be the tax subject of the tax obligation.

3.4

The matter of fact is fixed, as stated in no. 3.1 above, it being important, now, to determine the Law applicable to the underlying facts, in accordance with the questions to be decided, identified in no. 2.1 above, being certain that the central question, at issue, in the present case files, with respect to which there are absolutely opposite understandings between the Requesting Party and the TA, consists in knowing whether no. 1 of article 3 of the CIUC relating to the subjective incidence of the single motor vehicle tax establishes or not a rebuttable presumption.

3.5

Everything analyzed and, taking into account, on one hand, the positions of the parties in confrontation, mentioned in points 1.3 and 1.4 above and, considering, on the other hand, that the central question to be decided is whether no. 1 of article 3 of the CIUC establishes or not a legal presumption of tax incidence, it is necessary, in this context, to appreciate and render a decision.

4 QUESTION OF THE WRONG INTERPRETATION AND APPLICATION OF THE SUBJECTIVE INCIDENCE RULE OF THE IUC

4.1

Considering it to be uncontroversial in the doctrine, that in the interpretation of tax laws the general principles of interpretation apply fully, which will be, only and naturally, limited by the exceptions and particularities dictated by the very Law, object of interpretation. This is an understanding that has come to receive acceptance in the General Tax Laws of other countries and which also came to have a seat in article 11 of our General Tax Law, which moreover, has been frequently underlined by jurisprudence.

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

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

• No. 1 of article 3 of the CIUC provides that "The tax subjects of the tax are the owners of the vehicles, considering as such the natural or legal persons, of public or private law, in whose name the same are registered";

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

• As teaches Jorge Lopes de Sousa, in Tax Procedure and Process Code, Annotated and Commented, volume I, 6th Edition, Área Editora, SA, Lisbon 2011, p. 589, that in matters of tax incidence, presumptions can be revealed by the expression "it is presumed" or by similar expression, therein mentioning several examples of these presumptions, referring to the constant in article 40, no. 1 of the CIRS, in which the expression "it is presumed" is used and the constant in article 46 no. 2, of the same Code, in which the expression "is considered" is used, as an expression with an effect similar to that one and embodying, equally, a presumption;

• In the legal formulation set forth in no. 1 of article 3 of the CIUC, in which a presumption was established, revealed by the expression "considering", of meaning similar and of equivalent value to the expression "presuming", in use since the creation of the tax in question;

• The use of the expression "considering" aimed at nothing more than the establishment of a more marked and clear approach between the tax subject of the IUC and the actual owner of the vehicle, which is in harmony with the reinforcement conferred to the ownership of the vehicle, which came to constitute the tax-generating event, pursuant to article 6 of the CIUC;

• The relevance and interest of the presumption, in question, which historically was revealed by means of the expression "presuming" and which now, serves itself of the expression "considering", resides in the truth and justice that, by that means, is conferred to fiscal relations and, which embody fundamental fiscal values, permitting the taxation of the real and actual owner and not of the one who, by circumstances of diverse nature, sometimes passes, nothing more, than an apparent and false owner. If the case, thus not being considered, not admitting and relevance of presenting probative elements destined to the demonstration that the actual owner is, in fact, a person different from the one appearing in the registry and, which initially, and in principle, was supposed to be the true owner, those values would be objectively set aside.

4.2

There is to consider, also, the principle of equivalence, inscribed in article 1 of the CIUC, which has underlying the polluter-pays principle and, concretizes the idea inscribed therein that whoever pollutes must, for this, pay. The referred principle has constitutional seat, to the extent that it represents a corollary of what is provided in paragraph h) of no. 2 of article 66 of the constitution, having, also, seat in community law, whether at the level of original law, article 130-R, of the Treaty of Maastricht (Treaty of the European Union, of February 7, 1992), where the alluded principle came to be included as support of the Community Policy, in the environmental domain and which aims to hold responsible whoever contributes with the damages that ensue for the community, stemming from the use of motor vehicles, to be assumed by their owner-users, as costs that only they must bear.

4.3

Given the facts above described, it is important to emphasize that the already referred elements of interpretation, whether those related to literal interpretation, supported in the words legally used, whether those respecting the logical elements of interpretation, of a historical nature or of a rational order, all point, in the sense that the expression "considering" has a sense equivalent to the expression "presuming", should, thus be understood that what is provided in no. 1 of article 3 of the CIUC establishes a legal presumption which, in view of article 73 of the LGT, where it is established that "Presumptions established in tax incidence rules always admit contrary proof", will necessarily be rebuttable, which means that the tax subjects are, in principle, the persons in whose name such vehicles are registered. They shall, thus, be those persons, identified in these conditions to whom the TA must, necessarily, be directed;

• But it shall, in principle, be so, given that within the framework of prior hearing, of mandatory character, given the provision in paragraph a) of no. 1 of article 60 of the LGT, the tax relationship may be reconfigured, validating the initially identified tax subject or redirecting the procedure in the direction of the one who will be, in fact, the true and actual, tax subject of the tax in question.

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

• Prior hearing which, naturally, must be realized in a moment immediately prior to the assessment procedure, corresponds to the seat and proper time to, with certainty and security identify the tax subject of the IUC.

5 ON THE LEGAL VALUE OF REGISTRATION

5.1

With respect to the legal value of the registration, it is important to note what is established in no. 1 of article 1 of Decree-Law no. 54/75, of February 12 (several times amended, the last being via Law no. 39/2008, of August 11), when it provides that "the registration of vehicles has essentially the purpose of giving publicity to the legal situation of motor vehicles and their trailers, with a view to the security of legal commerce":

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

• The definitive registration is constituted of nothing more than a rebuttable presumption, admitting, therefore, contrary proof, as follows from the law and jurisprudence has been signaling, being able to see, among others the Judgments of the STJ no. 03B4369 of February 19, 2004 and no. 07B4528, of January 29, 2008, available at: www.dgsi.pt;

• Therefore, the legally reserved function of the registration is on one hand that of publicizing the legal situation of the goods, in the case at hand, of the vehicles and, on the other hand, it allows us to presume that there exists the right over these vehicles and that the same belongs to the holder, as such inscribed in the registration, it does not have a constitutive nature of the right of ownership, but only declarative, hence the registration does not constitute a condition of validity of the transmission of the vehicle from the seller to the buyer;

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

• In this context it is fitting to recall that, in view of what is provided in no. 1 of article 408 of the CC, the transfer of real rights over things, in the case sub judice, motor vehicles, is determined by mere effect of the contract, being that pursuant to what is provided in paragraph a) of article 879 of the CC, among the essential effects of the contract of purchase and sale, the transfer of the thing stands out;

• In view of the foregoing, it becomes clear that the legislative thought points in the direction that what is provided in no. 1 of article 3 of the CIUC, establishes a presumption "juris tantum, consequently rebuttable, thus permitting, that the person, who, in the registry, is inscribed as owner of the vehicle, may present elements of proof destined to demonstrate that such ownership is inserted in the legal sphere of another person, to whom the ownership was transferred.

• Now, in casu, it must be clarified that, pursuant to paragraph a) of no. 1 of article 18 of the CIUC, when one is faced with the absence of registration of vehicle ownership effected within the legal time period, the tax due in the year of the vehicle's registration is assessed and exacted: "a) To the tax subject of the tax on vehicles based on the DAV, or based on the complementary declaration of vehicles on which the assessment of that tax is based, even though it may not be due;

• It results from this legal provision that at the end of the 60-day period (no. of art. 17 of the CIUC, if the registration is not effected, which prevents the knowledge of the corresponding owner and, consequently, the tax subject of the Single Motor Vehicle Tax is that the Law ficulates, that the tax subject of the tax on vehicles (ISV), becomes responsible for the payment of the IUC.

• In any case, such legal provision, does not apply to the Requesting Party, since the same, does not have as its purpose the use of vehicles, but rather their transmission to third parties:

• All the more so, since the motor vehicles, in question, were transferred and invoiced before the end of the legally granted time period for registration, as they were exported to Member States of the European Union and, third States;

• Whereby it results from the foregoing that the final destination of the referred vehicles, was not Portugal, which removes the Requesting Party from the responsibility of the IUC, corresponding to the year 2010.

6 THE PRESUMPTION OF ARTICLE 3 OF THE CIUC AND THE DATE ON WHICH THE IUC IS EXIGIBLE

6.1 THE PRESUMPTION OF ARTICLE 3 OF THE CIUC

• The TA considers that the presumption that exists in no. 1 of article 3 of the CIUC is a result of an interpretation contra legem, resulting from a biased reading of the letter of the law and, therefore, violating the unity of the legal system, however, and saving due respect, the understanding of jurisprudence goes in the direction that one must consider the existence of a legally rebuttable presumption, whereby consequently it serves the values and interests questioned, whether at the level of material fiscal justice, whether at the level of the environmental purposes aimed at by the IUC;

• With respect to the unity of the legal system it is to be noted everything that was above cited, namely, regarding the ratio of article 1 of the CIUC; regarding the rules and principles of the LGT; regarding the pertinent rules and applicable to the registration of motor vehicles, regarding the interpretation that better serves and achieves the mentioned unity and ensures the connection of these same rules, considering the legal presumption that is provided in article 3 of the CIUC.

6.2 DATE ON WHICH THE IUC IS EXIGIBLE

• The IUC is a tax of periodic taxation, whose periodicity corresponds to the year that begins on the act of registration or in each of its anniversaries, pursuant to what is provided in nos. 1 and 2 of article 4 of the CIUC;

• It is exigible pursuant to no. 3 of article 6 of the referred Code;

• Being important to note that, with respect to the assessment of the IUC taxed to the Requesting Party on the vehicles above referred to, in the year 2010, are not to be considered, because at the moment of the tax events the vehicles no longer belonged to it, for the referred vehicles were sold to third parties, before the legally provided time periods for their respective registrations cf. the probative documents, already above cited and, attached to the gracious claim (contained in the PA, dcºs nos. 1 to 20) which are given as fully reproduced for all legal purposes.

6.2.1

With relevance regarding the burden of proof, article 342 no. 1 of the CC stipulates "to the one who invokes a right it falls to make the proof of the constitutive facts of the alleged right";

6.2.2

Also article 346 of the CC (contrary proof) determines, that "to the proof that is produced by the party on whom the burden of proof falls, the opposing party may oppose contrary proof with respect to the same facts, destined to make them doubtful; if it succeeds, the question is decided against the party burdened with the proof." (As affirms Anselmo de Castro, A., 1982, ED. Almedina Coimbra, "Declaratory Civil Procedure", III, p. 163, "falling on one of the parties the burden of proof, to the opposing party it is enough to oppose contrary proof, this being a proof destined to make doubtful the facts alleged by the first".

Thus, in the case of the case files, what the Requesting Party has to prove, in order to rebut the presumption that flows either from article 3 of the CIUC, or from the Motor Vehicle Registry itself, is that it Requesting Party was not owner of the vehicles in question in the period to which the challenged assessments refer. Proposes to prove, as results from the case files, is that the ownership of the vehicles, did not belong to it in the periods to which the assessments refer, cf., documents attached to the Gracious Claim, contained in the PA (docºs nºs no. 1 to 20), which are given as fully reproduced for all legal purposes.

6.3 REBUTTAL OF THE PRESUMPTION

• The Requesting Party, as referred to in 3.1., with respect to the proven facts, alleged, with the purpose of setting aside the presumption, not to be owner of the vehicles, at the time of the occurrence of the tax events, offering for such purposes the following documents:

• Copies of sales invoices to third parties

• And, copies of accounting extracts;

• Documents of exportation

• In this way, the ownership of the referred vehicles, no longer belonged to it, not being able, therefore to enjoy their use, from a date prior to that in which the IUC was exigible, thus corporizing, means of proof with sufficient and adequate force to rebut the presumption founded in the registry, as provided in no. 1 of article 3 of the CIUC, documents, those, which enjoy, the presumption of truthfulness provided in no. 1 of article 75 of the LGT;

• It follows from here, that at the date on which the IUC was exigible who held the ownership of the motor vehicles was not the Requesting Party.

7 OTHER QUESTIONS RELATING TO THE LEGALITY OF THE ASSESSMENT ACTS

• With respect to the existence of other questions pertaining to the legality of the assessment acts, taking into account that it is implicit in the establishment of an order of knowledge of defects, as provided in article 124 of the CPPT, that proceeding the request for arbitral opinion based on defects that prevent the renewal of the challenged assessments, becomes prejudiced, because useless, the knowledge of other defects, it does not seem necessary to know of the other questions raised.

8 REIMBURSEMENT OF THE TOTAL AMOUNT PAID

• Pursuant to what is provided in paragraph b) of no. 1 of article 24 of the RJAT and, in conformity with what is established there, the arbitral decision on the merit of the pretension that may not be subject to appeal or challenge, binds the tax administration from the end of the time period provided for appeal or challenge, and this, in the exact terms of the success of the arbitral decision in favor of the tax subject and until the end of the time period provided for the spontaneous execution of the sentences of the tax judicial courts "Restore the situation that would exist if the tax act, object of the arbitral decision had not been practiced, adopting the acts and operations necessary for this effect"

• These are legal commands that are in complete harmony with what is provided in article 100 of the LGT, applicable to the case, ex vi, of what is provided in paragraph a) of no. 1 of article 29 of the RJAT, in which it is established that "The tax administration is obliged, in case of total or partial success of complaints or administrative appeals or judicial process in favor of the tax subject, to the immediate and full reconstitution of the situation that would exist if the illegality had not been committed, corresponding the payment of compensatory interest, under the terms and conditions provided for in the law".

• The case contained in the present case files, raises the manifest application of the mentioned rules, since, as a consequence of the illegality of the assessment acts, referenced, in this process, there will, by force of these rules, be place for the reimbursement of the amounts paid, whether as title of the tax paid, whether of the corresponding compensatory interest, as a way to achieve the reconstitution of the situation that would exist if the illegality had not been committed.

9 THE RIGHT TO COMPENSATORY INTEREST

• The declaration of illegality and consequent annulment of an administrative act confers to the recipient of the act the right to the reintegration of the situation in which the same would find itself before the execution of the annulled act.

• Within the scope of the assessment of the tax, its annulment confers to the tax subject the right to the restitution of the tax paid and, as a rule, the right to compensatory interest, pursuant to no. 1 of article 43 of the LGT and article 61 of the CPPT.

• Whereby, the Requesting Party, has the right to compensatory interest on the amount of tax paid, referring to the annulled assessment.

10 DECISION

In view of the foregoing, this Arbitral Tribunal decides:

• To judge the request for declaration of illegality of the IUC assessment, relating to the year 2010, with respect to the motor vehicles identified in the present process, proceeding, consequently, to the annulment of the corresponding tax acts;

• To judge the request for condemnation of the Tax Administration to the reimbursement of the sum improperly paid, in the amount of 52,858.51 Euros, plus the respective compensatory interest, legally due, condemning the Tax and Customs Authority to effect these payments.

CASE VALUE:

• In conformity with what is provided in articles 306 no. 2 of the CPC and 97-A, no. 1 of the CPPT and in article 3, no. 2 of the Costs Regulation in Tax Arbitration Processes, the value of the case is fixed at € 52,858.51 (fifty-two thousand, eight hundred and fifty-eight euros and fifty-one cents).

COSTS:

• In accordance with no. 4 of article 22 of the RJAT, the amount of costs is fixed at € 2,142.00, pursuant to Table I, attached to the Costs Regulation in Tax Arbitration Processes, to be charged to the Tax and Customs Authority.

Let the parties be notified.

Lisbon, April 11, 2016

The Arbitrator

Maria de Fátima Alves

(the text of the present decision was prepared by computer, pursuant to article 131, no. 5 of the Civil Procedure Code, applicable by reference to article 29, no. 1 paragraph e) of Decree-Law 10/2011, of January 20 (RJAT), governing its drafting by current orthography)