IUC Subjective Incidence: Who Is Liable for Vehicle Circulation Tax? CAAD 654/2015-T

ARBITRAL DECISION

I. - REPORT

A - PARTIES

A…, SA legal entity no. …, with registered address at Street…, no. …, …-… - Lisbon, hereinafter referred to as the "Claimant", filed a request for constitution of an arbitral tribunal, under the terms of paragraph a) of number 1 of article 2 of Decree-Law no. 10/2011, of January 20 (Legal Regime for Arbitration in Tax Matters, hereinafter referred to as "RJAT"), with a view to ruling on the following dispute that opposes it to the Tax and Customs Authority (which succeeded, among others, the General Tax Office) hereinafter referred to as "Respondent" or "TA".

B - REQUEST

1 - The request for constitution of the arbitral tribunal was accepted by His Excellency the President of CAAD on October 29, 2015 and, on November 6, notified to the TA.

2 - The Claimant did not proceed with the nomination of an arbitrator, and therefore, under the terms of number 1 of article 6 of RJAT, the undersigned, on 22-12-2015, was appointed by the Ethics Board of the Administrative Arbitration Centre as arbitrator of a Single Arbitral Tribunal, having accepted in accordance with the legally provided terms.

3 - The Parties were, on 22-12-2015, duly notified of such appointment, and did not manifest the will to refuse it, in accordance with the combined terms of paragraphs a) and b) of number 1, of article 11 and of articles 6 and 7 of the Ethics Code.

4 - In these circumstances, in conformity with the terms of paragraph c) of number 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 arbitral tribunal was duly constituted on 13-01-2016.

5 - On June 16, 2016, the meeting referred to in article 18 of RJAT took place, from which minutes were drawn up, which are attached to the record, and the witness B… was also examined, as the Claimant waived the examination of witness C…

The Respondent did not attend the aforementioned meeting, and the proceedings continued in accordance with the terms of article 19 of RJAT.

The Tribunal then granted the Claimant and the Respondent a period of 5 days to, if they wished, submit written submissions.

6 - The Claimant and the Respondent submitted their submissions.

7 - The present Claimant requests that this Arbitral Tribunal:

a) - Declare the illegality and consequent annulment of the 18 assessment acts relating to the Single Circulation Tax (hereinafter referred to as IUC), pertaining to 18 motor vehicles, as identified in the record, which are hereby deemed to be fully reproduced herein.

b) - Condemn the Tax and Customs Authority to reimburse the amount of € 3,414.53, which it indicates as the value of the claim.

c) - Condemn the Tax and Customs Authority to payment of indemnificatory interest for the deprivation of the amount of € 3,414.53.

C - CAUSE OF ACTION

8 - The Claimant duly submitted, as had been established at the meeting of article 18 of RJAT, its written submissions, in which it reiterates, in essence, the arguments initially presented in its request for arbitral ruling, and in the grounds of its request for arbitral ruling, it states, in summary, the following:

9 - That it is a financial credit institution with strong presence in the national market.

10 - That, as a financial credit institution, it has, in the financing of the automotive sector, one of its most relevant areas of activity, celebrating, in this context, among others, financial lease contracts.

11 - That the nineteen vehicles identified in the list, which it attaches as Annex A, were given in financial lease to its customers, as are also identified in that Annex.

12 - That a key point of the aforementioned contracts resides in the fact that the lessees, during the term of the contracts, have the exclusive enjoyment thereof, and may, at the end of the term, acquire the vehicle by paying a residual amount.

13 - That it was notified to proceed with payment of the IUC pertaining to the assessment acts, relating to the years 2013 and 2015, identified in the document attached to the request for arbitral ruling, as Annex A, relating to the vehicles referenced in that Annex, given that, in the understanding of the Respondent, the corresponding amounts should be paid by the Claimant, as owner of the vehicles in question, in whose name they are registered, and because the obligation established in article 19 of CIUC was not complied with.

14 - That the TA, even knowing that the aforementioned vehicles were subject to financial lease contracts, and even knowing the identity of the lessees, understood that it should require it to pay the tax in question.

15 - That, although unable to assume the status of taxpayer of the tax, it proceeded to its payment, with respect to the assessments referenced in the record, concerning the vehicles, likewise identified in the proceedings, in the total amount of € 3,543.48.

16 - That, with respect to each of the vehicles involved in the proceedings, a financial lease contract was in force at the moment the corresponding IUC became due, and the Claimant could not be responsible for payment of that tax. (cf. articles 16, 17, 36, 37 and 127 of the Claim)

17 - That, in the field of CIUC, the legislator chose to burden the taxpayer, not in accordance with its wealth, abandoning the principle of ability to pay, but rather in the just measure of the cost to the environment and to road infrastructure that the taxpayer, through the use of motor vehicles, may generate.

18 - That, in most cases, it will be the owner of the motor vehicle who is the taxpayer of the IUC, under the terms of number 1 of article 3 of CIUC, insofar as the rule is that, together with ownership of the vehicle, the individual also has usufruct thereof.

19 - That, being subject to financial lease, the motor vehicles identified in the record were never, at any time, used by it, but rather by the respective lessees, who had the exclusive use of any of the vehicles in question, to whom belonged the potential of its use.

20 - That, in financial lease contracts, the right to use the vehicle is subtracted from its owner, while lessor, and is granted to the lessee the right to use and enjoy, exclusively, such vehicle.

21 - That, under the terms of number 2 of article 3 of CIUC, the lessees have the exclusive enjoyment of the motor vehicle, and they also have the obligation to pay the respective tax.

22 - That, with financial lease contracts in force, with respect to the vehicles identified in the proceedings, at the moment the IUC became due, it is the lessees, and not the lessor, who have the obligation to ensure payment of that tax.

D - RESPONSE OF THE RESPONDENT

23 - The Respondent submitted, on 15-02-2016, its Response, and, in accordance with what was duly established, as appears in the minutes of the meeting of article 18 of RJAT, submitted its submissions in writing, in which it reiterates, in essence, the arguments initially set forth in its Response.

In the aforementioned Response, the TA, in summary, alleged the following:

24 - In the aforementioned Response, the TA considers that the allegations of the Claimant cannot, at all, proceed, insofar as they make an interpretation and application of the legal norms applicable to the case, notoriously wrong, insofar as:

25 - They 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 attend to the systematic element, violating the unity of the scheme established throughout CIUC and, more broadly, throughout the entire legal-fiscal system, further resulting from an interpretation that ignores the ratio of the scheme established in CIUC. (cf. article 17 of the Response)

26 - It states that the tax legislator, in establishing in article 3, number 1 of CIUC who are the taxpayers of the IUC, established, expressly and intentionally, that these are the owners, being considered as such the persons in whose name they are registered (or in the situations provided for in number 2, the persons enumerated therein). (cf. article 21 of the Response)

27 - 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 taxpayers of the tax are the owners of the vehicles, being presumed as such the natural or legal persons, of public or private law, in whose name they are registered". (cf. article 22 of the Response)

28 - It considers that the wording of article 3 of CIUC corresponds to a clear choice of legislative policy adopted by the legislator and does not entail any legal presumption, so that to understand that a presumption is established therein would unequivocally be to perform an interpretation contra legem. (cf. articles 31, 33 and 36 of the Response)

29 - It states that the aforementioned understanding has already been adopted by the case law of our courts, transcribing, for this purpose, part of the judgment of the Administrative and Tax Court of Penafiel, handed down in Case no. 210/13.OBEPNF. (cf. articles 34 and 35 of the Response)

30 - On the systematic element of interpretation, it considers that the solution advocated by the Claimant is intolerable, and the understanding championed by it finds no legal support. (cf. article 44 of the Response)

31 - On the "ratio" of the scheme, it understands that, in light of a teleological interpretation of the scheme established throughout the IUC Code, the interpretation advocated by the Claimant, to the effect that the taxpayer of the IUC is the effective owner, regardless of not appearing in the vehicle register the registration of that quality, is manifestly wrong, insofar as it is the very ratio of the scheme established in CIUC that constitutes clear proof that what the tax legislator intended was to create a tax based on the taxation of the owner of the vehicle, as it appears in the vehicle register. (cf. articles 67 and 68 of the Response)

32 - It adds that CIUC carried out a reform of the regime of taxation of vehicles in Portugal, substantially altering the regime of vehicle taxation, making the taxpayers of the tax the owners appearing in the property register, regardless of the circulation of vehicles on public roads. (cf. article 70 of the Response)

33 - In this sense, it states that this is the understanding inscribed, namely, in recommendation no. 6-B/2012 of 22-06-2012, of the Ombudsman addressed to the Secretary of State for Public Works, Transport and Communications.

34 - It adds that the interpretation conveyed by the Claimant is also incompatible with the Constitution insofar as such interpretation results in the violation of the principle of trust, the principle of legal certainty, the principle of efficiency of the tax system and the principle of proportionality. (cf. articles 108 and 109 of the Response)

35 - It understands that in matters of financial lease, and for purposes of article 3 of CIUC, it is necessary that financial lessors, as is the case with the Claimant, comply with the obligation established in article 19 of the aforementioned Code, in order to be able to exempt themselves from the obligation to pay the tax, so that, such obligation not having been complied with, it is necessary to conclude that the Claimant is a taxpayer of the tax.

36 - It considers that, with respect to the vehicles with registrations …-…-…; …-… -…; …-… -…; …-… -… and …-… -…, there were no financial lease contracts in force on the date of the tax event, nor were any proofs of their alienation presented at the end of these contracts.

37 - Finally, it states that it was not the Respondent who gave rise to the submission of the request for arbitral ruling, but rather the Claimant, and consequently, the Claimant should be condemned to pay the arbitral costs "in accordance with article 527/1 of the New Code of Civil Procedure by virtue of article 29/1-e) of RJAT".

38 - It considers, in conclusion, that, given all the arguments presented, the request for arbitral ruling should be ruled unfounded, maintaining in the legal order the tax assessment acts challenged, and accordingly absolving the Respondent of the claim.

E - ISSUES TO BE DECIDED

39 - It is necessary, then, to appreciate and decide.

40 - In view of the foregoing, with respect to the positions of the Parties and the arguments presented, the issues to be decided are, in particular, as follows:

a) - Whether the rule of subjective incidence contained in article 3, number 1, of CIUC establishes or does not establish a presumption.

b) - What is the legal value of the vehicle register in the economy of CIUC, particularly for purposes of the subjective incidence of this tax.

c) - Whether, on the date the tax became due, a contract for rental of a motor vehicle without driver, long-term (ALD) is in force, the taxpayer of the IUC, for purposes of the provisions of article 3, numbers 1 and 2 of CIUC, is the lessee or the lessor entity, owner of the vehicle, in whose name the right of ownership is registered.

F - PROCEDURAL REQUIREMENTS

41 - The Arbitral Tribunal is duly constituted and is materially competent, under the terms of paragraph a) of number 1 of article 2 of Decree-Law no. 10/2011, of January 20.

42 - The Parties enjoy legal personality and capacity, are legitimate and are duly represented (cf. article 4 and number 2 of article 10 of Decree-Law no. 10/2011 and article 1 of Ordinance no. 112/2011, of March 22).

43 - The proceedings do not suffer from vices that would invalidate them and no exceptions have been raised that would prevent judgment on the merits of the case, thus the Tribunal is in a position to issue the arbitral decision.

44 - Taking into account the tax administrative proceedings, a copy of which was attached to the file by the TA, the documentary evidence attached to the record, the testimony of the witness and the submissions produced by the Claimant and the Respondent, it is now necessary to present the factual matter relevant for understanding the decision, as fixed in the terms mentioned below.

45 - The Claimant, as appears from the minutes referenced in number 5, withdrew from challenging the assessment relating to the vehicle with registration …-… -…, whose tax amount is € 128.95, so that the amount whose annulment is sought, with respect to the remaining eighteen vehicles, amounts to the total value of € 3,414.53.

II - GROUNDS

G - GROUNDS OF FACT

46 - In matters of relevant fact, this tribunal takes as established the following facts:

47 - The Claimant is a financial credit institution, having in the financing of the automotive sector, one of its most relevant areas of activity, celebrating, in this context, among others, financial lease contracts ("Leasing") or Long-Term Rental contracts ("ALD");

48 - The eighteen motor vehicles identified in the record were given in rental - Long-Term Rental ("ALD") - to customers of the Claimant, whose identification is in the proceedings;

49 - The Claimant was notified to proceed with payment of the IUC pertaining to the assessment acts identified in a document attached to the request for arbitral ruling, with respect to eighteen vehicles, likewise identified in the proceedings;

50 - The TA had knowledge that the aforementioned vehicles were subject to contracts for rental of motor vehicles without driver, long-term - ALD - in the mode of motor financing, but understood that it should require the Claimant to pay the tax in question.

51 - The Claimant, although not assuming the status of taxpayer of the tax, proceeded to its payment, in the total amount of € 3,414.53, with respect to the eighteen assessments referenced in the record, concerning the eighteen vehicles, likewise identified in the proceedings;

52 - With respect to the eighteen vehicles involved in the proceedings, that is, to all vehicles except the vehicle with registration …-… -…, from whose assessment the Claimant withdrew from challenging, there was in force a contract for rental of a motor vehicle, without driver, long-term - commonly ALD - in the mode of motor financing, on the date the corresponding IUC became due;

53 - On the dates relating to the due date of the IUC, to which the assessments identified in the record, relating to the years 2013 and 2015, refer, there were in force, with respect to the eighteen vehicles identified in the record, contracts for rental of a motor vehicle without driver, long-term - ALD - in the mode of motor financing;

54 - The four ALD contracts, in the mode of motor financing, relating to the vehicles with registrations …-… -…; …-… -…; …-… -… and …-… -… were not in force on the dates on which the corresponding IUC was due.

GROUNDS OF PROVEN FACTS

55 - The facts taken as proven are based on the documents mentioned, with respect to each of them, insofar as their correspondence to reality was not challenged, in the submissions produced and in the witness testimony.

• The witness demonstrated knowledge of the facts to which she testified and there was no fact that would justify suspicions about her impartiality.

FACTS NOT PROVEN

56 - In matters of fact, with relevance to the decision, this tribunal considers as not proven the force of the four contracts for rental of a motor vehicle without driver, long-term - commonly ALD - in the mode of motor financing, on the date the corresponding IUC became due, with respect to the vehicles with registrations …-… -…; …-… -…; …-… -… and …-… -…

H - GROUNDS OF LAW

57 - The matter of fact is fixed, and it is now necessary to proceed with its legal subsumption and determine the Law applicable to the underlying facts, in accordance with the issues decided enumerated in number 40.

58 - The first issue, with respect to which there are absolutely opposite understandings between the Claimant and the TA, translates to knowing whether the rule of subjective incidence contained in number 1 of article 3 of CIUC establishes or does not establish a rebuttable presumption.

59 - The positions of the parties are known. Indeed, for the Claimant, the provisions of number 1 of article 3 of CIUC constitute a rebuttable legal presumption, insofar as the owner of the motor vehicle is deemed to be the taxpayer of the IUC, since it is presumed that he is the individual who uses it and holds its usufruct, also considering that, under the terms of number 2 of the aforementioned article, the lessees have the exclusive enjoyment of the motor vehicle, and they also have the obligation to pay the respective tax.

60 - The Respondent, for its part, understands that the tax legislator, in establishing in article 3, number 1 of CIUC who are the taxpayers of the IUC, determined, expressly and intentionally, that these are the owners, being considered, as such, the persons in whose name they are registered (or in the situations provided for in number 2, the persons enumerated therein).

I - INTERPRETATION OF THE RULE OF SUBJECTIVE INCIDENCE CONTAINED IN NUMBER 1 OF ARTICLE 3 OF CIUC

61 - On this matter, that is, whether the rule of subjective incidence contained in number 1, of article 3 of CIUC, establishes a presumption, it should be noted that the case law established in CAAD points to the fact that the said rule establishes a rebuttable legal presumption. Indeed, from the first Decisions handed down on this matter, in the year 2013, among which may be particularly mentioned those handed down in the context of Cases nos. 14/2013-T, 26/2013-T and 27/2013-T, to the most recent ones which may be indicated the Decisions handed down in the context of Cases no. 69/2015-T, no. 191/2015-T and no. 202/2015 - T, passing through numerous Decisions handed down in the year 2014, of which mention is made, by way of mere example, the Decisions handed down in Cases nos. 34/2014-T, 120/2014-T and 456/2014 - T, all point to the understanding that number 1, of article 3 of CIUC establishes a rebuttable legal presumption.

For this purpose, the understanding inscribed in the Judgment of the Central Administrative Court South, handed down on 19-03-2015, Case 08300/14, available at: www.dgsi.pt, should also be considered, when it expressly states that article 3, number 1 of CIUC "[…] establishes a legal presumption that the holder of the vehicle register is its owner, such presumption being rebuttable by virtue of article 73 of LGT".

This is an understanding on which we rely entirely and which is given, without more, as valid and applicable in the present case, not being considered, consequently, necessary other developments, given the abundant grounds set forth in the aforementioned Decisions and in the aforementioned Judgment.

62 - This being the understanding that, with respect to article 3, number 1 of CIUC, is entirely adopted by this tribunal, it is important, however, to still note the lack of merit that assists the Respondent, when, whether in articles 108 and 109 of its response, or in numbers 76 and 77 of its Submissions, it alleges that the interpretation that goes in the direction of understanding that a rebuttable legal presumption is established in number 1, of article 3 of CIUC violates the constitutional principles of trust and legal certainty, of efficiency of the tax system and of proportionality.

Let us appreciate, then, that matter.

Let us see,

• On the principle of proportionality, it should first be emphasized that the same, insofar as it is materially inherent to the regime of rights, freedoms and guarantees, inscribing itself in their defense, aims, essentially, to regulate the action of the Public Administration in order that its activity in relating to individuals is guided by the choice of the most equitably adequate measures for the pursuit of the public interest.

As teaches Prof. Freitas do Amaral, in Course of Administrative Law, 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", being "[…] firmly anchored the idea that, in a democratic Rule of Law state, the measures of the public powers should not exceed what is strictly necessary for the realization of the public interest".

The principle of proportionality, adds the aforementioned Professor, ibidem, p. 129, means that "[…] the limitation of goods or interests private by acts of the public powers must be adequate and necessary to the concrete ends that such acts pursue, as well as tolerable when confronted with those ends".

With respect to the principle of proportionality, it should also be noted what J. J. Gomes Canotilho and Vital Moreira tell us, in CONSTITUTION OF THE PORTUGUESE REPUBLIC, ANNOTATED, VOLUME I, 4th Edition, 2007, Coimbra Publisher, pp. 392/393, when they consider that the aforementioned principle is unfolding in three sub-principles, namely: "[…] a) principle of adequacy (also designated by principle of suitability); b) principle of exigency (also called principle of necessity or indispensability); c) principle of proportionality in the strict sense, which means that the restrictive legal means and the obtained ends must be situated in a "just measure", preventing the adoption of legal measures restricted disproportionate, excessive, in relation to the obtained ends […]".

The aforementioned sub-principles all have 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 at hand, will imply answering the question of knowing what is the adequate interpretation of number 1 of article 3, with a view to the pursuit of the legal purposes provided for in article 1 of CIUC, which translate into the tax burden of the effective owners of motor vehicles (and not, necessarily, of those appearing in the register) in the measure of the environmental and road cost that they provoke.

As refers Prof. J. J. Gomes Canotilho in Constitutional Law and Theory of the Constitution, Almedina - Coimbra, 1998, pp. 264 et seq., the most important field of application of the principle of proportionality or of prohibition of excess, which has constitutional basis in articles 18, number 2 and 266, number 2 of CRP, "[…] is that of the restriction of rights, freedoms and guarantees by acts of the public powers. However, the logical domain of application of the principle of proportionality extends to conflicts of legal goods of any kind." The administration, adds the aforementioned author, idem, "[…] must always observe, in each concrete case, the demands of the prohibition of excess […]".

The case law points in this same sense, namely the judgment of the Supreme Administrative Court 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 congruence, adequacy or suitability of the means or measure to achieve the purpose legally proposed 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 that it has to pursue with the rights and legitimate interests of individuals possibly affected by its acts, interests and rights which, in the case at hand, amount to non-taxation in IUC of persons who are no longer owners of vehicles and who, consequently, in no way contribute to the effectuation of any road and environmental cost.

What is important is to balance the legal purposes and the means to pursue them, and, in the framework of a judgment of balance, identify the means most adequate for this purpose, which, in the case, translate into the interpretation adopted by the arbitral tribunal.

One could say, moreover, that the understanding that the aforementioned number 1 of article 3 of CIUC establishes a rebuttable legal presumption corresponds to the only interpretation that coherently squares 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 number 1, of article 3 of CIUC is, thus, the only one that allows 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 that they provoke - as stated in article 1 of CIUC, which means that the taxpayers of the IUC are, presumably, the persons in whose name the vehicles are registered, that is, the said taxpayers are, in principle, and only in principle, the persons in whose name such vehicles are registered, there being, thus, no other interpretation capable of achieving the said legal purposes, only in this way, it is reaffirmed, are the said principles of proportionality and justice shown to be complied with.

The opposite understanding, that is, that considered by the TA, which interprets number 1, of article 3 of CIUC as not establishing a rebuttable legal presumption, understanding that the taxpayers of the IUC are, definitively, the persons in whose name the vehicles are registered, just as it leads to the imposition of a tax burden on someone who may no longer be the owner of the vehicle in question and who, in this way, does not pollute, removing from tax liability those who, in reality, is the effective causer of the environmental and road damages, resulting from the use of vehicles of which they are the real owners, evidence that the legally prescribed purposes would not, at all, be achieved, not respecting, thus, the principle of equivalence which, in the context of CIUC, has an absolutely structuring function. Such understanding, that yes, is not shown, in these circumstances, in tune with the principle of proportionality.

The interpretation made by the tribunal, in the decision that is now being reformed, took exactly into account the principle of proportionality when, to the contrary of what the Respondent intended, it has, in due account, that the definitive registration does not have constitutive effect since 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 attends to the principle of equivalence, as a fundamental element of CIUC.

• As to the efficiency of the tax system, it could be said that the efficiency of the Administration in general, or of the TA in particular, in the common sense, corresponds to the capacity/work methodology oriented towards the optimization of the work performed or the services rendered, 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 quality of taxpayers or not.

In technical sense, it could 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 these purposes, or, as referred by Diogo Leite Campos, Benjamim Silva Rodrigues and Jorge Lopes de Sousa, in General Tax Law, Annotated and Commented, 4th Edition 2012, Writing Meeting, Lda, Lisbon, p. 488, in the annotations to article 55 of LGT, it is a principle that obliges "[…] the tax administration to refrain from imposing on taxpayers obligations that are unnecessary to satisfy the purposes that it aims to pursue".

In this framework, the aforementioned principle of efficiency of the tax system will mean the capacity to achieve the 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 need for observance of other principles to which the tax administration must subordinate its activity, namely that of the inquisitorial and of the discovery of material truth, and obviously, the application of the aforementioned principle of efficiency cannot be made, whether to the detriment of the rights of citizens, or by the absence of observance of the legal purposes. [1]

• As to the principle of legal certainty and trust, it should be noted, first of all, that this latter principle, that of trust, is a concretization of the principle of good faith, which, having establishment in our legal order, from 1996, came to have express constitutional inscription, as appears in number 2 of article 266 of CRP, where it is established that "Organs and administrative agents are subordinate 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 ours)

With respect to good faith, it should be noted what Prof. Freitas do Amaral refers when, in Course of Administrative Law, Vol. II, Almedina, 2002, pp. 135/136, citing Prof. V. Fausto de Quadros, tells us that "[…] the Public Administration is obliged to obey bona fide in relations with individuals. Moreover, it should even set, also there, the example to individuals of the observance of good faith, in all its manifestations, as the essential core of its ethical behavior. Without this, it can never be affirmed that the State (and with it other public entities) is a person of good character".

On the other hand, the principle of trust is also held to be a consequence of the principle of legal certainty, inseparable 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 generating confidence of citizens in the legal protection of the Public Administration.

With respect to the principles of legal certainty and protection of trust, Prof. J. J. Gomes Canotilho tells us in Constitutional Law and Theory of the Constitution, Almedina - Coimbra, 1998, p. 250 et seq., that the aforementioned principles are closely associated, considering that "[…] legal certainty is connected with objective elements of the legal order - guarantee of legal stability, security of orientation and realization of law - while protection of trust is more related to the subjective components of security, namely the calculability and predictability of individuals in relation to the legal effects of the acts of the public powers". In any case, adds the aforementioned Professor, idem, that the "[…] general principle of legal certainty in the broad sense (thus encompassing the idea of protection of trust) can be formulated as follows: the individual has the right to be able to rely on that his acts or public decisions affecting his rights, positions or legal relations anchored in valid and valid legal norms are linked the legal effects provided for and prescribed by those same norms".

It follows from this doctrine that persons, when selling their vehicles, must be sure that, should they proceed with the sale of vehicles of which they are owners, and not being the same registered in the name of the acquirers, the legal effects resulting therefrom will be those provided for and flowing from the legal norms in force and their adequate interpretation, in light of the legal purposes of those same norms, which, in this case, led the arbitral tribunal to consider registration as a rebuttable presumption of the existence of the right and that only persons who provoke road and environmental costs should be taxed.

The better way to, in the case at hand, ensure legal certainty, in the broad sense, is thus, that made by way of the interpretation made by the arbitral tribunal, when it considers to be established in number 1 of article 3 of CIUC, a rebuttable legal presumption, allowing any citizen, who proceeds with the sale, to a third party, of a motor vehicle, the possibility to demonstrate that, when the IUC became due, he was no longer its owner nor responsible for payment of that tax.

• Beyond what is mentioned above, it will still be important to know whether the interpretation adopted by the arbitral tribunal, in addition to not conflicting with any of the aforementioned principles, is directly and substantially inscribed in the context of the constitutional order.

With respect to the interpretation of the law in light of the Constitution, or of interpretation in conformity with the Constitution, Prof. Jorge Miranda tells us, in Manual of Constitutional Law, VOLUME II, Introduction to the Theory of the Constitution, 2nd edition, Coimbra Publisher, 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 ours)

The understanding that considers to be established in number 1 of article 3 of CIUC a rebuttable legal presumption is supported by several elements of interpretation, among which should 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 be taken into account.

On the aforementioned systematic element the following should be mentioned:

a) In the understanding of BAPTISTA MACHADO, in Introduction to Law and to the Legitimating Discourse, p. 183, the systematic element "[…] comprises the consideration of the other provisions that form the complex normative of the institute in which the provision 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 similar institutes (parallel places). It also comprises the systematic place that is incumbent upon the provision to be interpreted in the overall legal order, as well as its consonance with the spirit or intrinsic unity of the entire legal order".

b) It is known that a legal principle, in this case the principle of equivalence, does not exist in isolation, but is rather linked by an intimate nexus with other principles that integrate, at the more global level, the respective legal order, in this case, with the other principles embodied in the system inscribed in CIUC, and with other constitutionally established principles. In that sense, each article of a given legal instrument, in this case CIUC, will only be comprehensible if we situate it, whether before the other articles that follow or precede it, or before the constitutional order.

c) With respect to the systematization of CIUC, environmental concerns were determining for the aforementioned principle of equivalence to be, from the start, inscribed in the first article of the aforementioned Code, which, necessarily leads to the subsequent articles, insofar as they have their foundation in such principle, being influenced by it. This occurred, namely, with the taxable base, which came to be constituted by various elements, particularly those respecting pollution levels, and with the rates of the tax, established in articles 9 to 15, which were influenced by the environmental component, and, naturally, also with the subjective incidence itself, provided for in article 3 of CIUC, which cannot escape the aforementioned influence.

d) The aforementioned principle of equivalence, as noted by Sérgio Vasques, in Special Consumption Taxes, Almedina, 2001, p. 122 et seq., implies that "[…] the tax should correspond to the benefit that the taxpayer derives from the public activity; or to the cost that the taxpayer imputes to the community by his own activity". Adds the aforementioned author, 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 this reason, as also states the cited author, idem, the realization of the principle of equivalence dictates special demands "[…] with respect to the subjective incidence of the tax [..]."

The aforementioned principle that informs the current Single Circulation Tax, is inscribed in the environmental concerns established in number 2, paragraph a) of article 66 of CRP and in the need to - with a view to ensuring the right to the environment, in the framework of sustainable development - "Prevent and control pollution and its effects and harmful forms of erosion", concerns these, which are, manifestly, considered in the interpretation defended by the arbitral tribunal.

On the other hand, the provision in paragraph h) of number 2 of article 66 of the Constitution, when it establishes that, in the context of sustainable development, it is incumbent on the State to "ensure that fiscal policy is compatible with development and environmental protection and quality of life", entails as a corollary the polluter-pays principle, which concretizes the idea, inscribed therein, that whoever pollutes must, for that reason, pay, being thus, the interpretation defended by the arbitral tribunal, in perfect harmony with the constitutional order.

e) It is also worth noting, merely to raise the question of why the rules contained in article 9 of the Civil Code oblige the interpreter of ordinary legislation, given that the said Code does not occupy any prominent place in the legal system.

To this question responds Prof. Jorge Miranda, ibidem, p. 230, when he considers that the "[…] conclusion to which one is inclined is that rules such as these are valid and effective, not because they appear in the Civil Code - since this does not occupy any prominent place in the legal system - but, directly, as such, by translating a legislative will, not contradicted by any other provisions, concerning the problem of interpretation (which are not only technical-legal) that they address."

Adds the aforementioned author, idem, that "rules on these matters can be considered substantially constitutional and it would not even be strange to see them elevated to the Constitution in formal sense."

With respect to the problematic of interpretation and its rules, as appears from Prof. José de Oliveira Ascensão, in The Law, Introduction and General Theory, 2nd edition, Calouste Gulbenkian Foundation, 1980, pp. 352/353, the imperative character of such rules should be emphasized, and their binding nature for the interpreter.

The interpretation that the arbitral tribunal makes of number 1 of article 3 of CIUC and the criteria that, for this purpose, it considered, from the literal element, to the systematic element, passing through the historical and rational (or teleological) element, do not collide, thus, with any constitutional principles.

Number 1 of article 9 of CC provides that the search for legislative thought must "[…] particularly take 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 to the environment and of respect for the questions related to it, and which are shown inscribed in the constitutional order.

Thus, in view of what is set forth above, it does not seem, with all due respect, that the TA is right, insofar as the interpretation considered by the arbitral tribunal, 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 trust and legal certainty, of efficiency of the tax system and of proportionality, and that, on the other hand, such interpretation is expressly and substantially in conformity with the principles inscribed in the Constitution.

Thus, it is not perceived that the interpretation made by the tribunal, on number 1 of article 3 of CIUC, contends with any constitutional norms or principles in force.

J - ACQUISITION OF OWNERSHIP OF THE VEHICLE AND VALUE OF REGISTRATION

63 - First and foremost, it should be added, in light of what will be explicitly stated hereinafter about the value of registration, that the acquirers of vehicles become owners of those same vehicles by way of the celebration of the corresponding purchase and sale contracts, with registration or without it.

64 - There are three articles of the Civil Code that are important to take into account, with respect to the acquisition of ownership of a motor vehicle. They are, first, article 874, which establishes the notion of purchase and sale contract, as being "[…] the contract by which the ownership of a thing, or another right, is transmitted, by means of a price"; article 879, in whose paragraph a) it is established, as essential effects of the purchase and sale contract, "the transmission of the ownership of the thing or the holding of the right" and article 408, which has as its heading contracts with real effect, and establishes in its number 1, that "the constitution or transfer of real rights over a determined thing takes place by the mere effect of the contract, except for the exceptions provided for in the law". (emphasis ours)

We are, indeed, in the domain of contracts with real effect, which means that their celebration causes the transmission of real rights, in the case, motor vehicles, determined by the mere effect of the contract, as flows expressly from the rule previously mentioned.

65 - With respect to the aforementioned contracts with real effect, it is worth noting the teachings of Pires de Lima and Antunes Varela, when, in annotations to article 408 of CC, they tell us that "From these contracts called real (quoad effectum), by having as immediate effect the constitution, modification or extinction of a real right (and not only the obligations tending to that result) distinguish themselves the so-called real contracts (quoad constitutionem), which require the delivery of the thing as an element of their formation (cf. articles 1129, 1142 and 1185)".

We are thus, before contracts in which the ownership of the sold thing is transferred, without more, from the seller to the buyer, having, as cause, the contract itself.

65 - Also from the case law, namely from the Judgment of the Supreme Court of Justice no. 03B4369 of 19/02/2004, available at: www.dgsi.pt, it appears that, in light of the provision of article 408, number 1, of Civil Code, "the constitution or transfer of real rights over a determined thing takes place by the mere effect of the contract, except for the exceptions provided for in the law". It is the case of the purchase and sale contract of a motor vehicle (articles 874 and 879 paragraph a) of Civil Code), which does not depend on any special formality, being valid even when celebrated in verbal form - in accordance with Judgment of the Supreme Court of Justice of 3-3-98, in CJSTJ, 1998, year VI, Volume I, p. 117". (emphasis ours)

66 - Having the purchase and sale contract, in light of what is stated above, real nature, with the aforementioned consequences, it is necessary to consider, also, the legal value of the vehicle registration object of such contract, insofar as the transaction of the aforementioned good is subject to public registration.

67 - On the legal value of the vehicle registration, it is important, first of all, to take into account the provision of number 1 of article 1 of DL no. 54/75, of February 12, relating to the registration of motor vehicles, when it establishes that "Vehicle registration has essentially as its purpose to give publicity to the legal situation of motor vehicles and their trailers, with a view to the security of legal commerce". (emphasis ours)

68 - Being clear, in light of the aforementioned rule, what is the purpose of registration, there is, however, no clarity, within the scope of the aforementioned Decree-Law, on the legal value of such registration, and it is important to consider article 29 of the aforementioned legal instrument, relating to the registration of vehicle ownership, when it provides that "The provisions relating to land registration are applicable, with the necessary adaptations, to the registration of automobiles, […]". (emphasis ours)

69 - In this framework, in order to achieve the sought knowledge on the legal value of the registration of vehicle ownership, it is important to take into account what is established in the Land Registry Code, approved by Decree-Law no. 224/84, of July 6, when it provides in its article 7 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". (emphasis ours)

70 - The combination of the provisions of the aforementioned articles, particularly that established in number 1 of article 1 of DL no. 54/75, of February 12 and in article 7 of the Land Registry Code, allows to consider, on the one hand, that the fundamental function of registration is to give publicity to 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.

71 - Thus, definitive 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, for this reason, contrary evidence, as flows from the law and case law has been indicating, and to this purpose, may be seen, among others, the Judgments of the Supreme Court of Justice nos. 03B4369 and 07B4528, respectively, of 19/02/2004 and 29/01/2008, available at: www.dgsi.pt.

72 - The function legally reserved for registration is, thus, on the one hand, that of making public the legal situation of goods, in the case, of vehicles and, on the other, to allow us to presume that the right exists over those vehicles and that the same belongs to the holder, as such inscribed in the registration, which means that registration 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 seller to buyer.

L - OF THE TAXPAYER OF THE IUC IN THE FORCE OF THE CONTRACT FOR RENTAL OF A MOTOR VEHICLE (ALD)

73 - The existence of a contract of promise of purchase and sale of a motor vehicle coupled to the so-called ALD contract, as occurs in the case at hand, is held to be essential in order that it may be assimilable to the financial lease contract. This is what appears from the case law, namely from the Judgment of the Supreme Court of Justice of 14-05-2009, case 08P4096, available at: www.dgsi.pt.

74 - It results from the Legal Regime of the Financial Lease Contract, approved by Decree-Law no. 149/95, of June 24, with the last amendment introduced by Decree-Law no. 30/2008, of January 25, namely from the provision of its article 9 that, among others, the obligations of the lessor are those of granting the enjoyment of the good for the purposes to which it is destined and that of selling the good to the lessee, should the latter wish, at the end of the contract.

75 - On the other hand, in light of that established in article 10 of the aforementioned legal instrument, namely in paragraphs a) of its numbers 1 and 2, we learn that the obligations of the lessee are to pay the installments and to use and enjoy the leased good, which means that, in the force of a financial lease contract that has a motor vehicle as its object, only the lessee has exclusive enjoyment thereof.

76 - The ALD contracts (copies) attached to the proceedings, which, moreover, are configured as "standard contracts" that the Claimant celebrates with its customers, contain, within the scope of its clauses, clauses, namely, concerning "Use and Maintenance of the Vehicle", establishing the obligation of the lessee to use of the motor vehicle object of the contract, as well as others relating to the responsibility of the lessee to maintain a provisioned bank account, with a view to payment of the value of the installments of the financed amount.

77 - The contracts for rental of motor vehicles without driver, long-term - commonly ALD - in the mode of motor financing, involved in the present proceedings, celebrated between the Claimant (lessor) and each of its customers (lessees), confer on them the exclusive enjoyment of the respective vehicles, being they who use them as if they were the true owners of those goods.

78 - The interpretation of number 1, of article 3 of CIUC, in light of all that, to this purpose, has been stated above, taking into account, particularly, the legal relevance conferred to the principle of equivalence, does not entail the taxation, in IUC, of the lessor who, as formal owner of the vehicle, does not have, consequently, any potential polluting, which means that the damages accruing to the community, resulting from the use of motor vehicles should be assumed by their real users, as costs that only they should bear. The lessees, those yes, have the full use and enjoyment of the vehicles, as legally established, being their true users and effective generators of environmental damages, and should thus be responsible for the corresponding tax, this being the understanding that, in light of the ratio legis of CIUC, should be drawn from the provision of number 2 of article 3 of that same Code.

79 - Thus, the interpretation of number 2 of article 3 of CIUC only admits to view the lessees as those responsible for payment of the IUC, and it is important to note the provision of article 19 of CIUC, when, precisely, for purposes of the provision of article 3 of the aforementioned Code, that is, for purposes of subjective incidence, it comes to impose on entities that proceed with financial leasing the obligation to provide to the TA data relating to the identification of the users of the leased vehicles, which reveals, namely, that, for purposes of the aforementioned incidence, it was intended to know who are, ultimately, the real users of the leased vehicles, so that they, and not others, bear the single circulation tax, which, moreover, is shown in total harmony with the said principle of equivalence, as a structuring principle of CIUC.

80 - There are, thus, no doubts about the persons that the legislator wanted to hold responsible for the payment of the IUC, equating to owners the financial lessees, acquirers with reservation of ownership, as well as other holders of options to purchase rights by force of the lease contract. (cf. article 3, number 2 of CIUC)

81 - In light of what has just been stated, it is our understanding that, if a contract for rental of a motor vehicle without driver, long-term - ALD - in the mode of motor financing, is in force on the date the tax becomes due, the taxpayer of that tax is not, in light of the provision of number 2 of article 3 of CIUC, the lessor but rather the lessee, not only by force of the letter of the law itself, but because it is this one that has exclusive enjoyment of the vehicle and, as such, the intrinsic potential polluting, regardless of whether the registration of the right of ownership remains in the name of the lessor or the non-compliance of the obligation of notification provided for in article 19 of CIUC, an obligation which, moreover, to what is known, was never regulated by the TA, whether, namely in terms of deadlines, whether in the type of notification form.

82 - With respect to the aforementioned article 19 of CIUC, it should be stated that, contrary to what the TA alleged about the absence of proof relating to the compliance with the obligation of notification provided for in the aforementioned article, with respect to the lease contracts referenced in the present proceedings, the Tribunal considers that such obligation was complied with. Indeed,

83 - In the framework of witness testimony, the witness examined, who, note, in addition to showing herself, absolutely, familiar with the procedures provided for in the aforementioned article 19, a matter on which, moreover, she was testifying, evidenced a clear technical knowledge of the subject, explaining to the Tribunal the mechanisms used by the Claimant to bring to the knowledge of the TA all the ALD contracts that are being celebrated.

84 - For this purpose, the Tribunal learned that the Claimant adhered, from the force of the current CIUC, to a functionality made available by the TA that translates into the possibility of, monthly, making the download of the file relating to the registrations of the vehicles that appear on the site of the Tax Administration, and for whose payment of IUC it is responsible.

85 - It is in these circumstances that the Claimant elects, periodically (at the beginning and end of each month), all the vehicles that in that period are subject to the said payment, identifying, on the other hand, the vehicles that, being subject to a lease contract, are not under its responsibility, mentioning, for purposes of IUC, the identification of the lessees and their NIF, in a "specific field" existing for the purpose, then making the upload of the file that, worked in these terms, is forwarded to TA.

The clear and convincing explanation of the witness leaves no doubts that the ALD contracts involved in the proceedings were, with the aforementioned regularity, brought to the knowledge of the TA, thus showing that compliance was given to the obligation provided for in article 19 of CIUC.

86 - With respect to the obligation provided for in the aforementioned article, it should be noted, as already alluded to above, that, even in the absence of compliance with the obligation provided for in the aforementioned article by the lessor, the taxpayer of the IUC would not, for this reason, cease to be the lessee. Indeed, having the TA the need to know whether or not the obligation provided for in article 19 of CIUC was complied with, it must be borne in mind that one of two things: either the TA, in the exercise, namely, of its powers inscribed in the inquisitorial principle which, fixed in article 58 of LGT, establishes in the sense that "The tax administration must, in the proceedings, carry out all necessary steps to satisfy the public interest and the discovery of material truth, and is not subordinated to the initiative of the author of the claim" (emphasis ours), has knowledge that the same was complied with, thus being, from the start, identified the lessee, as taxpayer of the tax; or it learns that such obligation was not complied with, which, neither for this reason, removes the lessee from the subjective incidence of the IUC.

87 - In this framework, with the exception of the vehicles with registrations …-…-…; …-… -…; …-… -… and …-… -…, whose contracts for rental of motor vehicles without driver, long-term - ALD - in the mode of motor financing, were not in force on the dates of the due date of the corresponding IUC, with the payment thereof not being the responsibility of the lessees, in all the other contracts relating to the remaining fourteen vehicles, the payment of the tax was the responsibility of the lessees.

M - OF THE MEANS OF EVIDENCE PRESENTED

88 - The vehicles with registrations …-… -…; …-… -…; …-… -… and …-… -…, whose contracts for rental of motor vehicles without driver, long-term - ALD - in the mode of motor financing, were not in force on the dates of the due date of the corresponding IUC, generated tax assessments, relating to the year 2015, in the amount of € 684.14, which, reduces the value of the tax paid by the Claimant, with respect to the remaining fourteen vehicles, to the total value of € 2,730.39.

89 - The remaining fourteen contracts for rental of motor vehicles without driver long-term - ALD - in the mode of motor financing, which were in force on the date the tax became due, of each of the fourteen motor vehicles, are, in the perspective of this Arbitral Tribunal, sufficient proof to conclude for the application of the provision of number 2, of article 3 of CIUC, considering themselves, thus, appropriate means to prove the quality of lessees and, as such, taxpayers of the IUC, there being no, moreover, any elements that allow to understand that the data inscribed in those contracts do not correspond to the contractual truth, and it is also certain that the law, in this case, number 1 of article 75 of LGT, confers on such documents a presumption of veracity, which means that, not being demonstrated by the TA the absence of correspondence between the content of such documents and reality, as it was not, their content must be considered true.

90 - In light of what is set forth above, it is not proven that all vehicles identified in the record were subject to contracts for rental of a motor vehicle without driver, long-term (ALD) in force in the respective date of the due date of the tax (years 2013 and 2015).

91 - The termination of the four contracts aforementioned, occurred, respectively, for the vehicles with registrations …-… -…; …-… -…; …-… -… and …-… -…, on 22-12-2014, 29-12-2014, 29-12-2014 and 28-12-2014, verifying that the dates of the due date of the IUC are situated on 12-01-2015, 03-01-2015, 13-01-2015 and 13-01-2015, respectively, which means that, on these dates, the taxpayers of the aforementioned tax were not the lessees of the contracts in question.

92 - In light of what has just been stated, and taking into account, whether the presumption established in number 1 of article 3 of CIUC, whether the interpretation of number 2 of that same article and the responsibility of the lessees, as taxpayers of the tax, whether the legal value of vehicle registration in the economy of CIUC, whether the contracts for rental of a motor vehicle without driver long-term (ALD), relating to the fourteen vehicles identified with registrations …-… -…; …-… -…; …-… -…; …-… -…; …-… -…; …-… -…; …-… -…; …-… -…; …-… -…; …-… -…; …-… -…; …-… -…; …-… -… and …-… -…, which were in force on the dates the corresponding IUC became due, whose amount totals € 2,730.39, the tax assessment acts relating to these vehicles cannot merit our agreement, either because an adequate interpretation and application of the legal norms of subjective incidence was not taken into account, which constitutes an error of law on the requirements, which constitutes violation of law, whether because the said acts were based on a matter of fact, clearly divergent from the effective reality, which constitutes an error of fact on the requirements and therefore violation of law.

93 - In sum, it could be said, in consonance with what is set forth above, that the assessment acts relating to the fourteen vehicles identified in the previous article are considered illegal, insofar as, on the date of the respective due date of the IUC, contracts for rental of a motor vehicle without driver long-term - ALD - in the mode of motor financing, were in force, being the taxpayers of the tax the respective lessees, and not the Claimant, in light of the provision of number 2 of article 3 of CIUC, and it should be noted that the amount assessed and paid, with reference to such vehicles, corresponds to the amount of € 2,730.39.

N - REIMBURSEMENT OF THE AMOUNT PAID AND INDEMNIFICATORY INTEREST

94 - Under the terms of the provision of paragraph b) of number 1 of article 24 of RJAT, and in conformity with what is established therein, the arbitral decision on the merits of the claim to which there is no appeal or challenge binds the tax administration from the end of the period provided for appeal or challenge, and it must - in the exact terms of the success of the arbitral decision in favor of the taxpayer and until the end of the period provided for spontaneous execution of the judgments of the tax courts - "Restore the situation that would exist if the tax act object of the arbitral decision had not been committed, adopting the acts and operations necessary for such purpose." (emphasis ours)

95 - These are legal commands that are in total harmony with the provision of article 100 of LGT, applicable to the case by force of the provision of paragraph a) of number 1 of article 29 of RJAT, in which it is established that "The tax administration is obliged, in case of total or partial success of claims or administrative appeals, or of judicial proceedings in favor of the taxpayer, to the immediate and full reconstruction of the situation that would exist if the illegality had not been committed, comprising the payment of indemnificatory interest, under the terms and conditions provided for in the law." (emphasis ours)

96 - The case consisting in the present record, raises the manifest application of the aforementioned rules, given that as a consequence of the illegality of the assessment acts, referenced in this proceedings, there must, by force of those rules, be a reimbursement of the amounts paid, whether as tax, whether as compensatory interest, as a way to achieve the reconstruction of the situation that would exist if the illegality had not been committed, amounts which in the case at hand total the amount of € 2,730.39, resulting from the total amount of € 3,414.53, which was paid, deducted from the amount of € 684.14 associated with the assessments relating to the vehicles with registrations …-… -…; …-… -…; …-… -… and …-… -…

97 - As to the indemnificatory interest, it appears manifest that, in light of that established in article 61 of CPPT and with the requirements of the right to indemnificatory interest fulfilled, that is, with the existence verified of error attributable to the services resulting in payment of the tax debt in an amount superior to that legally due, as provided for in number 1 of article 43 of LGT, the Claimant has the right to indemnificatory interest at the legal rate, calculated on the amount of € 2,730.39.

CONCLUSION

98 - In the circumstantial framework that has been set forth, it is concluded that if on the date the tax becomes due a contract for rental of a motor vehicle, without driver, long-term - ALD - in the mode of motor financing, is in force, for purposes of the provision of article 3, numbers 1 and 2, of CIUC, the taxpayer of the IUC is the lessee, even if the registration of the right of ownership of the vehicle appearing in the Motor Vehicle Registry Office is made in the name of the lessor entity, and that the same has not complied with the obligation of notification provided for in article 19 of CIUC, as long as proof of the existence of the said contract is made.

99 - Having the IUC assessment acts relating to the vehicles with registrations …-… -…; …-… -…; …-… -…; …-… -…; …-… -…; …-… -…; …-… -…; …-… -…; …-… -…; …-… -…; …-… -…; …-… -…; …-… -… and …-… -…, been, fundamentally, supported, whether in the idea that, in the framework of a contract for rental of a motor vehicle, without driver, long-term - ALD - in the mode of motor financing, in force, when the IUC becomes due, the taxpayers of the tax are the lessors, in light of that established in article 3, numbers 1 and 2, of CIUC, whether in the consideration of a matter of fact divergent from reality, the TA makes, on the one hand, wrong interpretation and application of the said legal norms, committing an error of law on the requirements, which constitutes violation of law, committing, on the other, an error of fact on the requirements and therefore violation of law.

100 - In light of these errors on the requirements of fact and law in which the said assessment acts rest, the request for arbitral ruling underlying the present proceedings is to be ruled partially successful, justifying the annulment of such assessment acts, with all its legal consequences.

III - DECISION

101 - Therefore, taking into account all of the foregoing, this Arbitral Tribunal decides:

• To rule partially successful, as proven, on the grounds of violation of law, the request for arbitral ruling with respect to the annulment of the IUC assessment acts, concerning the vehicles with registrations …-… -…; …-… -…; …-… -…; …-… -…; …-… -…; …-… -…; …-…-…; …-… -…; …-… -…; …-… -…; …-… -…; …-… -…; …-… -… and …-… -…;

• To annul, consequently, the IUC assessment acts, relating to the years 2013 and 2015, concerning the vehicles, as mentioned above;

• To condemn the TA to the reimbursement of the amount of € 2,730.39 obtained under the terms indicated above, in number 96, relating to the IUC and to the compensatory interest that was paid, concerning the years 2013 and 2015, and to the payment of indemnificatory interest at the legal rate, counted from the date of payment of the aforementioned amount, until the full reimbursement thereof;

• To condemn the Claimant and the Respondent in costs, which are fixed, for each one, in the proportion of 20% for Claimant and 80% for Respondent.

VALUE OF THE PROCEEDINGS

In conformity with the provision of articles 306, number 2 of CPC (ex-315, number 2) and 97-A, number 1 of CPPT and in article 3, number 2 of the Regulation of Costs in Tax Arbitration Proceedings, the value of the proceedings is fixed at € 2,730.39.

COSTS

In accordance with the provision of article 12, number 2, in fine, in article 22, number 4, both of RJAT, and in article 4 of the Regulation of Costs in Tax Arbitration Proceedings and of Table I, which is attached thereto, the amount of the total costs is fixed at € 612.00.

Notify.

Lisbon, July 12, 2016

The Arbitrator

António Correia Valente

[1] See the study on the matter, prepared by Prof. Carlos Pestana Barros, in Science and Technical Taxation, 2005, no. 416, pp. 105-126