IUC Subjective Incidence in Financial Leasing: Legal Presumptions and Tax Liability (CAAD 661/2015-T)

ARBITRAL DECISION

I – Report

1.1. A…, S.A., legal entity no.…, with registered office at…, Avenue…, lot …, … floor, Lisbon (hereinafter referred to as "Applicant"), having been notified of 23 assessments of IUC on vehicles related to its activity, presented, on 28/10/2015, a request for constitution of an arbitral tribunal and for an arbitral decision, pursuant to article 10, no. 2, of Decree-Law no. 10/2011, of 20/1 (Legal Framework for Arbitration in Tax Matters, hereinafter referred to as "RJAT"), in which the Tax and Customs Authority (AT) is requested, with a view to the "annulment [of the same], for violation of the provisions of article 3 of the IUC Code as regards the conditions of subjective incidence of the tax, and the consequent reimbursement of the amount of €3,224.18, corresponding to €3,189.22 of tax paid unduly and €34.96 of undue compensatory interest, as well as the payment of indemnificatory interest for the deprivation of the aforementioned amount, pursuant to article 43 of the General Tax Law."

1.2. On 8/1/2016 the present Singular Arbitral Tribunal was constituted.

1.3. Pursuant to article 17, no. 1, of the RJAT, AT was summoned, as the defendant party, to submit a reply, in accordance with the aforementioned article. AT submitted its reply on 8/2/2016, having argued in favour of the total rejection of the Applicant's request, and raised a preliminary issue regarding the value of the claim.

1.4. The Applicant, in a motion dated 6/4/2016, pronounced itself on the aforementioned preliminary issue, having, in summary, considered that AT had no grounds.

1.5. By order of 2/5/2016, the Tribunal considered that, as the Applicant had already pronounced itself on the exception raised by the Defendant – thus fulfilling the provisions of article 18, no. 1, paragraph b), of the RJAT –, it would be dispensable, pursuant to article 16, paragraph c), of the RJAT, the meeting provided for in the aforementioned article 18 and that the case was ready for decision. Accordingly, the date of 9/5/2016 was fixed for the delivery of the arbitral decision.

1.6. The Arbitral Tribunal was duly constituted, is materially competent, the proceedings do not suffer from defects that invalidate it (see below, "preliminary issue") and the Parties have legal personality and capacity, being legitimate.

II – Allegations of the Parties

2.1. The Applicant alleges, in its initial petition, that: a) "the Applicant is not the tax subject of IUC relating to the registrations in question"; b) "the tax acts of the IUC in dispute are affected by error regarding the conditions of the (alleged) taxable event, which constitutes a defect of violation of law, by virtue of article 99, paragraph a), of the Code of Tax Procedure and Process [...] capable of being alleged to substantiate the annulment of tax assessment acts of IUC in the present proceedings"; c) "in all cases covered by the present request for an arbitral decision, the tax assessed relates to: (i) vehicles already sold by the Applicant, (ii) vehicles whose leasing contract was still in force and (iii) tax relating to situations where the leasing contract was in breach, all of which cases [...] correspond to grounds for exclusion of subjective incidence of the tax, not considered by the Tax and Customs Authority in each of the assessments now subject to the request for an arbitral decision"; d) "according to article 6, no. 3, of the IUC Code, the tax is considered due to the owner (or other holders of the vehicle having equivalent standing) on the first day of the tax period of the vehicle, which, according to article 4, no. 2, of the same Code, takes place on the date on which the registration is assigned"; e) "thus, in accordance with this provision, and considering that on the date of maturity of the tax the Applicant was no longer the owner of the vehicles in question, it follows that the tax subject should be the new owner of the vehicle, or another holder having equivalent standing under article 3, no. 2, of the IUC Code"; f) "the first 16 situations identified in the attached table share the cause of action constituted by the fact that the vehicle associated with the assessment was sold by the Applicant prior to the date of maturity of the IUC"; g) "even if publicity was not given to the transfers of property of the vehicles through the vehicle registration, this does not prevent the IUC from falling upon the actual owners of the vehicle, once the Applicant has demonstrated the respective transfer"; h) "the following situation, identified in the attached table, comes down to the fact that the vehicle associated with the assessment was subject to a leasing contract which was in force on the date on which the taxable event occurred and the corresponding exigibility"; i) "from the joint application [of article 3, no. 1 and no. 2, of the IUC Code], it follows [...] that IUC is due on an annual basis, and although normally the tax subject is the owner, if the vehicle has been subject to leasing, the tax subject should be the financial lessor"; j) "having regard to the facts presented, as well as the normative content of the aforementioned provisions of the IUC Code, it is necessary to conclude that, where a financial leasing contract is in progress in the situations marked, a financial leasing contract during the tax period of the vehicle and, in particular, at the moment when the tax-generating facts occurred, the tax subject was exclusively the financial lessee, and not the Applicant"; l) "finally, in the 6 last situations identified in the attached table, the vehicles identified in the present defence were assigned on financial leasing to customers of the Applicant"; m) "however, prior to the date of maturity of the IUC, and as a result of breach of contractual obligations by each of the Applicant's customers, the Applicant found itself obliged to terminate the financial leasing contractual relationships, which were resolved early (given the time contractually provided) without the lessees having proceeded with the restitution of the assets to the lessor to which they were obliged"; n) "in this context, the Applicant resorted to the expedient provided for in article 21 of Decree-Law no. 149/95, of 24 June [...], which presupposes the prior cancellation of the registration of the financial leasing"; o) "in the cases in question, the situation arises of the lessee maintaining in its sphere all the prerogatives to which the financial leasing contractual relationship entitled it, notwithstanding the registration of the leasing having been cancelled. The Applicant therefore considers that the tax that it intends to assess should be imputed to the holders of the vehicles/lessees, in line with their demonstrated conduct".

2.2. In view of the foregoing, the Applicant requests, in summary, the "annulment of the IUC assessments attached to the case, for violation of the provisions of article 3 of the IUC Code as regards the conditions of subjective incidence of the tax, and the consequent reimbursement of the amount of €3,224.18, corresponding to €3,189.22 of tax paid unduly and €34.96 of undue compensatory interest, as well as the payment of indemnificatory interest for the deprivation of the aforementioned amount, pursuant to article 43 of the General Tax Law."

2.3. For its part, AT alleges, in its defence: a) that "the Request of 30.10.2015 presented by the Applicant cannot be permitted, as it lacks legal support, under penalty of violation of the law"; b) that "the procedural figure of enlargement of the claim cannot serve to remedy deficiencies intrinsic to the Applicant's initial petition and which inevitably imply the untimeliness of the present request for an arbitral decision on that twenty-fourth vehicle and corresponding assessment note without an invoice of sale"; c) that "the enlargement of the claim can only take place, in accordance with no. 2 of article 265 of the Code of Civil Procedure, when it is the development or consequence of the original claim. [...]. This is not at all the case in the present proceedings, insofar as the intended enlargement cannot be accepted, taking into account that the proceedings (whether arbitral or not) is composed of rigid procedural cycles, formally separate"; d) that "however informal arbitration in tax matters may be, it prevents the parties, according to their needs and at any time they see fit in the proceedings, from alleging anew and 'correcting' what was initially adduced, invoking a mere oversight for this purpose. [...]. Accordingly, in the terms set out above, it is requested that the Request of 30.10.2015 of the Applicant be removed from the record, together with the corresponding Assessment Note, as well as the new table attached with the twenty-fourth vehicle, or that this Request be understood as not written"; e) that, "in the concrete case of the proceedings, [...] the Tribunal, in the decision it will deliver, cannot condemn to that which has not been requested in the initial petition of 28.10.2015, namely as regards the 23 assessments of IUC referring to the year 2015, in the total value of € 3,224.18"; f) that "the understanding advocated by the Applicant incurs not only in a skewed reading of the letter of the law, but also in the adoption of an interpretation that does not take into account the systemic element, violating the unity of the regime established throughout the IUC Code and, more broadly, throughout the entire tax-legal system and further results from an interpretation that ignores the rationale of the regime established in the article in question, and also, throughout the IUC Code"; g) that "it is imperative to conclude that, in the case of the present arbitral decision proceedings, the legislator expressly and intentionally established that the following [as owners or in the situations provided for in no. 2, the persons referred to there] be considered: the persons in whose name the same [the vehicles] are registered, as this is the interpretation that preserves the unity of the tax-legal system"; h) that "to understand that the legislator established here a presumption would unequivocally be to carry out an interpretation contra legem"; i) that "article 3 of the IUC Code does not contain any legal presumption, and it is certain that the thesis advocated by the Applicant directs its objective to the wrong target"; j) that "the systemic element of interpretation of the law also demonstrates that the solution advocated by the Applicant is intolerable, finding no support in the law whatsoever. This results not only from the aforementioned no. 1 of article 3 of the IUC Code, but also from other norms established in the aforementioned Code"; l) that, "even admitting that, from the perspective of the rules of civil law and property registration, the absence of registration does not affect the acquisition of the quality of owner and that registration is not a condition for the validity of contracts with real effect, under the terms established in the IUC Code (which in the case in question constitutes special law, which, under general rules of law derogates the general norm), the tax legislator intentionally and expressly wanted that persons in whose name the vehicles are registered be considered as owners, lessees, buyers with reservation of ownership or holders of the right of purchase option in long-term leasing"; m) that, "in light of a teleological interpretation of the regime established throughout the IUC Code, the interpretation advocated by the Applicant to the effect that the tax subject of IUC is the actual owner, regardless of whether the registration of this quality does not appear in the vehicle registration, is manifestly wrong [...] insofar as it is the very rationale of the regime established in the IUC Code that constitutes clear proof that what the tax legislator intended was to create a Single Motor Vehicle Tax based on the taxation of the owner of the vehicle as it appears in the vehicle registration"; n) that "the tax acts in dispute do not suffer from any defect of violation of law, insofar as in light of the provisions of article 3, nos. 1 and 2, of the IUC Code and article 6 of the same code, it was the Applicant, in its capacity as owner, the tax subject of the IUC"; o) that "invoices are not apt to prove the conclusion of a synallagmatic contract such as a purchase and sale, as such documents do not by themselves reveal an essential and unequivocal declaration of will (i.e., acceptance) by the purported buyers"; p) that "invoices are only valid after proof of their good collection, and if this proof has not been made, then the invoices are invalid, or at least clearly insufficient, for proof of the facts alleged"; q) that "mere unilateral documents do not have sufficient probative value to rebut the legal presumption contained in the registration"; r) that, "if the invoices are invalid, or at least clearly insufficient, for proof of the facts alleged by the Applicant, all the more so, the Assessment Note no. 2015…, without an invoice of sale, does not prove anything whatsoever, and is therefore challenged for all legal purposes this document. That is, Assessment Note no. 2015…, without an invoice of sale, is not sufficient proof to undermine any legal presumption, if any, established in article 3 of the IUC Code"; s) that "notwithstanding the Applicant attaching a copy of the respective contract [relating to the vehicle, subject of the leasing contract, with the registration …-…-…], the truth is that no proof is made that the same was in force in the year of the IUC in question. [...]. The irrefutable proof that the Applicant should have made, but did not, was to attach a document proving payment of the leasing rent in the month of the exigibility of the tax"; t) that "it is not credible the mere invocation of a breach of financial leasing contract, with non-return of the leased goods, to justify non-subjection to IUC [...] it being unreasonable to consider that the Applicant has no document proving the situation of breach of the leasing contracts in question, or the attempts at recovery of its credits or vehicles, being, moreover, a large financial company in the sector"; u) that, "if this Tribunal should consider that the aforementioned leasing contracts attached to the proceedings prove the breach of financial leasing contract, with non-return of the leased goods, to justify non-subjection to IUC, in relation to the financial leasing contract no. … relating to the vehicle with registration …-…-…, the same cannot be considered as proof of this fact, taking into account that it is silent as to the maturity of the rents, as well as the date of its commencement or termination"; v) that "the interpretation conveyed by the Applicant [...] shows itself contrary to the Constitution, insofar as such interpretation results in the violation of the principle of reliance, the principle of legal certainty, the principle of efficiency of the tax system and the principle of proportionality"; x) that "the transmission of property of motor vehicles is not susceptible to being controlled by the Defendant [since] IUC is assessed in accordance with the registration information duly transmitted by the Institute of Registries and Notaries. [...]. [...] the Defendant [limited itself] to fulfilling the legal obligations to which it is bound and, in parallel, to following the registration information provided to it by those responsible"; z) that "the tax acts in dispute are valid and legal, because in accordance with the legal regime in force on the date of the taxable events, so that, in this case, no error occurred attributable to the services [...]. Accordingly, the legal requisites granting the right to indemnificatory interest are not met. [...]. Nor, furthermore, compensatory interest whose reimbursement is claimed."

2.4. AT concludes, in final summary, that: "a) the request of the Applicant of 30.10.2015 should be removed from the record, the enlargement of the claim not being admitted, the exception invoked proceeding concomitantly; b) the present request for an arbitral decision should be judged unfounded, the tax assessment acts impugned remaining in the legal order and the Defendant being absolved accordingly from the claim."

III – Proven Factuality, Not Proven and Respective Grounds

3.1. The following facts are considered proven:

i) The Applicant is a credit financial institution, subject to supervision by the Bank of Portugal, which carries out its activity in the branch of motor vehicle financing, namely through the granting of loans for the acquisition of vehicles or the conclusion of financial leasing contracts.

ii) The Applicant received 23 assessment notes for IUC for the year 2015 on vehicles related to the aforementioned activity, according to assessment notes attached to the initial petition and which are here deemed reproduced. To these must be added the one contained in the request of the Applicant of 30/10/2015, as it is understood that the enlargement of the claim is, in the present case, admissible (see below, "preliminary issue"). Accordingly, the value of the present proceedings changes from €3,224.18 to €3,245.28.

iii) The 24th assessment, according to the numbering contained in the (updated) table attached to the initial petition, relating to the vehicle with registration …-…-… (payment deadline of 2/2/2015), has no invoice of sale associated with it.

iv) The assessment relating to a financial leasing contract (see situation 17 of the table attached to the initial petition: assessment no. 2015…), in the total amount of €32.35 (€32.00 of IUC + €0.35 of compensatory interest), was called into question by the presentation of a leasing contract (contract no.…), which demonstrates, by the start and end dates of the same, that the Applicant was not the owner of the vehicle in question on the date of payment of the tax.

v) The Applicant proceeded to payment of the IUC in question. Dissatisfied with the aforementioned assessments, it presented the present request for an arbitral decision on 28/10/2016.

3.2. As regards the documents brought to the present proceedings by the Applicant aimed at demonstrating that the tax relates to vehicles already sold (situations 1 to 16 of the table attached to the initial petition + situation 24), or that it relates to situations of breach of financial leasing contracts without return of leased goods (situations 18 to 23), it is considered that, for the first set of situations (1-16 + 24), the documents presented do not allow the presumption of article 3, no. 1, of the IUC Code to be rebutted, and that, for the latter (18-23), the documents presented are not capable of demonstrating the alleged breach (in effect, in the first set, invoices issued by the Applicant were presented but not purchase and sale contracts, invoices/receipts or receipts that would allow proof of payment and discharge; in the second set, the Applicant alleged that it was "IUC after the contract entered into debt" but limited itself to presenting the contracts, having not presented documents proving the contractual breaches, or documents proving the, by it alleged, attempts at recovery of its credits or vehicles).

3.3. The facts considered pertinent and proven (see 3.1) are based on analysis of the positions exposed by the parties and of the documentary evidence attached to the proceedings. The facts that were considered not proven are based on the lack of documentary evidence demonstrative of the allegations made (see 3.2).

IV – Preliminary Issue

As mentioned in the report of the present decision, the Defendant raised, in its reply of 8/2/2016, an exception which it understands "[implies] the untimeliness of the present request for an arbitral decision on [the] twenty-fourth vehicle and corresponding assessment note without an invoice of sale."

It is therefore necessary to determine whether the same should be considered well-founded, taking also into account what is contained in the request of the Applicant of 6/4/2016, in which it pronounced itself on the aforementioned exception.

The Defendant alleges, in summary, that "the procedural figure of enlargement of the claim cannot serve to remedy deficiencies intrinsic to the Applicant's initial petition and which inevitably imply the untimeliness of the present request for an arbitral decision on that twenty-fourth vehicle and corresponding assessment note without an invoice of sale" and, furthermore, that, "however informal arbitration in tax matters may be, [the rigid procedural cycles] prevent the parties, according to their needs and at any time they see fit in the proceedings, from alleging anew and 'correcting' what was initially adduced, invoking a mere oversight for this purpose". The Defendant concludes, thus, that "the request of the Applicant of 30.10.2015 should be removed from the record, the enlargement of the claim not being admitted, the exception invoked proceeding concomitantly".

It is concluded, however, that the Defendant's position is not well-founded, since (and in summary): a) the aforementioned request, dated 30/10/2015, was received on the day following that of the request for constitution of the present Tribunal, which allowed its timely knowledge, as well as the exercise of the right to be heard by the Defendant (which it was able to do through its reply); b) in the request in question, in which the Applicant requests the correction of the initial claim, in order to include the value relating to assessment note no. 2015…, the annulment of which is alleged, it is verified that the grounds of the request for illegality coincide with those invoked for situations of the same type that were contained in the initial claim, that is, it was not justified – also for reasons of procedural economy – that the submission of a separate proceeding be required merely to allege the nullity of this specific assessment note (especially since there is, among all of them, identity of tax, circumstances and grounds of fact and law invoked for its appreciation and decision); c) furthermore, by virtue of the provisions of article 265, no. 2, of the Code of Civil Procedure, applicable ex vi article 29, no. 1, paragraph e), of the RJAT, "the claimant may, at any time, reduce the claim and may enlarge it until the closure of the discussion in 1st instance if the enlargement is the development or consequence of the original claim." Now, as was said above, in a), the request for enlargement took place well before that phase (equivalent, in arbitral proceedings, to the meeting to which article 18 of the RJAT alludes; or, in cases in which this is not held, as it is understood to be unnecessary, to the moment of presentation of final arguments or, also, of the arbitral order which closes this procedural phase and determines the continuation of the proceedings to final decision).

Accordingly, with the legal requirements for the enlargement of the claim being met, and with the principle of the right to be heard being ensured, the admission of the request of the Applicant dated 30/10/2015 is justified, also in the name of the principle of procedural economy, being unfounded the exception alleged by the Defendant. Consequently, as a result of the aforementioned enlargement, the value of the present proceedings becomes €3,245.28 (which does not imply any change in the amount of costs).

V – Law

In the present case, there are five disputed questions of law: 1) whether article 3 of the IUC Code contains a presumption and whether rebuttal of the same was accomplished; 2) whether, as AT alleges, the Applicant's interpretation does not take into account the systemic and teleological elements of interpretation of law; 3) whether the presentation of contract(s) is sufficient to demonstrate the alleged breach of contracts of vehicles assigned on financial leasing, and the force of a leasing contract on the date on which the taxable event occurred; 4) whether, as AT alleges, "the interpretation conveyed by the Applicant [...] shows itself contrary to the Constitution"; 5) whether indemnificatory interest is owed to the Applicant.

Let us see then.

1. and 2) The first two questions of law converge in the direction of interpretation of article 3 of the IUC Code, so it is necessary to: A) determine whether the norm of subjective incidence, contained in the aforementioned article 3, establishes or does not establish a presumption; B) determine whether, in considering that this norm establishes a presumption, this violates the "unity of the regime", or disregards the systemic element and the teleological element; C) determine – admitting that the presumption exists (and that the same is rebuttable) – whether rebuttal of the same was accomplished.

A) Article 3, nos. 1 and 2, of the Code of the Single Motor Vehicle Tax, has the following wording, which is reproduced here:

"Article 3 – Subjective Incidence

1 - The tax subjects are the owners of the vehicles, being considered as such the natural or legal persons, of public or private law, in whose name the same are registered.

2 - Financial lessees are equated to owners, buyers with reservation of ownership, as well as other holders of the right to purchase option by virtue of the leasing contract".

The interpretation of the cited legal text is, naturally, essential for the resolution of the case under analysis. In that measure, it is necessary to resort to article 11, no. 1, of the General Tax Law, and, by referral of this, to article 9 of the Civil Code.

Now, in accordance with the aforementioned article 9 of the Civil Code, interpretation begins with the letter of the law and seeks, through it, to reconstitute the "legislative thought". The same is to say (regardless of the objectivism-subjectivism debate) that literal analysis is the basis of the interpretive task and the systemic, historical or teleological elements are guides to orient the aforementioned task.

The literal apprehension of the legal text in question does not generate - even though the separation of this from the ascertainment, even if minimal, of its meaning is very debatable - the notion that the expression "being considered as such" means something different from "being presumed as such". In fact, it would be very difficult to find authors who, in a task of pre-understanding of the aforementioned legal text, would instinctively reject the identity between the two expressions.

Confirming the indistinction (both literal and in meaning) of the words "considered" and "presumed" (presumption), see, for example, the following articles of the Civil Code: 314, 369, no. 2, 374, no. 1, 376, no. 2, and 1629. And, with particular interest, the case of the expression "is considered", contained in article 21, no. 2, of the Personal Income Tax Code. As Diogo Leite Campos, Benjamim Silva Rodrigues and Jorge Lopes de Sousa note, with respect to this article of the Personal Income Tax Code: "in addition to this norm showing that what is at issue in taxation of capital gains is ascertaining the real value (the market value), the limitation to ascertainment of real value derived from the rules for determining the taxable value provided in the Corporate Income Tax Code cannot but be considered as a presumption in the matter of incidence, the rebuttal of which is permitted by article 73 of the General Tax Law" (General Tax Law, Annotated and Commented, 4th ed., 2012, pp. 651-2).

B) These are only some examples that allow the conclusion that it is precisely for reasons related to "unity of the legal system" (the systemic element) that it cannot be asserted that only when the verb "presume" is used is there a presumption, given that the use of other terms or expressions (literally similar) can also serve as the basis for presumptions. And, among these, the expressions "is considered as" or "being considered as" assume, as has been seen, prominence.

If literal analysis is only the basis of the task, it is naturally essential to evaluate the text in light of the other elements (or sub-elements of the so-called logical element). In effect, AT also alleges that the Applicant's interpretation does not take into account the systemic element, violating the unity of the regime established throughout the IUC Code and, more broadly, throughout the entire tax-legal system, and that in light of a teleological interpretation of the regime established throughout the IUC Code, the interpretation advocated by the Applicant is wrong.

It is therefore justified to determine whether the interpretation that considers the existence of a presumption in article 3 of the IUC Code collides with the teleological element, i.e., with the purposes (or with the sociological relevance) of what was intended with the rule in question. Now, such purposes are clearly identified at the beginning of the IUC Code: "The single motor vehicle tax obeys the principle of equivalence, seeking to tax contributors in the measure of the environmental and road cost that these cause, in implementation of a general rule of tax equality" (see article 1 of the IUC Code).

What can be inferred from this article 1? It can be inferred that the close link of IUC to the principle of equivalence (or the benefit principle) does not allow the exclusive association of the "contributors" referred to there with the figure of owners but rather with the figure of users (or of economic owners). As was well noted in the Arbitral Decision delivered in case no. 73/2013-T: "in truth, the legislative intent of the tax [IUC] rather points in the direction that the users of the vehicles should be taxed, the 'economic owner' in the words of Diogo Leite de Campos, the actual owners or the financial lessees, for it is these who have the polluting potential causing the environmental costs to the community."

In effect, if the aforementioned legislative intent were otherwise, how could one understand, for instance, the obligation (on the part of entities that proceed with vehicle leasing) - and for the purposes of the provisions of article 3 of the IUC Code and article 3, no. 1, of Law no. 22-A/2007, of 29/6 - of provision to the Tax Administration of data relating to the fiscal identification of the users of the aforementioned vehicles (see article 19)? Would it be that where it says "users", should it instead be read, disregarding the systemic element, "owners with registration in their name"...?

C) From the foregoing the conclusion follows that limiting the tax subjects of this tax only to owners of vehicles in whose name the same are registered - ignoring situations in which these no longer coincide with the actual owners or actual users of the same - constitutes a restriction which, in light of the purposes of IUC, finds no basis of support. And, even if it is alleged that the legislator's intention was that, for the purposes of IUC, those who, as such, appear in the vehicle registration be considered as owners, it is necessary to bear in mind that such registration, in light of what has been said previously, generates only a rebuttable presumption, i.e., a presumption that can be overcome by the presentation of evidence to the contrary. In this sense, see, for example, the Judgment of the Court of Appeal of Lisbon of 19/3/2015, case 8300/14: "The [...] article 3, no. 1, of the IUC Code, establishes a legal presumption that the holder of the vehicle registration is its owner, such presumption being rebuttable".

It would, moreover, be unjustified the imposition of a kind of irrebuttable presumption, since, without an apparent reason, one would be imposing a (admittedly debatable) formal truth to the detriment of what could actually be and would have been proven; and, on the other hand, would be contrary to the duty of AT to comply with the principle of inquisitorial power established in article 58 of the General Tax Law, i.e., the duty to carry out the necessary steps for correct determination of the factual reality on which its decision should rest (which means, in the present case, determination of the actual and effective owner of the vehicle).

Furthermore, if the seller were not permitted to rebut the presumption contained in article 3 of the IUC Code, this would be to benefit, without a plausible reason, the buyers who, in possession of correctly completed and signed contract forms, and enjoying the advantages associated with their condition as owners, were to attempt to exempt themselves, by way of a "registration formalism", from payment of tolls or fines.

In this regard, it should also be noted that vehicle registration does not have constitutive effect, functioning, as aforesaid, as a rebuttable presumption that the holder of the registration is, effectively, the owner of the vehicle. In this sense, see, for example, the Judgment of the Supreme Court of Justice of 19/2/2004, case 03B4639: "Registration does not have constitutive effect, since it is intended to give publicity to the registered act, functioning (merely) as a mere rebuttable presumption, (presumption "juris tantum") of the existence of the right (articles 1, no. 1 and 7, of the Constitution and article 350, no. 2, of the Civil Code) as well as of the respective ownership, all in the terms contained therein."

In the same sense, the Arbitral Decision delivered in case no. 14/2013-T referred, in these terms which are hereby endorsed: "the essential function of vehicle registration is to give publicity to the legal situation of the vehicles, registration not having constitutive effect, functioning (merely) as a mere rebuttable presumption of the existence of the right, as well as of the respective ownership, all in the terms contained therein. The presumption that the right registered belongs to the person in whose name it is entered can be rebutted by evidence to the contrary. Not meeting AT the requirements of the notion of third party for registration purposes [a circumstance that could prevent the full effect of the purchase and sale contracts concluded], it cannot avail itself of the absence of updating of the registration of the property right to call into question the full effect of the purchase and sale contract and to require the seller (previous owner) to pay the IUC due by the buyer (new owner) as long as the presumption of the respective ownership is rebutted through sufficient evidence of the sale."

Now, in the case here under analysis, it is verified that rebuttal of the presumption was not accomplished in situations 1 to 16 of the table attached to the initial petition, since the evidence presented by the Applicant was limited to invoices (unilaterally issued), no purchase and sale contracts having been presented, or - what would have identical probative force - invoices/receipts or receipts that allow proof of payment and discharge, that is, that allow demonstration, unequivocally, that the alleged purchases and sales were concluded.

As regards the probative force of documents such as purchase and sale contracts, or invoices/receipts or receipts that allow proof of payment, see, for example, the Arbitral Decision delivered in case no. 583/2015-T, of 15/2/2016: "not having been attached to the proceedings, namely, copies of documents proving payment of the price (cheque or proof of transfer of the amount relating to the sale of each of the vehicles), the actual transmission of property of the aforementioned vehicles could not be proven. In effect, only with the presentation of such documents (with presumption of truthfulness and validity), would there have been sufficient force to rebut, in accordance with the provisions of article 73 of the General Tax Law, the presumption contained in article 3, no. 1, of the Code of the Single Motor Vehicle Tax (and as a consequence of which the tax assessments resulted). In these terms, it will be necessary to conclude that the Applicant failed to prove the transmission of property of the vehicles which constitute the object of the IUC assessments which are part of the Arbitral Request and, consequently, failed to rebut the presumption arising from the entry in the Vehicle Registration."

In the same sense, see also the Arbitral Decision delivered by us in case no. 428/2015-T, of 11/1/2016: "It is considered not proven [...] the (alleged) sale of the motor vehicle [...], as no document (purchase and sale contract, duly signed by both parties, or invoice proving receipt of the price) has been presented that proves the invoked transfer of ownership".

See, finally, the Judgment of the Court of Appeal of Lisbon of 19/3/2015 (in case 8300/14): "The I.U.C. is legally configured to function in integration with vehicle registration, which is inferred, from the outset, from article 3, no. 1, of the I.U.C. Code, a norm where it is established that the tax subjects are the owners of the vehicles, furthermore adding that the persons in whose name they are registered are to be considered as such. The aforementioned article 3, no. 1, of the I.U.C. Code, establishes a legal presumption that the holder of the vehicle registration is its owner, such presumption being rebuttable, by virtue of article 73 of the G.T.L. The rebuttal of the legal presumption obeys the rule contained in article 347 of the Civil Code, in accordance with which full legal proof can only be contradicted by means of proof that shows it is not true the fact which is the object thereof. Which means that it is not enough for the other party to oppose mere counter-proof – which is intended to cast doubt on the facts (see article 346 of the Civil Code) that makes the presumed facts doubtful. On the contrary, it must show that it is not true the presumed fact, in such a way that no uncertainty remains that the facts resulting from the presumption are not real. [...] the issuance of invoice/receipt or of receipt makes proof of payment and discharge ['and, consequently, proof that the purchase and sale was concluded'] - see article 787 of the Civil Code".

Being insufficient the invoices presented by the Applicant, for the reasons set out, it is also concluded, a fortiori, that assessment note no. 2015 … (relating to vehicle with registration …-…-…), presented without an invoice of sale, does not constitute, by itself, sufficient proof to set aside the aforementioned legal presumption.

1. With regard to cases in which breach of financial leasing contract was alleged (situations 18 to 23 of the table attached to the initial petition), it is understood that the presentation of contracts is insufficient to justify non-subjection to IUC, given that the same, although they contain references to the maturity of the rents, as well as to the date of their commencement and termination, do not allow proof of the alleged breach – in effect, the Applicant did not present, for all these cases, documents proving the situation of breach nor documents proving the alleged attempts at recovery of its credits or vehicles.

As was stated in point iv) of the proven factuality, the assessment relating to a financial leasing contract (situation 17 of the table attached to the initial petition), in the total amount of €32.35 (assessment no. 2015…), was called into question with the presentation of a leasing contract (contract no.…), which demonstrates, by the commencement and end dates of the same, that the Applicant was not the owner of the respective vehicle on the date of payment of the tax. Which constitutes sufficient proof, it not being necessary – contrary to what AT alleges – the attachment of a document proving payment of the leasing rent in the month of the exigibility of the tax.

1. In light of what has been set out above [in 1) and 2)], it is concluded that there is no interpretation "contrary to the Constitution", contrary to what the Defendant alleged in points 133 to 141 of its reply.

2. A final note to appreciate, under article 24, no. 5, of the RJAT, the request for payment of indemnificatory interest in favour of the Applicant (article 43 of the General Tax Law and article 61 of the Code of Tax Procedure and Process).

In this regard, the Arbitral Decision delivered in case no. 26/2013-T, of 19/7/2013 (which dealt with a situation similar to the one now under consideration) recalled: "The right to indemnificatory interest referred to in the aforementioned norm of the General Tax Law presupposes that tax has been paid in an amount greater than what was due and that this derives from error, of fact or of law, attributable to the services of AT. [...] even if it is acknowledged that the tax paid by the applicant is not due, because it is not the tax subject of the tax obligation, determining, consequently, its reimbursement, it is not seen that, at its origin, there is the error attributable to the services, which determines such right [to indemnificatory interest] in favour of the taxpayer. In effect, in proceeding with the official assessment of IUC considering the applicant as the tax subject of this tax, AT limited itself to comply with the norm of no. 1 of article 3 of the IUC Code, which, as abundantly stated above, imputes such quality to the persons in whose name the vehicles are registered."

Considering this justification – with which full agreement is expressed –, it is concluded, also as regards the present case, for the rejection of the aforementioned request for payment of indemnificatory interest.

VI – DECISION

In light of the foregoing, it is decided:

• To judge the request for an arbitral decision unfounded, the IUC assessments impugned remaining entirely in the legal order (except assessment no. 2015…), and the defendant entity being absolved accordingly from the claim.

• To judge the request for an arbitral decision well-founded only as regards the aforementioned assessment no. 2015…, the respective total amount being reimbursed to the applicant.

• To judge unfounded the request insofar as it relates to the recognition of the right to indemnificatory interest in favour of the applicant.

The value of the proceedings is set at €3,245.28 (three thousand two hundred and forty-five euros and twenty-eight cents), in accordance with article 32 of the Code of Administrative Procedure and article 97-A of the Code of Tax Procedure and Process, applicable by virtue of the provisions of article 29, no. 1, paragraphs a) and b), of the RJAT, and article 3, no. 2, of the Regulation of Costs in Arbitration Proceedings in Tax Matters.

Costs to be borne by the applicant, in the amount of €612.00 (six hundred and twelve euros), in accordance with Table I of the Regulation of Costs in Arbitration Proceedings in Tax Matters, and in compliance with the provisions of articles 12, no. 2, and 22, no. 4, both of the RJAT, and of the provisions of article 4, no. 4, of the aforementioned Regulation.

Notify.

Lisbon, 9 May 2016.

The Arbitrator

(Miguel Patrício)

Text prepared by computer, in accordance with the provisions of article 131, no. 5, of the Code of Civil Procedure, applicable by referral of article 29, no. 1, paragraph e), of the RJAT.

The drafting of the present decision is governed by the orthography prior to the Orthographic Agreement of 1990.