Summary
Full Decision
ARBITRAL DECISION
I – REPORT
A…, Lda, taxpayer no. …, with registered office at Rua …, no. …, …, …-… …, hereinafter referred to as Claimant, filed a request for the establishment of an arbitral tribunal in tax matters and a request for an arbitral ruling, pursuant to the provisions of Articles 2, no. 1, a) and 10, no. 1, a), both of Decree-Law no. 10/2011, of 20 January (Legal Regime of Arbitration in Tax Matters, hereinafter referred to as RJAT), requesting the declaration of illegality of four acts of assessment of Single Vehicle Circulation Tax (IUC) for the years 2009, 2010, 2011 and 2012 and compensatory interest, relating to the vehicle with registration number …-…-…, issued by the Tax and Customs Authority.
The request for establishment of the arbitral tribunal was accepted by the President of CAAD and automatically notified to the Tax and Customs Authority on 09-09-2014.
Pursuant to the provisions of Articles 5, no. 2, a), 6, no. 1 and 11, no. 1, a) of the RJAT, the Deontological Council appointed the undersigned as arbitrator of the singular arbitral tribunal, who communicated acceptance of the task within the applicable period.
On 22-10-2014 both parties were duly notified of this appointment and did not express any intention to refuse the arbitrator's appointment, in accordance with the combined provisions of Article 11, no. 1, subparagraphs a) and b) of the RJAT and Articles 6 and 7 of the Code of Ethics.
Thus, in accordance with the provision contained in subparagraph c) of no. 1 of Article 11 of the RJAT, the singular arbitral tribunal was constituted on 13-11-2014.
On 17-03-2015 the meeting provided for in Article 18 of the RJAT was held.
The parties presented written submissions.
The arbitral tribunal was regularly constituted and is materially competent, pursuant to the provisions of Articles 2, no. 1, a), and 30, no. 1, of Decree-Law no. 10/2011, of 20 January.
The parties possess legal personality and capacity, are legitimated and are represented (Articles 4 and 10, no. 2, of the same legal instrument and Article 1 of Ordinance no. 112-A/2011, of 22 March).
The proceedings do not suffer from nullities and no exceptions were raised.
The allegations supporting the Claimant's request for an arbitral ruling are, in summary, as follows:
Claimant's Allegations
11.1 The Claimant was notified by the Tax and Customs Authority for payment of IUC relating to the heavy goods vehicle of the brand DAF, model 1093, with registration number …-…-….
11.2 The tax assessed concerns the years 2009, 2010, 2011 and 2012, as shown in the assessment statements nos. 2009 …, 2010.., 2011 … and 2012....
11.3 Now, the Claimant sold the vehicle in question on 24-10-2007 to the French company B…, with registered office in …, France.
11.4 To prove this sale, the Claimant attaches a copy of invoice no. 5250 and the accounting records of the transaction.
11.5 Independently of vehicle registration, from that date onwards, the Claimant ceased to be the owner of the vehicle.
11.6 In the context of IUC, the presumption that the tax debtor of the IUC is the entity in whose favour the invoice is registered is rebuttable, through evidence to the contrary, pursuant to the provision of Article 73 of the General Tax Law, as established by the case law of this Arbitration Centre in cases nos. 26/2013-T and 73/2013-T.
11.7 The Claimant paid, in the context of an enforcement proceeding, the total amount of IUC and compensatory interest of € 3,476.99.
11.8 It also paid penalties for late payment, in the total amount of € 987.50.
11.9 With the declaration of illegality of the assessments now being contested, the Claimant should be refunded the tax and compensatory interest, as well as the penalty should be annulled, all in the total amount of € 4,464.49.
Respondent's Reply
12.1 In the Reply, as a preliminary matter, the Respondent alleges that, with respect to the request for annulment of the penalties borne, this matter falls outside the scope of competence of the arbitral tribunal, as results from the provision of Article 2, no. 1 of the RJAT.
12.2 Therefore, the tribunal should consider itself incompetent for this part of the request.
12.3 As regards the value of vehicle registration in the determination of the tax debtor of IUC, the AT considers that the Claimant's allegations: a) constitute a biased reading of the letter of the law; b) do not heed the systematic element, violating the unity of the regime established throughout the IUC and, more broadly, throughout the entire legal-fiscal system; and, finally, c) further result from an interpretation that ignores the ratio of the regime established in no. 1 of Article 3 of the CIUC.
12.4 The tax legislator, by establishing in Article 3, no. 1, who are the tax debtors of the IUC, expressly and intentionally established that these are the owners (or in the situations provided for in no. 2 the persons mentioned therein), being considered as such the persons in whose name the same are registered.
12.5 The legislator did not use the expression "it is presumed" as it could have done, for example, in the following terms: "the tax debtors 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 the same are registered".
12.6 Thus, it is imperative to conclude that the legislator established expressly and intentionally that the persons in whose name the same (vehicles) are registered are to be considered as such (as owners or in the situations provided for in no. 2 the persons enumerated therein), because it is this interpretation that preserves the unity of the legal system.
12.7 In accordance, this 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, rendered in Case no. 210/13.0BEPNF. (See Article 33 of the Reply).
12.8 Regarding the systematic element of interpretation, the Respondent alleges that the solution advocated by the Claimant is intolerable, finding the understanding upheld by it no legal support, as results not only from no. 1 of Article 3, but also from the provision of Article 6, no. 1 when it refers to "as attested by the registration number or record".
12.9 Thus, the failure to update the registration shall be attributed to the legal sphere of the tax debtor of the IUC and not of the Portuguese State.
12.10 Even if admitting that from the perspective of the rules of civil law and land registration, the absence of registration does not affect the acquisition of the quality of owner, pursuant to the provisions established in the CIUC, the legislator expressly and intentionally wished that the persons in whose name (the vehicles) are registered be considered as owners, lessees, buyers with reservation of ownership or holders of the right to purchase option in long-term leasing.
12.11 Having regard to the teleological element, including parliamentary proceedings, the Respondent alleges that, with the reform of automobile taxation resulting from Decree-Law no. 20/2008, of 31 January, it became clear that the IUC became due by the persons appearing in the register as owners.
12.12 In point IV of the reply, the Respondent further adds that, without prejudice to the foregoing, if the rebuttal of the presumption be accepted as valid – which is only admitted for purposes of reasoning – it will still be said that the sale invoice and its respective accounting record is not sufficient proof to undermine the legal presumption established in Article 3 of the CIUC.
12.13 Invoices are internal documents, of an accounting and commercial nature, incapable, by themselves, of proving the purchase and sale of the vehicle.
12.14 The claimant should have attached other documents that would allow corroboration of the sale, in particular the purchase and sale contract, a declaration from the buyer or proof of the actual performance of payment.
12.15 Finally, as regards arbitration costs, since the Claimant did not take care to update the vehicle registration, the procedural costs of this proceeding shall be its responsibility since its omission gave rise to the issuance of assessments to the holder of the right of property.
12.16 Consequently, the Claimant should be condemned to payment of the arbitration costs, in line with what was decided in a similar matter under Case no. 26/2013-T of this Arbitration Centre.
All considered, it is necessary to render a final decision.
A. MATTERS OF FACT
A.1. Established Facts
1 - The Claimant was notified of the acts of assessment of the IUC for 2009 to 2012, nos. 2009 …, 2010 …, 2011 … and 2012 … relating to the vehicle with registration number …-…-…;
2 - Through a verbal purchase and sale contract, the vehicle was transferred to the company B…, with registered office in …, France, on 24/10/2007;
3 - The Claimant issued the respective sale invoice and recorded the transaction in the company's accounting.
4 - The Claimant made full payment of said tax assessments and compensatory interest in the amount of € 3,476.99.
5 - It also paid penalties in the total amount of € 987.50.
There are no unproven facts with relevance to the assessment of the merits of the case.
B. ON THE LAW
B1 On the Exception of Incompetence of the Arbitral Tribunal
The Claimant, in its request for an arbitral ruling, in addition to the annulment of the acts of assessment relating to the IUC and the consequent request for the refund of the tax and compensatory interest in the amount of € 3,476.99, also requested the annulment of the penalties applied and paid in the total amount of € 987.50.
Pursuant to no. 1 of Article 2 of the RJAT, the competence of said arbitral tribunals comprises: a) The declaration of illegality of acts of tax assessment, acts of self-assessment, acts of withholding at source and acts of payment on account; b) The declaration of illegality of acts of determination of taxable income, acts of determination of taxable amount and acts of fixing patrimonial values; and, finally, c) The examination of any question, of fact or of law, relating to the draft assessment decision, whenever the law does not guarantee the right to lodge the claim referred to in the preceding subparagraph.
Such framework is reiterated by Ordinance no. 112-A/2011, of 22 March, which in its Article 2 specifies the scope of jurisdiction, making it clear that it is the responsibility of arbitral tribunals to judge requests which, within the scope of the administrative and tax courts, follow the procedural form of judicial challenge (subparagraph a) of Article 101 of the General Tax Law and subparagraphs a) to f) of no. 1 of Article 97 of the Code of Tax and Customs Procedure), with the limitations provided for in subparagraphs a) to d) of the same article.
Thus, the request made by the Claimant for annulment of the penalties and refund of the amounts does not fall within the scope of competence of this tribunal.
In this sense, Councillor Jorge Lopes de Sousa also ruled, in Commentary to the Legal Regime of Tax Arbitration, included in the Guide to Tax Arbitration, Almedina, March, 2013, p. 105 when he states that they remain "(…) outside the competence of these arbitral tribunals the examination of disputes arising in fiscal enforcement proceedings or in tax administrative offence proceedings".
Therefore, it is concluded that the exception raised by the Respondent is well-founded, and this Arbitral Tribunal cannot know, ratione materiae, of the invalidity of the decision relating to the application of the penalty and refund of the respective amount paid.
B2 On the Merits
Given the positions of the Parties assumed in the arguments presented, the central question is whether, on the date of the occurrence of the tax event (Article 3, no. 1, of the CIUC), if the owner of the vehicle is not the one appearing in the register, will it nevertheless be the one always considered the tax debtor of the IUC, with the result that the ownership shown in the register is not considered a rebuttable presumption, or, in other words, whether the rule of subjective incidence contained in Article 3, no. 1 of the CIUC establishes or does not establish a presumption.
If the presumption is admitted, it will then be necessary to determine whether the Claimant has proven the transfer of ownership of the vehicle on a date prior to that to which the assessments relate.
- On the Interpretation of Article 3, no. 1 of the CIUC, to Determine Whether or Not the Same Establishes a Presumption of Vehicle Ownership
As for the first question, the matter has already been extensively treated in Tax Arbitration Case Law. See, by way of example, the various decisions of the CAAD published at www.caad.org.pt, namely those rendered in cases nos. 14/2013, 26/2013, 27/2013, 73/2013, 170/2013, 294/2013 and 216/2014. In this decision we shall follow the understanding and conclusions of those decisions.
For the sake of synthesis and clarity of thought, we adhere, without reservation, to the framework provided in the arbitral decision in Case no. 216/2014-T, which we quote and to which we refer:
"The general and unanimous sense of such Case Law is to consider that Article 3-1 of the CIUC establishes a rebuttable presumption of ownership based on the entries or inscriptions contained in the Motor Vehicle Registration Authority and/or in the IMTT database on the date of the tax event.
That is: if the IUC is assessed based on the entries in the register or in accordance with the elements contained in the IMTT database, the tax debtor may exonerate himself from payment by demonstrating the non-correspondence between the reality and those entries and elements which the Tax Authority used to carry out the assessments.
There are no reasons to reverse or alter the essential meaning of this Case Law.
Let us then examine the question again and more closely:
Article 3 of the CIUC (Code of Single Vehicle Circulation Tax) provides:
Article 3
Subjective Incidence
1 – The tax debtors 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 – Lessees, buyers with reservation of ownership, as well as other holders of purchase option rights by virtue of a leasing contract are deemed to be owners".
On the other hand, no. 1 of Article 11 of the General Tax Law provides that "in determining the meaning of tax rules and in qualifying the facts to which they apply, the general rules and principles of interpretation and application of laws are observed".
Resolving the doubts that arise in the application of legal norms presupposes the carrying out of an interpretative activity.
It is therefore necessary to consider what is the best interpretation of Article 3, no. 1 of the CIUC, in the light, first, of the literal element, that is, the one aimed at detecting the legislative thought which is objectified in the norm, to verify whether the same contemplates a presumption, or whether it definitively determines that the tax debtor of the tax is the owner who appears in the register.
The question that arises is, in the case sub judice, whether the expression "being considered" used by the legislator in the CIUC, instead of the expression "being presumed", which was the one contained in the regulations preceding the CIUC, will have removed the nature of presumption from the legal provision in question.
In our view, and contrary to what the AT learnedly argues, the answer must necessarily be negative, since from the analysis of our legal system it is clear that the two expressions have been used by the legislator with equivalent meaning, whether at the level of rebuttable presumptions, whether in the context of irrebuttable presumptions, and therefore nothing permits extracting the conclusion sought by the Tax Authority based on a mere semantic reason.
In fact, this occurs in various legal norms that establish presumptions using the verb "consider", of which we indicate, merely by way of example, the following:
~ within the scope of civil law - no. 3 of Article 243 of the Civil Code, when it establishes that "a third party who acquired the right after the registration of the simulatio action is always considered to be in bad faith, when the action is registered";
~ also within the scope of intellectual property law, the same occurs, when Article 59, no. 1 of the Code of Industrial Property provides that "(…) inventions whose patent has been requested during the year following the date on which the inventor leaves the company are deemed to have been made during the performance of the employment contract (…)";
~ and, finally, within the scope of tax law, when nos. 3 and 4 of Article 89-A of the General Tax Law provide that it is the taxpayer's burden to prove that the declared income corresponds to reality and that, if such proof is not made, the income is presumed ("deemed" in the text of the Law) to be the income that results from the table contained in no. 4 of said article.
This conclusion that there is complete equivalence of meanings between the two expressions, which the legislator uses interchangeably, satisfies the condition established in Article 9, no. 2 of the Civil Code, since the minimum correspondence of wording is assured for the purposes of determining the legislative thought.
It is next important to subject the norm in question to the other elements of logical interpretation, in particular, the historical element, the rational or teleological element and the systematic element.
Discoursing on interpretative activity, Francisco Ferrara states that it "is the most difficult and delicate operation that a jurist can undertake, and demands fine handling, keen judgment, felicitous intuition, much experience and perfect mastery not only of the positive material, but also of the spirit of a certain legislation. (…) Interpretation should be objective, balanced, without passion, sometimes bold, but not revolutionary, keen, but always respectful of the law" (See Essay on the Theory of Interpretation of Laws, translation by Manuel de Andrade, (2nd ed.), Arménio Amado, Editor, Coimbra, 1963, p. 129).
As Batista Machado points out, "the legal provision presents itself to the jurist as a linguistic utterance, as a set of words that constitute a text. To interpret clearly consists in withdrawing from that text a certain meaning or content of thought.
The text allows multiple meanings (polysemy of text) and frequently contains ambiguous or obscure expressions. Even when apparently clear at first reading, its application to concrete cases of life very often raises unforeseen and unforeseeable difficulties of interpretation. Furthermore, although apparently clear in its verbal expression and bearing only one meaning, there is still the possibility that the verbal expression has betrayed the legislative thought – a phenomenon more frequent than might appear at first sight" (See Introduction to Law and the Discourse of Legitimation, pp.175/176).
"The purpose of interpretation is to determine the objective meaning of the law, the vis potestas legis.(…) The law is not what the legislator wanted or intended to express, but only that which he expressed in the form of law. (…) On the other hand, the legal command has an autonomous value that may not coincide with the will of the architects and drafters of the law, and may lead to unforeseen and unexpected consequences for the legislators. (…) The interpreter should seek not what the legislator wanted, but what the law objectively appears to want: the mens legis and not the mens legislatoris (See Francesco Ferrara, Essay, pp. 134/135).
To understand a law "is not only to mechanically grasp the apparent and immediate meaning that results from verbal connection; it is to inquire deeply into legislative thought, to descend from the verbal surface to the intimate concept that the text contains and to develop it in all its possible directions"(loc. cit., p.128).
With the objective of unveiling the true meaning and scope of legal texts, the interpreter makes use of interpretative factors which are essentially the grammatical element (the text, or the "letter of the law") and the logical element, which in turn is subdivided into the rational (or teleological) element, the systematic element and the historical element. (See Baptista Machado, loc. cit., p. 181; Oliveira Ascensão, The Law – Introduction and General Theory 2nd Ed., Calouste Gulbenkian Foundation, Lisbon, p.361).
Among us, it is Article 9 of the Civil Code (CC) that provides the fundamental rules and elements for the correct and adequate interpretation of norms.
The text of no. 1 of Article 9 of the CC begins by saying that interpretation should not be confined to the letter of the law, but should reconstruct from it the "legislative thought".
On the expression "legislative thought" Batista Machado tells us that Article 9 of the CC "did not take a position in the controversy between subjectivist doctrine and objectivist doctrine. This is proven by the fact that it does not refer, either to the "will of the legislator" or to the "will of the law", but rather points as the scope of interpretative activity the discovery of "legislative thought" (Article 9, no. 1). This expression, deliberately neutral, means precisely that the legislator did not want to commit himself" (loc. cit., p. 188).
In the same sense are P. de Lima and A. Varela, in annotations to Article 9 of the CC (See Civil Code Annotated – vol. I, Coimbra ed., 1967, p. 16).
And on no. 3 of Article 9 of the CC, Batista Machado further states: "(…) this no. 3 proposes to us, therefore, a model of ideal legislator who established the most correct (most accurate, just or reasonable) solutions and knows how to express himself correctly. This model clearly bears the characteristics of objectivism, since the concrete legislator (often incorrect, precipitous, unfortunate) is not taken as a reference point, but an abstract legislator: wise, foresighted, rational and just" (Work and loc. cit. p. 189/190).
Right after this distinguished Master calls attention to the fact that no. 1 of Article 9 refers to three more elements of interpretation: "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" (loc. cit, p. 190).
As for the "circumstances of the time in which the law was elaborated", Batista Machado further explains that this expression "represents what is traditionally called the occasio legis: the conjunctural factors of a political, social and economic nature that determined or motivated the legislative measure in question" (loc. cit., p.190).
Regarding the "specific conditions of the time in which it is applied", this element of interpretation "decidedly has an actualist connotation (loc. cit., p. 190) which coincides with the opinion expressed by P. de Lima and A. Varela, in the annotations to Article 9 of the CC.
With respect to the "unity of the legal system", Baptista Machado considers this the most important interpretative factor: "(…) its consideration as a decisive factor would always be imposed upon us by the principle of the coherence of values or axiological order of the legal system" (loc. cit., p. 191).
It is also this author who tells us, regarding the literal or grammatical element (text or "letter of the law"), that it "is the starting point of interpretation. As such, it has from the outset a negative function: that of eliminating those meanings that have no support, or at least some correspondence or resonance in the words of the law.
But it also has a positive function, in the following terms: if the text allows only one meaning, that is the meaning of the norm – with the caveat, however, that one may conclude on the basis of other norms that the wording of the text has betrayed the thought of the legislator" (loc. cit., p. 182).
Referring to the rational or teleological element, this author states that it consists "in the reason for the law (ratio legis), in the end sought by the legislator in elaborating the norm. Knowledge of this end, especially when accompanied by knowledge of the circumstances (political, social, economic, moral, etc.,) in which the norm was elaborated or of the political-economic-social conjuncture that motivated the legislative decision (occasio legis) constitutes a most important aid in determining the meaning of the norm. It suffices to recall that clarification of the ratio legis reveals to us the valuation or weighing of the various interests regulated by the norm and, therefore, the relative weight of those interests, the choice between them expressed by the solution that the norm conveys" (loc. cit., pp. 182/183).
Regarding the systematic element (context of the law and parallel passages) which "this element comprises the consideration of the other provisions that form the complex normative structure of the institute in which the norm to be interpreted is integrated, that is, which regulate the same matter (context of the law), as well as the consideration of legal provisions that regulate parallel normative problems or related institutes (parallel passages). It also comprises the systematic place that belongs to the norm to be interpreted in the overall legal system, as well as its consonance with the spirit or intrinsic unity of the entire legal system.
This interpretative aid is based on the postulate of the intrinsic coherence of the legal system, in particular on the fact that the norms contained in a code obey, in principle, a unitary thought" (Batista Machado, loc.cit., p. 183).
"(…) In particular we must take into consideration the interconnection of the various laws of the country, because a fundamental requirement of all sound legislation is that the laws fit together and do not result in a jumble of disconnected provisions (Joseph Kohler, quoted by Manuel de Andrade, in Essay, p. 27).
Descending to the case at bar and to the legal and juridical framework that underlies it:
Through the analysis of the historical element, the conclusion is drawn that, from the entry into force of Decree-Law 59/72, of 30 December, the first to regulate this matter, until Decree-Law no. 116/94, of 3 May, the last to precede the CIUC [see Law no. 22-A/2007, as amended by Law 67-A/2007 and 3-B/2010], the presumption [underlined] was established that the tax debtors of the IUC were the persons in whose name the vehicles were registered on the date of their assessment.
It is therefore verified that the tax law always had the objective of taxing the true and effective owner and user of the vehicle, and it would appear to be indifferent the use of one or the other expression which, as we have seen, have in our legal system a coincident meaning.
The same may be said when we resort to elements of interpretation of a rational or teleological nature.
Indeed, the current and new framework of automobile taxation establishes principles aimed at subjecting the owners of vehicles to bear the costs of damages caused by road and environmental damage caused by them, as can be gleaned from the text of Article 1 of the CIUC.
Now, the consideration of these principles, in particular the principle of equivalence, which deserve constitutional protection and establishment in community law, and are also recognized in other branches of the legal system, determines that said costs be borne by the real owners, the causers of said damages, which excludes, entirely, an interpretation which would aim to prevent the presumed owners from providing evidence that they are no longer so because property is in the legal sphere of another[5].
Thus, also, from the interpretation made in light of elements of a rational and teleological nature, in view of what the rationality of the system guarantees and the purposes pursued by the new CIUC, it is clear that no. 1 of Article 3 of the CIUC establishes a rebuttable legal presumption.
Given the foregoing, it is important to conclude that the ratio legis of the tax points towards ensuring that the effective owner-users of the vehicles are taxed, and therefore the expression "being considered" is used in the normative provision in question in a sense similar to "being presumed", which is why there is no doubt that a legal presumption is established.
On the other hand, Article 73 of the General Tax Law establishes that "(…) the presumptions established in the rules of tax incidence always admit evidence to the contrary, and therefore are rebuttable (…)".
Being the case that, establishing Article 3, no. 1 of the CIUC a presumption juris tantum [and therefore rebuttable], the person who is inscribed in the register as owner of the vehicle and who, for that reason was considered by the Tax Authority as the tax debtor of the tax, may present evidence aimed at demonstrating that the holder of ownership, on the date of the tax event, is another person, to whom the ownership was transferred.
(…)
These operations of transfer of ownership are enforceable against the Tax and Customs Authority, because, although the facts subject to registration only produce effects with respect to third parties when registered, given the provision of Article 5, no. 1 of the Land Registration Code [applicable by reference from the Motor Vehicle Registration Code], the Tax Authority is not a third party for registration purposes, since it is not in the situation provided for in no. 2 of said Article 5 of the Land Registration Code, applicable by virtue of the Motor Vehicle Registration Code, that is: it did not acquire from a common author rights incompatible with each other.
In summary and in conclusion:
For the assessment of IUC, the Tax and Customs Authority can only avail itself of the registered reality or information contained in the IMTT database if the obsolescence of the legal situation is not proven, in particular as regards the ownership of the vehicle.
Vehicle registration, in the economy of the CIUC, thus represents mere rebuttable presumption of the tax debtors of the tax."
It now remains to determine whether the Claimant has proven the transfer of ownership of the vehicle.
- On the Proof of Transfer of Motor Vehicles
Given the foregoing, we conclude that no. 1 of Article 3 of the CIUC establishes a rebuttable presumption, pursuant to Article 73 of the General Tax Law, that the holder of vehicle registration is its owner. In the present case, the Claimant must prove, in order to rebut the presumption of Article 3, no. 1 of the CIUC (and even of Vehicle Registration) that it was not the owner of the vehicle in question during the period to which the assessments being contested relate.
To prove that the transfer of ownership occurred through purchase and sale contracts, the Claimant submitted a copy of the respective invoice and accounting record.
In its allegations, the Respondent alleges that invoices, as private unilateral documents, do not constitute sufficient proof to rebut the presumption.
We disagree with this understanding.
It cannot but be noted, from the outset, that the purchase and sale contract of a motor vehicle is a verbal contract, not subject, therefore, to a specific form. From this framework, there necessarily results special importance to the tax document not only for tax purposes but also for civil or other purposes.
In the present case, the Claimant presented an invoice, issued in accordance with legal requirements, proving the sale operation.
Invoices constitute, for tax purposes, the documents legally required to prove sales operations and provision of services, as clearly results from the various tax codes (see no. 6 of Article 23 of the Corporate Income Tax Code, subparagraph b) of no. 1 of Article 29 and Article 36 of the Personal Income Tax Code and Article 115 of the Personal Income Tax Code).
It would therefore be strange if an invoice constituted, from the perspective of the transferor (now Claimant), sufficient proof to determine any capital gain or loss from the sale of a vehicle (as shown in the accounting record presented), taxed under Corporate Income Tax, but, conversely, did not constitute sufficient proof to prove the same transfer, now for purposes of IUC.
It is of course clear that this does not prevent the AT from demonstrating that it is a false document because there was no actual transfer (with all fiscal and criminal consequences).
In the present case, there is no proof or even any indication that calls into question the presumption of good faith of the taxpayer and the documents presented, as clearly results from the provision of Article 75 of the General Tax Law.
In conclusion, the prerequisites necessary for the granting of the request for annulment of assessments nos. 2009 …, 2010 …, 2011 … and 2012 … are met, based on illegality and error in the presuppositions.
D. DECISION
Therefore, it is decided in this Arbitral Tribunal:
a) To grant the exception of incompetence of the tribunal, on the basis of matter, to know of the request for annulment of the penalties applied;
b) To grant the request for declaration of illegality of the IUC assessments nos. 2009 …, 2010 …, 2011 … and 2012 …, based on illegality and error in the presuppositions;
c) To condemn the Tax and Customs Authority to refund to the Claimant the amounts of IUC and compensatory interest paid unduly;
d) To condemn the Respondent and the Claimant to payment of the costs of proceedings in the total amount of € 612.00, in the proportion of €482.79 and €137.21, respectively.
E. Value of the Proceedings
The value of the proceedings is fixed at € 4,464.49, pursuant to Article 97-A, no. 1, a), of the Code of Tax and Customs Procedure, applicable by virtue of subparagraphs a) and b) of no. 1 of Article 29 of the RJAT and no. 2 of Article 3 of the Regulation of Costs in Tax Arbitration Proceedings.
F. Costs
The amount of the arbitration fee is fixed at € 612.00, pursuant to Table I of the Regulation of Costs of Tax Arbitration Proceedings, to be paid by the Respondent, since the request was entirely unsuccessful, pursuant to Articles 12, no. 2, and 22, no. 4, both of the RJAT, and Article 4, no. 4, of said Regulation.
The responsibility for costs regarding the declaration of illegality of the IUC assessments is that of the losing party because, contrary to what is alleged, the AT could have, in response to the appeal for administrative review or within 30 days following the date of knowledge of the request for establishment of the Arbitral Tribunal, proceeded to the revocation of the identified assessment acts (Article 13, no. 1 of the RJAT), all the more so since the Claimant attached, upon presentation of those requests, a copy of the invoice proving the transfer of ownership of the vehicle.
Let it be notified.
Lisbon,
1 June 2015
The Arbitrator
(Amândio Silva)
[1] The genesis of the legal tax relationship presupposes the cumulative verification of the three necessary presuppositions for its arising, namely: the real element, the personal element and the temporal element. (In this sense, see, among many other authors, Freitas Pereira, M.H., Tax Law, 3rd Edition, Almedina, Coimbra, 2009.
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