Process: 674/2015-T

Date: March 30, 2016

Tax Type: IUC

Source: Original CAAD Decision

Summary

This arbitral decision addresses the subjective incidence of the Unique Circulation Tax (IUC) when new vehicles are registered in an importer's name but sold for expedition to other EU Member States or third countries within the legal registration period. The claimant, a vehicle importing company, challenged IUC assessments totaling €36,784.20 for 2011-2012, arguing that 268 vehicles were sold and exported within the 60-day registration period established in Article 42(2) of the Motor Vehicle Registration Regulation (MVRR). The core legal issue involves whether the legal presumption under Article 3(1) of the IUC Code (CIUC), which designates the registered owner as the tax obligor, can be rebutted when vehicles are sold before the tax becomes due. The claimant argued that under Article 73 of the General Tax Law (LGT), this presumption is rebuttable, and they successfully demonstrated through invoices that vehicles were transferred before expiration of the registration period. Furthermore, the claimant contended that the tax-generating event and exigibility of IUC only occur after the 60-day registration period expires, pursuant to Articles 17(1) and 18(1)(a) of CIUC, not upon issuance of the Vehicle Customs Declaration or registration certificate. The claimant also invoked the equivalence principle under Article 1 of CIUC, asserting that IUC should burden actual vehicle users who cause environmental and road costs in Portuguese territory, not intermediaries who merely register vehicles for commercial expedition. The arbitration was conducted under the Legal Regime of Arbitration in Tax Matters (LRAT), with the claimant seeking annulment of the assessments and reimbursement of paid taxes plus compensatory interest under Article 43(2) of LGT for error attributable to tax services.

Full Decision

ARBITRAL DECISION

I – REPORT

  1. A… SA, formerly B…, S.A., collective person no. …, with registered office at Rua…, no. …, …--… Porto, having been notified of the assessments of Unique Circulation Tax (IUC), relating to the years 2011 and 2012, in the total amount of € 36,784.20, presented, on 11 November 2015, a request for constitution of an arbitral tribunal and for an arbitral pronouncement, under the provisions of articles 2, no. 1, paragraph a) and 10, no. 1, paragraph a), both of Decree-Law no. 10/2011, of 20 January, which approved the Legal Regime of Arbitration in Tax Matters, hereinafter "LRAT", in which the Tax and Customs Authority (TA) is requested to declare the illegality and annul the acts of IUC assessment for the years 2011 and 2012, which it identifies, as well as to order the TA to proceed with the reimbursement of taxes paid, plus the respective indemnity interest.

  2. Under the provisions of articles 6, no. 1 and 11, no. 1 paragraph a), of Decree-Law no. 10/2011, of 20 January, the Deontological Council of the Administrative Arbitration Centre (CAAD) appointed the undersigned as sole arbitrator on 10 December 2015, having the same communicated acceptance of such appointment.

  3. On 11 December, the Parties were notified of such appointment, under the combined provisions of article 11, no. 1 paragraph b) of the LRAT, in the wording introduced by article 228 of Law no. 66-B/2012, of 31 December, with articles 6 and 7 of the CAAD Deontological Code, with the Parties not having manifested the intention to refuse the appointment of the arbitrator.

Under these circumstances, in accordance with the provision of paragraph c) of no. 1 of article 11 of the LRAT, in the wording introduced by article 228 of Law 66-B/2012, of 31 December, the Sole Arbitral Tribunal was constituted on 25 January 2016.

4.1 Under the provisions of article 17, nos. 1 and 2 of the LRAT, the TA was notified, as the respondent party, to submit a reply within 30 days and, if it deemed appropriate, to request the production of additional evidence, and within the same period a copy of the administrative file was to be sent, which it did on 2 March 2016.

4.2 In that reply, the Respondent sustained the legality of the assessments made, concluding for the total rejection of the claim.

It also alleged that only matters of law were at issue, and requested the dispensation of the production of witness testimony, indicated by the Claimant in the initial petition.

4.3 In the exercise of contradiction, the Arbitral Tribunal notified the Claimant to pronounce itself on the dispensation of witness examination, as well as, given the fact that only matters of law were under consideration, whether it waived the first meeting referred to in article 18 of the LRAT, without prejudice to the presentation of written submissions, should it deem appropriate, a matter on which the Respondent was equally inquired, with both giving their assent, by communications of 10 and 9 March 2016, respectively.

PROCEDURAL REQUIREMENTS

  1. The Arbitral Tribunal is regularly constituted, is materially competent and the Parties enjoy legal personality and capacity, being legitimate, in light of articles 4 and 10, no. 2 of the LRAT and of article 1 of Ordinance no. 112-A/2011, of 22 March.

The proceeding does not suffer from vices that would invalidate it and there are no incidents that warrant resolution nor preliminary questions on which the Arbitral Tribunal should pronounce itself.

II - LEGAL GROUNDS

6.1 The Claimant, in the initial petition, to substantiate the request for arbitral pronouncement, essentially alleged the following:

a) The legal presumption contained in article 3, no. 1 of the CIUC, that the owner of the vehicle is the person who appears as such in the motor vehicle register, being therefore the passive subject of the tax and becoming responsible for payment of the tax, cannot be qualified as an irrebuttable presumption of subjective tax incidence;

b) Under the provisions of article 73 of the General Tax Law (GTA), the person who appears in the register as owner of the vehicle may always rebut the presumption provided for in article 3 of the CIUC, that is, the presumption that he is the owner and consequently the passive subject of the IUC;

c) In this manner, he may demonstrate that such fact does not correspond to the truth, since on the date when the IUC became due he had already transferred the vehicle in question;

d) In the years 2011 and 2012 it imported in the exercise of its commercial activity 268 vehicles, which it identified and which were registered and subsequently invoiced within the legally granted period for registration and dispatched/exported to other Member States of the European Union (EU) /Third States, not having had the Portuguese market as final destination;

e) Against the above, the view cannot be accepted that the tax-generating event and the exigibility of the IUC occur with the issuance of the Vehicle Customs Declaration (VCD), in the name of the importer and with the subsequent request for issuance of the vehicle registration certificate, in the name of the importer, given that such understanding disregards the provisions of articles 17, no. 1 and 18, no. 1, paragraph a), both of the CIUC;

f) The legislator established, unequivocally, that, in the year of registration, the tax-generating event of the IUC and its exigibility occur only after the expiration of the period for registration provided for in article 42, no. 2 of the Motor Vehicle Registration Regulation (MVRR), that is, after the period of 60 days counted from registration;

g) One cannot confuse the completion of the VCD, the tax-generating event of the Vehicle Tax (VT), with the tax-generating event of the IUC;

h) In the case of IUC it is only possible to determine the passive subject of the tax after the expiration of the period for such registration, provided for in article 42, no. 2 of the MVRR, that is, the period of 60 days after the obtaining of registration by the registered operator and the presentation of the registration certificate does not originate nor is confused with the tax-generating event of the IUC;

i) The understanding of the Respondent that the tax becomes exigible is also manifestly illegal due to violation of the principle of equivalence provided for in article 1 of the CIUC, given that the tax should seek to burden the owners of vehicles in proportion to the environmental and road cost caused by the circulation of vehicles in national territory;

j) Having the Claimant succeeded in providing proof through the attachment of the respective invoices that the vehicles in question were transferred and invoiced before the expiration of the legally granted period for registration and dispatched/exported to other member states of the EU or third states, it should be concluded that it succeeded in rebutting the presumption derived from the registration and provided for in article 3, no. 1, of the CIUC, whereby the annulment of the IUC assessments in question should be determined, based on their respective illegality;

l) The fact that, although aggrieved, it proceeded to payment of the IUC implies that, being underlying such assessments manifest error regarding the assumptions of fact and law, the Claimant understands that, if it is recognized as having grounds, it is owed indemnity interest due to error imputable to the services, according to the provisions of article 43, no. 2 of the GTA;

m) In conclusion, it is requested that the illegality be declared and the acts of IUC assessment for the years 2011 and 2012 relating to the vehicles that it specified be annulled, requested that, consequently, the TA be condemned to the restitution of the amounts of IUC opportunely paid, as well as be condemned to the payment of indemnity interest, since they were based on the materialization of error imputable to the services.

6.2 For its part, the Respondent in reply to the initial petition, in its defense, came to say the following:

a) Within the scope of article 17 of the CIUC the introduction into consumption and assessment of tax on vehicles which do not possess national registration is entitled by the issuance of a VCD, the same being constitutive of the tax-generating event in accordance with the terms and for the purposes set forth in article 5 of the CISV;

b) Under the provisions of no. 4 of article 117 of the Highway Code, the registration is requested from the Institute of Mobility and Land Transport (IMLT) by the entity that proceeds with admission or introduction into consumption;

c) Article 24 of the MVRR states that "The initial registration of ownership of imported vehicles, admitted, assembled, constructed or reconstructed in Portugal is based on the respective request and proof of compliance with tax obligations"

d) Taking into account the provisions of article 3, no. 1, according to which "Passive subjects of the tax are the owners of vehicles, being considered as such the natural or legal persons, of public or private law, in the name of which the same are registered", article 6, no. 1, with regard to the tax-generating event and to the exigibility of the tax, according to which "The tax-generating event is constituted by the ownership of the vehicle, as attested by the registration or registration in national territory" and article 17, all of the CIUC, according to which "… the tax is assessed by the passive subject of the tax within 30 days following the expiration of the period regularly required for the respective registration.";

e) It is verified that from the articulation between the scope of the subjective incidence of the IUC and the fact constitutive of the corresponding tax obligation arise unequivocally from article 6 of the CIUC the legal situations that generate the birth of the tax obligation, that is the registration or the registration in national territory;

f) "… by force of the combination of the express norms and in special attention to the provision of article 24 of the MVRR, approved by DL no. 55/75 of 12.02, in the wording given by DL no. 178-A/2005 of 28 October, it is implied that the initial registration of ownership, of admitted vehicles (as is the case of the proceedings), is based on the respective request and proof of compliance with the tax obligations relating to the vehicle";

g) "That is, the issuance of registration certificate implies the presentation of a VCD by the Claimant and the payment of the corresponding VT, and automatically originates the registration of the ownership of the vehicle under article 24 of the MVRR in the name of the entity that proceeded with its importation of the vehicle and requested registration, that is the claimant", whereby "the first registration of each vehicle is considered in the name of the importing entity";

h) It is peremptory that under the terms of article 24 of the MVRR, the importer appears in the register as first owner of the vehicle and, in that sense, is according to the provided in articles 3 and 6 of the CIUC, passive subject of the tax, being the tax-generating event assessed under the terms of the mentioned article 6 by the registration or by the registration in national territory;

i) Having the Claimant requested the issuance of registration certificate and being the vehicle registered in the name of the latter, the requirements of the tax-generating event of the IUC are met, as well as its exigibility, being the same passive subject of the tax;

j) The tax legislator in article 6 of the CIUC clearly established the premises regarding the tax-generating event of the tax, as well as its exigibility, clearly providing that such fact is constituted by the ownership of the vehicle;

l) The understanding of the Claimant that it may always rebut the legal presumption that the Respondent is the owner of the vehicles, at the moment when the tax becomes due, that is, after the expiration of the legally granted period for registration, does not find the slightest correspondence with the letter of the law beyond violating frontally the principle of legality, equality, taxpaying capacity and legal certainty and security, finding not the slightest correspondence with the ratio legis contained in article 6 of the CIUC nor with the mens legislatoris;

m) The understanding that the Claimant advances that taxation may be set aside in case the vehicle is exported to another country within 60 days, or in cases where they occur between the 61st day and the 90th day, does not find shelter in the letter of the law, that is, does not find in the letter of the law the slightest verbal correspondence;

n) The tax legislator did not fictionally provide that the legal presumption of ownership could be rebutted within the 60 days referred to in no. 2 of article 42 of the MVRR, which would be paid within 30 days following in accordance with article 17 of the CIUC, and much less fictionally provided that importers, despite appearing as first owners of the imported vehicles, may see taxation set aside in the context of IUC, should the vehicle be registered in the name of another owner within 60 days, which owner assesses and pays the IUC within 30 days under article 17 of the CIUC;

o) The legislator established that the tax-generating event is assessed by registration or by registration, expressly establishing article 24 of the MVRR that having been paid the VT and registration requested, it is automatically registered in the name of the importer, that is of the Claimant;

p) Therefore, having completed the VCD, paid the VT and made the request for registration, it ineluctably fulfilled the tax-generating event of the IUC, that is the registration and the registration (objective/subjective incidence), with payment being exigible under article 3 of the CIUC;

q) Regardless of whether the Claimant sold the vehicle to other countries, before or after the 60 days for registration, such fact, in light of the tax-generating event provided for in article 6 of the CIUC is manifestly innocuous, in that the legislator expressly established that the tax-generating event is attested by the assignment of the registration, and once the first registration is made, it doubly fulfills the tax-generating event of the tax;

r) The tax legislator intentionally and expressly wanted that be considered as passive subjects of the tax the owners in the name of which the vehicles are registered;

s) The "vexatio quaestio" lies in the motor vehicle registration for purposes of incidence of tax, notably as to the exigibility of the IUC, established in articles 3 and 6 both of the CIUC, and, in that the vehicles are registered in the name of the Claimant, the tax is exigible to it, not being possible to set aside the subjective incidence of the tax, being relevant in support of its thesis the argumentation contained in Arbitral Decision no. 55/2014-T;

t) Following the argumentative ideology adduced by the Claimant, would be found the formula to distort the ratio legis of the CIUC, proceeding to its non-application and circumvention in clear and manifest violation of the most elementary legal and constitutional principles of tax legality, justice, taxpaying capacity, equality and legal security and certainty;

u) The effective environmental concern underlying the ratio of the reform of automobile taxation does not set aside another of the fundamental ratios of the CIUC, which is that the tax legislator intended to create an IUC based on the taxation of the owner of the vehicle as contained in the motor vehicle register or through the issuance of the registration to which article 6 of the CIUC refers, an understanding which is accepted in Arbitral Decision no. 63/2014-T;

v) The setting aside of subjective incidence in taxation in the context of IUC proposed by the Claimant contradicts the principle of legality and typicity established in article 8 of the GTA and article 103 of the Portuguese Republic Constitution (PRC), since such understanding is not supported by law, also colliding with the principle of taxpaying capacity established in article 4 of the GTA and 104 of the PRC and, by greater reason, violates the principle of tax equality contained in article 13 of the PRC, in that taxpaying capacity is the unitary criterion of taxation that realizes the duty of all to pay taxes according to the same criterion, thus also affront the principle of legal certainty and security;

x) The elision of the presumption that the Claimant invokes suffers from erroneous interpretation and application of legal norms, given that it incurs an skewed reading of the letter of law, in that the tax legislator expressly and intentionally established that these are the owners, being considered as such the persons the persons in the name of which the same are registered;

y) The legislator did not use the expression "are presumed", and to understand that the legislator established here a presumption is unequivocally to effect an interpretation "contra legem", being rather a clear choice of legislative policy accepted by the legislator, whose intention within its freedom of legislative configuration was that be considered owners those who as such appear in the motor vehicle register, being this the understanding already adopted by the jurisprudence of our courts, rendered in the context of proceeding that ran its course in the Administrative and Tax Court of Penafiel;

z) It also defends that if the Claimant intends to react against the presumption of ownership that is attributed to it, then, forcibly, it will have to react through the appropriate means provided for in the MVRR and in the registry laws, subsidiarily applicable, and against the very content of the motor vehicle register, for it is not by the challenging of IUC assessments that the registration information is rebutted;

aa) Also the systematic element of interpretation of the law demonstrates that, from the articulation between the scope of the subjective incidence of the IUC and the fact constitutive of the corresponding tax obligation, it arises unequivocally that only the legal situations object of registration generate the birth of the tax obligation, that is, the moment from which the tax obligation is constituted presents a direct relationship with the issuance of the registration certificate, in which must appear the facts subject to registration (cf. articles 4/2 and 6/3 of the CIUC, article 10/1 of DL 54/75, of 12 February, and article 42 of the MVRR);

bb) In the absence of such registration, the owner will be notified to comply with the corresponding tax obligation, for the Respondent, taking into account the current configuration of the legal system, will not have to proceed with the assessment of the tax based on elements that do not appear in registers and public documents and as such authentic;

cc) The non-updating of the registration in accordance with the provisions of article 42 of the MVRR is imputable in the legal sphere of the passive subject of the IUC and not in that of the Portuguese State, as the active subject of such tax;

dd) To accept the position defended by the Claimant, the Respondent would have to proceed with the assessment of the IUC regarding that other person identified by the person appearing in the motor vehicle register to which it had first assessed the IUC and, alleging and proving this that, in the meantime, it has already celebrated a contract with another, the respondent would have to re-assess the IUC to this new passive subject and so on successively, placing in question the period of expiration of the tax;

ee) Legal security and certainty would be placed in question, given that the institute of motor vehicle registration would cease to provide the security and certainty that constitute its main purposes, as well as the power and duty of the Respondent to assess taxes;

ff) In light of a teleological interpretation, the tax legislator intended to create a tax based on the taxation of the owner of the vehicle as appears in the motor vehicle register, being significant that the cases taxatively typified in article 3 of the CIUC both in its no. 1 as in no. 2 correspond exactly to the cases of mandatory motor vehicle registration under the Motor Vehicle Registration Code (MVRC);

gg) Parallelly, the interpretation of the Claimant is offensive of the principle of efficiency of the tax system, in that it translates into an obstruction and increasing costs of the competencies attributed to the respondent, with obvious prejudice to the interests of the Portuguese State;

hh) The claimant in seeking to disregard the registration reality, reality that constitutes the cornerstone on which the building of the IUC is based, generates for the Respondent, and ultimately for the Portuguese State, additional administrative costs, obstruction of the performance of its services, lack of control of the tribute and uselessness of registry information systems;

ii) The argumentation conveyed by the Claimant represents a violation of the principle of proportionality, in that it disregards it totally in confrontation with the principle of taxpaying capacity;

jj) The Claimant should be condemned to the payment of arbitral costs, as well as the legal requirements conducive to the right to indemnity interest are not met.

In summary, the Respondent requests that the request for arbitral pronouncement be judged unsubstantiated, with the tax acts impugned remaining in the legal order, and, consequently, be absolved of the claim.

  1. On matters of fact, relevant for the decision to be rendered, this Arbitral Tribunal considers as proven, given the elements in the case file, the following facts:

7.1 The Claimant is a company that, in the context of its activity, imports vehicles which, for commercial and contractual reasons established with the manufacturers, sometimes proceeds with their registration in Portugal but, subsequently, sells them and dispatches them to other Member States of the European Union (EU), or, in certain cases, exports them to third countries.

7.2 – In the years 2011 and 2012, on various dates, it proceeded with the introduction into consumption of the vehicles which, identified by the national registration and by the date on which it was assigned, below are discriminated in no. 7.8, totaling 268 vehicles.

7.3 – Following the assignment of the national registration, within a period that in no case exceeded 60 days relating to such assignment, it proceeded with their sale to various companies headquartered in other Member States of the EU, on the dates mentioned in the list of vehicles, contained in 7.8.

7.4 – The recipients of such sales were C…, (1), headquartered in Weibenburg, D…, (3), in Emmerig, E…, (4), in Kempten, F…, (6), in Hamburg, all in Germany, G…,(2), in … Sur Marne, in France, and H…, (5), in Aarshot and I…, (7), in Wilrig, both in Belgium, being discriminated in the list mentioned in 7.8, the vehicles acquired by each of the companies.

7.5 – Regarding all of them, the Claimant promoted their dispatch covered by customs forms with record of authorization for exit, having effected the cancellation of the national registrations that had been assigned to it, in the competent entity.

7.6 – During the course of the year 2014, the Claimant was confronted by the TA with the IUC debts relating to the vehicles indicated below. For economic reasons, it proceeded with the respective payment, through the electronic channel, in accordance with what is stipulated legally for passive subjects who are legal persons.

7.7 – The amounts paid, in euros, reported to the vehicles mentioned below, are discriminated by the amount of IUC and by the respective amount of compensatory interest.

7.8. The vehicles whose IUC and respective compensatory interest are the object of examination in the context of the challenge, are the following:

[VEHICLE LIST TABLE - 268 vehicles with registration dates, sale dates, purchaser codes, IUC amounts, interest, and totals - totaling €36,784.20]

  1. There are no unproven facts relevant to the decision of the case.

LEGAL GROUNDS

  1. Based on what has been set out above, it is understood that this Arbitral Tribunal should find an answer to the following disputed legal questions:

a) – To ascertain whether article 3, no. 1 of the CIUC contains or not a presumption and, in case the answer to this question is affirmative, to investigate whether this can be rebutted;

b) - Taking into account the provision of article 6 of the CIUC, of which the tax-generating event is constituted by the ownership of the vehicle, as attested by the registration or registration in national territory, and that the taxation period corresponds to the year that begins on the date of registration, according to article 4, no. 2, given the fact of the mandatory nature of registration to verify only 60 days after the assignment of the registration, what is the relevance of sales made within the legally granted period for registration, for purposes of imputation of the tax debt;

c) – To what extent the interpretation defended by the Claimant violates the most elementary legal and constitutional principles of tax legality, justice, taxpaying capacity, equality and legal security and certainty;

d) - Being the IUC debt already paid, as well as the respective compensatory interest, as resulted from the action of the Respondent with a view to collection, in case of substantiation of an arbitral decision favorable to the Claimant, is, or is not, the payment of indemnity interest due;

e) – Furthermore, with regard to responsibility for payment of procedural costs.

a) NATURE OF ARTICLE 3, NO. 1 of the CIUC

10.1 Law no. 22-A/2007, of 29 June, which approved the IUC, regarding subjective incidence, came to provide in article 3, no. 1 of the CIUC, that "Passive subjects of the tax are the owners of vehicles, being considered as such natural or legal persons, of public or private law, in the name of which the same are registered."

10.2 In the understanding of the Claimant, the legal presumption contained in article 3, no. 1 of the CIUC, that the owner of the vehicle is the person who appears as such in the motor vehicle register, being therefore the passive subject of the tax and becoming responsible for payment of the tax, cannot be qualified as an irrebuttable presumption of subjective tax incidence.

This point of view is rejected by the Respondent, who considers that the same does not find the slightest correspondence with the letter of the law, beyond violating frontally the principle of legality, equality, taxpaying capacity and legal certainty and security. In fact, such understanding incurs not only a skewed reading of the letter of the law, as the adoption of an interpretation that does not attend to the systematic element, violating the unity of the regime established throughout the IUC and, more broadly, throughout the entire fiscal-legal system, and further derives from an interpretation that ignores the ratio of the regime established in the article in question, and as well throughout the entire IUC. The tax legislator established expressly and intentionally that these are the owners considered as such the persons in the name of which the same are registered.

11.1 For the analysis of this question, we cannot refrain from resorting to article 9 of the Civil Code (CC) which establishes that, for purposes of interpretation of law, the interpreter should not confine himself to the letter of the law, but reconstruct from the texts the legislative thought, taking especially into account the unity of the legal system, the circumstances in which the law was elaborated and the specific conditions of the time in which it is applied.

However, it further imposes that cannot be considered by the interpreter the legislative thought that does not have in the law a minimum of verbal correspondence, even if imperfectly expressed, being in the fixing of the sense and scope of the law presumed that the legislator established the most correct solutions and knew how to express his thought in adequate terms.

11.2 The recourse to this article 9 of the CC is an requirement of article 11, no. 1 of the GTA, according to which, in the determination of the sense of fiscal norms and in the qualification of facts to which the same apply, the general rules and principles of interpretation and application of laws are observed.

11.3 In these terms, it is a matter of ascertaining the scope of the substitution promoted by the legislator, of the word "presuming-se" (are presumed), which appeared in previous diplomas, for "considerando-se" (being considered), as it appears in the current legislative text, and what meaning to attribute to the elimination of the expression "until proof to the contrary" which also appeared in previous diplomas.

Historical Antecedents

12.1 Law no. 22-A/2007, of 29 June, repealed Decree-Law no. 143/78, of 12 June, which had approved a new "Regulation of Tax on Vehicles"[1], applicable to light passenger cars and motorcycles, having also repealed Decree-Law no. 116/94, of 3 May, which had approved the "Regulation of Circulation and Haulage Taxes", applicable to vehicles engaged in private or own-account road transport of goods or public or own-account road transport of goods.

12.2 The above-mentioned Decree-Law no. 143/78, in its respective article 3, provided that "The tax is due by the owners of vehicles, being presumed as such, until proof to the contrary, the persons in the name of which the same are registered or recorded".

This wording was precisely the same as had previously appeared in Decree-Law no. 599/72, of 30 December, a diploma that had instituted a so-called "Tax on Vehicles", and came, afterwards, to appear in the subsequent legislation that followed it, Decree-Law no. 782/74, of 31 December, and Decree-Law no. 81/76, of 28 January.

For its part, Decree-Law no. 116/94, established in its respective article 2 that "Passive subjects of the ICi and ICa are the owners of vehicles, being presumed as such, until proof to the contrary, natural or legal persons in the name of which the same are registered".

12.3 To understand this grammatical lexicon used for so long of "being presumed as such, until proof to the contrary" it is important to take into account the function of registration in the context of the legalization of automobiles.

Decree-Law no. 47,952, of 22 September 1967, in article 1 considered that "The registration of automobiles has essentially the purpose of identifying the respective owners and, in general, giving publicity to the rights inherent to motor vehicles".

Decree-Law no. 54/75, of 12 February reaffirmed in precise terms the same provision and established in article 5, no. 1, paragraph a), that the right of ownership and usufruct of automobiles are subject to registration, being mandatory the registration of such fact.

For the registration of such fact, Decree no. 55/75, also of 12 February, which approved the MVRR, fixed a period of 60 days counting from the date of assignment of the registration for the same to be requested, as flows from article 42, nos. 1 and 2, being this the legislative framework that remains in force.

12.4 For legal norms with such deep foundations, which traversed various diplomas and were in force for practically forty years, some purpose of the legislator should be inferred in not having maintained the same terminology.

When using the word "presuming", the interpreter had perfect awareness that article 349 of the CC conferred upon him the faculty of drawing a conclusion from the fact of vehicles being registered or recorded in the name of a determined person, that is, that they would be the owners, the so-called inference, however, subject to being able to be rebutted by means of proof to the contrary, as imposed by article 350, no. 2 of the CC, and as the tax norms themselves reaffirmed.

The expression "until proof to the contrary", did not, moreover, leave any other interpretative route, since it reinforced the presumptive nature "juris tantum" of the norm.

  1. With the use of the word "being considered" there is room for, as the Respondent sustains, another interpretation to be possible, which is not that which traditionally prevailed, further reinforced by the fact that the expression "until proof to the contrary" has been eliminated, an expression that, always, prevailed, remaining to ascertain whether from this legislative change it is legally possible an interpretation in the sense propounded by the Respondent.

  2. We believe not, for the reasons which are hereinafter explained.

14.1 As has been referred to above, article 9 of the CC establishes that cannot be considered by the interpreter the legislative thought that does not have in the law a minimum of verbal correspondence, even if imperfectly expressed, being in the fixing of the sense and scope of the law presumed that the legislator established the most correct solutions and knew how to exprimir his thought in adequate terms.

Now if the legislator intended to eliminate the referred presumption and, as the Respondent defends, intentionally and expressly wanted that be considered as passive subjects of the tax the owners in the name of which the vehicles are registered, naturally it would not adopt a redaction so equivocal and would limit itself to providing, for example, that "Passive subj...

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Frequently Asked Questions

Automatically Created

Who is liable for IUC payment when a new vehicle is sold for expedition but registered in the seller's name?
Under Article 3(1) of the IUC Code, the registered owner is presumed liable for IUC payment. However, this presumption is rebuttable under Article 73 of the General Tax Law. When a new vehicle is sold for expedition within the 60-day legal registration period established in Article 42(2) of the Motor Vehicle Registration Regulation, the seller can rebut the presumption by proving the vehicle was transferred before the tax became due. The key issue is that IUC exigibility occurs only after expiration of the registration period under Articles 17(1) and 18(1)(a) of CIUC, not upon registration itself. If the seller demonstrates through invoices and export documentation that the vehicle was sold and dispatched to other EU Member States or third countries within this period, they should not be considered the passive subject of IUC, as they were not the owner when the tax-generating event occurred.
Can legal presumptions of vehicle ownership be rebutted for IUC purposes under Portuguese tax law?
Yes, legal presumptions of vehicle ownership can be rebutted for IUC purposes under Portuguese tax law. Article 3(1) of the IUC Code establishes a legal presumption that the person registered as owner in the motor vehicle register is the passive subject of the tax. However, this is not an irrebuttable presumption. Under Article 73 of the General Tax Law (LGT), taxpayers may rebut legal presumptions by proving that the presumed facts do not correspond to reality. In the context of IUC, this means a registered owner can demonstrate they had already transferred the vehicle before the tax became due. Evidence such as sale invoices, export documentation, and proof of dispatch to other jurisdictions within the legal registration period can successfully rebut the ownership presumption. The distinction between registration for administrative purposes and actual ownership at the moment of tax exigibility is crucial for determining the correct passive subject of IUC.
What is the legal framework for challenging IUC assessments through tax arbitration at CAAD?
The legal framework for challenging IUC assessments through tax arbitration at CAAD (Administrative Arbitration Centre) is established by Decree-Law no. 10/2011 of 20 January, which approved the Legal Regime of Arbitration in Tax Matters (LRAT). Under Articles 2(1)(a) and 10(1)(a) of LRAT, taxpayers can request constitution of an arbitral tribunal to challenge tax assessments. The process involves: (1) filing a request for arbitration identifying the contested acts; (2) appointment of an arbitrator by CAAD's Deontological Council under Articles 6 and 11 of LRAT; (3) notification to parties and constitution of the tribunal; (4) submission of reply by the Tax Authority within 30 days under Article 17 of LRAT, including the administrative file; (5) possibility of witness testimony and hearings under Article 18 of LRAT, though parties may waive these if only legal matters are at issue; and (6) issuance of an arbitral decision. The tribunal must be regularly constituted, materially competent, and parties must have legal standing under Article 4 of LRAT and Ordinance no. 112-A/2011.
How does the sale of a new registered vehicle within the legal registration period affect IUC subjective incidence?
The sale of a new registered vehicle within the legal registration period significantly affects IUC subjective incidence by potentially shifting the tax obligation from the registered owner to the actual owner at the moment of tax exigibility. Under Articles 17(1) and 18(1)(a) of the IUC Code, the tax-generating event and exigibility of IUC occur only after expiration of the registration period provided in Article 42(2) of the Motor Vehicle Registration Regulation—specifically, 60 days from registration. This creates a critical temporal distinction: registration itself does not trigger IUC liability. If a vehicle is sold and invoiced within this 60-day period, the seller can argue they should not be the passive subject of IUC because they were no longer the owner when the tax became due. This is particularly relevant for vehicles sold for expedition to other EU Member States or third countries, as these vehicles do not circulate in Portuguese territory and thus do not generate the environmental and road costs that IUC aims to burden under the equivalence principle in Article 1 of CIUC. The seller's ability to prove the sale through invoices and export documentation is essential to rebut the registration-based ownership presumption.
What are the taxpayer's rights to reimbursement and compensatory interest after annulment of IUC assessments?
Taxpayers have specific rights to reimbursement and compensatory interest after annulment of IUC assessments under Portuguese tax law. If an IUC assessment is annulled due to illegality, the Tax Authority must reimburse any taxes paid. Additionally, under Article 43(2) of the General Tax Law (LGT), taxpayers are entitled to compensatory interest (juros indemnizatórios) when the tax assessment was based on manifest error regarding factual or legal assumptions attributable to tax services. The compensatory interest compensates taxpayers for the financial prejudice suffered due to improper collection of taxes resulting from errors by the administration. To claim these rights, taxpayers must demonstrate: (1) that the assessment was illegal and has been annulled; (2) that taxes were actually paid; and (3) that the error was attributable to tax services rather than the taxpayer. The rate and calculation period for compensatory interest are determined according to applicable legal provisions. These rights ensure taxpayers are made whole when tax authorities improperly assess and collect taxes, providing both principal reimbursement and compensation for the time value of money and financial prejudice caused by the erroneous assessment.