Summary
Full Decision
ARBITRAL DECISION
I – REPORT
A..., Credit Finance Institution, SA, taxpayer number ..., with headquarters at Street ..., number 5, ...º, in Lisbon, hereinafter referred to as Claimant, filed a request for the constitution of an arbitral tribunal in tax matters and a request for arbitral decision, under the provisions of articles 2.º no. 1 a) and 10.º no. 1 a), both of Decree-Law no. 10/2011, of January 20 (Legal Framework for Arbitration in Tax Matters, abbreviated as RJAT), requesting the declaration of illegality of 97 (ninety-seven) assessment acts of the Single Circulation Tax (IUC), attached as Document no. 1 and which are enumerated in Document no. 5 of the Request, to which reference is made and which are deemed fully reproduced, carried out by the Tax and Customs Authority and relating to the year 2013, in the total amount of €6,561.95, including default interest.
The request for constitution of the arbitral tribunal was accepted by the President of CAAD and automatically notified to the Tax and Customs Authority on 18-09-2014.
Pursuant to the provisions of articles 5.º, no. 2, para. a), 6.º, no. 1 and 11.º, no. 1, para. a) of the RJAT, the Deontological Council designated the undersigned as arbitrator of the singular arbitral tribunal, who communicated acceptance of the appointment within the applicable period.
On 31-10-2014 the parties were duly notified of that designation, and neither expressed the intention to reject the arbitrator's designation, in accordance with articles 11.º no. 1 paragraphs a) and b) of the RJAT and articles 6.º and 7.º of the Deontological Code.
Thus, in accordance with the provision in paragraph c) of no. 1 of article 11.º of the RJAT, the singular arbitral tribunal was constituted on 20-11-2014.
By order of 06-03-2015, the tribunal dispensed with the meeting provided for in article 18.º of the RJAT, as well as final arguments.
The arbitral tribunal was regularly constituted and is materially competent, in accordance with the provisions of articles 2.º, no. 1, paragraph a), and 30.º, no. 1, of Decree-Law no. 10/2011, of January 20.
The parties have legal personality and capacity, are legitimate and are represented (articles 4.º and 10.º, no. 2, of the same decree and article 1.º of Ordinance no. 112-A/2011, of March 22).
The proceedings do not suffer from nullities and no exceptions were raised.
The arguments supporting the Claimant's request for arbitral decision are, in summary, as follows:
Arguments of the Claimant
10.1 As a preliminary matter, the Claimant alleges its procedural legitimacy to present the request for arbitral decision relating to the assessments of the tax at issue, notified to the companies B…, Lda, C..., Lda, D…, SA, because the whole of its assets, liabilities, rights and responsibilities were incorporated into the sphere of the present Claimant, in the context of merger processes, as evidenced by the supporting documents it presents.
10.2 Accordingly, pursuant to article 65.º of the General Tax Law, the Claimant is a legitimate party in the present proceedings.
10.3 The Claimant is a credit finance institution whose corporate purpose is the practice of operations permitted to banks, with the exception of the receipt of deposits.
10.4 In the exercise of its activity, the Claimant grants to its clients financing intended for the purchase of motor vehicles.
10.5 Vehicle financing is formalized through the execution of loan contracts in which the borrower grants in favor of the lender, as full security for payment of the loaned amount, a reservation of title of the motor vehicle, until complete payment of the loaned amount. Alternatively, financing is effected through the execution of financial leasing contracts.
10.6 The Claimant was notified to exercise the right to prior hearing as it was considered to be the passive subject of IUC for the 97 vehicles identified in Document no. 5, attached to the Request.
10.7 Not having exercised that right, the Tax Authority proceeded to assess the IUC and default interest.
10.8 The Claimant considers, however, that it is no longer the passive subject for the following reasons: in 84 of the situations at issue the vehicles were sold by the Claimant before the date of occurrence of the taxable event; in the remaining 13 situations there are financial leasing contracts, in effect during the taxation period under analysis, through which the Claimant transferred the possession of the vehicles to the lessee.
10.9 To prove these facts, it presents copies of the invoices for the sale of the 84 vehicles and the financial leasing contracts for the remaining 13 vehicles.
10.10 The disputed question is limited, in essence, to the interpretation of article 3.º of the IUC Code. Let us examine it.
10.11 The basis of the tax legal relationship presupposes the cumulative verification of three necessary prerequisites for its emergence: the real element, the personal element and the temporal element.
10.12 Pursuant to no. 1 of article 2.º, the prerequisite of real incidence is verified: the tax is levied on vehicles of the following categories, registered in Portugal, as is the case.
10.13 As to temporal incidence, the tax is due on the first day of the taxation period, understood as the year in which registration begins or on each anniversary thereof.
10.14 Third, taking into account the various elements of interpretation – the grammatical element and the historical element, the latter subdividing into the historical element, the rational element and the systematic element – the prerequisite of personal incidence is not fulfilled, whereby the present Claimant is not, in this case, the passive subject of the assessed tax.
10.15 Pursuant to nos. 1 and 2 of article 3.º of the IUC Code, "the passive subjects of the tax are the owners of the vehicles" and "financial lessees, acquirers with reservation of title, as well as other holders of purchase option rights by force of a leasing contract are equated with owners."
10.16 By stating that "the passive subjects of the tax are natural or legal persons, of public or private law, in whose name they are registered," article 3.º no. 1 of the IUC Code enshrines a rebuttable presumption, as provided by article 73.º of the General Tax Law.
10.17 It is further added that we are dealing with a legal presumption and not a legal fiction – as the Tax Authority appears to argue – on pain of ignoring the connection between the passive subject of the tax and the use of the vehicle, according to the ratio legis of the tax.
10.18 In systematic terms, it would always be unconstitutional to have a rule of incidence based on a legal fiction by violation of the principle of equality, with the same grounds already used by the Constitutional Court for the presumption jus et de jure enshrined in a rule of incidence.
10.19 To rebut the presumption, the Claimant demonstrated that the title to the vehicle belongs to a third party, presenting for that purpose the invoices for the sale of the vehicles at a time prior to when the tax assessment occurred; for the vehicles subject to financial leasing, it presented the respective contracts.
10.20 Finally, it also notes that purchase and sale and leasing are contracts with real efficacy in the sense that the transfer of ownership or possession occurs as a consequence of the contract itself, whereby it is also clear that the documents presented with this pleading, which evidence the respective contracts of purchase and sale and leasing, are sufficient documents to prove the ownership and possession of the vehicle.
10.21 It further invokes Arbitral Decisions nos. 14/2013-T, 256/2013-T, 1/2014-T, 294/2013-T, 287/2013-T and 286/2013-T, of this CAAD, in which the same decision was reached.
10.22 It concludes by requesting the annulment of the IUC assessments that are the object of the present proceedings on the ground of erroneous qualification of the tax facts pursuant to article 99.º, para. a), of the Code of Tax Procedure and Process.
Response of the Respondent
11.1 In its response, as an introductory matter, the Tax Authority acknowledges the existence of the case law cited by the Claimant but reminds of the absence of legal precedent in Portugal.
11.2 On the other hand, it recalls the existence of a relevant line of case law with regard to conclusive documentary proof to rebut the presumption arising from the registration (see cases nos. 63/2014-T, 126/2014-T, 130/2014-T, 150/2014-T, 220/2014-T, and 339/2014-T).
11.3 In material terms, the Tax Authority believes that the Claimant's arguments: a) constitute a skewed reading of the letter of the law; b) do not heed the systematic element, violating the unity of the regime enshrined throughout the IUC and, more broadly throughout the entire legal-tax system; and, finally, c) also stem from an interpretation that ignores the ratio of the regime enshrined in no. 1 of article 3.º of the IUC Code.
11.4 The tax legislator, in establishing in article 3.º, no. 1 who the passive subjects of the IUC are, established expressly and intentionally that these are the owners (or in the situations provided for in no. 2 the persons mentioned therein), considering as such the persons in whose name they are registered.
11.5 The legislator did not use the expression "it is presumed" as it could have done, for example, in the following terms: "the passive subjects of the tax are the owners of the vehicles, and it is presumed that such are the natural or legal persons, of public or private law, in whose name they are registered."
11.6 Thus, the wording of article 3.º of the IUC Code corresponds to a clear option of legislative policy adopted by the legislator, whereby to understand that a presumption is enshrined therein would unequivocally be to carry out an interpretation contra legem.
11.7 Accordingly, this understanding has already been adopted by the case law of our courts, transcribing, for that purpose, part of the judgment of the Administrative and Tax Court of Penafiel, rendered in Case no. ….OBEPNF. (See article 24.º of the Response)
11.8 On the systematic element of interpretation, the Claimant alleges that the solution advocated by the Claimant is intolerable, finding the understanding endorsed by this no legal support. (Article 25.º of the Response)
11.9 Finally, taking into account the "ratio" of the parliamentary debates surrounding the approval of the present regime, it clearly results that the automobile taxation regime approved establishes that the IUC "became due by the persons who appear in the registration as owners of the vehicles" (article 46.º).
11.10 It further adds that invoices alone do not constitute an apt document to prove the sale of the vehicles, since, being a bilateral contract, they do not reveal, on their own, an essential and unequivocal declaration of intent on the part of the alleged acquirer.
11.11 This unequivocal declaration of intent could have been evidenced through the presentation of a copy of accounting documents and banking documents that would prove, unequivocally, the sale of the same, which was not done.
11.12 As to liability for the payment of arbitration costs: it was not the Respondent that gave rise to the submission of the request for arbitral decision but rather the Claimant that only alleged the alleged transfer of ownership after the tax assessment.
11.13 Consequently, the Claimant should be condemned to payment of the arbitration costs, in line with what was decided in a similar question in the context of Case no. 72/2013-T of this Arbitration Center.
All things considered, it is necessary to render a final decision.
A. FACTS
A.1. Facts Deemed Proven
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The Claimant is a credit finance institution whose corporate purpose is the practice of operations permitted to banks, with the exception of the receipt of deposits.
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In the course of its activity, the Claimant grants to its clients financing intended for the purchase of motor vehicles, which are embodied in loan contracts in which the borrower grants to the Claimant, as security, the reservation of title of the motor vehicle until complete payment of the loaned amount, or in financial leasing contracts.
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The Claimant incorporated by merger the companies B…, Lda, C…, Lda, D…, SA.
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The merged companies, as they constituted the entities in whose name the vehicles were registered, were notified to exercise the right to prior hearing in relation to the ex officio assessment of IUC for the year 2013 relating to the vehicles identified in Document no. 5 attached to the Request.
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The merged companies were subject to ex officio assessments of the Single Circulation Tax (IUC) for 2013, set forth in the assessment statements relating to the vehicles identified therein that form part of document no. 1 attached to the Request, which is hereby deemed reproduced, and which is enumerated in the list in document no. 5.
B. LAW
Given the positions of the parties assumed in the arguments presented, the central issue is whether, on the date of occurrence of the facts giving rise to the tax (article 3.º no. 1, of the IUC Code), if the owners of the vehicles are not those appearing in the registration, they will nonetheless always be considered the passive subjects of the IUC, with the result that the title shown in the registration is not considered a rebuttable presumption, or, put otherwise, whether the rule of subjective incidence in article 3º no. 1 of the IUC Code establishes or does not establish a presumption.
Equally, it is intended to ascertain whether, in the validity of a financial leasing contract, who assumes the quality of passive subject of IUC is the owner of the vehicle (lessor entity) or the lessee.
This matter has already been abundantly dealt with in Tax Arbitral Case Law. See, by way of example, the various decisions of CAAD published at www.caad.org.pt, namely those rendered in cases nos. 14/2013, 256/2013-T, 228/2014, 222/2014, 230/2014 and 230/2014. In the present decision we shall follow the understanding and conclusions of those decisions.
For brevity and clarity of thought, we adhere unreservedly to the framework established in the arbitral decision in the context of Case no. 230/2014-T, which we cite and to which we refer:
"The general and unanimous sense of such case law is to consider that article 3º-1 of the IUC Code enshrines a rebuttable presumption of the title of ownership from the entries or registrations in the Motor Vehicle Registration Office and/or the IMTT database on the date of the taxable event.
That is: where the IUC is assessed on the basis of the registrations or in accordance with the elements in the IMTT databases, the passive subject may exonerate himself from payment by demonstrating the non-correspondence between reality and those entries and elements resorted to by the Tax Authority to carry out the assessments.
There are no grounds for reversing or altering the essential sense of this case law.
Let us then examine the issue again and more closely:
Article 3.º of the IUC Code provides:
Article 3.º
Subjective Incidence
1 – The passive subjects of the tax are the owners of the vehicles, being considered as such the natural or legal persons, of public or private law, in whose name they are registered.
2 – Financial lessees, acquirers with reservation of title, as well as other holders of purchase option rights by force of a leasing contract are equated with owners."
Article 11º no. 1 of the General Tax Law provides, for its part, 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 rules presupposes the carrying out of an interpretative activity.
It is therefore necessary to consider what is the best interpretation of article 3.º, no. 1 of the IUC Code, in light, first, of the literal element, that is to say the one in which the aim is to detect the legislative thought that is objectified in the rule, to verify whether it contemplates a presumption, or whether it definitively determines that the passive subject of the tax is the owner appearing in the registration.
The question that arises is whether the expression "considered as" used by the legislator in the IUC Code, instead of the expression "presumed," which was what appeared in the decrees that preceded the IUC Code, will have removed the nature of presumption from the legal provision in question.
In our view and contrary to what the Tax Authority argues, the answer necessarily has to be in the 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, whereby nothing enables the conclusion sought by the Tax Authority to be drawn on a mere semantic basis.
Indeed, this occurs in various legal provisions that enshrine presumptions using the verb "consider," of which the following are indicated merely by way of example:
~ in the field of civil law - no. 3 of article 243.º of the Civil Code, when it provides that "the third party who acquired the right after registration of the simulation action is always considered in bad faith, when such action takes place";
~ also in the field of industrial property law the same applies, when article 59.º, no. 1 of the Industrial Property Code provides that "(…) inventions whose patent has been requested during the year following the date on which the inventor leaves the company are considered made during the execution of the employment contract (…)";
~ and, finally, in the field of tax law, when nos. 3 and 4 of article 89-A of the General Tax Law provide that the taxpayer bears the burden of proof that the declared income corresponds to reality and that, if such proof is not made, it is presumed ("considered" in the letter of the Law) that the income is that which results from the table that appears in no. 4 of that article.
This conclusion of complete equivalence of meaning between the two expressions, which the legislator uses indifferently, satisfies the condition established in article 9.º, no. 2 of the Civil Code, since the minimum correspondence of wording is assured for purposes of determining the legislative thought.
It is necessary, following that, to submit the provision in question to the other elements of logical interpretation, namely the historical element, the rational or teleological element and the systematic element.
Discussing the interpretative activity, Francisco Ferrara states that this "is the most difficult and delicate operation that a jurist can engage in, and requires fine treatment, refined sense, happy intuition, much experience and perfect mastery not only of positive law, but also of the spirit of a certain legislation. (…) Interpretation must be objective, balanced, without passion, bold at times, 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 states "the legal provision presents itself to the jurist as a linguistic statement, as a set of words that constitute a text. To interpret consists evidently in deriving from that text a certain sense or content of thought.
The text permits multiple meanings (polysemy of the text) and frequently contains ambiguous or obscure expressions. Even when apparently clear on first reading, its application to concrete cases of life frequently gives rise to unforeseen and unpredictable interpretation difficulties. Furthermore, although apparently clear in its verbal expression and bearing only one sense, account must still be taken of the possibility that the verbal expression may have betrayed the legislative thought – a phenomenon more frequent than will appear on first sight" (See Introduction to Law and to Legitimating Discourse, 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 wished or intended to express, but only what 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 unintended consequences for the legislators. (…) The interpreter must seek not what the legislator wished, but what objectively appears wished in the law: the mens legis and not the mens legislatoris" (See Francesco Ferrara, Essay, pp. 134/135).
To understand a law "is not merely to grasp mechanically the apparent and immediate meaning that results from verbal connection; it is to investigate with depth the 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 uncovering the true meaning and scope of the legal texts, the interpreter avails himself of the interpretative factors that 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 element (or teleological), 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.º of the Civil Code that provides the rules and fundamental elements for the correct and adequate interpretation of norms.
The text of no. 1 of article 9.º of the Civil Code begins by saying that interpretation must not be confined to the letter of the law, but must reconstruct from it the "legislative thought."
Concerning the expression "legislative thought," Batista Machado tells us that article 9.º of the Civil Code "did not take a position in the controversy between the subjectivist doctrine and the objectivist doctrine. This is evidenced by the fact that it refers neither to the "will of the legislator" nor to the "will of the law," but rather points as the goal of interpretative activity the discovery of "legislative thought" (article 9.º, 1.º). This expression, deliberately colorless, means exactly that the legislator did not wish to commit itself" (loc. cit., p. 188).
In the same sense P. de Lima and A. Varela pronounce themselves, in annotation to article 9.º of the Civil Code (See Civil Code Annotated – vol. I, Coimbra ed., 1967, p. 16).
And concerning no. 3 of article 9.º of the Civil Code, Batista Machado further states: "(…) this no. 3 proposes to us, therefore, a model of ideal legislator that enshrined the most correct solutions (more correct, just or reasonable) and knows how to express itself correctly. This model clearly takes on objectivist characteristics, since it does not take the concrete legislator (often incorrect, precipitous, unhappy) as its point of reference but rather an abstract legislator: wise, foreseeing, rational and just" (Work and loc. cit. p. 189/190).
Immediately following, this distinguished Master calls attention to the fact that no. 1 of article 9.º refers to three further elements of interpretation "the unity of the legal system," the "circumstances in which the law was elaborated" and the "conditions specific to the time in which it is applied" (loc. cit, p. 190).
As to the "circumstances of the time in which the law was elaborated," Batista Machado further explains that this expression "represents what has traditionally been called the occasio legis: the conjunctural factors of a political, social and economic order that determined or motivated the legislative measure in question" (loc. cit., p. 190).
Regarding the "conditions specific to the time in which it is applied," this element of interpretation "has decidedly a modernizing connotation (loc. cit., p. 190) which coincides with the opinion expressed by P. de Lima and A. Varela in annotations to article 9.º of the Civil Code.
With regard 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 on us by the principle of axiological or value-based coherence of the legal order" (loc. cit., p. 191).
It is also this author who tells us, with regard to the literal or grammatical element (text or "letter of the law") that this "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 no correspondence or resonance in the words of the law.
But it also has a positive function, in the following terms: if the text permits only one meaning, that is the meaning of the rule – with the caveat, however, that it may be concluded on the basis of other rules that the wording of the text 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 rule. Knowledge of this end, particularly when accompanied by knowledge of the circumstances (political, social, economic, moral, etc.) in which the rule was elaborated or the political-economic-social situation that motivated the legislative decision (occasio legis) constitutes a subsidy of the utmost importance for determining the meaning of the rule. It suffices to recall that the elucidation of the ratio legis reveals to us the valuation or balancing of the various interests that the rule regulates and, therefore, the relative weight of those interests, the choice between them expressed by the solution that the rule conveys" (loc. cit., pp. 182/183).
With regard to the systematic element (context of the law and parallel provisions) that "this element comprises the consideration of the other provisions that form the complex of norms of the institute in which the rule being interpreted is integrated, that is, that regulate the same matter (context of the law), as well as the consideration of legal provisions that regulate parallel normative problems or related institutes (parallel provisions). It further comprises the systematic place that pertains to the rule being interpreted in the overall legal order, 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 intrinsic coherence of the legal order, namely on the fact that the norms contained in a codification obey by principle a unitary thought" (Batista Machado, loc. cit., p. 183).
"(…) In particular we must take into account the concatenation of the various laws of the country, because a fundamental requirement of all sound legislation is that laws fit together with one another and do not result in a jumble of disconnected provisions" (Joseph Kohler, cited by Manuel de Andrade, in Essay, p. 27).
Descending to the case at hand and to the legal and juridical framework that underlies it:
Through analysis of the historical element, the conclusion is drawn that, from the entry into force of Decree-Law 59/72, of December 30, the first to regulate this matter, to Decree-Law no. 116/94, of May 3, the last to precede the IUC Code [see Law no. 22-A/2007, as amended by Laws 67-A/2007 and 3-B/2010], a presumption [highlighted] was enshrined that the passive subjects of the IUC were the persons in whose name the vehicles were registered on the date of their assessment.
It is therefore verified that tax law has always had the objective of taxing the true and effective owner and user of the vehicle, rendering it immaterial the use of one or the other expression which, as we have seen, have a coinciding meaning in our legal order.
The same applies when we resort to elements of interpretation of a rational or teleological nature.
Indeed, the current and new framework of automobile taxation enshrines principles aimed at subjecting the owners of vehicles to bear the losses for damage caused by vehicles to roads and the environment, as is evident from the tenor of article 1.º of the IUC Code.
Now the consideration of these principles, particularly the principle of equivalence, which merit constitutional protection and recognition in community law, and are also recognized in other branches of the legal order, determines that the referred costs be borne by the real owners, the causes of the said damages, which wholly precludes an interpretation aimed at preventing the presumed owners from proving that they are no longer owners because ownership is in the legal sphere of another.
Thus, also, from the interpretation carried out in light of elements of a rational and teleological nature, having regard to what the rationality of the system guarantees and the ends sought by the new IUC Code, it is clear that no. 1 of article 3.º of the IUC Code enshrines a rebuttable legal presumption.
In view of the above, it is important to conclude that the ratio legis of the tax points in the direction that the true owner-users of vehicles are taxed, whereby the expression "considered as" is used in the normative provision in question in a meaning similar to "presumed," which is why there is no doubt that a legal presumption is enshrined.
(…)
B – Financial Leasing and the Passive Subject of the IUC.
As has been seen, the law provides that the passive subjects shall be the owners of the vehicles [article 1.º-1, of the IUC Code], equating with owner the financial lessee, the acquirer with reservation of title and other holders of purchase option rights.
Returning to the interpretation of the law and to what has been explained above, recognizing in particular that the IUC is an environmental and road tax [see article 1.º of the IUC Code, in addition to other provisions of this compendium from which the same conclusion emerges, such as article 7.º (reference to carbon emission levels) and articles 9.º and seq. (dealing with rates, there is constant reference to carbon emission levels)].
It can therefore be concluded that the reference of the tax, the tax capacity is based on the vehicle and, consequently, on who uses it.
And if that is so, it makes no sense to tax the financial lessor – the formal owner of the vehicle or a "quasi-owner" but not its economic owner – and leave outside that taxation the one who truly acts as an owner, using the vehicle as his own property, that is, the financial lessee. It is this one who uses or enjoys the vehicle and all the amenities (and inconveniences…) that it provides.
Through analysis of the historical element, the conclusion is drawn that, from the entry into force of Decree-Law 59/72, of December 30, the first to regulate this matter, to Decree-Law no. 116/94, of May 3, the last to precede the IUC Code [see Law no. 22-A/2007, as amended by Laws 67-A/2007 and 3-B/2010], a presumption [highlighted] was enshrined that the passive subjects of the IUC were the persons in whose name the vehicles were registered on the date of their assessment.
It is therefore verified that tax law has always had the objective of taxing the true and effective owner and user (financial lessee, for example) of the vehicle, rendering it immaterial the use of one or the other expression which, as we have seen, have a coinciding meaning in our legal order.
The same applies when we resort to elements of interpretation of a rational or teleological nature. Indeed, the current and new framework of automobile taxation enshrines principles aimed at, as has been seen, subjecting the owners of vehicles to bear the losses for damage caused by vehicles to roads and the environment, as is evident from the tenor of article 1.º of the IUC Code.
Now the consideration of these principles, particularly the principle of equivalence, which merit constitutional protection and recognition in community law, and are also recognized in other branches of the legal order, determines that the referred costs be borne by the "true owners" and users of vehicles, the causes of the said damages, which wholly precludes an interpretation aimed at preventing the presumed owners from proving that they are no longer owners because ownership is in the legal sphere of another.
Thus, also, from the interpretation carried out in light of elements of a rational and teleological nature, having regard to what the rationality of the system guarantees and the ends sought by the new IUC Code, it is clear that no. 1 of article 3.º of the IUC Code enshrines a rebuttable legal presumption.
In view of the above, it is important to conclude that the ratio legis of the tax points in the direction that the true owner-users-financial lessees of vehicles are taxed, whereby the expression "considered as" is used in the normative provision in question in a meaning similar to "presumed," which is why there is no doubt that a legal presumption is enshrined."
We further add that this understanding is confirmed by the provision of article 19.º of the IUC Code which determines that entities that proceed with financial leasing, operational leasing or long-term rental of vehicles are obliged to provide the Tax General Directorate with data relating to the tax identification of users of leased vehicles. That is, the lessor entity must inform the Tax Authority of the execution, in this case, of financial leasing contracts so that it may proceed with the assessment of the tax to the lessee.
In conclusion, if on the date of occurrence of the taxable event a financial leasing contract is in effect that has as its object a motor vehicle, the passive subject of the tax is not the lessor but, pursuant to no. 2 of article 3.º of the IUC Code, the lessee, because it is this party that has the enjoyment of the vehicle, regardless of whether the registration of the property right remains in the name of the lessor.
- Proof of the Transfer of Motor Vehicles
In view of the above, we conclude that no. 1 of article 3.º of the IUC Code enshrines a rebuttable presumption, under article 73.º of the General Tax Law, that the holder of the motor vehicle registration is its owner. In the present case, the Claimant has to prove, in order to rebut the presumption of article 3.º, no. 1 of the IUC Code (and also of the Motor Vehicle Registration) that it was not the owner of the vehicles in question in the period to which the assessments at issue relate.
To prove that such transfers of ownership occurred through purchase and sale contracts, the Claimant presents copies of invoices.
In its arguments, the Respondent alleges that invoices, as individual and unilateral documents, do not constitute sufficient proof to rebut the presumption.
We disagree with this understanding.
It cannot fail to be noted, from the outset, that the contract for the purchase and sale of a motor vehicle is a verbal contract, not subject, therefore, to any specific form. From this framework there necessarily results a special importance of the tax document not only for tax purposes but also for civil or other purposes.
In the case at hand, the Claimant presented invoices, issued in accordance with legal requirements, evidencing the sale operation. Invoices constitute, for tax purposes, the legally required documents to prove sales operations and service provisions, as clearly results from the various tax codes (see the provision in no. 6 of article 23.º of the Income Tax Code, para. b) of no. 1 of article 29.º and article 36.º of the Value Added Tax Code and article 115.º of the Personal Income Tax Code).
It would thus be strange if an invoice constitutes, from the perspective of the seller, sufficient proof to determine a gain on the sale of a vehicle, taxable under the Personal Income Tax Code (in the organized accounting regime) or the Income Tax Code but, to the contrary, does not constitute sufficient proof to demonstrate the same transfer, now for purposes of IUC.
This statement does not preclude the Tax Authority from demonstrating that it is a forged document through the absence of any actual transfer (with all the fiscal and criminal consequences).
In the case at hand, there is no proof or even any indication that calls into question the presumption of good faith on the part of the taxpayer and the documents presented, as clearly results from article 75.º of the General Tax Law.
In conclusion, the prerequisites necessary for the granting of the request for annulment of the assessments are met, on the ground of illegality and error in the prerequisite.
D. DECISION
The Tribunal therefore decides as follows:
a) To grant the request for declaration of illegality of the assessments identified in the Annex to this Arbitral Decision, and corresponding assessments of default interest, in the total amount of €6,561.95;
b) To condemn the Tax and Customs Authority to payment of the costs of proceedings, in the amount of €612.00.
E. Value of the Proceedings
The value of the proceedings is fixed at €6,561.95, pursuant to article 97.º-A, no. 1, a), of the Code of Tax Procedure and Process, applicable by virtue of paragraphs a) and b) of no. 1 of article 29.º of the RJAT and of no. 2 of article 3.º of the Regulation of Costs in Tax Arbitration Proceedings.
F. Costs
The arbitration fee is fixed at €612.00, pursuant to Table I of the Regulation of Costs in Tax Arbitration Proceedings, to be paid by the Respondent, since the request was entirely granted, pursuant to articles 12.º, no. 2, and 22.º, no. 4, both of the RJAT, and article 4.º, no. 4, of the cited Regulation.
The liability for costs rests with the defeated party because, contrary to what has been alleged, the Tax Authority could have proceeded with the revocation of the assessment acts identified within the 30 days following the date of knowledge of the request for constitution of the Arbitral Tribunal (article 13.º no. 1 of the RJAT).
Let it be notified.
Lisbon
June 12, 2015
The Arbitrator
(Amândio Silva)
[1] The basis of the tax legal relationship presupposes the cumulative verification of the three prerequisites necessary for its emergence, namely: the real element, the personal element and the temporal element. (In this sense, see, among many other authors, Freitas Pereira, M.H., Taxation, 3rd Edition, Almedina, Coimbra, 2009.
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