IUC Subjective Incidence: Legal Presumptions and Effective Vehicle Ownership – CAAD 680/2014-T

ARBITRAL DECISION - ENGLISH TRANSLATION

SUMMARY

Article 3, paragraph 1 of the IUC Code, in the version in force on the date to which the disputed assessments refer, enshrines a legal presumption which, pursuant to Article 73 of the LGT (General Tax Law), may be rebutted.

Observing the principle of equivalence enshrined in Article 1 of the IUC Code, the taxpayer subject to the tax should not be the formal owner of the vehicle, but rather its actual owner.

There occurs partial subsequent futility of the dispute and consequent partial extinction of the proceedings if the Claimant obtains partial satisfaction of the claim by virtue of partial revocation by the Respondent, after constitution of the Arbitral Tribunal, of the disputed assessment act(s).

ARBITRAL DECISION[1]

Claimant – A...

Respondent - Tax and Customs Authority

The Arbitrator Dr. Sílvia Oliveira, appointed by the Deontological Council of the Administrative Arbitration Centre (CAAD) to form the Singular Arbitral Tribunal, constituted on 28-11-2014, with respect to the process identified above, decided as follows:

REPORT

1.1 A... (hereinafter referred to as "Claimant"), taxpayer no..., non-resident for tax purposes with tax representative address in Portugal at Rua ..., ..., ..., in Lisbon, submitted a request for arbitral pronouncement and constitution of a Singular Arbitral Tribunal, on 15-09-2014, pursuant to the provisions of Article 4 and paragraph 2 of Article 10 of Decree-Law no. 10/2011, of 20 January [Legal Regime for Tax Arbitration (RJAT)], in which the Tax and Customs Authority is named as Respondent (hereinafter referred to as "Respondent").

1.2 The Claimant seeks, in the referred request for arbitral pronouncement, that the Arbitral Tribunal declare "(…) the illegality and consequent annulment of the assessment acts of the Unique Vehicle Circulation Tax (IUC) and respective acts denying gracious complaints":

1.2.1 "No..., no..., no..., no..., no... and no..., relating to the years 2009 and 2010, vehicles..., ... and ..., in the total amount of EUR 283.77 (…) and of the act denying the gracious complaint";

1.2.2 "No..., no..., no..., no..., no... and no..., relating to the years 2011 and 2012, vehicles..., ... and..., in the total amount of EUR 273.18 (…) and of the act denying the gracious complaint";

1.2.3 "No... and no..., relating to the years 2013 and 2014, vehicle..., in the total amount of EUR 66.06 (…)"; and

1.2.4 "No..., relating to the year 2013, vehicle..., in the total amount of EUR 827.62 (…)".

1.3 The request for constitution of the Arbitral Tribunal was accepted by His Excellency the President of CAAD and was notified to the Respondent on 16-09-2014.

1.4 The Claimant did not proceed to appoint an arbitrator, wherefore, pursuant to Article 6, paragraph 2, subparagraph a) of the RJAT, the undersigned was designated, on 31-10-2014, as arbitrator by the President of the Deontological Council of CAAD, with the appointment being accepted within the legally prescribed deadline and terms.

1.5 On 31 October 2014, the parties were duly notified of this appointment, and neither manifested an intention to refuse the appointment of the arbitrator, pursuant to the combined provisions of Article 11, paragraph 1, subparagraphs a) and b) of the RJAT and Articles 6 and 7 of the Deontological Code.

1.6 Thus, in accordance with the prescription in subparagraph c), paragraph 1, Article 11 of the RJAT (in the wording introduced by Article 228 of Law no. 66-B/2012, of 31 December), the Arbitral Tribunal was constituted on 28-11-2014, and an arbitral order was issued on 04-12-2014, to notify the Respondent to, pursuant to Article 17, paragraph 1 of the RJAT, submit a response within a maximum period of 30 days and, if it so wished, request additional evidence production.

1.7 On 16-01-2015, the Respondent submitted its Response, having defended itself by challenging and concluded that "the present request for arbitral pronouncement should be judged unfounded, with the tax assessment acts challenged being maintained in the legal order and absolving (…) the Respondent of the claim".

The holding of the meeting referred to in Article 18 of the RJAT was dispensed with, and the Parties were notified of an order dated 02-02-2015, to the effect that "(…) successively present written pleadings within 15 days, with the period for the Respondent to begin counting upon notification of the joining of the Claimant's pleadings", with 23-03-2015 being designated for the purpose of rendering the arbitral decision and the Claimant being warned that "by the date of rendering the arbitral decision it should proceed to payment of the subsequent arbitral fee, pursuant to paragraph 3 of Article 4 of the Regulation of Costs in Tax Arbitration Proceedings and communicate that payment to CAAD" (which it did with date 05-03-2015).

Neither of the Parties submitted written pleadings.

On 17-03-2015, the Claimant requested the joining to the file of certificates of deregistration, dated 06-03-2015, relating to the vehicles on which the IUC assessments that are the object of the claim are based, which request was accepted by arbitral order of 17-03-2015[2].

As scheduled, on 23-03-2015, an arbitral decision was rendered to the effect of:

"Judge the request for arbitral pronouncement presented by the Claimant as founded and condemn the Respondent as to the claim for declaration of illegality of the IUC assessments, relating to the years 2009, 2010, 2011, 2013, 2013 and 2014, relating to the vehicles identified in the file, annulling, in consequence, the respective tax assessment acts";

"Condemn the Respondent to repayment of the amounts that were unduly paid by the Claimant, but without the addition of compensatory interest, having regard to the fact that the Respondent merely, at the date of the assessments, gave effect to the provisions of paragraph 1 of Article 3 of the IUC Code, with no error being apparent that could be attributed to it";

"Condemn the Respondent to payment of the costs of the present proceedings".

The Respondent, not being satisfied with the content of the above-mentioned arbitral decision, filed a challenge thereto, pursuant to Articles 26 and 27 of the RJAT, directed to the Central Administrative Court South (TCAS), and a Judgment was rendered to the effect of declaring "(…) null the Arbitral Decision rendered in the arbitration process no. 680/2014-T (…)", on the basis of omission of pronouncement (without unanimity of the Collective) and having ordered "(…) the return of the file to the Administrative Arbitration Centre", in order to reform the Arbitral Decision "(…) in accordance with the rescissory judgment of the TCA South (…)".

Having regard to the notification, on 09-05-2016, of Office no..., of 04-05-2016, relating to the sending of the certificate of the above-mentioned Judgment, with a note of passage into judgment, the Tribunal was also notified of that decision.

On 18-05-2016, the Respondent submitted a request to, in particular, request the (re)processing of the "(…) request for arbitral pronouncement from the request presented by the Claimant on 2015-03-16".

Additionally, by an arbitral order of 24-05-2016, it was reiterated that once "(…) the 10-day period given in the arbitral order issued on 12 May 2016 (…) expired, a new order shall be issued, designating a date for the rendering of the new Arbitral Decision (…), taking into account the teaching of the learned Judgment of the TCAS (…), (re)processing, in this manner, the arbitration proceedings with respect to the replacement of the Arbitral Decision previously rendered".

On the same date, the Claimant submitted a request attaching documentation used in the challenge proceeding no. 08642/15, of 18-02-2016, which proceeded before the TCAS and, on 06-06-2016, the Respondent submitted a request to reiterate, in particular, that the Tribunal should "(re)process the request for arbitral pronouncement in accordance with (…) suggested (…), under penalty of the consequent challenge consequences", without attaching any additional documentation to the file.

By an arbitral order of 09-06-2016, this Tribunal decided, in accordance with the procedural principles set forth in Article 16 RJAT, of the autonomy of the arbitral tribunal in the conduct of the proceedings and in the determination of the rules to be observed [subparagraph c)], of cooperation and procedural good faith [subparagraph f)] and of the free conduct of the proceedings set forth in Articles 19 and 29, paragraph 2 of the RJAT, as well as taking into account the principle of limitation of useless acts, provided for in Article 130 of the Code of Civil Procedure (CPC), applicable by virtue of Article 29, paragraph 1, subparagraph e) of the RJAT:

Designate 11-07-2016 for the rendering of a new arbitral decision, following the declaration of nullity of the arbitral decision dated 23-03-2015, decision to be rendered "(…) in accordance with the rescissory judgment of the TCA South (…)";

Maintain the arbitral order dated 17-03-2015, the tenor of which is hereby fully reproduced.

The Respondent submitted, on 16-06-2016, a new request to reiterate the "(…) FALSITY of the objective supervening nature of the certificates (…)" presented by the Claimant on 16-03-2015, and the "(…) ILLEGALITY of their admission to the file" requesting, in particular, the revocation of the "(…) arbitral order of 2015-03-17, as illegal, and ordered the removal of the request and documents presented by the Claimant on 2015-03-16 (…)", and the Tribunal decided, by an arbitral order dated 04-07-2016, this Tribunal decided to maintain the content of the arbitral order dated 17-03-2015.[3]

On 11-07-2026 a new arbitral decision was rendered, wherein was maintained the sense of the decision previously rendered, that is, the founding of the claim.

The Respondent, not being satisfied with the content of this arbitral decision, filed a challenge thereto, pursuant to Articles 26 and 27 of the RJAT, directed to the TCAS, petitioning that the "(…) Challenge be judged founded and, consequently, the arbitral decision be declared null, thus rendering the customary JUSTICE", alleging, in summary, in accordance with the tenor of the copy of the certificate of the TCAS Judgment itself (which rendered a decision on the referred challenge), that "the arbitral decision suffers (…) from nullity, (…) by violating the structural principle of the right to be heard (…)" because the Respondent understands that "had the Singular Arbitral Tribunal taken care to ensure the right to be heard (effectively exercised, but subsequently removed from the file), the Challenging Party would always have raised (…) the reasonable doubt of the false supervening nature of the supplementary pleading and the certificates of the IMT (…)" attached to the file on 16-03-2025 by the Challenged Party (here Claimant).

The proceeding to challenge the arbitral decision followed its course in the Common Tax Contentious Subsection of the Tax Contentious Section of the TCAS (proceeding no. …/16.0BCLSB), with a decision being rendered on 28-04-2024 (passed into judgment on 29-05-2024), unanimously, to the effect of "judging the present challenge founded, annulling the challenged arbitral decision, for violation of the principles of the right to be heard and equality of the parties, and determining the return of the file to CAAD, in order, if nothing prevents it, that a new decision be rendered, the specific irregularities identified being cured; (…)", with CAAD being notified thereof on 12-06-2024.

By an arbitral order of 10-07-2024, the reopening of the proceeding was determined and that it be (re)processed from the date of the Claimant's request that gave rise to the subsequent developments (that is, from 17-03-2015, the date on which the Claimant requested the joining to the file "(…) as proof of the allegations in Articles 11 to 14 and 54 of its initial request, of six certificates of deregistration, relating to the vehicles (…)" that it identifies) and, in consequence, the arbitral orders subsequent to that date were rendered without effect, notifying the Respondent to, within 10 days, make pronouncements, if it so wishes, on the tenor of the documents presented by the Claimant.

On 03-09-2024, the Respondent submitted a request to exercise the right to be heard on the documents attached to the file by the Claimant, alleging in summary that "the request and documents presented on 2015-03-16 not only cannot be carried into the file; as, subsidiarily, are not apt to demonstrate what was alleged by the Respondent" because "the request and documents of 2015-03-16 are nothing more than a RUSE and a FALSE supervening occurrence" for the reasons it presents in the said request [4], concluding that "(…) the removal of the request and documents presented by the Claimant on 2015-03-16 should be ordered. If this is not understood, it should nonetheless be judged that the request for arbitral pronouncement is unfounded, by virtue of failure to demonstrate the deregistration of the registrations with reference to the dates of export of the vehicles. Alternatively, the Claimant should be condemned to payment of the arbitral costs of the present proceeding, by virtue of having caused the entire issue".

To support what was alleged in the request identified in the preceding point, the Respondent attached four documents to the file.[5]

By an arbitral order of 04-09-2024, the Claimant was notified to, within 10 days, if it so wished, exercise its right to be heard, pronouncing itself on the tenor of the documents attached by the Respondent.

The Claimant submitted a request on 20-09-2024, clarifying that the Respondent would have annulled (or partially annulled) the tax assessment acts challenged by a decision of 09-04-2018 of a request for official review, attaching to the file a copy of the decision and identifying the annulled acts, which would determine the subsequent futility (albeit partial) of the dispute, as well as alleging arguments in defense of the position of supervening nature of the documents attached on 17-03-2015.

By an arbitral order of 23-09-2024, it was ordered that the Respondent be notified to, within 10 days, inform the Tribunal as to the effective annulment, total or partial, of the assessment acts that are the object of the proceeding and its effects.

By a request of 04-10-2024, the Respondent came to attach to the file a document (email of 25-09-2024 from SF Amadora) confirming the partial annulment of the disputed assessments (which it identifies).

By an arbitral order of 07-10-2024 (notified on 08-10-2024), the Parties were notified that the new arbitral decision would be rendered by 31-10-2024.

By an arbitral order of 31-10-2024, the Parties were notified of the decision to admit the certificates presented to the proceeding by the Claimant on 17-03-2015, in the terms and with the grounds developed therein.

GROUNDS FOR THE CLAIM

2.1 The Claimant sustains its claim, in summary, as follows:

Of the disputed acts – Assessments no..., no..., no..., no..., no... and no... (vehicles registration no..., ... and ...)

2.2 "On 24 February 2014, the present Claimant submitted a gracious complaint against (…) AT, (…), with the intent to annul the Unique Vehicle Circulation Tax assessments (…) no..., no..., no..., no..., no... and no..." issued by the Finance Service Amadora..., being assessments in the total amount of EUR 283.77, "(…) compos[ed] of tax plus interest", and "(…) related to the years 2009 and 2010 and relating to vehicles with registration no..., ... and ..., which at that time belonged to the Claimant".

2.3 The Claimant alleges that "it was not notified of any of the assessment acts above described, so as to be able to exercise its right of defense and prior hearing (…)", "only becoming aware of them upon summons in the context of enforcement proceedings (…), dated 27 and 29 January 2014".

2.4 Further according to the Claimant, "on 16 May 2014, it was (…) notified by office no..., from the Finance Directorate of Lisbon, to, if it so wished, exercise its right of participation in the decision, in the form of prior hearing, regarding the proposed decision on the gracious complaint", "a right which it exercised (…) on 30 May (…), deducing there new arguments to justify its undue taxation in the context of IUC".

2.5 "On 19 June 2014 the Claimant was notified by office no..., from the Finance Directorate of Lisbon, of the decision denying the gracious complaint no...2014... by AT".

Of the disputed acts – Assessments no..., no..., no..., no..., no... and no... (vehicles registration no..., ... and ...)

The Claimant alleges that "it also submitted a gracious complaint on 28 February 2014, against AT, (…), relating to IUC assessments no..., no..., no..., no..., no..., no..., (…) with the intent of their annulment" being that such assessments, "in the total amount of EUR 273.18 (…), compos[ed] of tax plus interest, related to the taxation period between 2011 and 2012 being (…) relating to vehicles with registration no..., ... and...".

"On 30 May 2014, the Claimant was notified by office no... from the Finance Directorate of Lisbon, to exercise the right of prior hearing relating to the proposed decision on the gracious complaint", "a right which it exercised (…) on 12 June 2014, thus deducing in this pleading new arguments to sustain the thesis of its undue taxation in the context of IUC" but, "on 14 July 2014, the Claimant was notified by office no... from the Finance Directorate of Lisbon, of the decision denying gracious complaint no... by AT".

Of the disputed acts – Assessment Statement no. 2013... and no. 2014..., relating to assessments no... and no... (vehicle with registration no. ...)

In this context, the Claimant states that "on 2 June 2014, it was (…) notified (…) of an IUC assessment statement relating to assessments no... and no..., with a payment deadline of 17 June 2014", which "(…) were relating to the years 2013 and 2014, being relating to the vehicle with registration no..., which at times belonged to the Claimant" and "totaling the amount of EUR 66.06 (…) corresponding to tax plus interest".

In this matter, the Claimant alleges that it was not "(…) notified to submit a prior hearing regarding such assessments (…)".

Of the disputed acts – Assessment Statement no. 2013..., relating to assessment no... (vehicle with registration no...)

With regard to this IUC assessment note, the Claimant alleges that it was notified, on 22-07-2014, of the respective IUC assessment statement, relating to the year 2013 and concerning the vehicle with registration no..., in the amount of EUR 827.62 (tax and interest), the payment deadline of which was 11-08-2014.

However, "on 9 May 2014, the Claimant had already been notified (…) of the draft IUC assessment act relating to that same vehicle in that same year", having "on 2 June (…) submitted a prior hearing directed to the same Finance Service, relating to the said IUC assessment", "expressing (…) its argumentative approach, defending (…) that its taxation in the context of IUC was unwarranted", but "the arguments deduced there by the Claimant not having been (…) duly considered".

Regarding the cumulation of claims

In this context, according to the Claimant, "several distinct claims relating to various IUC assessments are cumulated (…), with a view to their annulment" given that "pursuant to Article 3, paragraph 1 of the RJAT, the cumulation of claims is permitted even where they relate to different acts, when the founding of such claims depends essentially on the appreciation of the same circumstances of fact as well as the same interpretation and application of principles or rules of law", a situation which, according to the Claimant, "(…) is entirely verified".

Regarding the facts

"The present Claimant proceeded to sell and export all the vehicles (…) identified to Angola in the year 2009", "ceasing at that moment to hold the right of ownership, as well as possession, over the aforementioned automobiles" further stating that, "upon the loading of the said vehicles for their dispatch to Angola, the Portuguese registration plate had already been removed therefrom", "subsequently acquiring an Angolan registration plate".

Thus, the Claimant defends that "it was only by mere oversight (…) that it did not immediately cancel the registrations of the said vehicles", "doing so immediately upon noticing such failure".

Regarding the Law – Regarding the defects of the disputed acts – Lapse of the assessments for 2009

In this context, the Claimant alleges that "it was not notified of the (…) assessments no..., no... and no... (…)" "only becoming aware of them upon its summons in the context of tax enforcement proceedings" understanding that "as the period of lapse of the right to assess the tax in which notification must be effected (…) has already expired, it must be concluded that the present assessments suffer from that same defect".

"Now the 2009 assessments would lapse (…) in the year 2013, having thus elapsed 4 years", "whereby AT could no longer demand anything of the Claimant after that period elapsed", being that "the present request should (…) determine the lapse of such assessments, for failure to notify them to the Claimant".

Defect of Form – Omission of essential formalities

"Regarding assessments no... and..., of which the Claimant became aware through assessment statement no. 2013... and 2014...", the Claimant alleges that it only became aware of them "upon summons in enforcement proceedings", they not having been "preceded by notification for prior hearing", "which prevented (…) the principle of participation (…)", "compromising (…) the Claimant's defense" whereby it defends that "the said assessment acts are liable to annulment for omission of essential formalities (…)".

On the other hand, the Claimant comes to allege that in the case of the vehicle with registration no..., despite the right of prior hearing having been exercised regarding assessment no..., concerning the year 2013, "the facts stated (…) were not (…) considered (…) or incorporated in the reasoning of the decision".

Defect of Form – Lack of reasoning of the tax acts

According to the Claimant, "the assessment acts are not reasoned as legally required", "whereby also according to this ground, the acts in question should be annulled".

Defect of violation of Law – Regarding the rebuttal of the ownership presumption contained in the objective tax incidence rule

According to the Claimant, "despite being listed as owner in registration terms, (…) it may by way of contrary proof rebut the presumption of tax incidence that bears upon it", thus concluding that, not being, "in the periods assessed, the owner of the vehicles that are the subject of the tax", "(…) the tax incidence rule (…) was violated".

Defect of violation of Law – Regarding the violation of the principle of equality and contributory capacity

In this context, the Claimant defends that "the unique vehicle circulation tax complies with the principle of equivalence, seeking to burden the taxpayers to the extent of the environmental and road cost that they cause, in implementation of a general rule of tax equality", being that "the ratio of the IUC is guided by the burden on the taxpayer according to the costs and impact that the use of the vehicle fostered", whereby, "with the taxation of the said vehicles, what occurred was a burden on the Claimant completely devoid of justification, which if paid would translate into a true unjust enrichment on the part of AT", concluding that "the understanding that the registered owner is always the taxpayer subject to the tax clearly violates the principles of equality and contributory capacity".

"Now in the case, according to the Claimant, "(…) there is no correspondence whatsoever between the monetary charge, the object of the tax and the factual reality", whereby "there does not exist (…) a taxation in accordance with the contributory capacity of the (…) Claimant since the taxed vehicles were no longer its property nor (…) were they located in national territory".

"In these terms, the Claimant concludes that "the recognition of the implicit presumption contained in the rule relating to the objective tax incidence" should be "(…) upheld" and, "by reason of this, the Claimant owes nothing, with the application of IUC to the automobiles identified (…) not being admissible".

Defect of violation of Law – Regarding the violation of the principle of legality

In this matter, the Claimant understands that "(…) in the case under analysis (…) the collection of the tax was made to the detriment of fundamental constitutional principles in the taxation of taxpayers", "thus existing a gross violation of the principle of legality".

And the Claimant concludes the arbitral request by seeking "the declaration of illegality and consequently annulment of the IUC assessment acts" identified, in the total amount of EUR 1,450.63 (tax and interest), relating to the years 2009 to 2014, of the vehicles it identifies.

RESPONSE OF THE RESPONDENT

3.1 The Respondent responded sustaining the unfoundedness of the request for arbitral pronouncement, "with the tax assessment acts challenged being maintained in the legal order (…)", invoking the arguments that follow.

Regarding the lapse of the right to assess the tax relating to 2009

In this context, the Respondent alleges that "the Claimant comes to allege that assessments no..., no... and no... (subject of Gracious Complaint no...2014...) appear to be illegal, because the same were never notified to it by the deadline for such purpose (i.e., 2013-12-31), being certain that it only became aware of them via its summons in the context of tax enforcement proceedings".

The Respondent does not accept the fact described in the preceding point because, according to the Respondent, "all assessments in question here were issued by the Respondent and all notified to the Claimant in 2013", in the following terms:

"As regards assessment no..., the same was issued by the Respondent on 2013-10-12, sent by the Respondent on 2013-10-14, under postal registration no. RY...PT and received by the Claimant on 2013-10-16";

"As regards assessment no..., the same was issued by the Respondent on 2013-10-12; sent by the Respondent on 2013-10-14, under postal registration no. RY...PT and received by the Claimant on 2013-10-16";

"As regards assessment no..., the same was issued by the Respondent on 2013-10-12, sent by the Respondent on 2013-10-14, under postal registration no. RY...PT and received by the Claimant on 2013-10-16".

Regarding the omission of the right to prior hearing

In this matter, according to the Respondent, "the Claimant comes to allege that assessments no..., no..., no..., no..., no..., no... (all subject of Gracious Complaint no...2014...), no... and no... (both relating to Assessment Statement no. 2013-...) appear to be illegal, because the same were not preceded by the right to prior hearing".

The Respondent does not accept the fact described in the preceding point because "all assessments in question here were issued by the Respondent after (…) assignment of the right to prior hearing to the Claimant", in the following terms:

"As regards assessment no..., the same was preceded by notification for prior hearing via office no. GIC-..., sent with postal registration no. RY...PT and received by the Claimant on (…) 2013-06-22";

"As regards assessment no..., the same was preceded by notification for prior hearing via office no. GIC-..., sent with postal registration no. RY...PT and received by the Claimant on 2013-06-21";

"As regards assessment no..., the same was preceded by notification for prior hearing via office no. GIC-..., sent with postal registration no. RY...PT and received by the Claimant on 2013-06-20";

"As regards assessment no..., the same was preceded by notification for prior hearing via office no. GIC-..., sent with postal registration no. RY...PT and received by the Claimant on 2013-06-22";

"As regards assessment no..., the same was preceded by notification for prior hearing via office no. GIC-..., sent with postal registration no. RY...PT and received by the Claimant on 2013-06-22";

"As regards assessment no..., the same was preceded by notification for prior hearing via office no. GIC-..., sent with postal registration no. RY...PT and received by the Claimant on 2013-06-22";

"As regards assessment no..., the same was preceded by notification for prior hearing via office no. GIC-..., sent with postal registration no. RY...PT and received by the Claimant on 2014-03-10";

"As regards assessment no..., the same was preceded by notification for prior hearing via office no. GIC-..., sent with postal registration no. RY...PT and received by the Claimant on 2014-03-10".

Regarding the failure to analyze the elements raised in prior hearing

The Respondent continues, invoking that "in this chapter the Claimant comes to allege that assessments no..., no..., no..., no..., no..., no... and no... appear to be illegal, because the Respondent did not consider the arguments adduced in the exercise of the right to prior hearing".

In this context, according to the Respondent, "the Claimant did not bother (…) to concretely specify what arguments were supposedly not analyzed by the Respondent", "which, in truth, is understandable, (…) if the Claimant did not bring any new elements in the exercise of the right to prior hearing".

With effect, and according to the Response submitted by the Respondent, "the Claimant did not raise (…) new arguments translated in the submission of evidence intended to rebut the (alleged) legal presumption (in favor of the Respondent) that automobile ownership coincides with the registered owner", whereby "(…) the Respondent did not have to pronounce itself on them".

Regarding the lack of reasoning

In this context, the Respondent writes that "the Claimant comes to allege that all assessments appear to be illegal, because they are not reasoned, since they merely enumerate articles and the information presented, in addition to being sparse, sin by being telegraphic" but, according to the Respondent's allegation, "one should first of all begin by highlighting the mass process nature represented by IUC assessment", "(…) which inevitably has repercussions on the form of notifications, in particular in the establishment of standardized and computerized reasoning, which nonetheless does not fail to observe the provision of Article 77 of the General Tax Law nor calls into question the purposes (…) of the right to reasoning".

"Secondly, continues the Respondent, "should a situation of lack or insufficiency of reasoning (…) exist, it was incumbent on the Claimant to request the issuance of the certificate provided for in Article 37 of the Code of Tax Procedure and Process (CPPT)".

"On the other hand, a very different matter for the Respondent "is, thirdly, the circumstance of the Claimant not wanting to abide by the notified acts (…)", it not being "possible to state that a given act is unfounded when, in the concrete case, the contextual reasoning allowed its addressee to know the factual and legal reasons that led the Respondent to make the decisions in question, with that sense and content".

Regarding error regarding the presuppositions

In this matter, according to the Respondent, "the Claimant comes to allege that all assessments rest on error regarding its presuppositions, to the extent that it was no longer the owner of the automobile vehicles in question at the moments when the obligation to assess the respective IUC became due, despite the automobile register indicating the Claimant as owner thereof", an understanding with which the Respondent does not agree because the Claimant "incurs not only a biased reading of the letter of the law, but also the adoption of an interpretation that does not heed the systematic element, violating the unity of the regime enshrined in the entire IUC Code and, more broadly, in the entire legal-fiscal system and further results from an interpretation that ignores the purpose of the regime enshrined in the article at hand, and likewise, in the entire IUC Code".

Regarding the objective tax incidence of the IUC

In this regard, the Respondent alleges that "the first misunderstanding underlying the interpretation defended by the Claimant relates to a biased reading of the letter of the law" (…) because this establishes that "taxpayers subject to the tax are the owners of vehicles, being considered as such the natural persons (…) in whose name the same are registered".

"In these terms, continues the Respondent that "it is imperative to conclude that (…) the legislator established expressly and intentionally that persons be considered as (…) owners (…), the persons in whose name the (…) vehicles are registered, because it is this interpretation that preserves the unity of the tax legal system", defending thus the removal of the establishment of a presumption by understanding that this "would inequivocally be to effect an interpretation contrary to law".

"Thus, the Respondent defends that "in light of this wording it is manifestly not possible to invoke that it is a presumption, as the Claimant defends (…) being rather a clear choice of legislative policy adopted by the legislator, whose intention (…) was that, for the purposes of IUC, be considered owners, those who as such appear in the automobile register".

Regarding the interpretation that does not heed the systematic element, violating the unity of the regime

At this point, the Respondent understands that "from the articulation between the scope of the objective tax incidence of the IUC and the constitutive fact of the corresponding tax obligation it unequivocally results that only legal situations that are the subject of registration (…) give rise to the birth of the tax obligation (…)" being that this "is considered due on the first day of the taxation period (…)", that is, "the moment from which the tax obligation is constituted presents a direct relationship with the issuance of the registration certificate, in which the facts subject to registration must appear".

"Thus, "in the absence of such registration (…) the owner shall be notified to fulfill the corresponding tax obligation, as the Respondent (…) shall not have to proceed to assess the tax based on elements that do not appear in registers and public documents and, as such, authentic (…) whereby the failure to update the register shall be imputable in the legal sphere of the taxpayer subject to the IUC and not in that of the Portuguese State, as the active subject of this Tax".

Regarding the interpretation that ignores the teleological element of interpretation of the law

In this sense, the Respondent alleges that, having regard to the tenor of parliamentary debates around the approval of Decree-Law no. 20/2008, of 31 January, "(…) it unequivocally results that the IUC is due by the persons who appear in the register as owners of the vehicles", "(…) so as to avoid the problems (…) related to the fact that there are many vehicles not registered in the name of the real owner".

"In truth, according to the position defended by the Respondent, "the new regime of taxation of the IUC came to substantially alter the regime of automobile taxation, becoming taxpayers subject to the tax the owners appearing in the property register (…)" whereby, according to the Respondent, "(…) it is clear that the tax acts at issue do not suffer from any defect of violation of law, to the extent that in light of the provision" in the applicable legislation, "it was the Claimant, in the capacity of owner, who was the taxpayer subject to the IUC".

Regarding the probative documents joined with a view to rebuttal of the presumption

In this matter, the Respondent understands that "in light of all that has been expounded and by virtue of the provision in Article 3, paragraphs 1 and 2 of the IUC Code and Article 6 of the same code, it was the Claimant, in the capacity of owner appearing in the Motor Vehicle Register, who was the taxpayer subject to the IUC".

"In this context, according to the Respondent, "accepting that it is admissible to rebut the presumption (…) it will nonetheless be necessary to appreciate the facts and documents joined by the Claimant and their probative value with a view to such rebuttal", because "it is not by the mere export of a good that the Claimant ceases to hold the right of ownership over the same", "it not being by way of a simple contract for provision of international transport services (…) that the Claimant ceases to be owner of the vehicle, being thus necessary a subsequent legal transaction (…)".

"Secondly, still according to the Respondent, "it is not mere removal of the Portuguese registration plate upon loading that the Claimant also ceases to hold the right of ownership over the vehicle (…)" because "(…) the registration plate constitutes only an element relating to the registration of the vehicle" "(…) it not being by the fact that a vehicle does not have a registration plate that it becomes devoid of an owner".

"On the other hand, for the Respondent, "the IUC does not constitute a tax on registration as occurs in some countries, but rather a tax on property", being "the objective incidence of the IUC the automobile property, meaning that that tax is incidence on vehicles registered or registered in Portugal (…)" and, "(…) revealing, on the one hand, the motor vehicle register that the Claimant is the owner of the vehicles and, on the other hand, the Claimant not having proceeded to cancel the registrations, then it is inescapable to conclude that (…) it is subject to the tax obligation".

"With respect to the documents, it is verified that the Claimant instructed its request for arbitral pronouncement with the joining of the documents (…) relating to the (alleged) exports and sales of the vehicles and with the documents (…) relating to the requests to cancel the registrations of the vehicles", the Respondent raising the question of whether those documents will constitute "sufficient proof to shake the (supposed) legal presumption established" in the law.

"The answer to the question raised in the preceding point is, in the Respondent's understanding, "clearly not, whereby the Documents 19 to 27 joined (…) are challenged for all legal purposes" because "the export declarations and sale declarations are not apt to prove the celebration of a synallagmatic contract as is purchase and sale (…)", "(…) with the possibility of doing so in a later moment now being foreclosed", concluding the Respondent that "the Claimant failed to prove the alleged transfer of the vehicles in question".

Regarding the violation of the constitutional principles of equality, contributory capacity and legality

In this context, the Respondent understands that "(…) the Claimant has no basis (…)" because "(…) its understanding appears, itself, to be contrary to the no less constitutional principles of trust, legal certainty, efficiency of the tax system and proportionality (…)".

Regarding the interpretation contrary to the Constitution

In this context, the Respondent understands that "the interpretation conveyed by the Claimant appears contrary to the Constitution, to the extent that such interpretation translates into the violation of the principle of trust, the principle of legal certainty, the principle of efficiency of the tax system and the principle of proportionality".

Regarding the payment of compensatory interest and responsibility for payment of arbitral costs

In this regard, the Respondent alleges that "the IUC is not assessed in accordance with information generated by the Respondent itself (…)" whereby, "the Claimant not having taken care of the updating of the motor vehicle register (…) and only having ordered the cancellation of the registrations on 2014-02-28, that is, much after being notified to exercise the right to prior hearing and after notification of the assessments (…), it is inescapable to conclude that the Claimant did not proceed with the care that was required of it", concluding that "(…) it was not the Respondent who gave rise to the deduction of the request for arbitral pronouncement, but rather the Claimant itself", whereby "consequently, the Claimant should be condemned to payment of the arbitral costs (…)".

"Finally, concludes the Respondent that "the present request for arbitral pronouncement should be judged unfounded, the tax assessment acts challenged being maintained in the legal order and the Respondent being accordingly absolved of the claim".

RULING ON PROCEDURAL ISSUES

4.1 The Tribunal is regularly constituted, pursuant to Article 2, paragraph 1, subparagraph a), Articles 5 and 6, all of the RJAT and is competent to proceed with the appreciation of the request for arbitral pronouncement formulated by the Claimant.

The parties enjoy legal personality and capacity, are legitimate as to the request for arbitral pronouncement and are duly represented, pursuant to the provisions of Articles 4 and 10 of the RJAT and Article 1 of Portaria (Ordinance) no. 112-A/2011, of 22 March.

The request for arbitral pronouncement is timely given that it was presented within the period provided in subparagraph a) of paragraph 1 of Article 10 of the RJAT.[6]

The cumulation of claims effected by the Claimant, relating to different IUC assessment acts, is valid, pursuant to the provision in Article 3, paragraph 1 of the RJAT, given that the founding of such claims depends on the appreciation of the same circumstances of fact and the interpretation and application of the same principles or rules of law.

4.5 The exception of lapse of the right to assess the tax relating to the year 2009 was raised in the request, which shall be analyzed, preliminarily, in Chapter 5. (Matters of Fact), given that it is related to the documentation providing proof of the notification of the respective IUC assessments.

4.6 The issue of (partial) subsequent futility of the dispute was raised by the Claimant in a moment subsequent to the submission of the request (see point 1.25., supra) because the Respondent would have annulled (or partially annulled) the tax assessment acts challenged by decision of a request for official review (dated 09-04-2018), a fact which came to be confirmed by the Respondent, which shall be analyzed, preliminarily, in Chapter 6. (Matters of Law).

4.7 No other exceptions requiring consideration were raised.

4.8 No nullities were found to exist, whereby it is now necessary to proceed with consideration of the merits of the claim.

MATTERS OF FACT

Preliminarily, and with respect to matters of fact, it is important to point out that the Tribunal does not have to pronounce itself on everything that was alleged by the Parties, it being incumbent upon it, rather, the duty to select the facts that matter for the decision and discriminate the proven fact from the unproven fact [cf. Article 123, paragraph 2, of the Code of Tax Procedure and Process (CPPT) and Article 607, paragraphs 3 and 4, of the CPC, applicable ex vi Article 29, paragraph 1, subparagraphs a) and e), of the RJAT].

5.2 Accordingly, the facts pertinent to the judgment of the case are chosen and delineated according to their legal relevance, which is established in attention to the various plausible solutions of the question(s) of Law.

Proven Facts

The Claimant was notified of the following IUC assessments (as proven by each of the documents below indicated, attached with the request:

The Claimant practiced and was notified of the procedures documented by the following documents joined to the file:

Gracious complaint (proceeding no...2014...), submitted on 24-02-2014, relating to IUC assessments nos..., ..., ..., ..., ... and..., relating to the years 2009 and 2010 and concerning automobile vehicles..., ... and... (doc. no. 1 of the request);

Office no... from the Finance Directorate (DF) of Lisbon, of 15-05-2014, relating to notification of the Claimant regarding the possibility of exercising the right of participation in the decision on the gracious complaint identified in the preceding point, in the form of prior hearing, in accordance with the order of 14-05-2014 (doc. no. 8 of the request);

Prior hearing in writing, on 19-06-2014, relating to the project denial of the gracious complaint above identified (doc. no. 9 of the request);

Office no... from DF Lisbon, of 18-06-2014, to the effect of notifying the Claimant of the final decision denying the gracious complaint above identified, in accordance with the order of 16-06-2014 (doc. no. 10 of the request).

Gracious complaint (proceeding no...-...), submitted on 28-02-2014, relating to IUC assessments nos..., ..., ..., ..., ... and..., relating to the years 2011 and 2012 and concerning automobile vehicles..., ... and... (doc. no. 12 of the request for absence of joining a copy of doc. no. 11 of the request);

Office no... from DF Lisbon, of 30-05-2014, relating to notification of the Claimant regarding the possibility of exercising the right of prior hearing concerning the project denial of the gracious complaint identified in the preceding point, in accordance with the order of 27-05-2014 (doc. no. 12 of the request);

Prior hearing in writing, on 12-06-2014, relating to the project denial of the gracious complaint above identified (doc. no. 13 of the request);

Office no... from DF Lisbon, of 03-07-2014, to the effect of notifying the Claimant of the final decision denying the gracious complaint above identified, in accordance with the order of 27-06-2014 (doc. no. 14 of the request);

Notification by the Finance Service of Amadora..., on 09-05-2014, for prior hearing in the context of official assessment of IUC relating to the year 2013 of the vehicle... (doc. no. 17 of the request);

Prior hearing in writing, on 02-06-2014, relating to the official assessment of IUC referred to in the preceding point (doc. no. 18 of the request);

Submission of Certificates issued by the Lisbon Maritime Customs, dated 27-02-2014, with the following tenor (docs. nos. 19, 20, 21 and 22):

"It certifies that the vehicles with registration nos. ... and..., were declared for export at the Lisbon Maritime Customs, through the Export DAU (Declaration for Customs Use) no... of 2009-09-09 (…) and that the photocopy requested is intended to confirm the export of the said vehicle, for cancellation of registration";

"It certifies that the vehicles with registration nos. ... and..., were declared for export at the Lisbon Maritime Customs, through Export DAU no. 2009... of 2009-09-04 (…) and that the photocopy requested is intended to confirm the export of the said vehicle, for cancellation of registration";

"It certifies that the vehicle with registration no... was declared for export at the Lisbon Maritime Customs, through Export DAU no. 2009... of 2009-09-02 (…) and that the photocopy requested is intended to confirm the export of the said vehicle, for cancellation of registration".

Submission of Certificates[7] issued by the Institute of Mobility and Transport, I.P. (IMT), dated 06-03-2015, with the following tenor:

"It certifies (…) that from the computerized register it appears that the vehicle ... has been deregistered since 12 September 2009" (doc. no. 2 of the request presented by the Claimant on 17-03-2015);

"It certifies (…) that from the computerized register it appears that the vehicle ... has been deregistered since 12 September 2009" (doc. no. 3 of the above-mentioned request);

"It certifies (…) that from the computerized register it appears that the vehicle ... has been deregistered since 21 September 2009" (doc. no. 4 of the above-mentioned request);

"It certifies (…) that from the computerized register it appears that the vehicle ... has been deregistered since 21 September 2009" (doc. no. 5 of the above-mentioned request);

"It certifies (…) that from the computerized register it appears that the vehicle ... has been deregistered since 12 September 2009" (doc. no. 6 of the above-mentioned request).

Notification of assessment no..., issued on 12-10-2013, sent on 14-10-2013 under postal registration no. RY...PT and received by the Claimant on 16-10-2013 (docs. nos. 10 and 11 of the response)[8];

Notification of assessment no..., issued on 12-10-2013, sent on 14-10-2013 under postal registration no. RY...PT and received by the Claimant on 16-10-2013 (docs. nos. 12 and 13 of the response)[9];

Notification of assessment no..., issued on 12-10-2013, sent on 14-10-2013 under postal registration no. RY...PT and received by the Claimant on 16-10-2013 (docs. nos. 14 and 15 of the response)[10];

Notification for prior hearing relating to assessment no..., via office no. GIC-..., sent with postal registration no. RY...PT and received by the Claimant on 10-03-2014 (docs. nos. 7 and 8 of the response)[11];

Notification for prior hearing relating to assessment no..., via office no. GIC-..., sent with postal registration no. RY...PT and received by the Claimant on 10-03-2014 (docs. nos. 8 and 9 of the response)[12].

In the course of a request for official review (no...), submitted on 16-06-2016 by the Claimant, in order to request the annulment of the IUC assessment acts relating to the years 2009 to 2012 of the vehicles with registration nos. ... and ..., the Respondent decided, by order of 09-04-2018, that it was founded, and ordered the annulment of the following IUC assessments (doc. no. 1 attached by the Claimant in the request presented on 20-09-2024):

With respect to the vehicle with registration no..., assessments for the years 2009 to 2012 were annulled, that is, assessments nos..., ..., ... and ...;

With respect to the vehicle with registration no..., assessments for the years 2009 to 2012 were annulled, that is, assessments nos..., ..., ... and....

In accordance with information provided by the Respondent (in the document attached with the request of 04-10-2024), assessments relating to the years 2009 to 2012 relating to the vehicle with registration no... (..., ..., ... and ...) were paid out of time and the assessment relating to the year 2013 was annulled (which was no longer part of this arbitral proceeding).

No other facts were proven that would be liable to affect the decision on the merits of the claims.

Unproven Facts

The following facts are considered as unproven, with relevance for the decision, based on the lack or insufficiency of the documentary evidence joined to the file:

5.8.1. Notification for prior hearing relating to assessment no..., via office no. GIC-..., allegedly sent with postal registration no. RY...PT and allegedly received by the Claimant on 22-06-2013 (doc. no. 1 of the response)[13];

5.8.2. Notification for prior hearing relating to assessment no..., via office no. GIC-..., allegedly sent with postal registration no. RY...PT and allegedly received by the Claimant on 21-06-2013 (doc. no. 2 of the response)[14];

5.8.3. Notification for prior hearing relating to assessment no..., via office no. GIC-..., allegedly sent with postal registration no. RY...PT and allegedly received by the Claimant on 20-06-2013 (doc. no. 3 of the response)[15];

5.8.4. Notification for prior hearing relating to assessment no..., via office no. GIC-..., allegedly sent with postal registration no. RY...PT and allegedly received by the Claimant on 22-06-2013 (doc. no. 4 of the response)[16];

5.8.5. Notification for prior hearing relating to assessment no..., via office no. GIC-..., allegedly sent with postal registration no. RY...PT and allegedly received by the Claimant on 22-06-2013 (doc. no. 5 of the response)[17];

5.8.6. Notification for prior hearing relating to assessment no..., via office no. GIC-..., allegedly sent with postal registration no. RY...PT and allegedly received by the Claimant on 22-06-2013 (doc. no. 6 of the response)[18].

6. GROUNDS OF LAW

Preliminary Issue – Regarding the partial subsequent futility of the dispute

6.1 Preliminarily, let us recall that the Claimant submitted a request on 20-09-2024, clarifying that the Respondent would have annulled (or partially annulled), the tax assessment acts challenged, by decision of a request for official review dated 09-04-2018, attaching to the file a copy of the decision and identifying the annulled acts, which would determine the subsequent futility (albeit partial) of the dispute as to the respective tax assessment acts, which came to be confirmed by the Respondent, by request of 04-10-2024, in accordance with which it was shown that, in the course of the official review proceeding no...2016..., the Respondent annulled the following IUC assessments, in accordance with the matters established as proven (see point 5.5., supra):

6.1.1. With respect to the vehicle with registration no..., assessments for the years 2009 to 2012 were annulled, that is, assessments nos..., ..., ... and ...;

6.1.2. With respect to the vehicle with registration no..., assessments for the years 2009 to 2012 were annulled, that is, assessments nos..., ..., ... and....

6.2 In this context, it is important to preliminarily appreciate the question of the founding of the partial subsequent futility of the dispute, which constitutes a dilatory exception, which is a cause of extinction of the proceedings (albeit, in the case, partially) and implies the partial absolution (in the case) of the Respondent from the proceedings, pursuant to Articles 277, subparagraph e) and 278, paragraph 1, subparagraph e), of the CPC, subsidiarily applicable by virtue of Article 29, paragraph 1, subparagraph e), of the RJAT.

6.3 Administrative annulment produces retroactive effects, pursuant to Article 163, paragraph 2, of the CPA (Administrative Procedure Code), being that, once the period set in paragraph 1 of Article 13 of the RJAT expires, the Respondent becomes unable to practice a new tax act with respect to the same taxpayer or tax obligor, tax and taxation period, except on the basis of new facts (paragraph 3 of Article 13 of the RJAT).

6.4 In the case sub judice, the tax assessment acts which constitute the main object of the dispute – IUC assessment acts relating to the years 2009 to 2014 of different vehicles, were partially the subject of administrative annulment by the Respondent in a moment subsequent to the constitution of this Tribunal, as can be verified from the matters of fact fixed (see point 5.5. of this decision).

6.5 The claim formulated by the Claimant is thus partially satisfied as to the annulment of the IUC assessment acts above identified in point 6.1., as well as as to the annulment of the decisions denying gracious complaints to the extent that they relate to the said assessments (GC no...2014... relating to assessments nos..., no..., no... and no... and GC no... relating to assessments nos..., no..., no... and no...), because new assessment acts cannot be practiced, thus giving rise to partial subsequent futility of the dispute.

6.6 As Lebre de Freitas and Isabel Alexandre teach, "the impossibility or subsequent futility of the dispute occurs when, by fact occurring during the pendency of the proceedings, the claim of the plaintiff cannot be maintained, by virtue of the disappearance (…) of the object of the proceedings, or finds satisfaction outside the schema of the intended founding. (…), the founding ceases to matter – beyond, by impossibility of achieving the intended result; here, by it having been achieved by other means" (Civil Procedure Code Annotated, vol. 1º, Almedina, Coimbra, 4th edition, reprint 2021, page 561).

6.7 In consequence, and as to the IUC assessments meantime annulled by the Respondent, the fact of which was brought to the knowledge of the Tribunal, it is determined that the Respondent be partially absolved from the proceedings in consequence of the partial subsequent futility of the dispute as to those assessments.

Preliminary Issue - Regarding the lapse of the right to assess the IUC for 2009

6.8 On the other hand, and also preliminarily, with respect to the question of the lapse of the right to assess the IUC for 2009 raised by the Claimant (assessments no. (no..., no... and no...), it should be noted that as to assessments nos. ... and..., given that they were annulled by the Respondent, in accordance with point 5.5., and the preceding point, consideration of the question of lapse as to the same is rendered moot, because unnecessary.

6.9 As to assessment no..., relating to the year 2009, concerning the vehicle..., we would like here to refer to point 5.4.15., supra, in which the timely notification of the said assessment on 16-10-2013 was established as proven, that is, within the legal period, the Claimant's allegation of alleged lapse of the right to assess being without foundation.

6.10 In these terms, given that the proceedings should continue as to the assessments for which there is no evidence of having been annulled during the pendency of the same [no... (2009), no... (2010), no... (2011), no... (2012), all relating to the vehicle with registration no....; no... (2013), relating to the vehicle with registration no...; no... (2013) and no... (2014) both relating to the vehicle with registration no...], it is verified that the issue underlying the present request for arbitral pronouncement shall be that of the verification of the legality of the said IUC assessments, as well as ascertaining the legality of the acts denying the gracious complaints duly filed, relating to those IUC assessments.

6.11 Indeed, in the request for arbitral pronouncement the Claimant invokes the circumstance of, on the date to which the tax facts that gave rise thereto relate, it was no longer the owner of the vehicles and, consequently, did not assume the quality of taxpayer subject to the IUC that was assessed to it.

6.12 Thus, the following shall be the questions to be decided for purposes of the statement in the preceding point:

6.12.1. Does Article 3 of the IUC Code, in the wording in force on the date to which the disputed assessments relate, establish or not a rebuttable presumption as to the owners of automobile vehicles, as taxpayers subject to tax, so as to rebut the presumption that persons in whose name the same are registered are to be considered as such?

6.12.2. Did the Claimant succeed in demonstrating in the course of the arbitral proceeding that it was not, on the date to which the IUC assessments that are the object of this proceeding relate (years 2009, 2010, 2011, 2012, 2013 and 2014), the owner of the vehicles..., ... and..., thus succeeding in rebutting the presumption?

6.12.3. Do the IUC assessments made by the Respondent suffer from illegality, in view of the applicable legislation?

6.13 In this context, the Claimant considers that it is not the taxpayer subject to the tax that was assessed to it, because in accordance with the provision in Article 3, paragraph 1, of the IUC Code, a rebuttable presumption is therein enshrined, that is, which admits contrary proof, in particular, through the demonstration that the vehicles with registration nos..., ... and... were transferred to third parties and sent to Angola in 2009 and, therefore, the IUC relating to the years 2009, 2010, 2011, 2012, 2013 and 2014 could not be required of it (underlined by us).

6.14 To the contrary, the Respondent considered that the provision in Article 3, paragraph 1, of the IUC Code does not comprise any legal presumption and that, rather, it expressly and intentionally established that persons be considered as owners those in whose name the vehicles are registered.

6.15 In this dispute, it will be necessary to determine the objective tax incidence of the IUC (in accordance with the provision in the respective Code) and to take a position on the said rule of objective tax incidence, so as to ascertain whether the same establishes or not a legal presumption and to decide, in the affirmative case, whether the same is susceptible of being rebutted (as the Claimant defends) or whether, to the contrary, it is established expressly and irrebuttably, that persons in whose name the vehicles are registered are the owners, for purposes of objective tax incidence of the IUC (as the Respondent defends).

6.16 Preliminarily, with a view to the appreciation of this matter, it should be borne in mind that acquirers of vehicles become owners of those same vehicles by way of the celebration of the corresponding purchase and sale agreements, with or without registration.

6.17 In this context, there are three articles of the Civil Code that are important to consider in respect of the acquisition of ownership of an automobile vehicle, namely:

6.17.1. Article 874, which establishes the notion of purchase and sale agreement, as being "(…) the agreement by which the ownership of a thing, or other right, is transferred, against payment of a price";

6.17.2. Article 879, subparagraph a), pursuant to which one of the essential effects of the purchase and sale agreement is provided as "the transfer of the ownership of the thing or the titularity of the right";

6.17.3. Article 408, paragraph 1, which establishes that "the constitution or transfer of real rights over a determined thing is done by mere effect of the agreement, except for the exceptions provided in law".

6.18 In this matter, we are within the realm of agreements with real effect, which means that their celebration causes the transfer of real rights, which in the case of automobile vehicles, is determined by mere effect of the agreement, as expressly results from the rule previously mentioned.

6.19 Within the realm of agreements with real effect, cite Pires de Lima and Antunes Varela, in annotations to Article 408 of the Civil Code, when they defend that "(…) the agreements called real because they have as their immediate effect the constitution, modification or extinction of a real right (…) are distinguished from the so-called real agreements, which require the delivery of the thing as an element of their formation".[19]

6.20 Thus, we shall be faced with agreements in which the ownership of the thing sold is transferred, without more, from the seller to the buyer, having, as its cause, the agreement itself.

6.21 Also in this regard the case law has defended, in view of the provision in Article 408, paragraph 1 of the Civil Code that "the constitution or transfer of real rights over a determined thing is done by mere effect of the agreement, except for the exceptions provided in law" being in this case the purchase and sale agreement of an automobile vehicle [see Article 874° and 879, subparagraph a) of the Civil Code], which does not depend on any special formality, being valid even when celebrated by word of mouth.[20] [21]

6.22 Given that the purchase and sale agreement, in view of what is referred to above, has real nature, with the aforementioned consequences, there must also be considered the juridical value of motor vehicle registration (object of such an agreement), to the extent that the transaction of the said good is subject to public registration.

6.23 Indeed, Article 1 of Decree-Law no. 54/75, of 12 February, considers that as to the registration of vehicles it "has essentially the purpose of giving publicity to the legal situation of motor vehicles (…), with a view to the security of legal commerce", being that, in accordance with the Motor Vehicle Registration Code (applicable ex vi Article 29 of the RJAT) "definitive registration constitutes a presumption that the right exists and belongs to the holder inscribed in the precise terms in which the registration defines".

6.24 Thus, it seems safe to conclude that definitive registration is a rebuttable presumption of the existence of the right, which may be set aside, that is, which admits contrary proof.

6.25 Notwithstanding, it should be noted that in the IUC Code there is no provision requiring registration as a condition of validity of agreements.

6.26 However, and before proceeding to interpret the provision in Article 3, paragraph 1, of the IUC Code, it is relevant to bear in mind the provision in Article 11 of the LGT, to the extent that tax rules must be interpreted in accordance with general principles of interpretation and, likewise, the provision in Article 9 of the Civil Code which establishes the rules and elements for the interpretation of rules.

6.27 Indeed, in order for us to conclude whether Article 3, paragraph 1, of the IUC Code (in the wording on the date to which the assessments relate) enshrined or not (i) a rebuttable presumption of who should be considered taxpayer subject to the tax based on Motor Vehicle Registration or whether (ii) the Legislator intended expressly and intentionally to determine, based on Motor Vehicle Registration, who should be considered the taxpayer subject to IUC, it is fundamental first to heed the letter of the Law.

Regarding the objective tax incidence of the IUC

6.28 In accordance with the provision in Article 3, paragraph 1, of the IUC Code, in the wording given by Law no. 22-A/2007, of 29 June (enactment approving the Code of this tax), "taxpayers subject to the tax are the owners of vehicles, being considered as such the natural persons or legal entities, of public or private law, in whose name the same are registered" (underlined by us).

6.29 Thus, in accordance with the literal element of the rule referred to, the problematic centers on the expression "considering-se as tais" (considering as such) used by the legislator because the letter of the Law does not refer to the expression "presuming-se" (presuming as such), as was in the enactments preceding the present Code, being thus questionable whether the nature of presumption continues or does not to be present in the rule under analysis.

6.30 In this sense, and by way of example, it is verified that in Article 243, paragraph 3, of the Civil Code and in Articles 45, paragraph 6, and 89-A, paragraph 4, of the LGT, the expression "considers-se" (is considered) is also used and, nonetheless, we are faced with legal presumptions whereby, in accordance with the general rules of interpretation, it is considered that the minimum of verbal correspondence is assured, for purposes of the determination of the legislative thinking that is objectified in the rule at hand – the literal element.[22]

6.31 Thus, and still within the scope of the elements of interpretation in accordance with Article 9 of the Civil Code, it is also important to heed the historical element.

6.32 The legislator, in the definition of the objective tax incidence of the Municipal Tax on Vehicles (IMV), the Vehicle Circulation Tax (ICI) and the Hauling Tax (ICA), taxes abolished by the IUC, established that "the tax is due by the owners of vehicles, being presumed as such, until proof to the contrary, the persons in whose name the same are registered or matriculated" (underlined by us).

6.33 In these terms, as to this element of interpretation, this Tribunal understands that it is demonstrated that the antecedents of the IUC Code enshrined a presumption that taxpayers subject to the tax are the owners registered in the Motor Vehicle Register.

6.34 With respect to the IUC, notwithstanding continuing to attribute to the owners of vehicles the quality of taxpayers subject to tax, the legislator chose to use a different formulation of the rule of objective tax incidence, abandoning the expression "(…) being presumed as such, (…)" in favor of the expression "(…) being considered as such (…)", it being clear that the understanding underlying that article of the IUC Code foresees a rebuttable presumption, relative to which the semantic question in no way alters the interpretative sense of the rule.[23] [24]

6.35 Thus, and citing the understanding followed in prior decisions on this same matter, this Tribunal understands that it should be concluded that Article 3, paragraph 1 of the IUC Code establishes a presumption, because it is not the replacement of the expression "being presumed" by the expression "being considered" that causes this rule to cease to establish a presumption.[25]

6.36 In truth, this Tribunal understands that we are faced with a mere semantic matter, which in no way alters the content of the rule in question, for two reasons:

6.36.1. In order for a legal presumption to exist, it is necessary that the rule that establishes it adapts to the respective legal concept, set forth in Article 349 of the Civil Code, being for this irrelevant whether the same is explicit, revealed by the use of the expression "are presumed" or merely implicit.[26] [27]

6.36.2. On the other hand, the freedom of the legislator's conformability is limited by fundamental principles enshrined in the CRP (Constitution of the Portuguese Republic), in particular, the principle of equality, whose relevance is pertinent in the case under analysis.

6.37 Indeed, at the tax level, the principle of equality translates into the generality and abstraction of the rule that creates the essential elements of the tax, in accordance with the contributory capacity of each one.

6.38 In this context, "taxation in accordance with the principle of contributory capacity shall imply the existence and maintenance of an effective connection between the tax payment and the economic presupposition selected for object of the tax, requiring, for this reason, a minimum of logical coherence of the various concrete tax cases, provided for in law with the corresponding object of the same".[28]

6.39 Thus, it is in the sense of the legal concept of presumption and in respect of the constitutional principles of equality and contributory capacity that the legislator assigns full effect to the presumption derived from motor vehicle registration accepting it, as such, in the definition of the objective tax incidence of this tax, established in paragraph 1 of Article 3 of the IUC Code.

6.40 Indeed, with respect to the importance of motor vehicle registration, it is important to note that registration permits the publicity of the legal situation of goods and, likewise, to presume that the right exists over those and that the same belongs to the holder, as appears in the registration. Whereby we can consider that registration does not have a constitutive nature of the right, but rather a declarative nature, concluding that registration does not constitute a condition of validity of the transfer of the vehicle from the seller to the buyer.

6.41 In these terms, ownership is thus acquired by way of the celebration of a purchase and sale agreement, in accordance with the provision in Article 879, subparagraph a), of the Civil Code, pursuant to which one of the effects of this agreement rests on the transfer of the thing or the titularity of the right.

6.42 Finally, with respect to the rational and teleological element, it is further important to note that the IUC has underlying it the principle of equivalence enshrined in Article 1, of the respective Code, which came to embody the environmental concerns of this tax by establishing that the tax should burden the taxpayers for the environmental and road costs caused by automobile circulation, that is, the polluter must pay (principle that also underlies Article 66, paragraph 2, subparagraph h) of the CRP and Community Law).[29]

6.43 In truth, what is intended to be achieved through the establishment of the said principle is the possibility of internalizing the negative environmental externalities, which means nothing more than making the damages that accrue to the community resulting from the use of automobile vehicles be assumed by their owners-users, as costs that only they should bear and, being known the dimension of the environmental damages caused by automobile vehicles, feeling itself at the most varied levels, the logic and coherence of the system of automobile taxation, in general, and of the regime inscribed in the IUC Code in particular, point in the direction that the polluter must pay, thus associating the tax with the environmental damages caused.

6.44 This allocation of the tax burden to the subjects that, only apparently and in principle, are in those conditions, while formal owners of the vehicles (that is, as persons who appear in the register), rather postulates the knowledge of the actual owners (which may be those who appear in the register), given that they are these that, as actual polluters (or, at least, potential polluters), should suffer the respective tax.

6.45 These are, therefore, concerns with considerable importance, in the economy of the IUC, and which cannot fail to, coherently, be taken into account in the interpretation of Article 3, relating to the objective tax incidence of that tax.

6.46 Thus, corresponding the taxation of the actual polluters to an important end sought by law (in the case, by the IUC), and considering that (according to Francesco Ferrara [30]) "(…) legal interpretation is by its nature essentially teleological", in light of the elements of rational and teleological character of interpretation, it is imperative to conclude that paragraph 1 of Article 3 of the IUC Code establishes a rebuttable presumption.

6.47 In these terms, it is important to highlight that the said elements of interpretation, whether those related to literal interpretation, whether those respecting the logical elements of interpretation, of a historical nature or of a rational order, all point in the direction that the expression "being considered as such" has a sense equivalent to the expression "being presumed as such", and should thus be understood (reiterate) that the provision in paragraph 1 of art. 3 of the IUC Code establishes a legal presumption.

6.48 In this matter, it should be noted that, in accordance with the provision in Article 349 of the Civil Code, presumptions are inferences which the law, or the judge, draws from a known fact to establish an unknown fact, whereby they constitute means of proof, such proof having the function of demonstrating the reality of the facts (Article 341 of the Civil Code), whereby anyone who has a legal presumption in their favor is released from the obligation to prove the fact to which it leads (Article 350, paragraph 1, of the Civil Code).

6.49 However, presumptions, except in cases where law prohibits it, may be rebutted, by contrary proof (Article 350, paragraph 2, of the Civil Code) and, being tax incidence presumptions, these are always rebuttable, as expressly provided in Article 73 of the LGT.

6.50 Indeed, tax incidence presumptions may be rebutted, through the contradictory procedure proper thereto (provided for in Article 64 of the CPPT) or, alternatively, by way of gracious complaint or judicial challenge of the tax acts based thereon.[31]

6.51 In these terms, concluding that Article 3, paragraph 1, of the IUC Code establishes a rebuttable presumption, it remains to analyze whether this presumption was effectively rebutted by the Claimant, as results from the provision in Article 73 of the LGT.

6.52 Thus, in general, the person who is inscribed in the register as owner of the vehicle (and who, in that sense, is considered by the Tax Authority as being the taxpayer subject to IUC) must demonstrate, through the elements of proof available, that they are not the real owner of the vehicle and, likewise, that ownership was transferred to another.

6.53 In the case at hand, the Claimant attached with the request for arbitral pronouncement (for purposes of proof that it was no longer the legitimate owner, on the date of assessment that is the object of the request for arbitral pronouncement, of the vehicles with registration nos..., ... and ...):[32]

6.53.1. Copy of 3 certificates issued by the Lisbon Maritime Customs, in which it was referred that those vehicles "were declared for export (…)" through the respective Export DAU (Declaration for Customs Use),

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