IUC Subjective Incidence: Legal Presumption of Vehicle Ownership and Invoice as Proof of Transfer (CAAD 758/2015-T)

ARBITRAL DECISION

I – REPORT

1. A..., SA, legal entity no. ..., with registered office in ..., ..., …, hereinafter the Claimant, having self-assessed the Unique Vehicle Circulation Tax (IUC) and Compensatory Interest on 179 vehicles, which it lists, relating to the years 2013 and 2014, in the total amount of € 20,464.06, filed, on 17 December 2015, a request for constitution of an arbitral tribunal and arbitral decision, pursuant to the provisions of articles 2, no. 1, paragraph a) and 10, no. 1, paragraph a), both of Decree-Law no. 10/2011, of 20 January, which approved the Legal Framework for Arbitration in Tax Matters (RJAT), in which the Tax and Customs Authority (AT) is the Respondent,

It seeks that the illegality be declared and the corresponding annulment of the aforementioned IUC self-assessments and Compensatory Interest, with the consequent determination of the restitution of the totality of the taxes unduly paid and recognition of the right to indemnity interest, as well as the condemnation of the Respondent to payment of arbitral costs.

1. Pursuant to the provisions of articles 6, no. 1, and 11, no. 1, paragraph a), of the RJAT, the Deontological Council of the Administrative Arbitration Centre (CAAD) appointed the undersigned as sole arbitrator on 19 January 2016, and the latter communicated acceptance of that appointment.

On 5 February 2016, the Parties were notified of this appointment, pursuant to the combined provisions of article 11, no. 1, paragraph b) of the RJAT, with articles 6 and 7 of the CAAD Deontological Code, and neither party manifested the intention to refuse the arbitrator's appointment.

In these circumstances, in accordance with the provisions of paragraph c) of no. 1 of article 11 of the RJAT, the Sole Arbitral Tribunal was constituted on 22 February 2016.

3.1 Pursuant to article 17, nos. 1 and 2, of the RJAT, the AT was notified to, as the respondent party, within thirty days, present its response and, if it so wished, request the production of additional evidence, as well as remit a copy of the administrative file.

3.2 In the response presented on 2 April 2016, which is fully incorporated herein, the Respondent upheld the legality of the assessments made, having concluded that the request should be judged unfounded, with the consequent maintenance in the legal order of the tax acts contested, and that it should be absolved.

3.3 In the subsequent proceedings, the Parties were notified on 5 April 2015 of the meeting referred to in article 18, no. 1 of the RJAT, to be held on 18 April 2016, and it was clarified that if there were no impediments, oral arguments would be made. By request of the Respondent, and with the consent of the Claimant, the aforementioned meeting was postponed to 28 April 2016.

3.4 At the meeting held on the date indicated, in accordance with the minutes appearing in the file, the witnesses indicated by the Claimant were heard, and it was decided that written arguments would be produced, successively and for a period of ten days, beginning with the Claimant, and in accordance with no. 2 of the aforementioned article 18 of the RJAT, 3 June 2016 was set as the deadline for publication of the arbitral decision.

3.5 The written arguments were presented, on 9 and 13 May 2016, respectively, with the Parties reaffirming, in essence, the theses defended in the initial petition and in the response.

II - PROCEDURAL REQUIREMENTS

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

The proceedings do not suffer from defects that would invalidate it, and there are no incidents requiring resolution nor preliminary questions on which the Arbitral Tribunal should rule.

III – REASONING

Arguments of the Parties

5.1 To substantiate the request for arbitral decision, the Claimant, in essence, alleged the following:

a) It is the exclusive importer company of all automobiles of the brand "C..." for the national market, having as its corporate purpose the commerce of automobiles, respective parts and accessories;

b) New vehicles, as soon as imported, are immediately sold to the brand's dealerships, by means of delivery at their facilities with consequent issuance of invoices, which, in turn, either resell them to end customers, who will be their users and in whose interest they enter road circulation, or keep them on the showroom floor for purely display and testing purposes;

c) It is the dealerships that request from the Claimant the registration of the vehicles, as soon as they have a customer, - although from the strictly formal point of view the registration of the same is initially made in the name of the importer, precisely because at the date of the registration request the dealership is already the owner thereof – that is, at the date of the registration requests the vehicles have already been invoiced to the dealership by the Claimant;

d) Only after being sold to the dealerships are the vehicles registered, at which moment the Claimant bears the corresponding Vehicle Tax (ISV) – which is why it re-bills the respective tax to them;

e) Payments to the Claimant of the price of the vehicle and the ISV are made directly, immediately and in full by B... Branch Portugal, a financial entity that substitutes itself in collecting these amounts from the dealerships, this being a methodology agreed with all "C..." dealerships;

f) The Claimant is a taxable person of ISV under no. 1 of article 3 of the CISV, however, this reasoning is not transferable to the IUC, a distinct tax with autonomous rules of incidence;

g) Insofar as the vehicles are sold before assignment of the registration, on the dates of that assignment, the Claimant is not the owner of the vehicles, and consequently is not subject to IUC, such that the Respondent, by considering it as a taxable person, merely because the same would be registered in its name on the dates of the registrations, despite having in its possession elements pointing in the opposite direction, triggers assessments based on error in the factual presuppositions, for they tax the ownership of alien goods, that is, which do not belong to it on the dates to which they refer – dates of the registration of the vehicles;

h) Only by force of the assessments contested here did the Claimant learn that it still appeared formally as owner of the vehicles on the dates of registration of the vehicles, to the extent that, apparently, the real owners of the vehicles on those dates would not have in a timely manner proceeded to register in their name, such that it was unaware whether or not registrations had been made by the purchasers;

i) By force of article 1 of the CIUC the principle of equivalence prevails, that is to IUC will constitute the corresponding cost of the environmental and road cost resulting from the actual use of the vehicles in road circulation, such that the polluting taxpayer must bear the tax to the extent of the costs it causes to road infrastructure and the environment, and the assumption of these costs appeals to the principles of equality and equivalence;

According to the principle of equality, what is equal should be treated equally and what is different should be treated differently, not thus resulting in the application of a single IUC rate but in the differentiation of IUC values depending on the technical characteristics of the vehicles, that is depending on the lesser or greater cost they cause to the environment and road infrastructure;

j) Attentive to the provision of article 4, no. 3 of the General Tax Law (LGT), IUC represents a case of special contribution, in that "Special contributions that are based on ... special wear of public goods caused by the exercise of an activity are considered taxes";

l) The polluting taxpayer must bear the IUC to the extent of the costs it causes to road infrastructure and the environment, implementing article 7, the degradation that occurs in the road network, through consideration of criteria such as gross weight, number of axles and type of suspension;

m) The assumption of costs by the polluting taxpayer appeals to the principles of equality and equivalence, in that the principle of equivalence, as a criterion of equality, relates to the fair distribution of tax burdens among taxpayers depending on the road and environmental costs that these produce in society;

n) IUC may only have as its presupposition the social cost caused by the taxpayer, translated in the environmental and road cost resulting from the actual use of the vehicles and does not aim to tax vehicle importers for the simple reason that they are not the users of the vehicles that the tax intended to burden, in that their activity as an importer produces no environmental and road cost;

o) From the provisions of articles 3, no. 1 and 2, and 6, no. 1 of the CIUC it is extracted that IUC is incurred on the owner or purchaser with retention of ownership on the date of registration of the vehicle, it being presumed that the owner or purchaser with retention on that date is the one in whose name the vehicle is registered or matriculated;

p) The official assessments of IUC relating to the date of registration are in question, as deduced from the content of the assessments and other documentation remitted by the AT, however, the vehicles were not owned by the Claimant on the dates of their respective registrations, given that the Claimant had already sold them to third parties (the aforementioned dealerships);

q) The case law (unanimous) of CAAD establishes a legal presumption of ownership based on registry data – allowing the interested party to allege and prove that, despite this presumption derived from the registry, it is not the actual owner of the vehicles on the dates considered in the official registries, citing various arbitral decisions in favor of such thesis, namely decisions no. 26/2013, 27/2013 and 14/2013;

r) In summary, motor vehicle registry establishes a presumption of ownership, rebuttable by proof to the contrary, the transmission of ownership in the sale and purchase contract operates by mere agreement between the parties, having immediate real effect, independent of the buyer registering ownership in their name, the registry does not have constitutive effects but merely declarative, the AT must obey the principle of investigation and discovery of material truth, not being able to be satisfied with mere appearance of ownership deriving from the registry, concluding that from the principle of equivalence derives the principle of the "polluter-pays", only those who are the actual owners should be taxed;

s) To so consider, CAAD case law invokes the rules of legal interpretation, namely the very literal element of article 3, no. 1 of the CIUC, the principles of equality, of contributive capacity, of legality, of impartiality, of proportionality, of justice, of pursuit of public interest, of investigation and discovery of material truth (articles 55 and 58 of the LGT), beyond the rule of unity of the fiscal legal system; (articles 11 of the LGT and 9 of the Civil Code (CC);

t) and also the rational or teleological element of the law, which resides in the shift of the tax burden from the moment of acquisition of the vehicles to the phase of circulation, attentive to the principle of equivalence, the circumstances in which the law was elaborated and the temporal conditions in which it arose, beyond the principle of consensuality, according to which the legal-civil effects of the transmission of vehicles occur immediately, by mere agreement of purchase and sale;

u) The Claimant also invokes insufficiency of reasoning, given that the contested assessments do not make explicit the IUC values concretely required for each vehicle, are from years in which different rates were in force and only the assessment of compensatory interest is shown, with the factual and legal grounds and calculation and determination operations that will have led to the required values not being made explicit, such that this lack causes it to suffer from insufficiency of reasoning, which pursuant to article 125, no. 2 of the Code of Administrative Procedure (CPA) is equivalent to lack of reasoning, generating its respective annulability;

v) Article 18, no. 2 of the CIUC does not provide for any assessment of compensatory interest but only an official assessment of IUC for voluntary payment in 10 days. The requirement of compensatory interest before the deadline for voluntary payment has elapsed, suffers from defect of violation of law, and moreover, given that no IUC is in arrears, the assessment of compensatory interest does not respect article 35 of the LGT as concerns the verification of the legal presuppositions for its assessment;

x) For the assessment of compensatory interest there would always be required an adequate causal nexus between the conduct of the taxable person and the delay in assessment of the tax, pursuant to case law of the STA (Decision of STA, 2nd section, no. 587/2010, of 16 December 2010);

z) Since the contested assessments were paid, the Claimant, in addition to the restitution of the unduly paid taxes, is entitled to indemnity interest, for error of fact and law in the issuance of the assessments, pursuant to article 43 of the LGT.

5.2 For its part, the Respondent in response to the initial petition, in its response, came to state the following:

a) In the context of article 17 of the Code of Vehicle Tax (CISV) the introduction into consumption and assessment of tax on vehicles that do not have national registration is entitled by the issuance of a Vehicle Customs Declaration (DAV) and the same is constitutive of the taxable event pursuant to the terms and purposes of the provision in article 5 of the CISV;

b) Pursuant to the provision of article 117, no. 4, of the Road Code, registration is requested from the Institute of Mobility and Transport (IMT, I.P.) by the entity that proceeded with the admission or introduction into consumption, article 24 of the Motor Vehicle Registry Regulation (RRA) stating that "The initial registration of ownership of vehicles imported, admitted, assembled, constructed or reconstructed in Portugal is based on the respective application and proof of compliance with tax obligations";

c) Having regard to the provision of article 3, no. 1, according to which they are, "Taxable persons 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 names the same are registered", article 6, no. 1, concerning the taxable event and the exigibility of the tax, according to which "The taxable event of the tax is constituted by ownership of the vehicle, as attested by the registration or entry in national territory" and article 17, all of the CIUC, in accordance with which "... the tax is assessed by the taxable person within 30 days following the end of the deadline regularly required for the respective registration.", from the conjunction of the scope of subjective incidence of IUC and the constitutive fact of the corresponding tax obligation, it follows unequivocally from article 6 of the CIUC the legal situations that generate the birth of the tax obligation, that is, registration or entry in national territory;

d) That is, the moment from which the tax obligation is constituted has a direct relationship with the issuance of the registration certificate, in which the facts subject to registration must appear;

e) "... by force of the conjunction of the expressed norms, and in special attention to the provision of article 24 of the RRA, approved by DL no. 55/75 of 12.02, in the wording given by DL no. 178-A/2005 of 28 October, it is understood that the initial registration of ownership, of vehicles admitted (as is the case in these proceedings), is based on the respective application and proof of compliance with tax obligations relating to the vehicle", "That is, the issuance of a registration certificate implies the presentation of a DAV by the Claimant and payment of the corresponding ISV, and automatically gives rise to the registration of ownership of the vehicle under article 24 of the RRA in the name of the entity that proceeded with its importation of the vehicle and request for registration, that is the Claimant", such that "the first registration of each vehicle is considered in the name of the importing entity";

f) Pursuant to article 24 of the RRA, it is peremptory that the importer appears in the registry as first owner of the vehicle and, in that sense, it is in accordance with what is provided in articles 3 and 6 of the CIUC, taxable person of the tax, the taxable event being assessed pursuant to the aforementioned article 6 by registration or entry in national territory;

g) Having the Claimant requested the issuance of a registration certificate, and the vehicle being registered in its name, the presuppositions of the taxable event of IUC are met, as well as its exigibility, with the same being taxable person of the tax;

h) The Claimant's understanding that it proceeded with the sale of the vehicles to its dealerships, through issuance of invoices, even before assignment of registration, and thus is not owner of the vehicles and concomitantly taxable person of the tax, does not find the slightest correspondence with the letter of the law and moreover violates frontally the principle of legality, equality, contributive capacity and certainty and legal security;

i) To the Claimant, as importer of the vehicles, it falls upon it to introduce them into consumption, by way of the DAV and corresponding payment of ISV, and is issued the registration and the first registration is made in its name, such that it is manifestly irrelevant the sale to its dealerships before assignment of registration;

j) The argumentative rationale does not find correspondence with the ratio legis nor with the mens legislatori, for the tax legislator in article 6 of the CIUC clearly established the premises regarding the taxable event of the tax, as well as its exigibility, clearly providing that such fact is constituted by ownership of the vehicle, as attested by registration or entry in national territory;

l) The legislator did not fictionally establish that the tax would be due by the owner of the vehicle who was registered within the 60 days to which no. 2 of article 42 of the RRA alludes, much less fictionally established that importers, notwithstanding they proceed with the sale of the vehicles before assignment of the registration certificate, may, thus, see excluded the subjective incidence of IUC, rather established that the taxable event of the tax is assessed by registration or entry, expressly providing article 24 of the RRA that, having paid the ISV and requested registration, the vehicle is automatically registered in the name of the importer, that is the Claimant;

m) Therefore, having completed the DAV, paid the ISV and made the registration request, it ineluctably fulfilled the taxable event of IUC, that is the registration and entry (objective/subjective incidence), and is obliged to pay pursuant to article 3 of the CIUC;

n) Regardless of whether the Claimant sold the vehicle to its dealership before assignment of registration, such argument, in light of the taxable event provided for in article 6 of the CIUC, is manifestly innocuous, in that the legislator expressly established that the taxable event is attested by assignment of registration, such that the Claimant having completed the DAV, paid the ISV, requested the registration request and registered the vehicle, doubly fulfills the taxable event of the tax;

o) The tax legislator intentionally and expressly wanted that those considered as taxable persons of the tax be the owners in whose names the vehicles are registered, given that if the argumentative view advanced by the Claimant were followed, the formula would be found to distort the ratio legis of the CIUC, proceeding with its non-application and circumvention in clear and manifest violation of the most elementary legal and constitutional principles of tax legality, justice, contributive capacity, equality and legal certainty and security;

p) The Claimant bases its claim on the presupposition that, with the alienation of the vehicle to the dealership before the issuance of the registration, taxation in IUC is excluded, in light of article 3 of the CIUC, however, the taxable event is assessed by registration or entry in national territory such that the tax is exigible with its issuance, regardless of whether registration occurs in the name of another owner;

q) Article 18 of the CIUC came to establish as a rule the subjection to tax of the taxable person who presented the DAV and requested the issuance of registration, if the vehicle is not registered in the name of another person within the 60 days to which the provision of article 42 of the RRA alludes, plus the deadline for assessment and payment established in article 17 of the CIUC;

r) The Claimant's understanding aimed at excluding the subjective incidence and taxation of IUC, in case of sale of the vehicle before assignment of registration, apart from having no legal support, violates the constitutional principles of legality and tax justice, contributive capacity, equality, certainty and legal security;

s) The exclusion of subjective incidence in taxation in IUC proposed by the Claimant contradicts the principle of legality and typicality provided in article 8 of the LGT and article 103 of the Constitution of the Portuguese Republic (CRP), in that such understanding does not rest on the law, given that the legislator did not fictionally establish the exclusion of taxation in case the alienation of the vehicle occurs before assignment of registration;

t) It equally collides with the principle of contributive capacity provided in article 4 of the LGT and 104 of the CRP, which constitutes the presupposition and measure of taxes, constituting the economic suitability to bear the burden of the tax, that is, it requires that the legal type of tax contains reference only to elements that are economic-financial and, for greater reason and because intrinsically associated with the principle of contributive capacity, violates the principle of tax equality set forth in article 13 of the CRP and the principle of certainty and legal security;

u) The invoice is not a sufficiently probative document to exclude the norm of incidence of the presumption derived from registration, the Claimant not having attached to the proceedings proof of the motor vehicle application, with a view to ascertaining who appears as seller of the vehicle, such that, providing article 423 of the New Civil Procedure Code that those should be presented with the pleading in which the corresponding facts are alleged, the presentation of subsequent documentary evidence is precluded, namely of the motor vehicle application, citing in support an interlocutory position delivered by the collective arbitral tribunal in proceedings no. 75/2012-T;

v) Notwithstanding the non-attachment, invoices are also not suitable documents to prove the purchase option by the lessees, in that they are mere unilateral documents issued by the Claimant, not being apt to prove the conclusion of a sinallagmatic contract, such as a purchase and sale, as recent case law emanating from the CAAD has been inclining, citing proceedings 63/2014-T, 150/2014-T and 220/2014-T; 91, and it is certain that the rules of motor vehicle registry (still) have not reached the point where mere invoices unilaterally issued by the Claimant may substitute the motor vehicle registry application, moreover an officially approved document;

x) The Claimant should be condemned to payment of arbitral costs, as well as the legal presuppositions conducive to the right to indemnity interest are not met, in that the Respondent merely gave fulfillment to the legal obligations to which it is bound and, in parallel, to follow registry information that was supplied to it by the proper authorities;

z) Indeed, the competence for motor vehicle registry is not found in the sphere of the Respondent, but rather is attributed to various external entities, namely the Institute of Registries and Notaries to whom it falls to transmit to the Respondent the changes that may be verified regarding the ownership of motor vehicles.

In summary, the Respondent requests that the petition for arbitral decision be judged unfounded, with the tax acts contested remaining in the legal order, and, consequently, it be absolved of the petition.

IV – FACTS PROVEN AND NOT PROVEN

1. In matter of fact, with relevance for the decision to be delivered, this Arbitral Tribunal considers as proven, in light of the elements appearing in the proceedings, the following facts:

6.1 The Claimant is a company that in the course of its activity proceeds with the importation, in exclusive regime, of all automobiles of the brand "C..." intended for the national market, having as its corporate purpose the commerce of automobiles, respective parts and accessories.

6.2 Automobiles, new, as soon as they enter national territory, by sea or land, are deposited in a logistics center designated "CAT" and immediately directed to the brand's dealerships, some of them integral to the same economic group, through the issuance of invoices and delivery at the respective facilities of the purchasers.

6.3 The process of acquisition of the vehicles is initiated by direct order from the dealerships themselves to the manufacturer, using the informatics route for this purpose, and, as soon as admitted or imported in national territory, the Claimant makes them available to those dealerships, and they, within their respective activity, either resell them to end customers, or use them for purposes of "display" in their respective showrooms.

6.4 It is the dealership that requests from the importer, now the Claimant, that the ISV be assessed and paid and that registrations be assigned to the vehicles, at a moment when, as of that date of request, the same have already been invoiced to it by the Claimant.

6.5 With the registration of the vehicles and the inherent prior payment of ISV by the Claimant, the latter is debited to the dealerships to whom the vehicles have already been invoiced, by way of invoice where the registration already appears and not merely the chassis number, with no direct sales by the Claimant to end customers.

6.6 Although it appears in the sales invoices to the dealerships that "The seller reserves for itself the ownership of the goods contained in this invoice until full payment of the respective price", the price is paid to the Claimant on the day immediately following the issuance.

6.7 During the year 2014, the Claimant was confronted by the AT with IUC debts relating to vehicles it had imported in 2013 and 2014, contained in the list of vehicles mentioned below, having decided to proceed with the respective payment.

6.8 The list of the assessments, mentioning the date of invoice of each vehicle, the registration assigned to it and the respective date, the assessment registration no. and the amounts paid in IUC and compensatory interest, expressed in euros, is as follows:

[TABLE WITH 179 VEHICLES OMITTED FOR LENGTH - Details showing Sale Date, Registration, Registration Date, Assessment Number, IUC, Interest, and Total amounts for each vehicle]

6.9 Subordinated to the subject "Official Assessment of IUC – Notification for Prior Hearing", communications relating to the vehicles whose assessment is contested were made in the following terms:

"Based on the elements which the Tax and Customs Authority has at its disposal, Your Excellency was the owner/lessee of the vehicle with registration number …… of the category …… in …….

Characteristics of the vehicle. Year of registration …. Month of registration … Gross Weight … Number of vehicle axles … Number of trailer axles … Type of suspension ….

The tax in question was not assessed nor paid until the respective due date, which occurred on …… Thus Your Excellency is hereby notified that you may, if you wish to exercise the right of hearing pursuant to and for the purposes of article 60, no. 1 paragraph a) of the LGT, having thirty from the date of notification a period of 25 days for such purpose.".

6.10 The Claimant filed a gracious complaint, which was disregarded, as shown in the despatch issued in the AT information no. ...-.../2015, of 10 September 2015.

1. There are no facts established as not proven with relevance for the decision of the case.

Reasoning of the Proven Facts

1. In the facts established as proven account was taken of documentary evidence and the elements brought to the proceedings by the Claimant and by the Respondent, embodied in the initial petition and in the various annexes that accompanied it, and in the administrative file that proceeded in the entity Respondent, as well as the evidence resulting from the testimony collected at the hearing.

V - GROUNDS OF DECISION

1. Based on what is set forth above, to assess the legality of the assessments made in IUC, it is necessary that an answer be found for the following controversial legal questions:

a) Faced with the provision of article 3, no. 1, concerning subjective incidence, article 6, no. 1, as concerns the taxable event and exigibility of the tax, and article 17, all of the CIUC, and taking into account article 24 of the RRA, according to which the importer appears in the registry as first owner of the vehicle, what is the legal value of the registry for purposes of taxation of IUC of new vehicles to which a first registration is assigned;

b) Meaning and scope of the norm contained in article 3, no. 1 of the CIUC in matter of subjective incidence;

c) The insufficiency of reasoning of the assessment invoked by the Claimant and the preclusion of attachment of subsequent documentary evidence, subsequent to the filing of the request for arbitral decision;

d) The aptness of the invoice for purposes of proof of transmissions of the vehicles;

e) To what extent the interpretation defended by the Claimant is at odds with the Constitution as regards the principle of tax legality and typicality, of contributive capacity and certainty and legal security;

f) The IUC debt being already paid, as well as the respective compensatory interest, in case of success of an arbitral decision favorable to the Claimant, is, or is not, payment of indemnity interest due, and to whom falls the responsibility for payment of arbitral costs.

a) PRESUPPOSITIONS OF THE TAXABLE EVENT OF IUC

1. Law no. 22-A/2007, of 29 June, which approved the CIUC, to implement the taxable event of IUC, invokes various legal provisions aimed at establishing its factual presuppositions, which must be interpreted in a combined manner.

In matter of subjective incidence, it is provided in article 3, no. 1, that "Taxable persons 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 names the same are registered.".

Relating to the heading "Taxable event and exigibility", article 6, no. 1, states that "The taxable event of the tax is constituted by ownership of the vehicle, as attested by the registration or entry in national territory.", and is exigible on the first day of the tax period referred to in no. 2 of article 4 - no. 3 of the aforementioned article ("The tax period corresponds to the year which begins on the date of registration or on each of its anniversaries, concerning vehicles of categories A, B, C, D, and E ...").

For its part, article 17, no. 1, in matter of "Deadline for assessment and payment" establishes that "In the year of registration or entry in national territory, the tax is assessed by the taxable person within 30 days following the end of the legally required deadline for registration".

Finally, the same code provides in article 18, no. 1, a) that "In the absence of registration of ownership of the vehicle made within the legal deadline, the tax due in the year of registration of the vehicle is assessed and required from the taxable person of the vehicle tax based on the vehicle customs declaration...", through the promotion of official assessment (heading of the article).

11.1 In the Claimant's understanding, the fact of being taxable person of ISV pursuant to no. 1 of article 3 of the CISV does not imply that this reasoning is transferable to IUC, a distinct tax with autonomous rules of incidence.

Indeed, IUC may only have as its basis the social cost caused by the taxpayer, translated in the environmental and road cost resulting from the actual use of the vehicles, and therefore does not aim to tax vehicle importers, for the simple reason that they are not the users of the vehicles that the tax intended to burden, in that their activity as importers produces no environmental and road cost.

11.2 This point of view is rejected by the Respondent, which considers that the Claimant's understanding does not have correspondence with the ratio legis nor with the mens legislatori, for the tax legislator in article 6 of the CIUC clearly established the premises regarding the taxable event of the tax, as well as its exigibility, establishing that such fact is constituted by ownership of the vehicle, as attested by registration or entry in national territory, not having fictionally established that the tax would be due by the owner of the vehicle who was registered within the 60 days to which no. 2 of article 42 of the RRA alludes, much less that importers, notwithstanding they proceed with the sale of the vehicles before assignment of the registration certificate, may, thus, see excluded the subjective incidence of IUC.

1. In the domain of tax law, article 11, no. 1 of the LGT establishes that in determining the sense of tax norms and in qualifying the facts to which they apply, the general rules and principles of interpretation and application of laws are observed, providing that "if doubt persists about the sense of the norms of incidence to apply, regard should be had to the economic substance of the tax facts" - no. 3 of the same article.

Therefore, as the legal criterion for interpretation of tax law is defined, it is necessary to seek in civil law the general principles of interpretation and application of laws.

This is a matter contemplated in article 9 of the CC which establishes that, for purposes of interpretation of the law, the interpreter should not limit itself to the letter of the law, but reconstruct from the texts the legislative thought, having especially in mind the unity of the legal system, the circumstances in which the law was elaborated and the specific conditions of the time in which it is applied.

It further requires that a legislative thought not having in the law a minimum of verbal correspondence, albeit imperfectly expressed, cannot be considered by the interpreter, and that in fixing the sense and scope of the law it should be presumed that the legislator established the most correct solutions and knew how to express its thought in adequate terms.

The doctrine is clear as to the importance of interpretative activity, and Ferrara, one of the great masters of law, goes so far as to consider that it is the "most difficult and delicate operation to which a jurist can dedicate himself, and requires fine tact, refined sense, happy intuition, much experience and perfect mastery not only of positive material, but also of the spirit of a certain legislation", further adding, "It must be objective, balanced, without passion, bold at times, but not revolutionary, acute, but always respectful of the law". [1]

13.1 The legal framework that is offered for interpretation is a complex framework, given that the final result will be the product of the combined interpretation of various norms from diverse diplomas, published at different times.

The fiscal regime of IUC approved by Law no. 22-A/2007, of 29 June, integrated a global reform of automobile taxation, in which it was intended to create a common denominator in environmental taxation and establish greater equalization in the importance of fiscal revenue collected from the former Motor Vehicle Tax (a kind of registration tax collected by customs), much overvalued, and the circulation tax, (until then, of reduced financial importance).

With its institution, the following were expressly repealed: Decree-Law no. 143/78, of 12 June, which gave legal life to a "Regulation of Motor Vehicle Tax"[2], of scope applicable to light passenger automobiles and motorcycles, and Decree-Law no. 116/94, of 3 May, which approved the "Regulation of Circulation and Haulage Taxes", applicable to vehicles assigned to road transport of goods by private parties or on their own account, or road transport of goods publicly or on account of others.

13.2 In matter of subjective incidence, the aforementioned Decree-Law no. 143/78, in its article 3, established that "The tax is due by the owners of the vehicles, being presumed as such, until proof to the contrary, the persons in whose names the same are registered or matriculated".

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

For its part, Decree-Law no. 116/94 established in its article 2 that "Taxable persons of the Circulation Tax and Haulage Tax are the owners of the vehicles, being presumed as such, until proof to the contrary, natural or legal persons in whose names the same are registered".

Between the two diplomas a difference is possible to note, given that, while in the latter, the same took into account only the registry, in the former it was admitted that incidence could derive either from the registry or from the registration, a solution that was adopted by the legislator in the new regime.

13.3 IUC in having resumed in its respective subjective incidence the figure of registration of ownership, requires that the respective legal regime be sought, the rules in which the same is founded and that inform it.

Decree-Law no. 47,952, of 22 September 1967, in article 1, pointed as its essential purpose "… to identify the respective owners and, in general, to give publicity to the rights inherent to motor vehicles".

This purpose was reaffirmed in Decree-Law no. 54/75, of 12 February, which in article 5, no. 1, paragraph a), established that subject to registration are, among others, the right of ownership and usufruct of automobiles, with registration of such fact being compulsory.

For the registration of such fact, Decree no. 55/75, equally of 12 February, which approved the RRA, set a period of 60 days from the date of assignment of registration for it to be requested, as results from article 42, nos. 1 and 2, this being the legislative framework that has been maintained and continues in force.

[Note: The document continues but is truncated at this point in the source material. The translation preserves all references, article numbers, and maintains standard English legal terminology throughout.]