IUC Subjective Incidence: Vehicle Tax Liability After Sale – CAAD Case 77/2014-T

ARBITRAL DECISION

The present decision is rendered in accordance with the former spelling conventions.

I – Report.

1. A..., taxpayer no. ..., resident at ..., ... street, requested the constitution of the arbitral court in tax matters with a view to the annulment of the assessment acts for the Single Circulation Tax (IUC) and respective compensatory interest, relating to the tax periods of 2008, 2009, 2010, 2011 and 2012 and to the vehicle with registration plate ..-..-., in the total amount of € 184.04.

2. As the basis for the request, the Claimant alleges, in summary, that it does not qualify as the passive subject of the tax obligation inasmuch as it was not the owner of the motor vehicle identified above during the periods to which those assessments relate, since the same was sold on 14 January 2008.

To the aforementioned assessments, it further attributes other defects, namely, the erroneous qualification and quantification of the taxable fact, the absence of the legally required reasoning, as well as the omission of other legal formalities which, in the Claimant's view, prevent their subsistence in the legal order.

1. The Respondent (AT) responded by raising a preliminary issue regarding the value of the case indicated by the Claimant; and subsequently pronouncing itself on the subjective incidence of the tax in question, concluded for the unfoundedness of the requested relief and, consequently, for the maintenance of the questioned assessment acts.

2. The arbitral tribunal was duly constituted on 02-04-2014 and is materially competent in light of the provision set forth in Art. 2, No. 1, lit. a), of the RJAT.

3. The parties dispensed with the meeting of the arbitral tribunal provided for in Art. 18 of the RJAT.

4. The parties possess legal standing and procedural capacity and have legitimacy (Arts. 4 and 10, No. 2, of the RJAT, and Art. 1 of Ordinance No. 112-A/2011, of 22/03).

5. The proceedings do not suffer from any nullities.

II - Factual Matters.

1. With relevance to the assessment of the issues raised, the following factual elements are highlighted:

8.1. The Claimant, after exercising the right to prior hearing, was duly notified of official assessments of the Single Circulation Tax (IUC), relating to the motor vehicle with registration plate ..-..-.. and to the years 2008, 2009, 2010, 2011 and 2012, as shown in the collection documents and amounts contained in the following table:

8.2. Not conforming to the above-identified assessments, it submitted a claim for administrative reconsideration relating to that pertaining to the period of 2008, which was the subject of rejection by order of 15-07-2013 of the Head of the competent Finance Service.

8.3. The said decision was the subject of an administrative appeal, lodged on 08-08-2013, on which no decision was rendered and notified to the Claimant up to the date of presentation of the present request for arbitral decision.

8.4. With respect to the assessments relating to the periods of 2009, 2010, 2011 and 2012, an administrative claim for reconsideration was likewise submitted, which was rejected by order of 31-12-2013 of the Head of the Finance Service of ….

8.5. As the basis for the aforementioned claims and administrative appeal, the Claimant alleged, in summary, that it was not the owner of the vehicle during the tax periods to which the assessments relate, by virtue of having sold it in January 2008 to the company B..., LDA., (hereinafter also referred to simply as B...) with delivery of the respective documents accompanied by a declaration of sale signed by it so that the purchaser could sell it to a third party.

8.6. The decisions rejecting the claims referred to above are based, in summary, on the consideration that the passive subject of this tax is determined as a function of the registration of the vehicle, that the rule of incidence contained in Art. 3, No. 1, of the IUC Code does not establish any presumption capable of being rebutted, and the said Code does not provide "a legal rule that enables AT to assess tax, on the same motor vehicle, with reference to persons other than the natural or legal persons in whose names the same are registered."

8.7. On the said basis, the Respondent maintained the questioned assessments, which constitute the mediate subject matter of the present request for arbitral decision.

8.8. In support of its request for arbitral decision, the Claimant, in essence, reproduces the same facts and arguments already developed in those claims and administrative appeal, namely, that it was not the owner of the vehicle in question during the periods to which the assessments relate, since the same was the subject of a sale occurring in January 2008, and therefore was not the passive subject of the tax obligation.

8.9. Duly notified for that purpose, the Respondent submitted its response raising, from the outset, a preliminary issue relating to the value of the case.

8.10. Pronouncing itself on the substance of the request, the Respondent alleges, in summary, that IUC assessments are made based on the elements contained in the databases of the Institute of Mobility and Land Transport (IMTT) and the Institute of Registration and Notary Services (IRN), the passive subject being determined as a function of the persons in whose names the vehicles are registered with the latter entity.

III - Preliminary Issue.

Having summarized the relevant factual elements and the position of the Parties, it is important, before all else, to analyze and decide the preliminary issue raised by the Respondent which, as mentioned above, concerns the determination of the value of the case.

On the Value of the Case

1. The Respondent raises a preliminary issue regarding the economic value of € 2,000.00 attributed to the proceedings by the Claimant, on the understanding that this should be reduced to the amount of the questioned assessments of € 184.04.

2. Considering the provision set forth in Art. 97-A of the CPPT, applicable to arbitral proceedings by virtue of the provision in Art. 29, No. 1, lit. a), of the RJAT, the tribunal fixes the value of the proceedings at € 184.04, which, moreover, it would not fail to do in accordance with the terms and for the purposes provided in Art. 12, No. 2, of the said legal instrument.

IV - Joinder of Claims.

1. Considering the existence of a direct relationship among the tax assessments whose illegality it questions, the Claimant chose to request the joint assessment of the tax acts in question.

2. Considering the identity of the taxable facts, of the tribunal competent to decide and of the grounds of fact and law invoked, nothing prevents, in light of the provisions of Arts. 104 of the CPPT and 3 of the RJAT, the requested joinder of claims.

V - Legal Matters.

1. In the request for arbitral decision, the Claimant, in addition to other defects which it attributes to the IUC assessments, invokes the circumstance that, at the date to which the taxable facts that originated them relate, it was not the owner of the vehicle and, consequently, does not assume the status of passive subject of the tax which was assessed against it.

2. The remaining defects invoked regarding the questioned assessments - erroneous qualification and quantification of the taxable facts, violation of the duty to provide reasoning and omission of other unspecified legal formalities - are rendered moot by the issue of the subjective incidence of the said tax, which is considered of paramount importance, since from the response to be given to the same will derive the utility, or not, of the assessment of the remaining defects invoked.

3. Concerning the definition of the subjective incidence of the IUC, diametrically opposed positions are apparent from the outset between the Respondent (AT) and the Claimant (SP): for the former, the passive subject of this tax is the person in whose name the vehicle is registered; while for the latter, the rule of incidence establishes a presumption, derived from the registration, which may be rebutted by virtue of the provision set forth in Art. 73 of the LGT.

4. Thus, on the quality of passive subject of the tax obligation attributed to it, the Claimant alleges that at the date of the occurrence of the taxable facts it was not the owner of the vehicle to which the questioned assessments relate, since on 14-01-2008 the same had been sold to the company B... with delivery of the respective documents, including the declaration of sale signed so that it could sell it to a third party.

5. On the said date, a purchase note no. ... was issued by the acquiring company in favor of the Claimant, in which are identified, among other elements, the parties involved, the vehicle transacted and its respective price.

6. However, since the registration of the identified vehicle was not updated, the Claimant continued to appear therein as owner, a situation that was to remain so until 07-10-2013.

7. According to the understanding of AT, expressed in the course of the administrative claims for reconsideration lodged by the Claimant, it is sufficient that the registration entry of the vehicle is made in the name of a particular person for that person to qualify as the passive subject of the tax obligation for IUC.

8. Indeed, it follows from Art. 3, No. 1, of the IUC Code, that the passive subjects of this tax are the owners of the vehicles, being considered as such the persons in whose names the same are registered.

9. With relevance for the decision to be rendered in the present proceedings, the issue to be analyzed centers, first and foremost, on the interpretation of the rule in No. 1 of said Art. 3 of the IUC Code, in order to determine whether the rule of subjective incidence inscribed therein admits, or not, that the person in whose name the vehicle is registered in the Motor Vehicle Registry may demonstrate, through the means of proof admitted in law, that notwithstanding this fact, he is not the owner of the vehicle during the period to which the tax relates and thus avoid the tax obligation which rests upon him.

10. In sum, it is a matter of determining whether such rule establishes a legal presumption of tax incidence, capable of being rebutted, in accordance with general principles, as the Claimant contends, or whether, differently, as the AT understands, "the tax legislator, in clearly establishing in article 3, No. 1, of the law in question, who are the passive subjects of the IUC, determined expressly and intentionally that these are the owners (or, in the situations provided for in No. 2, the persons enumerated therein), being considered as such the persons in whose names the same are registered."

Being this the central issue to be decided in the present request for arbitral decision, it is important to analyze in greater detail the positions in confrontation.

Position of the Claimant.

1. On this matter and as the basis for the request for arbitral decision, the Claimant alleges, in summary, that:

a) At the dates to which the taxable facts of the IUC which gave rise to the questioned assessments relate, it was not the owner of the vehicle and, consequently, does not assume the status of passive subject of the tax which was assessed against it;

b) In light of the provision set forth in Art. 73 of the LGT, which provides that the presumptions established in the rules of tax incidence always admit proof to the contrary, the subjective incidence of the tax in question, based on the presumption of ownership derived from the registration, may be set aside by means of proof to the contrary;

c) It is not sufficient, therefore, that the entry in the vehicle registration in the name of a particular person is verified for that person to qualify as the passive subject of the tax obligation;

d) The rule in No. 1 of Art. 3 of the IUC Code admits that the person in whose name the vehicle is registered in the Registry may demonstrate, through the means of proof admitted in law, that he is not the owner of the vehicle during the period to which the tax relates and thus avoid the tax obligation which rests upon him;

e) The presumptions of tax incidence may be rebutted through the adversarial procedure provided for in Art. 64 of the CPPT or, alternatively, through the means of administrative claim for reconsideration or judicial challenge of the tax acts based thereon;

f) Thus, there can be no doubt that not only did the Claimant use the correct means but also, through the documents presented, succeeded in rebutting the legal presumption of ownership.

Position of the Respondent.

1. To the allegations of the Claimant, the Respondent (AT) responded in the sense that such allegations cannot at all proceed, and establishes No. 1 of Art. 3 of the IUC Code that "The passive subjects of the tax are the owners of the vehicles, being considered as such the natural or legal persons, of public or private law, in whose names the same are registered."

2. Developing its position, the Respondent states, in summary, that "The tax legislator, in clearly establishing in article 3, No. 1, of the law in question, who are the passive subjects of the IUC, determined expressly and intentionally that these are the owners (...) being considered as such the persons in whose names the same are registered."

3. In defense of this point of view, the Respondent emphasizes that "the legislator did not use the expression 'are presumed' as it well could have done." It further notes the circumstance that "the tax normative is replete with provisions analogous to that established in the final part of No. 1 of Art. 3, in which the tax legislator, within its freedom of legislative shaping, expressly and intentionally, establishes what should be considered legally for purposes of incidence, of income, of exemption, of determination and of periodization of taxable profit, of residence and of location, among many others."

4. As an example, among others, it refers to the rule in lit. a) of No. 2 of Art. 2 of the CIMT, in which the tax legislator does not presume that "there is a case for onerous transfer for purposes of No. 1 of article 2 of the CIMT, in the execution of a promise contract for the acquisition and alienation of real property in which it is stipulated in the contract or subsequently that the promisee-buyer may assign his contractual position to a third party." In this case, "the legislator expressly and intentionally assimilates this contract to an onerous transfer of property for purposes of IMT." Likewise, in the case of Art. 17 of the CIRC, the legislator also does not establish that the net surpluses of cooperatives are presumed to be the net result of the period but that these are considered to be such. After noting that a large part of the rules of incidence of the IRC have as their underlying rationale the determination of what should be considered income for purposes of this tax, it would have to be concluded that in using the expression "is considered" the tax legislator would have established a presumption in practically all the rules of incidence of the IRC which would be set aside precisely because accounting prescribes solutions different from those of the IRC, this being exactly the legislator's purpose to set aside the accounting rules.

5. Following this reasoning, the Respondent concludes that "it is imperative to conclude that, in the case of the present arbitral decision proceedings, the legislator established expressly and intentionally that the persons in whose names the same (the vehicles) are registered are to be considered as such (as owners...), since this is the interpretation that preserves the unity of the tax-legal system. Wherefore, "to understand that the legislator established here a presumption would unequivocally be to carry out an interpretation contrary to the law."

6. On the other hand, appealing to the systematic element, the Respondent understands that "the solution proposed by the Claimant is intolerable and finds no support in the law." This is because, in the same sense as provided in No. 1 of article 3 of the IUC Code, "article 6 of the IUC Code, under the heading 'Taxable Fact and Exigibility', in its No. 1, establishes that 'The taxable fact of the tax is constituted by ownership of the vehicle, as evidenced by the registration or registration in national territory. Or, 'the moment from which the tax obligation is constituted has a direct relationship with the issuance of the registration certificate, in which must appear the facts subject to registration .... In the same sense, the legislative solution adopted by the tax legislator in No. 2 of article 3 of the IUC Code, in making the assimilations established therein coincide with the situations in which the motor vehicle registration requires the respective registration."

7. The Respondent further maintains that "Such position is also evident in the circumstance that the Motor Vehicle Registry to which the Tax Administration has or may have access, and the certificate in which must appear the acts subject to registration, the exhibition of which may be required by the same Tax Administration from the interested party, contain all the elements intended for the determination of the Passive Subject, without the need for access to the contracts of a private nature which confer such Rights, enumerated by the IUC Code as constitutive of the Legal Situation of Passive Subject of this tax. In the absence of such registration, naturally, the Owner will be notified to fulfill the corresponding tax obligation, since the Tax Administration, taking into account the current configuration of the Legal System, will not have to assess the Tax on the basis of elements that are not contained in public records and documents and, as such, authentic. In these terms, the failure to update the registration, in accordance with the provision in article 42 of the Motor Vehicle Registration Regulation, shall be attributed to the legal sphere of the Passive Subject of the IUC and not to the State, as the active subject of this Tax."

8. Beyond the reasoning set forth, the Respondent further considers it relevant to state that "the interpretation conveyed by the Claimant is shown to be contrary to the Constitution."

9. Defending that "The oft-cited principle of taxpaying capacity is neither the only nor the main fundamental principle that informs the tax system" and that "Alongside this principle we find others with the same constitutional dignity, such as the principle of confidence and legal certainty, the principle of efficiency of the tax system and the principle of proportionality," the Respondent considers that it is imperative, "that in the interpretive task of article 3 of the IUC Code the principle of taxpaying capacity be articulated, or if you prefer tempered, with those other principles."

Hence concluding that "the interpretation proposed by the Claimant, an interpretation that in essence devalues the registration reality to the detriment of an 'informal reality' and incapable of minimal control by the Respondent, and offensive of the basic principle of confidence and legal certainty that should inform any legal relationship, here including the tax relationship."

1. Set forth, in summary and with partial quotation, the positions of the Claimant and the Respondent, they will be clearly defined:

• for the Claimant, the subjective incidence of the IUC rests on a presumption of ownership, derived from the motor vehicle registration, capable of being rebutted in accordance with legal principles; and

• for the Respondent, the rule of the IUC Code does not establish any presumption, expressing the understanding that the legislator defined as the passive subject of this tax, expressly and intentionally, the owner of the vehicle identified in the respective registration.

Subjective Incidence of the IUC.

1. With the exception provided in No. 2, relating to situations of sales with reservation of ownership and leases that assume the nature of financing, the art. 3 of the IUC Code establishes that the passive subjects of this tax are the owners of the vehicles, being as such considered the persons in whose names the vehicles are registered.

2. The recourse to the motor vehicle registration as a structuring element of the system for assessment of this tax is evident throughout the entire Code. Reference should be made, in particular, to its Art. 6, relating to the definition of the taxable fact of the tax obligation, whose No. 1 provides that it is constituted by ownership of the vehicle, as evidenced by the registration or registration in national territory. From this provision it follows that motor vehicles which are not, and need not be, registered in Portuguese territory, are only subject to the objective incidence of this tax if they remain therein for a period exceeding 183 days, as provided in No. 2 of the same article. It is, therefore, a rule which, resorting to the registration element, establishes, simultaneously, the taxable fact of the tax and the respective fiscal connection. It is also from the elements of the motor vehicle registration that the moment of the beginning of the tax period and constitution of the tax obligation is derived and, in a general manner, all the elements necessary for the assessment of the tax in question, as is well emphasized in the response prepared by AT.

3. However, from the dependence of the IUC tax system on the motor vehicle registration, one cannot extract, as an immediate conclusion, that the rule of subjective incidence, in the segment in which it considers as owner the person in whose name the vehicle is registered, does not constitute a presumption of incidence. It will be necessary, therefore, to resort to other interpretive elements, with special relevance to the legal notion of presumption.

Notion of Presumption.

1. According to the notion set forth in Art. 349 of the Civil Code, presumptions are the inferences which the law, or the judge, draws from a known fact to establish an unknown fact. Presumptions constitute means of proof, having as their function the demonstration of the reality of facts (Art. 341 of the Civil Code). Thus, one who has a legal presumption in his favor is excused from proving the fact to which it leads (Art. 350, No. 1, of the Civil Code). However, presumptions, except in cases where the law prohibits it, may be rebutted by means of proof to the contrary (Art. 350, No. 2, of the Civil Code). In the case of presumptions of tax incidence, these are always rebuttable, as expressly provided in Art. 73 of the LGT.

Presumption and Fiction.

1. Along with presumptions, used in tax law principally as a means of preventing the possibility of fraud and evasion or for reasons of simplification and practicability of tax laws, the legislator also resorts, with some frequency, to fictions. Unlike presumption, which departs from a known fact to establish an unknown fact, fiction, on the other hand, "is expressed in a legal process that considers a situation or a fact as distinct from reality in order to attribute legal consequences to it." [1] There is, therefore, a notable difference between one and the other of these figures, used with some frequency in the rules of tax codes and laws. That difference, which is not noted in the reasoning of AT's position, will be particularly relevant in the assessment of the present case.

2. Taking as reference the exemplification presented by the Respondent in support of its thesis, we could consider the case of No. 2 of Art. 17 of the CIRC, which for purposes of this tax determines that "the net surpluses of cooperatives are considered to be the net result of the period." Not ignoring the legislator of the CIRC that cooperatives, by virtue of their respective principles and legal regime applicable to them, cannot have as their purpose the achievement of profit, it attributes to those surpluses a nature distinct from reality, in order to attribute a legal consequence, which is the result of the net exercise for purposes of application of the rules for determining the taxable profit of businesses.

3. On the other hand, the existence, in parallel, of presumptions and fictions in the legal rules of tax incidence is even more evident, for example, in Art. 2 of the CIMT, referred to in the response of AT. According to the body of No. 3 of this article "It is also considered that there is a case for onerous transfer for purposes of No. 1 (the rule that defines the general rule of incidence of this tax, consisting of the onerous transfer of the right of ownership over real property) in the execution of the following acts or contracts:

a) Execution of a promise contract for the acquisition and alienation of real property in which it is stipulated in the contract or subsequently that the promisee-buyer may assign his contractual position to a third party."

and

e) Assignment of contractual position or adjustment for resale, by the promisee-buyer in a promise contract for the acquisition and alienation, with the definitive contract to be executed between the original promisee-seller and the third party."

1. In the first of the referred cases, one is dealing with a fiction, since the legislator does not ignore that the possibility of assignment of contractual position in a promise contract does not entail the transfer of the right of ownership, the subject of the general incidence of the said municipal tax. But, for tax purposes, it attributes the corresponding consequences. In the second case - adjustment for resale, to which lit. e) of the same number refers - one is dealing with a situation somewhat more complex, but which, according to consistent jurisprudence of the superior courts, constitutes a presumption.

2. How is this conclusion reached, if both rules have as their purpose and effects the taxation as transfers of ownership of real property of realities which are not? The answer lies precisely in the recourse to the legal concept of presumption. The rule in lit. e) of No. 3 of Art. 2 of the CIMT, regarding the "adjustment for resale" was already provided for, in identical terms, in paragraph 2 of Art. 2 of the prior Transfer Tax Code: the promisee-buyer who adjusted, with a third party, the sale of the real property which it had promised to acquire would be subject to the tax, based on the presumption that the property had been delivered to it and that it had acted as an owner thereof, by way of the assignment of its contractual position in that contract, but only if the transferential contract were to be executed between the original promisee-seller and that third party. In this case, the legislator created the presumption of economic transfer (delivery), covered by the incidence of the tax, whenever the promisee-buyer acted, before a third party and with the assent of the original promisee-seller, as a true owner, adjusting the resale of the property in question. It is the existence of "legal delivery" - delivery of the property which is the subject of the promise contract - that the rule presumes, in order to tax it. And here, too, the legislator departs from known facts - the contractual position and the legal transfer of the property to a third party - to establish an unknown fact, the adjustment for resale. A presumption that is rebuttable, by virtue of the provision set forth in Art. 73 of the LGT. [2]

Explicit and Implicit Presumptions.

1. The Respondent maintains that the tax legislator, "within its freedom of legislative shaping," expressly and intentionally determines that the persons in whose names the vehicles are registered are to be considered as owners, not using the expression "are presumed" as such, as it could have done.

2. Indeed, in the definition of the subjective incidence of the ICI, ICA and IMV, taxes which the current IUC came to replace, that was the expression used by the legislator. Within the scope of the abolished taxes, it is established that "the tax is owed by the owners of the vehicles, presumed to be as such, until proof to the contrary, the persons in whose names the same are registered or licensed." [3]

3. In the same sense, Art. 3, No. 1, of the Regulation of the Circulation and Haulage Taxes, approved by Decree-Law No. 116/94, of 03/05, establishes that the passive subjects of these taxes are "the owners of the vehicles presumed to be as such, until proof to the contrary, the natural or legal persons in whose names the same are registered."

4. With respect to the IUC, the legislator chose to use a formulation different from the rule of subjective incidence. Just as in the abolished taxes, it continues to attribute to the owners of the vehicles the status of passive subjects. However, it abandons the expression "presumed to be as such, until proof to the contrary, the persons in whose names the same are registered" in favor of "being considered as such the persons (...) in whose names the same are registered."

5. Contrary to the position expressed by AT, we understand that this is a mere semantic matter, which does not alter in the slightest the content of the rule in question and for two reasons: For there to be a legal presumption, it is necessary that the rule establishing it conforms to its respective legal concept, set forth in Art. 349 of the Civil Code, being for this purpose irrelevant whether it is explicit, revealed by the use of the expression "are presumed," or merely implicit; [4] on the other hand, the freedom of legislative shaping is limited by fundamental principles enshrined in the Constitution of the Republic, of which, with relevance for the present case, stands out the principle of equality. In the tax sphere, this principle is expressed in the generality and abstraction of the norm that creates the essential elements of the tax, in accordance with the taxpaying capacity of each. According to what may be extracted from the decision of the CC No. 343/97, of 29-04-97, "Taxation in accordance with the principle of taxpaying capacity will imply the existence and maintenance of an effective connection between the tax payment and the economic presupposition selected as the object of the tax, requiring, for this reason, a minimum of logical coherence of the various concrete hypotheses of taxation provided for in the law with the corresponding object thereof."

6. It is in accordance with the legal concept of presumption and in respect of the constitutional principles of equality and taxpaying capacity that the legislator attributes full efficacy to the presumption derived from the motor vehicle registration, incorporating it, as such, in the definition of the subjective incidence of this tax established in No. 1 of Art. 3 of the IUC Code.

7. Moreover, Decree-Law No. 54/75, of 12/02, which governs the registration of motor vehicles, not providing any rule regarding the constitutive character of the registration of motor vehicle ownership, establishes, in No. 1 of its Art. 1, that the motor vehicle registration aims only to give publicity to the legal situation of the property. In accordance with Art. 7 of the Real Property Registration Code, supplementarily applicable to motor vehicle registration, by reference in Art. 29 of that law, it determines that the registration only "(...) constitutes a presumption that the right exists and belongs to the registered holder, in the precise terms in which the registration defines it."

8. Pronouncing itself on this matter, the STJ, in a decision of 19-02-2004, rendered in process no. 3B4369, concludes that "(...) the registration does not have constitutive effect, since it is intended to give publicity to the registered act, functioning (only) as a mere presumption, rebuttable (presumption 'juris tantum') of the existence of the right (Arts. 1, No. 1, and 7, of the CRP84 and 350, No. 2, of the Civil Code) as well as of the respective ownership, in accordance with what appears therein (...)."

9. Thus, following the reiterated arbitral jurisprudence [5] relating to identical situations, it cannot fail to be understood that the expression "being considered as such" contained in the said rule configures a legal presumption, and that this is rebuttable, in accordance with general principles, and, in particular, by virtue of the provision set forth in Art. 73 of the LGT which determines that the presumptions established in the rules of tax incidence always admit proof to the contrary.

Rebuttal of Presumptions.

1. The presumptions of tax incidence may be rebutted through the adversarial procedure provided for in Art. 64 of the CPPT or, alternatively, through the means of administrative claim for reconsideration or judicial challenge of the tax acts based thereon.

2. In the present case, the Claimant did not use that particular procedure, having instead chosen to submit administrative claims for reconsideration which were rejected. Consequently, the present request for arbitral decision is the appropriate means to rebut the presumption of subjective incidence of the IUC on which the tax assessments whose annulment constitutes the subject matter of the request are based, since this is a matter that falls within the scope of the material competence of this arbitral tribunal (Arts. 2 and 4 of Decree-Law 10/2011).

3. To rebut the presumption derived from the entry in the motor vehicle registration, the Claimant offers, as evidence, a purchase note issued by B..., AUTOMOBILE COMMERCE; LDA., issued in its favor on 14-01-2008, relating to the transaction of the motor vehicle identified above.

4. Observing that the said document was not signed by the parties, on 19-05-2014, an order was issued, duly notified to the Claimant, to attach to the proceedings within 10 days the original duly signed or an authenticated copy. In due course, a copy of the said document was attached to the proceedings, duly signed, in accordance with the original.

5. In addition to the aforementioned sale note, the Claimant also attached, as evidence of the alleged facts, a certificate of the registration of the vehicle in question, carried out on 07-10-2013 in the name of C..., in the Registry of Commercial and Motor Vehicle Registrations of …, on the basis of a verbal contract of sale and purchase executed on 06-05-2008, in which the Claimant appears as seller and the person identified above as buyer.

6. The said transaction is recorded in a declaration, prepared in accordance with the official form for purposes of motor vehicle registration, duly signed by the parties, in which it is expressly declared that "The party identified in the request as seller declares that on 06.05.2008 it indeed executed as such the contract specified therein and therefore confirms it without any restrictions" (Doc. 17).

7. Pronouncing itself on the documentary evidence presented, the Respondent alleges that the same, by itself, is not sufficient to effect conclusive proof of the transfer of the vehicle in question, inasmuch as although the Claimant "alleges that the vehicle ceased to be its property since the year 2008, it does not indicate a single means of proof of the steps which it could and should have taken to ensure and confirm the new registration of the vehicle in the name of the subsequently alleged owner thereof ... Or, that is, and even after the year 2008, the vehicle in question continued, in accordance with the respective motor vehicle registration, to be the property of the claimant."

8. To the extent that may be extracted from the position of the Respondent regarding the proof produced, this would be insufficient to set aside the subjective incidence determined on the basis of ownership, as it appears in the registration which, in coherence with the substantive position assumed by it, would only be set aside as a function of timely updating of the registration itself.

9. This being not the understanding of the tribunal, it is important to evaluate the proof produced by the Claimant in order to determine whether it is sufficient to rebut the presumption derived from the motor vehicle registration which, in the sphere of subjective incidence, is accepted for purposes of the IUC.

10. From the facts alleged by the Claimant it may be inferred that the latter was not the owner of the vehicle during the periods to which the tax relates, since the same was the subject of a sale to an automobile sales company which, in turn, using a declaration of sale subscribed by him - without indication of the buyer's name - would have sold it to a third party.

11. One is dealing with a contract of sale and purchase which, relating to a determined movable thing and not being subject to any special formalism (Art. 219 of the Civil Code), operates the corresponding transfer of property rights (Art. 408, No. 1, of the Civil Code).

12. Dealing with a contract of sale and purchase which involves the transmission of ownership of a movable property, through the payment of a price, this has, as its essential effects, among others, that of delivering the thing (Arts. 874 and 879 of the Civil Code).

13. However, where there is a contract of sale and purchase which has as its object a motor vehicle, in which registration is mandatory, its proper performance presumes the issuance of the declaration of sale necessary for the entry in the registration of the corresponding acquisition in favor of the buyer, as has been understood by the jurisprudence of the superior courts. [6]

14. For registration purposes, no special formalism is required either, being sufficient the submission to the competent entity of a request subscribed by the buyer and confirmed by the seller which, by way of a declaration of sale, confirms that the ownership of the vehicle was acquired by the latter through a verbal contract of sale and purchase (see Art. 25, No. 1, lit. a) of the Motor Vehicle Registration Regulation).

15. Alleging the Claimant that, by verbal contract, it sold the vehicle to the company B... VEHICLE COMMERCE, LDA., with delivery of the respective documents and a declaration of sale subscribed by it, without indication of the buyer's name, so that that company could sell it to a third party, it may be concluded that the Claimant acted in good faith aiming at the proper performance of the contract.

16. Indeed, the documents presented confirm the alleged facts: the delivery of the vehicle and respective documents to that company, as shown in the sale note dated 14-01-2008 and declaration, signed by the Claimant as seller, and by the buyer, in which the transfer to the latter of the ownership of the said vehicle is confirmed by verbal contract executed on 6 May of the same year.

17. These are, therefore, the facts which the Claimant intends to prove through the documents presented, whereby, in light of the foregoing, there will only be a need to evaluate their formal probative force, for purposes of rebuttal of the presumption of tax incidence.

18. These are configured as private documents, duly signed by the parties involved, whose legal requirement, relevant for the purpose of attributing formal probative force to them, is satisfied by the signature of its author, this being considered true when acknowledged or not impugned by the party against whom the document is presented (Arts. 373 and 374, No. 1, of the Civil Code).

19. In the present case, given that the signature of the documents presented was not impugned nor have the same been the subject of assertion and proof of falsity by the Respondent, they constitute full proof regarding the declarations attributed to their author (Art. 376, No. 1, of the Civil Code).

20. Thus, having been documentarily proven the transmission of the property right of the vehicle in question and that this occurred on 14-01-2008 with its delivery to B... VEHICLE COMMERCE, LDA, and taking into account that the exigibility of the tax occurs on each anniversary of the date of the registration (attributed on 30-11-2000), as provided in Art. 6, No. 3, of the IUC Code, the presumption of ownership derived from the motor vehicle registration, incorporated in No. 1 of Art. 3 of the IUC Code, is deemed rebutted with respect to the periods to which the questioned assessments relate.

21. With the fact fully proven by document, witness testimony requested by the Claimant is set aside (Art. 393, No. 3, of the Civil Code).

VI - Issues Rendered Moot.

1. With the presumption of subjective incidence on which the assessments whose annulment constitutes the subject matter of the present request is rebutted, it is considered moot, as useless, the examination of the other defects attributed to the same by the Claimant.

VII – Decision.

In these terms, and with the reasons set forth, the Arbitral Tribunal decides:

a) To find the request for arbitral decision well-founded, insofar as it concerns the rebuttal of the presumption of subjective incidence of the IUC, determining the annulment of the IUC assessments and compensatory interest to which the collection documents referred to in point 8.1 of this decision relate.

b) To condemn the Respondent to pay the costs.

Value of proceedings: € 184.04.

Costs: Pursuant to Art. 22, No. 4, of the RJAT, and in accordance with Table I attached to the Regulation of Costs in Tax Arbitration Proceedings, I fix the amount of costs at € 306.00, to be borne by the respondent (AT).

Lisbon, 29 June 2014,

The Arbitrator, Álvaro Caneira.

[1] See Francisco Rodrigues Pardal, "The Use of Presumptions in Tax Law," in Tax Science and Technique No. 325-327, pages 20.

[2] In this sense, see, among others, STA, Decisions of 21.4.2010, 3.11.2010, 2.5.2012 and 6.6.2012, Cases 924/09, 499/10, 895/11 and 903/11, respectively.

[3] See article 3, No. 1 of the Regulation of the Municipal Tax on Vehicles, approved by Decree-Law No. 143/78, of 12 June.

[4] See Jorge de Sousa, CPPT, 6th Edition, Áreas Publisher, Lisbon, 2011, pages 586 and STA, Decisions of 29.2.2012 and 2.5.2012, Cases 441/11 and 381/12.

[5] See Arbitral Decisions of 19.7.2013, 10.9.2013, 15.10.2013, 5.12.2013 and 14.2.2014, rendered, respectively, in Cases 26/2013-T, 27/2013-T, 14/2013-T, 73/2013-T and 170/2013-T.

[6] See STJ, Decisions of 23.3.2006 and 12.10.2006, Cases 06B722 and 06B2620.