Summary
Full Decision
Arbitral Decision
I. - REPORT
A - PARTIES
A..., LDA, taxpayer identification number …, with registered office at Avenue …, no. …, …-… Lisbon, hereinafter referred to as "Claimant", filed an application for the constitution of an arbitral tribunal, pursuant to the provisions of subparagraph a) of paragraph 1 of Article 2 and Articles 10 and following of Decree-Law no. 10/2011, of 20 January (Legal Regime for Arbitration in Tax Matters, hereinafter referred to as "LRATM"), with a view to considering the following claim opposing the Tax and Customs Authority (which succeeded, among others, the General Tax Directorate) hereinafter referred to as "Respondent" or "TCA".
B - CLAIM
1 - The application for the constitution of the arbitral tribunal was accepted by the Honourable President of CAAD on 26 November 2014 and notified to the TCA on 28 November 2014.
2 - The Claimant failed to appoint an arbitrator, whereby, pursuant to the provisions of paragraph 1 of Article 6 of the LRATM, the undersigned was designated on 15-01-2015 by the Ethics Board of the Administrative Arbitration Centre as arbitrator of a Single Arbitral Tribunal, having accepted in accordance with the legally established terms.
3 - The Parties were, on 15-01-2015, duly notified of such appointment and did not express any intention to refuse it, in accordance with the combined provisions of subparagraphs a) and b) of paragraph 1 of Article 11 and Articles 6 and 7 of the Code of Ethics.
4 - In these circumstances, in conformity with the provisions of subparagraph c) of paragraph 1 of Article 11 of Decree-Law no. 10/2011, of 20 January, as amended by Article 228 of Law no. 66-B/2012, of 31 December, the arbitral tribunal was regularly constituted on 02-02-2015.
5 - On 7 July 2015, the Arbitral Tribunal considered the meeting provided for in Article 18 of the LRATM to be dispensed with, taking into account both the rulings issued in this regard in the case file, the fact that the dispute concerns fundamentally a matter of law, and the parties' willingness to dispense with said meeting.
6 - The present Claimant requests that this Arbitral Tribunal:
a) - Declare the illegality and consequent annulment of both the assessment acts relating to the Single Circulation Tax (hereinafter referred to as "SCT"), and the assessment acts of the compensatory interest associated with them, recorded in the assessment notifications referenced in the case file, relating to the years 2013 and 2014, as identified in the record, concerning the vehicles, equally identified in the record, which are hereby fully reproduced;
b) - Condemn the TCA to the reimbursement of the sum of € 1,398.06, corresponding to the total amount paid for SCT and compensatory interest, referring to the aforementioned years and vehicles;
c) - Condemn the Tax and Customs Authority to the payment of indemnification interest for the payment of the SCT and compensatory interest, unduly assessed and paid;
C - CAUSE OF ACTION
7 - The Claimant, in substantiating its request for arbitral pronouncement, states, in summary, the following:
8 - That it is a commercial company engaged in the activity of leasing motor vehicles and the provision of related services, proceeding, in that context, to the conclusion of vehicle leasing contracts.
9 - That, during the validity of these leasing contracts, it happened that some of the vehicles that were the subject of contracts, as identified in the record, were damaged as a result of accidents occurring, having, in these circumstances, been classified by insurers as Total Loss.
10 - That, with regard to such vehicles, it received from the Insurers communications related to the vehicles in question and with the corresponding indemnities for their Total Loss, at which time it proceeded to deliver to the Insurers all legal documentation with a view to the cancellation of the corresponding vehicle registrations.
11 - That in 2014 it was notified to exercise the right to prior hearing, regarding the assessments of Single Circulation Tax (SCT) and Compensatory Interest (CI) for the years 2013 and 2014, concerning the sixteen vehicles identified in the record.
12 - That, following such procedure, it was notified of the aforementioned assessments, in the total amount of €1,398.06, having, despite being convinced of their illegality, duly proceeded to the payment of the Single Circulation Tax and the Compensatory Interest assessed.
13 - That the basis of said assessments relates to the fact that the vehicles in question are registered in its name, whereby, in view of the provisions of paragraph 1 of Article 3 of the SCT Code, the TCA considered the Claimant as the owner of the mentioned vehicles and, as such, the taxpayer liable for the corresponding SCT.
14 - That Article 3 of the SCT Code establishes a rebuttable legal presumption, allowing the person registered in the register as owner of the vehicle to demonstrate that such ownership is situated in the legal sphere of another person, to whom such ownership was transferred, thereby ceasing to be the taxpayer of the tax, and that, on the other hand, the fact generating the tax is constituted by the ownership of the vehicle and that, according to what is established in paragraph 3 of Article 6 and paragraph 2 of Article 4, both of the SCT Code, the tax is considered due on the first day of the taxation period, which corresponds to the year beginning on the date of registration or on each of its anniversaries.
15 - That, when the fact generating the tax and its exigibility occurred, with reference to the years 2013 and 2014 and the vehicles identified in the record, it was no longer the owner of such vehicles.
16 - That the legal presumption established in paragraph 1 of Article 3 of the SCT Code is necessarily rebuttable, given that the presumptions set out in tax law rules always admit proof to the contrary, in accordance with the provisions of Article 73 of the General Tax Law.
17 - That the transmission of the ownership of the vehicles takes place by mere effect of the contract, in accordance with Articles 408 and 874 of the Civil Code, the registration of its ownership being merely a presumption that the right exists and belongs to the registered holder, which, being rebuttable, admits proof to the contrary.
18 - That paragraph 1 of Article 3 of the SCT Code, in establishing a presumption juris tantum, allows the person who is registered in the register as the owner of the vehicle to present evidence intended to demonstrate that such ownership is situated in the legal sphere of another person, to whom ownership was transferred.
19 - That the documentation presented, with regard to the vehicles in question, evidences that the transmission of the ownership of the vehicles occurred at a time prior to the date of the occurrence of the facts generating the tax, in the years 2013 and 2014.
D - RESPONDENT'S ANSWER
20 - The Respondent, the Tax and Customs Authority (hereinafter referred to as TCA), submitted its Answer on 11-03-2015, as well as a copy of the Tax Administrative Process File.
21 - In said Answer, the TCA understands that the reasons of fact and law invoked by the Claimant cannot proceed, since, first and foremost,
22 - The tax legislator, in determining in Article 3, paragraph 1 of the SCT Code who are the taxpayers of the SCT, expressly and intentionally wished to and established that such taxpayers were the owners, considering as such the persons in whose name the same are registered.
23 - It emphasizes that the legislator did not use the expression "it is presumed" as it could have done, for example, in the following terms: "the taxpayers of the tax are the owners of the vehicles, and it is presumed that they are natural or legal persons, of public or private law, in whose name the same are registered". (See Article 14 of the Answer)
24 - It considers that the understanding that the legislator established a presumption in Article 3 of the SCT Code, as the Claimant understands, would unequivocally be to make an interpretation contrary to law. (See Article 21 of the Answer)
25 - It understands that given the wording of Article 3, paragraph 1 of the SCT Code it is not manifestly possible to claim that it is a presumption, it being rather a clear option of legislative policy adopted by the legislator, whose intention, within its freedom of legislative shaping, was that for the purposes of the SCT, those considered as owners are those who, as such, appear in the register.
26 - It refers that the aforementioned understanding has already been adopted by the jurisprudence of our courts, transcribing for this purpose part of the judgment of the Administrative and Fiscal Court of Penafiel, delivered in Process no. …/13.OBEPNF. (See Article 25 of the Answer)
27 - With reference to the systematic element of interpretation, the TCA considers that the solution advocated by the Claimant is inadmissible, inasmuch as it has no legal support, neither in Article 3, paragraph 1 of the SCT Code, nor in other norms set out in said Code.
28 - It considers, equally, that in light of a teleological interpretation of the regime established throughout the SCT Code, the interpretation advocated by the Claimant, to the effect that the taxpayer of the SCT is the effective owner independently of not appearing in the vehicle register the registration of that quality, is manifestly wrong, inasmuch as it is the very ratio of the regime established in the SCT Code that constitutes clear proof that what the tax legislator intended was to create a tax based on the taxation of the owner of the vehicle, as it appears in the vehicle register. (See Articles 45 and 46 of the Answer)
29 - It adds that the SCT Code carried out a reform of the tax regime for vehicles in Portugal, substantially altering the regime of vehicle taxation, with the taxpayers of the tax becoming the owners appearing in the property register, independently of the circulation of the vehicles on the public road. (See Article 48 of the Answer)
30 - The interpretation conveyed by the Claimant is, also, in addition to what has already been referred, inconsistent with the Constitution, namely because, among others, it violates the principle of efficiency of the tax system, inasmuch as it results in an impediment and increase in the cost of the competences assigned to the Respondent, with obvious prejudice to the interests of the Portuguese State of which both the Claimant and the Respondent are a part. (See no. 61 of the Answer)
31 - It adds that the documents presented as evidence by the Claimant, as proof that the vehicles were not the property at the date of the facts generating the tax, inasmuch as they aim to provide it with knowledge of the amounts of indemnity that will be paid to it by the Insurers, do not prove the alteration of ownership of the vehicles, having no probative value to rebut the legal presumption contained in the register.
32 - It refers that it was not the Respondent who gave rise to the request for arbitral pronouncement, but rather the Claimant, and consequently, the Claimant should be condemned to the costs of the arbitration "in accordance with Article 527(1) of the New Code of Civil Procedure ex vi of Article 29(1-e) of the LRATM", also emphasizing that the legal requirements to consider the assessment of indemnification interest illegal are not met, a claim formulated by the Claimant.
33 - It considers, in conclusion, that, given the arguments put forward, the request for arbitral pronouncement should be judged unfounded, and consequently, the challenged tax acts of assessment remain in the legal order.
E - QUESTIONS TO BE DECIDED
34 - It is therefore necessary to appreciate and decide.
35 - Given the above, relative to the positions of the Parties and the arguments presented, the main questions to be decided are whether:
a) - The rule of subjective scope provided for in Article 3, paragraph 1 of the SCT Code establishes or does not establish a presumption.
b) - What is the legal value of the vehicle register in the economy of the SCT Code, particularly for the purposes of the subjective scope of this tax.
c) - If, at the date of the occurrence of the fact generating the tax, the vehicle had already been previously alienated, although the right of ownership of it continues to be registered in the name of its former owner, for the purposes of Article 3, paragraph 1 of the SCT Code, the taxpayer of the SCT is the former owner or the new owner.
F - PROCEDURAL REQUIREMENTS
36 - The Arbitral Tribunal is regularly constituted and is substantively competent, in accordance with the provisions of subparagraph a) of paragraph 1 of Article 2 of Decree-Law no. 10/2011, of 20 January.
37 - The Parties have legal personality and capacity, are legitimate and are legally represented (cf. Article 4 and paragraph 2 of Article 10 of Decree-Law no. 10/2011 and Article 1 of Order no. 112/2011, of 22 March).
38 - The process is not afflicted with vices that would invalidate it.
39 - Taking into account the information recorded in the administrative process file and the documentary evidence attached to the record, it is now necessary to present the factual matter relevant to the understanding of the decision, as it is established in the terms mentioned below.
II - REASONING
G - FACTUAL REASONING
40 - In relevant factual matters, this tribunal establishes the following facts as established:
41 - The Claimant is a commercial company engaged in the activity of leasing motor vehicles and the provision of related services, proceeding, in that context, to the conclusion of vehicle leasing contracts.
42 - During the validity of the leasing contracts, it happened that sixteen vehicles that were the subject of these contracts, as identified in the record, were damaged, having, in these circumstances, been classified by insurers as Total Loss.
43 - The Claimant was notified in 2014 to exercise the right to prior hearing, regarding the assessments of Single Circulation Tax (SCT) and Compensatory Interest (CI) for the years 2013 and 2014, concerning the sixteen vehicles identified in the record.
44 - Following such procedure, it was notified of the aforementioned assessments, in the total amount of €1,398.06, having proceeded to the payment of the Single Circulation Tax and the Compensatory Interest assessed.
45 - With regard to the sixteen vehicles identified in the record, the Claimant received from the Insurers communications related to the vehicles in question and with the corresponding indemnities for their Total Loss, at which time it remitted to them all legal documentation of those vehicles, with a view to the cancellation of the corresponding vehicle registrations.
46 - The basis of said assessments relates to the fact that the sixteen vehicles in question are registered in the name of the Claimant, whereby, in view of the provisions of paragraph 1 of Article 3 of the SCT Code, the TCA considered the Claimant as the owner of the mentioned vehicles and, as such, the taxpayer liable for the corresponding SCT.
47 - When the facts generating the tax and its exigibility occurred, with reference to the years 2013 and 2014 and the vehicles identified in the record, the Claimant was no longer the owner of those vehicles, having presented as evidence for this purpose the Documents/Communications of the Insurance companies, related to the vehicles in question and with the corresponding indemnities for their Total Loss.
REASONING OF THE FACTS ESTABLISHED
48 - The facts established are based on the documents mentioned, in relation to each of them, inasmuch as their correspondence with reality was not questioned.
FACTS NOT ESTABLISHED
49 - There are no facts established as not proven, given that all facts deemed relevant for the appreciation of the claim were proven.
H - LEGAL REASONING
50 - The factual matter is established, and it is now important to proceed with its legal subsumption and determine the Law applicable to the underlying facts, in accordance with the questions to be decided set out in no. 34.
51 - The decisive question in the present case, regarding which there are absolutely opposed understandings between the Claimant and the TCA, is whether the rule of subjective scope provided for in paragraph 1 of Article 3 of the SCT Code establishes or does not establish a rebuttable presumption.
52 - The positions of the parties are known. Indeed, for the Claimant, Article 3 of the SCT Code, when it provides that the taxpayers of the SCT are those in whose name the vehicles are registered, establishes a rebuttable legal presumption, allowing the person registered in the register as the owner of the vehicle to demonstrate that such ownership is situated in the legal sphere of another person, to whom such ownership was transferred, who will thus become the taxpayer of the tax.
53 - The Respondent, for its part, considers that the interpretation defended by the Claimant is manifestly wrong, inasmuch as it is the very ratio of the regime established in the SCT Code that constitutes clear proof that what the tax legislator intended was to create a tax based on the taxation of the owner of the vehicle, as it appears in the vehicle register, it not being manifestly possible to understand that Article 3, paragraph 1 of the SCT Code establishes a presumption.
I - INTERPRETATION OF THE RULE OF SUBJECTIVE SCOPE PROVIDED FOR IN PARAGRAPH 1 OF ARTICLE 3 OF THE SCT CODE
54 - It should be noted, first of all, that it is settled understanding in the doctrine that in the interpretation of tax laws the general principles of interpretation are fully applicable. This is an understanding that also has support in Article 11 of the General Tax Law.
55 - It is commonly accepted that, with a view to apprehending the meaning of the law, interpretation resorts to various means, it being important, first, to reconstruct the legislative thought through the words of the law, which means seeking, from the outset, its literal meaning. The said meaning, as is also settled, corresponds to the lowest degree of interpretive activity, it being important, for this reason, to evaluate it and measure it in light of other criteria, the so-called elements of a logical nature intervening, be they of rational (or teleological) sense, of a systematic character or of a historical nature.
56 - Regarding the interpretation of tax law, it is worth recalling, as the jurisprudence has indeed been pointing out, notably in the Judgments of the Supreme Administrative Court of 05/09/2012 and 06/02/2013, Processes nos. 0314/12 and 01000/12, respectively, available at: www.dgsi.pt, the importance of the provisions of Article 9 of the Civil Code (CC), as a fundamental rule of legal hermeneutics, which, in this context, cannot be overlooked.
57 - Interpretive activity is therefore unavoidable in resolving the doubts raised by the application of the legal norms in question.
58 - In the view of FRANCESCO FERRARA, in Interpretation and Application of Laws, translation by MANUEL DE ANDRADE, (2nd ed.), Arménio Amado, Editor, Successor - Coimbra, 1963, p. 131, the said interpretive activity "[...] is unique [and] complex, of a logical and practical nature, since it consists in inducing from certain circumstances the legislative will", adding, ibidem, p. 130, that "Looking to the practical application of law, legal interpretation is by its nature essentially teleological".
59 - The purpose of interpretation, the said author also tells us, ibidem, pp. 134/135, is "[...] to determine the objective meaning of the law [...]". The law, being the expression of the will of the State, is a "[...] will that persists in an autonomous way, detached from the complex of thoughts and tendencies that animated the persons who contributed to its enactment". Hence the activity of the interpreter should be to "[...] seek not what the legislator intended, but what objectively appears to be intended in the law: the mens legis and not the mens legislatoris".
60 - For MANUEL DE ANDRADE, quoting FERRARA, in Essay on the Theory of the Interpretation of Laws, p. 16 (2nd ed.), Arménio Amado, Editor, Successor - Coimbra, 1963, "Interpretation seeks the voluntas legis, not the voluntas legislatoris [...], and seeks the actual will of the law, not its will at the moment of application: it is not, therefore, a will of the past, but an always present will as long as the law does not cease to be in force. That is to say, the law, once formed, becomes detached from the legislator, gaining autonomous consistency; and, more than that, it becomes a living entity, which is not merely an inanimate body [...]".
FROM THE LITERAL ELEMENT
61 - It is in this framework that it is important to find an answer to the questions to be decided, particularly the one aimed at knowing whether Article 3, paragraph 1 of the SCT Code establishes or does not establish a presumption, beginning right away with the literal element.
62 - Being the literal element the first that must be used in seeking the legislative thought, it is necessarily with this that one must begin, seeking to reach the meaning of the expression "are considered as such the persons registered" in the aforementioned Article 3, paragraph 1 of the SCT Code.
64 - Paragraph 1 of said Article 3 of the SCT Code provides that "The taxpayers of the tax are the owners of the vehicles, being considered as such the natural or legal persons, of public or private law, in whose name the same are registered." (emphasis ours)
65 - The formulation used in said article, it is important to note, first of all, resorts to the expression "being considered", which raises the question of whether to such expression can be attributed a presumptive sense, thus equating it with the expression "it is presumed". These are expressions frequently used with equivalent senses, as is evident in various situations of the Portuguese legal system.
66 - In fact, there are countless rules that enshrine presumptions, combining, for this purpose, the verb "consider" in various ways. It is therefore not difficult to identify situations, in various areas of law, in which the expression "being considered" or "is considered" is used with a meaning equivalent to the expression "it is presumed" or "is presumed", expressions to which, both at the level of irrebuttable presumptions and in the context of rebuttable presumptions, an equivalent meaning is conferred, countless times.
67 - As it does not seem pertinent to again reference examples revealing these situations, given that such examples are abundantly set out in some of the decisions of tax arbitral tribunals, of which examples are those delivered in the context of Processes nos. 14/2013 - T, 27/2013 - T and 73/2013 - T, we hereby consider the same to be fully reproduced.
68 - In these circumstances, as the mentioned expressions are recurrently used with an equivalent purpose and meaning, it can be concluded that it is not only the use of the verb "presume" that places us before a presumption, but also the use of other terms can serve as a basis for presumptions, as, in particular, occurs with the expression "being considered", which, in our view, is precisely what is verified in paragraph 1 of Article 3 of the SCT Code.
It is therefore an understanding that, not appearing to correspond to a biased reading of the letter of the law, as the TCA considers, reveals itself in harmony with the provisions of paragraph 2 of Article 9 of the CC, inasmuch as it ensures, to the legislative thought, the minimum of verbal correspondence required there.
69 - From the literal perspective, given what has been set out, there is no doubt that the interpretation which considers a rebuttable presumption established in paragraph 1 of Article 3 of the SCT Code has full support in the formulation there established, given the aforementioned equivalence between the expression "being considered as such" and the expression "being presumed as such".
The linguistic element, as above referred, being the first that should be used in seeking the legislative thought, must, however, in order to find the true meaning of the norm, be subjected to the control of the other elements of interpretation of a logical nature (whether such elements of rational (or teleological) sense, of a systematic character or of a historical nature).
70 - Indeed, as is drawn from the work of MANUEL DE ANDRADE, cited above, p. 28, "[...] the purely linguistic analysis of a legal text is only the beginning [...], the first degree [...] or the first act of interpretation. In other words, it only provides us with the probable legislative thought and will [...] or, rather, the grammatical delimitation of the possible consistency of the law [...], the framework within which its true content resides".
71 - Thus, let us now see the rational (or teleological) element.
FROM THE HISTORICAL AND RATIONAL (OR TELEOLOGICAL) ELEMENT
72 - Attending to the elements of interpretation of a historical bent, it is important to recall, first, what is expressly set out in the preamble of Legislative Proposal no. 118/X of 07/03/2007, underlying Law no. 22-A/2007 of 29/06, when it refers that the reform of vehicle taxation is realized by way of the displacement of part of the tax burden from the moment of acquisition of vehicles to the circulation phase and aims to "form a coherent whole" which, although intended for the raising of public revenue, intends that the same be raised "in the measure of the environmental costs that each individual causes to the community", adding, regarding the tax in question and the different types and categories of vehicles, that "as a structuring and unifying element [...] the principle of equivalence is enshrined, thus making clear that the tax, as a whole, is subject to the idea that taxpayers should be burdened in the measure of the cost they cause to the environment and the road network, this being the reason for the existence of this tax figure".
73 - In this context, it seems clear that the teleological and rational sense of the new system of vehicle taxation can only coexist with a taxpayer of the tax, on the assumption that this, and no other, is the real and effective subject causing the road and environmental damage, as follows from the principle of equivalence, inscribed in Article 1 of the SCT Code.
74 - The aforementioned principle of equivalence, which informs the current Single Circulation Tax, has, at least in the part in which it specifically concerns the environment, underlying the polluter-pays principle, and realizes the idea, inscribed in it, that whoever pollutes should, for this reason, pay. The aforementioned principle has, moreover, in some way, constitutional grounding, inasmuch as it represents a corollary of the provisions of subparagraph h) of paragraph 2 of Article 66 of the Constitution.
75 - What is sought to be achieved by way of the aforementioned principle is to internalize negative environmental externalities, which, after all, in the case of this case, means nothing more than to make the prejudices that arise to the community, resulting from the use of motor vehicles, be assumed by their owners, as "economic - users", as costs that only they should bear.
76 - Returning to the aforementioned principle of equivalence, it will be said that the same has, in the economy of the SCT Code, an absolutely structuring role, upon which the normative structure of the Code in question is built. The aforementioned principle constitutes, therefore, a legally established end that the interpreter cannot fail to pursue.
77 - With regard to the aforementioned principle, it is worth noting what Sérgio Vasques tells us, when, in Special Consumption Taxes, Almedina, Coimbra, 2001, p. 122, with regard to the technical realization of that principle, considers that "In obedience to the principle of equivalence, the tax should correspond to the benefit that the taxpayer derives from the public activity; or to the cost that the taxpayer imputes to the community by its own activity".
78 - Addressing specifically the SCT, the aforementioned author adds, op. cit., that "Thus, a tax on automobiles based on a rule of equivalence will be equal only if those who cause the same road wear and the same environmental cost pay the same tax; and those who cause different wear and environmental cost, pay different tax as well", adding that the realization of said principle "[...] dictates other requirements still with regard to the subjective scope of the tax [...]".
79 - From what has been referred, it is clear that the taxation of real and effective polluters corresponds to an important purpose sought by the law, in this case by the SCT Code, a purpose which, in the words of Francesco Ferrara, in Interpretation and Application of Laws, 2nd Edition, Arménio Amado, Editor, Successor, Coimbra, 1963, p. 130, should always be before the eyes of the jurist, given that, as the aforementioned author refers there, "[...] legal interpretation is by its nature essentially teleological".
80 - Thus, it should be noted that, whether in view of the aforementioned historical elements, or in light of the elements of a rational or teleological character of interpretation which are left noted, it is equally imperative to conclude that paragraph 1 of Article 3 of the SCT Code can only enshrine a rebuttable presumption.
81 - It is also necessary to consider the systematic element of interpretation.
FROM THE SYSTEMATIC ELEMENT
82 - On the systematic element BAPTISTA MACHADO tells us, in Introduction to Law and to Legitimating Discourse, p. 183, that "this element comprises the consideration of the other provisions that form the complex normative structure of the institute in which the rule being interpreted is integrated, that is, that regulate the same matter (context of the law), as well as the consideration of legal provisions that regulate parallel normative problems or related institutes (parallel places). It also comprises the systematic place that corresponds to the rule being interpreted in the overall legal order, as well as its harmony with the spirit or intrinsic unity of the entire legal order".
83 - It is known that a legal principle, in this case the principle of equivalence, does not exist in isolation, but is linked by an intimate nexus with other principles that integrate, at a more global level, the respective legal order, in this case, with the other principles embodied in the system inscribed in the SCT Code. In that sense, each article of a given legal instrument, in this case of the SCT Code, will only be understandable if we place it before the other articles that follow or precede it.
84 - With regard to the systematization of the SCT Code, environmental concerns were decisive in ensuring that the aforementioned principle of equivalence was, from the outset, inscribed in the first article of said Code, which necessarily leads to the subsequent articles, insofar as they are based on such principle, being influenced by it. This was what occurred, in particular, with the tax base, which became constituted by various elements, particularly those concerning levels of pollution, and with the rates of the tax, established in Articles 9 to 15, which were influenced by the environmental component, and, naturally, also with the subjective scope itself, provided for in Article 3 of the SCT Code, which cannot escape the aforementioned influence.
85 - The systematic element of interpretation and the interaction between the various articles and principles that integrate the system inscribed in the SCT Code, also call for the understanding that what is established in paragraph 1 of Article 3 of the SCT Code cannot fail to embody a presumption.
86 - Paragraph 1 of Article 9 of the CC provides that the search for legislative thought should pay "[...] special attention to [...] the unity of the legal system, the circumstances in which the law was drafted and the specific conditions of the time in which it is applied", circumstances and conditions which, today more than ever, are of sensitivity to the environment and respect for questions related to it.
In this context, the considerations formulated on the aforementioned elements of interpretation, whether of a literal or historical bent, whether of a rational or systematic nature, point in the direction that Article 3, paragraph 1 of the SCT Code establishes a presumption, or rather, the ratio legis of that rule, as the reason or end that should reasonably be attributed to it, cannot fail to view the expression "being considered as such", used in the aforementioned article, as revealing the establishment of a presumption, which means that the taxpayers of the SCT, being, in principle, the owners of the vehicles, being considered as such, the persons in whose name the same are registered, may, after all, be others.
It will be said, moreover, that the establishment of the presumption in the aforementioned rule will correspond to the only interpretation that is compatible with the principle of equivalence, mentioned above.
87 - Still with regard to the presumption which has been referred and which is understood to be enshrined in paragraph 1 of Article 3 of the SCT Code, it is worth noting what is written in the preamble of Decree-Law no. 177/2014, of 15 December, when, referring to motor vehicles, it considers that "The non-regularization of the property registration presents serious consequences, both for whoever remained the owner in the register, and for whoever acquired and did not promote the registration in their favor, as well as for the various public entities that base their decisions on ownerships that they presume to be substantively true". (emphasis ours)
88 - Having arrived here, it is worth recalling the provisions of Article 73 of the General Tax Law, when it establishes that "The presumptions enshrined in the rules of tax scope always admit proof to the contrary", (emphasis ours), which means that the legal presumption, which appears to be established in paragraph 1 of Article 3 of the SCT Code, will necessarily be rebuttable.
89 - In this context, the taxpayers of the tax are, presumptively, the persons in whose name the vehicles are registered, that is, the aforementioned taxpayers are, in principle, and only in principle, the persons in whose name such vehicles are registered.
90 - Indeed, if the owner in whose name the vehicle is registered, comes to, as occurs in the present case, indicate and prove who were the owners of the vehicles in question, nothing justifies, in our view, that the former owner be made responsible for the payment of the SCT that may be due.
91 - Furthermore, this interpretation of paragraph 1 of Article 3 of the SCT Code is the one that, in our opinion, best fits the principles to which the TCA must subject its activity, namely the principle of the investigatory power, in order to discover the material truth.
92 - Regarding the aforementioned investigatory principle, it is worth alluding to the teachings of Diogo Leite Campos, Benjamim Silva Rodrigues and Jorge Lopes de Sousa, in General Tax Law, Annotated and Commented, 4th Edition 2012, Writing Meeting, Lda, Lisbon, p. 488/489, when, in annotations to the cited Article 58 of that Law, they refer that the administration has a dynamic role in gathering elements with relevance for the decision, adding that the "[...] lack of diligences deemed necessary for the construction of the factual basis of the decision will affect this not only in the event that they are mandatory (violation of the principle of equality), but also if the materiality of the facts considered is not proven or if, in that basis, relevant facts alleged by the interested party are lacking, due to insufficiency of proof that the Administration should have gathered [...]".
The investigatory principle, the aforementioned authors add, op. cit, "[...] has to do with the powers (-duties) of the Administration to conduct the investigations necessary to the knowledge of the facts essential or determinant for the decision [...]".
93 - The material truth, embodied, in the present case, in the circumstance that the ownership of the vehicles, identified in the request for arbitral pronouncement, were not property of the Claimant at the moment of exigibility of the tax, that is, from the date from which the tax creditor could make good, before the debtor, its right to the payment of the tax, was, given the elements contained in the case file, within the knowledge of the TCA.
J - OF THE ACQUISITION OF OWNERSHIP OF THE VEHICLE AND OF THE VALUE OF THE REGISTER
94 - First of all, it must be added, given what will be explicitly stated hereinafter regarding the value of the register, that the acquirers of vehicles become owners of those same vehicles by way of the transmission of their respective ownership, with registration or without it.
95 - There are three articles of the Civil Code that are important to take into account, regarding the acquisition of ownership of a motor vehicle. They are, first, Article 874, which establishes the notion of a contract of purchase and sale, as being "[...] the contract by which the ownership of a thing, or another right, is transmitted, in exchange for a price"; Article 879, in whose subparagraph a) it is established, as essential effects of the contract of purchase and sale, "the transmission of the ownership of the thing or the titularity of the right" and Article 408, which is titled "contracts with real effect", and establishes in its paragraph 1, that "the constitution or transfer of real rights over a determined thing takes place by mere effect of the contract, except for the exceptions provided for by law". (emphasis ours)
We are, in fact, in the domain of contracts with real effect, which means that their celebration causes the transmission of real rights, in this case, motor vehicles, determined by mere effect of the contract, as expressly follows from the previously mentioned norm.
96 - Regarding the aforementioned contracts with real effect, it is worth noting the teachings of Pires de Lima and Antunes Varela, when, in annotations to Article 408 of the CC, they tell us that "From these so-called real contracts (quoad effectum), because they have as an immediate effect the constitution, modification or extinction of a real right (and not merely the obligations tending to that result) are distinguished the so-called real contracts (quoad constitutionem), which require the delivery of the thing as an element of their formation (cf. Articles 1129, 1142 and 1185) ".
We are thus faced with contracts in which the ownership of the thing sold is transferred, without further ado, from the seller to the buyer, having, as its cause, the contract itself.
97 - Also from the jurisprudence, in particular from the Judgment of the Supreme Court of Justice no. 03B4369 of 19/02/2004, available at: www.dgsi.pt, it follows that, given the provisions of Article 408, paragraph 1, of the Civil Code, "the constitution or transfer of real rights over a determined thing takes place by mere effect of the contract, except for the exceptions provided for by law". This is the case of the contract of purchase and sale of a motor vehicle (Articles 874° and 879, subparagraph a) of the Civil Code), which does not depend on any special formality, being valid even when celebrated in verbal form - in accordance with Judgment of the Supreme Court of Justice of 3-3-98, in CJSTJ, 1998, year VI, Volume I, p. 117". (emphasis ours)
98 - Having the contract of purchase and sale, given what is referred, a real nature, with the aforementioned consequences, it is necessary to consider, also, the legal value of the vehicle register that is the object of that contract, insofar as the transaction of said good is subject to public registration.
99 - It is established, in fact, in paragraph 1 of Article 1 of Decree-Law no. 54/75, of 12 February, relating to the registration of motor vehicles, that "The registration of vehicles has essentially as its purpose to give publicity to the legal situation of motor vehicles and their trailers, with a view to the security of legal commerce". (emphasis ours)
100 - It being clear, given the aforementioned norm, what is the purpose of the register, there is not, however, clarity, within the scope of the aforementioned Decree-Law, on the legal value of that register, it being important to consider Article 29 of the aforementioned legal instrument, relating to the registration of vehicle ownership, when it is provided therein that "The provisions relating to property registration are applicable, with the necessary adaptations, to the registration of automobiles, [...]". (emphasis ours)
101 - In this context, so that we may attain the sought-after knowledge regarding the legal value of vehicle property registration, it is important to take into account what is established in the Property Registration Code, approved by Decree-Law no. 224/84, of 06 July, when it provides in its Article 7 that "definitive registration constitutes a presumption that the right exists and belongs to the registered holder in the exact terms in which the registration defines it". (emphasis ours)
102 - The combination of the provisions in the aforementioned articles, particularly the establishment in paragraph 1 of Article 1 of Decree-Law no. 54/75, of 12 February and in Article 7 of the Property Registration Code, allows one to consider, on the one hand, that the fundamental function of the register is to give publicity to the legal situation of vehicles, allowing, on the other hand, to presume that the right exists and that such right belongs to the holder in whose favor the same is registered, in the exact terms in which it is defined in the register.
103 - Thus, definitive registration is nothing more than the presumption that the right exists and belongs to the registered holder, in the exact terms of the register, but a rebuttable presumption, thereby admitting counter-proof, as follows from the law and the jurisprudence has been pointing out, and may, for this purpose, be seen, among others, the Judgments of the Supreme Court of Justice nos. 03B4369 and 07B4528, respectively, of 19/02/2004 and 29/01/2008, available at: www.dgsi.pt.
104 - The function legally reserved to the register is thus, on the one hand, to publicize the legal situation of the goods, in this case, of the vehicles and, on the other hand, to allow us to presume that there exists the right over those vehicles and that it belongs to the holder, as such registered in the register, which means that the register does not have a constitutive nature of the right of ownership, but merely declarative, hence the register does not constitute a condition of validity of the transmission of the vehicle from the seller to the buyer.
105 - Thus, if the acquirers of the vehicles, as their "new" owners, do not immediately promote the adequate registration of their right, it is presumed, for the purposes of Article 7 of the Property Registration Code and paragraph 1 of Article 3 of the SCT Code, that the vehicles continue to be the property of the person who remains their owner in the register, such person being the taxpayer of the tax, in the certainty, however, that such presumptions are rebuttable, whether by force of what is established in paragraph 2 of Article 350 of the CC, whether in light of the provisions of Article 73 of the General Tax Law. Hence, from the moment the aforementioned presumptions are set aside, by means of proof of their respective transmission, the TCA may not persist in considering the vehicle transmitter as the taxpayer of the SCT, who, in the register, continues to appear as its owner.
L - OF THE MEANS OF PROOF PRESENTED
106 - As written form is not legally required for the transmission of ownership of motor vehicles, proof of such transmission may be made by any means, in particular by way of testimonial or documentary evidence, including, in particular, invoices-receipts relating to the sale of vehicles.
107 - As a means of proof that the sixteen vehicles identified in the record were not its property at the date of exigibility of the tax, the Claimant attached "Communications" from Insurers correlated with the vehicles in question and with the corresponding indemnities for their Total Loss.
108 - Regarding the aforementioned "Communications" it should be emphasized that all of them display identical information, which are embodied, namely, in the following: identification of the vehicle; the amount relating to the value of the Salvage and the amount of indemnity for Total Loss; identification of the insurance company and the Claimant; VAT on the value of Salvage and identification of the invoice relating to its acquirer, as well as the data of the Claimant for the corresponding bank transfer.
109 - Insurance companies, in accordance with Article 8 of Decree-Law no. 94-B/98 of 17.04, «[...] are financial institutions whose sole purpose is the exercise of the activity of direct insurance and/or reinsurance, except in those branches or modalities that are legally reserved for certain types of insurers, and may also exercise activities connected or complementary to insurance or reinsurance, namely with regard to acts and contracts relating to salvages [...]»; (emphasis ours)
110 - The acquisition of salvages by insurance companies and their subsequent alienation, normally to scrap dealers, is a complementary activity of insurance operations, as results from the previously mentioned norm, inasmuch as what is at issue is that in the context of situations resulting from claims in which Total Loss of vehicles is verified, such companies are obliged to indemnify the injured parties, monetarily, in accordance with the insurance contract they have concluded with them, when the vehicle is deemed non-repairable, taking, on the other hand, the damaged vehicles and proceeding, subsequently, to the sale of the same in the state in which they acquired them.
111 - In fact, within the scope of the Mandatory Motor Third Party Liability System, contained in Decree-Law no. 291/2007 of 21 August, a vehicle involved in an accident is considered to be in a situation of Total Loss, as is provided in paragraph 1 of Article 41 of said legal instrument, when the obligation to indemnify is fulfilled in cash and not through the repair of the vehicle, whenever it is established that the repair is materially impossible or technically inadvisable.
112 - In the case of the present matter this is what happened, inasmuch as, on the one hand, the Insurers after the corresponding expert inspections decided to regularize the situation of the damaged vehicles as Total Loss and, on the other, as, in particular, results from the documentation attached to the record, relating to the exchange of information/letters between the Insurers and the Claimant, the Salvages in question, by force of the motor insurance contract, entered the patrimonial sphere of the insurance companies, the Claimant, as the injured party, being indemnified.
113 - With regard to the payment of the amounts inscribed in the "Communications" of the Insurers, referring to the vehicles in question, bearing in mind that the "vehicles" did not remain in the possession of their owner, it is important to emphasize that such amounts are comprised of two components, namely: the value of the Salvage and the value of the indemnity for Total Loss, which leaves no doubts regarding the transfer of ownership of the Salvages from the Claimant to the Insurance Companies.
114 - The aforementioned "Communications" of the Insurance Companies, that is, from Bonança Insurance Company, SA; Fidelidade Insurance Company, SA; Fidelidade - World Insurance Company, SA; Tranquilidade Insurance Company; Allianz Insurance Company and Western Insurance Company, SA, reveal that all the facts that occurred and which have been referred to above, in particular the transfer of ownership of the Salvages to the insurance companies, occurred between the years 2003 and 2012.
115 - Regarding the facts inscribed in the aforementioned "Communications", it is also important to note that, given the presumption of truthfulness which is conferred to them in paragraph 1 of Article 75 of the General Tax Law, it would be incumbent on the TCA, having regard to Article 75, paragraph 2 of the General Tax Law, in the context of the well-founded and objective reasons it had, to demonstrate that the information inscribed in those "Communications" does not correspond to reality.
116 - In these circumstances, as the TCA is exacting the SCT for the years 2013 and 2014, and the Claimant being not the owner of the vehicles in question in those years, it is considered that the aforementioned "Communications" of the Insurance Companies, combined with the information/letters contained in the record, are adequate and capable proof to rebut the presumptions in question in the record, that is, the presumption established in Article 7 of the Property Registration Code and that enshrined in paragraph 1 of Article 3 of the SCT Code, which means that, at the time the tax was due, in all cases, the Claimant was not the taxpayer of the SCT.
With respect to the aforementioned letters of the Insurance Companies to the Claimant, note that the same, in addition to, in particular, referring to the identification of the vehicle and the date on which the accident occurred, also refer to the placing at the disposal of the Claimant of the amount resulting from the indemnity, which is comprised of the value of Total Loss plus the value of the Salvage, which, in accordance with the guarantees contractually established, is referred to as remaining in the possession of the insurer.
M - REIMBURSEMENT OF THE AMOUNT PAID AND INDEMNIFICATION INTEREST
117 - In accordance with the provisions of subparagraph b) of paragraph 1 of Article 24 of the LRATM, and in conformity with what is there established, an arbitral decision on the merits of the claim against which no appeal or challenge is available binds the tax administration from the end of the period provided for appeal or challenge, the latter having to - in the exact terms of the success of the arbitral decision in favor of the taxpayer and until the end of the period provided for the spontaneous execution of sentences of the courts of tax courts - "Restore the situation that would have existed if the tax act that is the object of the arbitral decision had not been committed, adopting the acts and operations necessary for this purpose." (emphasis ours)
118 - These are legal commands that are in full harmony with the provisions of Article 100 of the General Tax Law, applicable to the case by force of the provisions of subparagraph a) of paragraph 1 of Article 29 of the LRATM, in which it is established that "The tax administration is obliged, in case of full or partial success of complaints or administrative appeals, or judicial proceedings in favor of the taxpayer, to the immediate and full restoration of the situation that would have existed if the illegality had not been committed, comprising the payment of indemnification interest, in the terms and conditions provided for by law." (emphasis ours)
119 - The case contained in the present matter gives rise to the manifest application of the aforementioned rules, given that as a result of the illegality of the assessment acts referenced in this process, there must be, by force of those rules, place for the reimbursement of the amounts paid, both as tax and as compensatory interest, as a way of achieving the restoration of the situation that would have existed had the illegality not been committed, amounts which in the case of the present matter total €1,398.06.
120 - As for indemnification interest, it is manifest that, given what is established in Article 61 of the Tax Proceedings Code and the requirements of the right to indemnification interest being fulfilled, that is, the existence of an error attributable to the services resulting in the payment of the tax debt in an amount exceeding what is legally due, as provided in paragraph 1 of Article 43 of the General Tax Law, the Claimant is entitled to indemnification interest at the legal rate, calculated on the sum of €1,398.06.
CONCLUSION
121 - In the factual context that has been referred to, the TCA, in committing the assessment acts in question in the present process, based on the idea that Article 3, paragraph 1 of the SCT Code does not enshrine a rebuttable presumption, makes an erroneous interpretation and application of this rule, committing an error regarding the legal premises, which constitutes a violation of law.
122 - On the other hand, because the TCA, at the date of the occurrence of the tax facts, understood that the Claimant was the owner of the vehicles referenced in the present process, considering it as such a taxpayer of the tax, when such ownership, with regard to the vehicles in question, was no longer inscribed in its legal sphere, basing itself, thus, on a matter of fact divergent from the actual reality, commits an error regarding the factual premises, and therefore a violation of law.
III - DECISION
123 - Therefore, taking into account all that has been set out, this Arbitral Tribunal decides:
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To hold as well-founded, as proven, on the grounds of violation of law, the request for arbitral pronouncement as it concerns the annulment of the assessment acts of SCT, concerning the vehicles identified in the record, relating to the years 2013 and 2014;
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To annul, consequently, the assessment acts of SCT, relating to the years 2013 and 2014, concerning the vehicles aforementioned;
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To condemn the TCA to the reimbursement of the sum of € 1,398.06, referring to the SCT and the compensatory interest that were paid, relating to the years 2013 and 2014, and to the payment of indemnification interest at the legal rate, counted from the date of payment of said sum, until its complete reimbursement;
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To condemn the TCA to pay the costs of the present process.
VALUE OF THE CASE
In accordance with the provisions of Articles 306, paragraph 2 of the Civil Procedure Code (former Article 315, paragraph 2) and 97-A, paragraph 1 of the Tax Procedures Code and Article 3, paragraph 2 of the Regulation of Costs in Tax Arbitration Processes, the value of the case is set at € 1,398.06.
COSTS
In accordance with the provisions of Article 12, paragraph 2, final part, in Article 22, paragraph 4, both of the LRATM, and in Article 4 of the Regulation of Costs in Tax Arbitration Processes and Table I attached thereto, the total amount of costs is set at € 306.00.
Notify.
Lisbon, 28 July 2015
The Arbitrator
António Correia Valente
(The text of this decision was prepared by computer, in accordance with Article 131, paragraph 5 of the Code of Civil Procedure (former Article 138, paragraph 5), applicable by reference from Article 29, paragraph 1, subparagraph e) of Decree-Law no. 10/2011, of 20 January (LRATM), being governed by its drafting according to the spelling prior to the Spelling Agreement of 1990.)
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