IUC Tax on Leased Vehicles: Subjective Incidence and Legal Presumptions in Financial Leasing (CAAD 819/2014-T)

ARBITRATION DECISION

I. - REPORT

A - PARTIES

The company A… - …, SA, legal entity no. …, with registered office at Rua …, no. …, … - Lisbon, hereinafter referred to as the "Claimant", filed an application for constitution of an arbitral tribunal, pursuant to the provisions of subsection a) of no. 1 of article 2 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 examining the following claim against the Tax and Customs Authority (which succeeded, among others, the General Directorate of Taxes) hereinafter referred to as the "Respondent" or "TCA".

B - CLAIM

1 - The application for constitution of the arbitral tribunal was accepted by the Honourable President of CAAD on 19 December 2014 and, on the same date, notified to the TCA.

2 - The Claimant did not proceed to appoint an arbitrator, and therefore, pursuant to the provisions of no. 1 of article 6 of the LRATM, the undersigned, on 10-02-2015, was designated by the Ethics Council of the Centre for Administrative Arbitration as an arbitrator of a Sole Arbitral Tribunal, having accepted according to the legally provided terms.

3 - The Parties were, on 10-02-2015, duly notified of such designation, having manifested no intention to refuse it, in accordance with the combined provisions of subsections a) and b) of no. 1 of article 11 and of articles 6 and 7 of the Code of Ethics.

4 - Under these circumstances, in compliance with the provisions of subsection c) of no. 1 of article 11 of Decree-Law no. 10/2011, of 20 January, in the wording introduced by article 228 of Law no. 66-B/2012, of 31 December, the arbitral tribunal was regularly constituted on 25-02-2015.

5 - On 15 July 2015, the Arbitral Tribunal considered the holding of the meeting provided for in article 18 of the LRATM to be dispensed with, taking into account both the rulings issued for this purpose in the SGP, as well as the circumstance that the dispute concerned fundamentally a matter of law, and the will of the parties to dispense with such meeting.

6 - The Claimant herein requests that this Arbitral Tribunal:

Declare the illegality and consequent annulment of both the acts of assessment relating to the Single Circulation Tax (hereinafter referred to as IUC), and the acts of assessment of the compensatory interest associated with them, embodied in the assessments of which it was notified, which are referenced in the file, relating to the year 2013, concerning the vehicles identified in the case, which are hereby deemed to be fully reproduced.

C - GROUNDS FOR CLAIM

7 - The Claimant, in the substantiation of its request for arbitral ruling, alleges, in summary, the following:

8 - That it is a credit financial institution which, on 30-11-2004, incorporated by merger both the assets and liabilities, as well as the rights and responsibilities of B… - …, LDA and C… - …, LDA.

9 - That the incorporated companies were deemed to be extinguished at the time of the said mergers, which occurred in the years 2003 and 2004, and that from the dates of such mergers the Claimant incorporated all the assets and liabilities and all the responsibilities that comprised the assets of the incorporated companies.

10 - That, in the scope of its activity, it grants its clients financing intended for the purchase of motor vehicles, which are formalized, either through the execution of a loan contract in which the borrower grants in favour of the lender, as security for the full payment of the amount loaned, a reservation of ownership of the vehicle, or through the execution of financial leasing contracts.

11 - That it was notified to exercise the right to prior hearing, concerning the various assessments of IUC, as identified in the file, relating to the year 2013 and concerning the seventy-eight vehicles identified in the case.

12 - That, in the name of the principle of procedural economy, it chose not to exercise the said right to prior hearing, since it exercised the said right in analogous proceedings, relating to the assessment of IUC for earlier years, and the Tax Authority maintained its tax classification.

13 - That it proceeded with the payment of IUC in all situations in which, at the date of the taxable event, it was the owner of the vehicle and the same was not leased.

14 - That in situations in which, at the date of the tax fact, it was not the owner of the vehicle or in which, on that date, the vehicle was leased, by way of a financial leasing contract, it did not proceed with the payment of IUC, as it considered it was not a taxable person for that tax.

15 - That of the seventy-eight vehicles involved in the case and identified therein, sixty-nine were disposed of on dates prior to the year 2013 to which the IUC refers and the remaining nine were leased - under financial leasing - in the year 2013, that is, on the date to which the taxability of the tax refers.

16 - That the SCTC has as the underlying principle of its taxation the polluter-pays principle, and therefore the legislator considered as taxable persons both the owners of the vehicles and the financial lessees, since these are the ones who have the polluting potential capable of generating environmental costs for society.

17 - That article 3, no. 1, of the SCTC enshrines a rebuttable legal presumption, which is why they are taxable persons for IUC, namely the owners and financial lessees even if they do not appear in the vehicle register, provided sufficient proof is provided to rebut the legal presumption arising from the vehicle register.

18 - That, whether it is a vehicle purchase and sale contract, or a financial leasing, such are contracts with real effect (quoad effectum) in the sense that the transfer of ownership or possession occurs as a result of the contract itself.

19 - That, as proof that, in some cases, it was not the owner of the vehicles, at the date of the tax fact subject to tax, and that, in others, it was, on that date, a financial lessor, it presented invoices for the sale of the vehicles and financial leasing contracts, documents which it considers sufficient to prove the ownership and possession of the vehicles in the period of taxation in question, namely that referring to the year 2013.

20 - That, under these circumstances, it is not a taxable person for IUC, insofar as the assumption of personal incidence of the tax is not present, which is fundamental for the occurrence of the tax obligation.

D - RESPONSE OF THE RESPONDENT

21 - The Respondent, Tax and Customs Authority, (hereinafter referred to as TCA), presented, on 06-04-2015, its Response.

22 - In the said Response, the TCA understands that the allegations of the Claimant cannot, in any way, be upheld, in that they make an interpretation and application of the legal norms applicable to the case, notoriously erroneous, in that

23 - They reveal an understanding that incurs not only a biased reading of the letter of the law, but also an interpretation that does not attend to the systematic element, violating the unity of the regime enshrined in the entire SCTC and, more broadly, in the entire legal-fiscal system, and further stemming from an interpretation that ignores the ratio of the regime enshrined in the SCTC. (See article 7 of the Response)

24 - It states that the tax legislator, in establishing in article 3, no. 1 of the SCTC who are the taxable persons for IUC, established, expressly and intentionally, that these are the owners (or in the situations provided for in no. 2 the persons mentioned therein), being considered as such the persons in whose names they are registered. (See article 11 of the Response)

25 - 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 taxable persons for the tax are the owners of the vehicles, being presumed as such the natural or legal persons, of public or private law, in whose names they are registered". (See article 12 of the Response)

26 - It considers that the wording of article 3 of the SCTC corresponds to a clear choice of legislative policy adopted by the legislator, and therefore understanding that it enshrines a presumption would unequivocally amount to interpreting contra legem. (See articles 21 and 23 of the Response)

27 - It states that the said 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 Case no. 210/13.OBEPNF. (See articles 24 and 25 of the Response)

28 - On the systematic element of interpretation, it considers that the solution put forward by the Claimant is intolerable, finding the understanding supported by it no legal support whatsoever. (See article 34 of the Response)

29 - On the "ratio" of the regime, the TCA considers that, in light of a teleological interpretation of the regime enshrined throughout the IUC Code, the interpretation put forward by the Claimant, to the effect that the taxable person for IUC is the actual owner regardless of not appearing in the vehicle register such ownership, is manifestly erroneous, in that it is the very ratio of the regime enshrined in the SCTC that constitutes clear proof that what the fiscal legislator intended was to create a tax based on the taxation of the owner of the vehicle, as appears in the vehicle register. (See articles 57 and 58 of the Response)

30 - It adds that the SCTC proceeded with a reform of the system of taxation of vehicles in Portugal, substantially altering the system of motor vehicle taxation, with the taxable persons for the tax becoming the owners appearing in the property register, irrespective of the circulation of the vehicles on public roads. (See article 64 of the Response)

31 - In this sense, it states that this is the understanding inscribed, namely, in recommendation no. 6-B/2012 of 22-06-2012, of the Ombudsman directed to the Secretary of State for Public Works, Transport and Communications.

32 - The interpretation conveyed by the Claimant also shows itself, beyond what has already been stated, to be inconsistent with the Constitution, namely because, among others, it violates the principle of efficiency of the tax system, which has constitutional dignity, a violation that would result in the obstruction and increased cost of the competencies attributed to the Respondent, with obvious prejudice to the interests of the Portuguese State, of which both the Claimant and the Respondent form part. (See article 130 of the Response)

33 - It adds that the invoices attached to the case, concerning sixty-nine vehicles, as documents unilaterally issued by the Claimant, do not constitute sufficient proof to "undermine the (supposed) legal presumption established in article 3 of the SCTC", not being apt to prove the conclusion of a synallagmatic contract, as is the case of the motor vehicle purchase and sale contract, further stating that such invoices raise "[…] serious doubts about their truthfulness, such are the discrepancies they present […]". (See articles 75, 77 and 94 of the Response)

34 - Regarding the invoices, it also considers that they present in their description different mentions, given that in the vehicles with the registration numbers …-…-…, …-…-…, …-…-…, …-…-… and …-…-… they present in their description the mention "sale of equipment", while in the other invoices the mention "sale of the vehicle" is inscribed.

35 - Regarding the invoice relating to the vehicle with the registration number …-…-…, it considers that the total loss of the vehicle covered by automobile insurance does not, in itself, imply the transfer of ownership of the insured object to the insurance company. (See articles 101 to 107 of the Response)

36 - Regarding the vehicle with the registration number …-…-…, it considers that the invoice relating to the alleged sale of the said vehicle was not attached to the request for arbitral ruling. (See article 95 of the Response)

37 - As for the vehicles that are the subject of financial leasing, numbering nine, it understands that, in the matter of financial leasing, and for purposes of article 3 of the SCTC, it is necessary that financial lessors, as is the case of the Claimant, fulfil the obligation established in article 19 of the said Code, in order to be able to exempt themselves from the obligation to pay the tax, and therefore, such obligation not having been fulfilled, it must be concluded that the Claimant is a taxable person for the tax.

38 - Finally, it states that it was not the Respondent who gave rise to the filing of the request for arbitral ruling, but rather the Claimant, and consequently the Claimant should be condemned in the arbitral costs "pursuant to article 527/1 of the New Civil Procedure Code ex vi article 29/1-e) of the LRATM".

39 - It considers, in conclusion, that, in light of all the arguments set out, the request for arbitral ruling should be judged as unfounded, with the tax assessment acts challenged remaining in the legal order, absolvating the Respondent entity from the claim accordingly.

E - QUESTIONS TO BE DECIDED

40 - It is therefore necessary to examine and decide.

41 - In light of the foregoing, concerning the positions of the Parties and the arguments presented, the questions to be decided are, in particular, those of knowing:

a) Whether or not the rule of personal incidence contained in article 3, no. 1 of the SCTC establishes a presumption.

b) What is the legal value of the vehicle register in the economy of the SCTC, particularly for purposes of the personal incidence of this tax.

c) If, on the date of taxability of the tax, a financial leasing contract is in force having as its object an automobile, is the taxable person for IUC, for purposes of the provisions of article 3, nos. 1 and 2 of the SCTC, the lessee or the lessor entity, owner of the vehicle, in whose name the ownership right is registered.

d) If, within the framework of a financial leasing contract having as its object an automobile, on the date of taxability of the tax, the vehicle has already been previously disposed of although the ownership right continues to be registered in the name of its former owner, for purposes of the provisions of article 3, no. 1, of the SCTC, the taxable person for IUC is the former owner or the new owner.

e) If, in the case of concluding that a presumption is established in no. 1 of article 3 of the SCTC, the documents presented (invoices and financial leasing contracts) as proof of the right invoked, are suitable means to rebut the said presumption.

F - PROCEDURAL REQUIREMENTS

42 - The Arbitral Tribunal is regularly constituted and is materially competent, pursuant to subsection a) of no. 1 of article 2 of Decree-Law no. 10/2011, of 20 January.

43 - The Parties enjoy legal personality and capacity, are legitimate and are legally represented (see article 4 and no. 2 of article 10 of Decree-Law no. 10/2011 and article 1 of Regulation no. 112/2011, of 22 March).

44 - The proceedings do not suffer from vices that would invalidate them.

45 - Taking into account the administrative tax proceedings, a copy of which was attached to the case by the TCA, and the documentary evidence comprising the proceedings, it is necessary to now present the factual matter relevant to understanding the decision, as it is fixed in the terms mentioned below.

II - GROUNDS

G - FACTUAL GROUNDS

46 - In terms of relevant facts, this tribunal considers the following facts to be established:

47 - The Claimant is a credit financial institution which, on 30-11-2004, incorporated by merger both the assets and liabilities, as well as the rights and responsibilities of B… - …, LDA and C… - …, LDA.

48 - The incorporated companies were deemed to be extinguished at the time of the said mergers, which occurred in the years 2003 and 2004, and from the dates of such mergers the Claimant incorporated all the assets and liabilities and all the responsibilities that comprised the assets of the incorporated companies.

49 - The Claimant's activity is substantially centred on the execution of financial leasing contracts intended for the purchase, by companies and individuals, of motor vehicles.

50 - The Claimant was notified of seventy-eight informal assessments of IUC, relating to the year 2013, as identified in the case (Doc. 1), relating to the vehicles referenced in the request for arbitral ruling.

51 - Sixty-nine of the vehicles identified in the proceedings were disposed of on dates prior to the year 2013 to which the IUC refers, with the remaining nine vehicles, with registration numbers …-…-…, …-…-…, …-…-…, …-…-…, …-…-…, …-…-…, …-…-… and …-…-…, being leased - under financial leasing - in the year 2013, that is, on the date to which the taxability of the tax refers.

52 - The Claimant, in situations in which it was not the owner of the vehicles, on the dates on which IUC was exigible, or in cases in which, on those dates, the vehicles were leased by way of financial leasing contracts in force, did not proceed with payment of the said tax.

53 - On the dates relating to the taxability of IUC, to which the assessments identified in the case relate, concerning the year 2013, the ownership of sixty-nine of the seventy-eight vehicles involved in the case had been transferred to the, hitherto, lessees, with the remaining nine vehicles, on the said dates, being subject to the force of financial leasing contracts.

54 - The Claimant, in cases in which it was not the owner of the vehicles, on the date on which IUC is being charged, presented copies of the invoices for the sale of the vehicles and the corresponding financial leasing contracts, and in the nine cases in which, on that same date, the vehicles were the subject of leasing contracts, presented the respective financial leasing contracts.

55 - The vehicle with registration number …-…-…, subject to the Vehicle Rental Contract without Driver no. …, was invoiced as Total Loss to Tranquility Insurance Company, SA.

56 - Regarding the vehicle with registration number …-…-… there is no invoice attached to the case relating to its alleged sale.

57 - The invoices relating to the vehicles with registration numbers …-…-…, …-…-…, …-…-…, …-…-… and …-…-… present in their description the mention "sale of equipment", while in the other invoices the mention "sale of the vehicle" is inscribed.

GROUNDS FOR PROVEN FACTS

58 - The facts deemed proven are based on the documents mentioned, concerning each of them, insofar as their correspondence to reality was not questioned.

FACTS NOT PROVEN

59 - There are no facts deemed as not proven, since all facts considered relevant to the examination of the claim were proven.

H - GROUNDS OF LAW

60 - The factual matter is fixed, and it is now necessary to proceed with its legal subsumption and determine the Law applicable to the underlying facts, in accordance with the questions to be decided stated in no. 41.

61 - The essential and decisive question in the present case, regarding which there are absolutely opposed understandings between the Claimant and the TCA, amounts to knowing whether the rule of personal incidence contained in no. 1 of article 3 of the SCTC establishes or does not establish a rebuttable presumption.

62 - The positions of the parties are known. In fact, for the Claimant, the provisions of no. 1 of article 3 of the SCTC configure a rebuttable legal presumption.

63 - The Respondent, for its part, considers that the wording of article 3 of the SCTC corresponds to a clear choice of legislative policy adopted by the legislator, and therefore understanding that a presumption is enshrined therein would unequivocally amount to interpreting contra legem.

I - INTERPRETATION OF THE RULE OF PERSONAL INCIDENCE CONTAINED IN NO. 1 OF ARTICLE 3 OF THE SCTC

64 - It is important to note first and foremost that it is undisputed in doctrine that in the interpretation of tax laws the general principles of interpretation apply in full. This is an understanding that, moreover, finds support in article 11 of the General Tax Law.

65 - It is commonly accepted that, with a view to grasping the meaning of the law, interpretation resorts to various means, first and foremost it is important to reconstruct the legislative thought through the words of the law, which means seeking its literal meaning from the outset. The said meaning, as is also undisputed, corresponds to the lowest degree of interpretive activity, and it is therefore important to weigh and assess it in light of other criteria, with the intervention, for that purpose, of the so-called elements of a logical nature, whether of rational (or teleological) meaning, of a systematic character or of a historical order.

66 - Regarding the interpretation of tax law, it is worth recalling, as jurisprudence has indeed been pointing out, particularly in the Judgments of the Supreme Court of Administrative Courts of 05/09/2012 and 06/02/2013, in cases 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 precept of legal hermeneutics, which in this context cannot be disregarded.

67 - Interpretive activity is therefore not avoidable with regard to resolving doubts raised by the application of the legal norms in question.

68 - In the view of FRANCESCO FERRARA, in Interpretation and Application of Laws, translated 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 inferring from certain circumstances the legislative will", adding, ibidem, p.130, that "Looking at the practical application of law, legal interpretation is by its nature essentially teleological".

69 - 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 manner, detached from the complex of thoughts and tendencies that animated the persons who contributed to its emanation". Hence the activity of the interpreter should be to "[…] seek not what the legislator wanted, but what objectively appears to be wanted in the law: the mens legis and not the mens legislatoris".

70 - For MANUEL DE ANDRADE, quoting FERRARA, in Essay on the Theory of 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 a will always present as long as the law ceases to be in force. That is to say that the law, once formed, detaches itself from the legislator, gaining autonomous consistency; and, more than that, becomes a living entity, which is not merely a lifeless body […]".

OF THE LITERAL ELEMENT

71 - It is in this framework that it is important to find an answer to the questions to be decided, particularly to the one aimed at knowing whether article 3, no. 1 of the SCTC establishes or does not establish a presumption, beginning, from the outset, with the literal element.

72 - Being the literal element the first that matters to consider, in search of legislative thought, it is necessarily by there that one should begin, seeking to attain the meaning of the expression "being considered as such the persons" to which reference is made in the said article 3, no. 1 of the SCTC.

73 - No. 1 of the said article 3 of the SCTC provides that "The taxable persons for 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." (underlined in original)

74 - The formulation used in the said article, it is important to note, first and foremost, resorts to the expression "being considered", which raises the question of whether such expression can be attributed a presumptive meaning, thus equating it with the expression "it is presumed". These are expressions frequently used with equivalent meanings, as is apparent in various situations of the Portuguese legal order.

75 - In truth, there are countless rules that enshrine presumptions, combining for this purpose, moreover, the verb to consider in various forms. 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, whether at the level of irrebuttable presumptions, whether within the framework of rebuttable presumptions, is conferred, countless times, an equivalent significance.

76 - It not being pertinent to again reference examples revealing such situations, given that such examples are abundantly stated in some of the decisions of tax arbitral tribunals, namely those rendered within the framework of Cases nos. 14/2013 - T, 27/2013 - T and 73/2013 - T, we consider them here to be fully reproduced.

77 - Under these circumstances, being the said expressions recurrently used with an equivalent purpose and meaning, it can be concluded that it is not only the use of the verb "to presume" that places us before a presumption, but also the use of other terms can serve as the basis for presumptions, as, designedly, occurs with the expression "being considered", which, in our view, is precisely what is verified in no. 1 of article 3 of the SCTC.

It is therefore an understanding which, while not appearing to correspond to a biased reading of the letter of the law, as the TCA considers, reveals itself to be in harmony with the provisions of no. 2 of article 9 of the CC, insofar as it assures, to the legislative thought, the minimum of verbal correspondence required therein.

78 - In the literal perspective, in light of what has been set out above, there is no doubt that the interpretation that considers a rebuttable presumption established in no. 1 of article 3 of the SCTC has full support in the formulation enshrined therein, in light of the said equivalence between the expression "being considered as such" and the expression "it is presumed as such".

The linguistic element, as referred to above, being the first that should be used in search of legislative thought, must, however, in order to find the true meaning of the rule, be subject to the control of the other elements of interpretation of a logical nature (whether such elements of rational (or teleological) meaning, of a systematic character or of a historical order).

79 - In fact, as can be drawn from the work of MANUEL DE ANDRADE, cited above, p. 28, "[…] 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 furnishes 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".

80 - Thus, let us then see the rational (or teleological) element.

OF THE HISTORICAL AND RATIONAL (OR TELEOLOGICAL) ELEMENT

81 - Attending to the elements of interpretation of a historical character, it is first of all important to recall what, expressly, is stated in the statement of reasons of Proposed Law no. 118/X of 07/03/2007, underlying Law no. 22-A/2007 of 29/06, when therein it is stated that the reform of motor vehicle taxation is realized through the displacement of part of the tax burden from the moment of vehicle acquisition 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, with respect to 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 it clear that the tax, as a whole, is subordinated 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 raison d'être of this tax figure".

82 - In this framework, it seems clear that the logic and rationality of the new system of motor vehicle taxation could only coexist with a taxable person for the tax, on the assumption that it is that person, and not another, who is the real and effective causer of road and environmental damage, as flows from the principle of equivalence, inscribed in article 1 of the SCTC.

83 - The said principle of equivalence, which informs the current Single Circulation Tax, has, at least in the part where it specifically concerns the environment, underlying it the polluter-pays principle, and realizes the idea, inscribed therein, that whoever pollutes must, for that reason, pay. The said principle has, moreover, in some way constitutional foundation, insofar as it represents a corollary of the provisions of subsection h) of no. 2 of article 66 of the Constitution.

84 - What is aimed to be achieved through the said principle is to internalize negative environmental externalities, which, after all, in the case of the present case, amounts to no more than ensuring that the damages which ensue for the community, arising from the use of motor vehicles, are assumed by their owners, as economic-users subjects, as costs that only they should bear.

85 - Returning to the mentioned principle of equivalence, it will be said that the same has, in the economy of the SCTC, an absolutely structuring role, with the normative edifice of the Code in question being founded thereon. The said principle therefore constitutes a legally enshrined purpose that the interpreter cannot fail to pursue.

86 - With regard to the said 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 implementation of this principle, considers that "In compliance with the principle of equivalence, the tax must correspond to the benefit that the taxpayer derives from the public activity; or to the cost that the taxpayer imputes to the community through its own activity".

87 - Addressing specifically IUC, the said 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 road wear and environmental cost, pay different tax as well", adding that the implementation of the said principle "[…] dictates other requirements also regarding the personal incidence of the tax […]".

88 - In light of what has just been stated, it is clear that the taxation of the actual and effective polluters corresponds to an important purpose sought by the law, in this case by the SCTC, 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, must always be before the jurist's eyes, given that, as the said author there states, "[…] legal interpretation is by its nature essentially teleological".

89 - Thus, it should be noted that, whether in light of the said historical elements, whether in light of the elements of a rational or teleological nature of interpretation which have been referenced, it is equally necessary to conclude that no. 1 of article 3 of the SCTC can only enshrine a rebuttable presumption.

90 - The systematic element of interpretation should also be considered.

OF THE SYSTEMATIC ELEMENT

91 - 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 of norms of the institute in which the rule to be 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 belongs to the rule to be interpreted in the overall legal order, as well as its consonance with the spirit or intrinsic unity of the entire legal order".

92 - It is known that a legal principle, in this circumstance the structuring principle of equivalence, does not exist in isolation, but is linked by an intimate nexus with other principles that integrate the legal instrument in which it is inserted, in this case, with the other principles embodied in the system inscribed in the SCTC. In that sense, each article of a given legal instrument, in this case of the SCTC, will only be comprehensible if we situate it before the other articles that follow or precede it.

93 - Regarding the systematization of the SCTC, environmental concerns were determining in order for the mentioned principle of equivalence to be, from the outset, inscribed in the first article of the said Code, which necessarily leads to the subsequent articles, insofar as they have their foundation in such principle, being influenced by it. This is what occurred, notably with the taxable base, which came to be constituted by various elements, particularly those concerning pollution levels, 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 personal incidence itself, provided for in article 3 of the SCTC, which cannot fail to be influenced by the said influence.

94 - The systematic element of interpretation and the interaction between the various articles and principles that integrate the system inscribed in the SCTC also appeal to the understanding that what is established in no. 1 of article 3 of the SCTC cannot fail to embody a presumption.

95 - No. 1 of article 9 of the CC provides that the search for legislative thought should take "[…] particularly into account […] the unity of the legal system, the circumstances in which the law was drawn up and the specific conditions of the time in which it is applied", circumstances and conditions which, today more than ever, are sensitive to the environment and respect for questions related to it.

In this context, the considerations formulated on the mentioned elements of interpretation, whether of a literal character or of a historical character, whether of a rational or systematic nature, all point to the understanding that article 3, no. 1 of the SCTC establishes a presumption, which means that the taxable persons for IUC, being in principle the owners of the vehicles, being considered as such the persons in whose names they are registered, may ultimately turn out to be others.

It will also be said that the establishment of the presumption in the mentioned rule will correspond to the only interpretation that is consonant with the principle of equivalence, mentioned above.

96 - Also with regard to the presumption that has been referred to and which is understood to be enshrined in no. 1 of article 3 of the SCTC, it is worth noting what is written in the preamble of the recently published Decree-Law no. 177/2014, of 15 December, when, referring to motor vehicles, it considers that "The failure to regularize the property registration presents serious consequences, both for those who remained owner in the register, and for those who acquired and did not promote registration in their favor, as well as for the various public entities that base their decisions on ownerships that they presume to be substantially true". (underlined in original)

97 - 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 incidence always admit proof to the contrary", (underlined in original), which means that the legal presumption, which appears to be established in no. 1 of article 3 of the SCTC, will necessarily be rebuttable.

98 - In this framework, the taxable persons for the tax are, presumably, the persons in whose names the vehicles are registered, that is, the said taxable persons are, in principle, and only in principle, the persons in whose names such vehicles are registered.

99 - In fact, 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 understanding, that the former owner be held responsible for the payment of the IUC that is due.

100 - Furthermore, it is this interpretation of no. 1 of article 3 of the SCTC that, in our opinion, best adjusts itself to the principles to which the TCA must subordinate its activity, namely to the principle of inquiry, in order to discover the material truth.

101 - With regard to the said principle of inquiry, 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, Ltd, Lisbon, p. 488/489, when, in annotations to the cited article 58, they state that it is the administration's role to play a dynamic role in gathering elements relevant to the decision, adding that the "[…] lack of diligence deemed necessary for the construction of the factual basis of the decision will affect it not only in the hypothesis of being mandatory (violation of the principle of equality), but also if the materiality of the facts considered is not proven or if relevant facts alleged by the interested party are lacking, because of insufficient proof that the Administration should have gathered […]".

The principle of inquiry, the said authors add, idem, "[…] concerns the powers (-duties) of the Administration to conduct the investigations necessary to the knowledge of the facts essential or determinant for the decision […]".

102 - The material truth, embodied, in the present case, in the circumstance that sixty-nine of the vehicles identified in the request for arbitral ruling were sold by the Claimant at a moment prior to that of the taxability of the tax, that is, to the date from which the tax creditor could enforce, before the tax debtor, its right to payment of the tax, and the remaining nine vehicles being, on that date, subject to financial leasing contracts, was within the knowledge of the TCA.

103 - It should not be said, as the TCA does, that the establishment of a presumption in article 3 of the SCTC and the consequences resulting therefrom would offend the principle of efficiency of the tax system, insofar as they would lead, in particular, to the "obstruction of the performance of its services, […]". (See article 130 of the Response)

The efficiency of the Public Administration in general, or of the TCA in particular, in the ordinary sense, will correspond to the capacity/methodology of work oriented towards the optimization of the work executed or the services provided, which will mean producing the maximum, in quantity and quality, with the minimum of costs, having nothing to do with the observance of legally enshrined principles and with respect for the rights of citizens, whether or not in the capacity of taxpayers.

104 - In a technical sense, it will be said that the principle of efficiency of the tax system is commonly held, in the domain of tax procedure, as a corollary of the principle of proportionality, which, as is known, imposes an adequate proportion between legal purposes and the means chosen to achieve these ends, or, as Diogo Leite Campos, Benjamim Silva Rodrigues and Jorge Lopes de Sousa refer, in General Tax Law, Annotated and Commented, 4th Edition 2012, Writing Meeting, Ltd, Lisbon, p. 488, in annotations to article 55 of the General Tax Law, it is a principle that obliges "[…] the tax administration to abstain from imposing on taxpayers obligations that are unnecessary to the satisfaction of the purposes it seeks to pursue".

In this framework, the said principle of efficiency of the tax system will mean the capacity to achieve the legally fixed objectives given the available means, or better, with the minimum means, which will also have nothing to do with respect for the rights of citizens, nor with the need to observe the principles to which the Tax Administration must subordinate its activity, namely those of inquiry and of discovery of material truth, and cannot, naturally, the application of the mentioned principle of efficiency be made to the prejudice of the rights of citizens.

J - OF THE ACQUISITION OF OWNERSHIP OF THE VEHICLE AND THE VALUE OF THE REGISTER

105 - First and foremost, it should be added, in light of what will be explicitly stated below regarding the value of the register, that the purchasers of the vehicles become the owners of those same vehicles through the execution of the corresponding purchase and sale contracts, with registration or without it.

106 - There are three articles of the Civil Code that matter to bear in mind, with regard to the acquisition of ownership of a motor vehicle. They are, first and foremost, article 874, which establishes the notion of purchase and sale contract, as being "[…] the contract whereby the ownership of a thing, or another right, is transferred, by means of a price"; article 879, in whose subsection a) it is provided, as essential effects of the purchase and sale contract, "the transfer of ownership of the thing or the titularity of the right" and article 408, which bears as its heading contracts with real effect, and establishes in its no. 1, that "the constitution or transfer of real rights over a determined thing occurs by mere effect of the contract, saving the exceptions provided for in the law". (underlined in original)

We are, in fact, in the domain of contracts with real effect, which means that their execution produces the transfer of real rights, in this case, motor vehicles, determined by mere effect of the contract, as expressly flows from the aforementioned rule.

107 - With regard to the said 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 contracts so-called real (quoad effectum), by having as their immediate effect the constitution, modification or extinction of a real right (and not merely the obligations tending towards that result), are distinguished the so-called real contracts (quoad constitutionem), which require the delivery of the thing as an element of their formation (see articles 1129, 1142 and 1185)".

We are thus before 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.

108 - Also from jurisprudence, namely from the Judgment of the Supreme Court of Judicial Courts no. 03B4369 of 19/02/2004, available at: www.dgsi.pt, it is drawn that, in light of the provisions of article 408, no. 1, of the Civil Code, "the constitution or transfer of real rights over a determined thing occurs by mere effect of the contract, saving the exceptions provided for in the law". This is the case of the motor vehicle purchase and sale contract (articles 874 and 879 subsection a) of the Civil Code), which does not depend on any special formality, being valid even when concluded in verbal form - according to Judgment of the Supreme Court of Judicial Courts of 3-3-98, in CJSTJ, 1998, year VI, volume I, p. 117". (underlined in original)

109 - Having the purchase and sale contract, in light of what has been stated above, a real nature, with the mentioned consequences, it is necessary to also consider the legal value of the vehicle register subject to that contract, insofar as the transaction of the said good is subject to public registration.

110 - It establishes, in fact, no. 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". (underlined in original)

111 - It being clear, in light of the said rule, what the purpose of the registration is, there is, however, no clarity, within the scope of the said Decree-Law, on the legal value of that registration, making it important to consider article 29 of the said legal instrument, relating to the registration of motor vehicle ownership, when therein it provides that "The provisions relating to land registration are applicable, with the necessary adaptations, to the registration of automobiles, […]". (underlined in original)

112 - In this framework, in order that we may achieve the sought knowledge of the legal value of motor vehicle ownership registration, it is important to bear in mind what is established in the Real Property Registration Code, approved by Decree-Law no. 224/84, of 6 July, when it provides in its article 7 that "the definitive registration constitutes a presumption that the right exists and belongs to the titleholder inscribed in the precise terms in which the registration defines it". (underlined in original)

113 - The combination of the provisions in the articles mentioned above, particularly the established in no. 1 of article 1 of Decree-Law no. 54/75, of 12 February and in article 7 of the Real Property Registration Code, allows consideration, on the one hand, that the fundamental function of registration is to give publicity to the legal situation of the vehicles, allowing, on the other hand, to presume that the right exists and that such right belongs to the titleholder in whose favor the same is registered, in the precise terms in which it is defined in the registration.

114 - Thus, the definitive registration constitutes nothing more than the presumption that the right exists and belongs to the inscribed titleholder, in the exact terms of the registration, but a rebuttable presumption, admitting, therefore, rebuttal evidence, as flows from the law and jurisprudence has been pointing out, and it is possible, in this regard, to see, among others, the Judgments of the Supreme Court of Judicial Courts nos. 03B4369 and 07B4528, respectively, of 19/02/2004 and 29/01/2008, available at: www.dgsi.pt.

115 - The function legally reserved to the registration is thus, on the one hand, to publicize the legal situation of the goods, in this case, of the vehicles and, on the other, to allow us to presume that there exists a right over those vehicles and that the same belongs to the titleholder, as such inscribed in the registration, which means that the registration does not have a constitutive nature of the right of ownership, but merely a declarative one, hence the registration does not constitute a condition of validity of the transmission of the vehicle from the seller to the buyer.

116 - Thus, if the buyers of the vehicles, as their "new" owners, do not forthwith promote the adequate registration of their right, it is presumed, for purposes of the provisions of article 7 of the Real Property Registration Code and of no. 1 of article 3 of the SCTC, that the vehicles continue to be the property of the person who sold them and who remains their owner in the registration, such person being the taxable person for the tax, in the certainty, however, that such presumptions are rebuttable, whether by force of the established in no. 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 in which the presumptions in question are removed, by means of proof of the said sales, the TCA cannot persist in considering the seller of the vehicle, who continues to appear in the registration as its owner, as the taxable person for IUC.

L - OF THE TAXABLE PERSON FOR IUC DURING THE FINANCIAL LEASING CONTRACT

117 - It is important, first and foremost, to note that the Legal Regime of the Financial Leasing Contract, approved by Decree-Law no. 149/95, of 24 June, with the last amendment introduced by Decree-Law no. 30/2008, of 25 January, provides in its article 9 that the lessor has as obligations, in particular, those to grant the enjoyment of the good for the purposes for which it is intended and to sell the good to the lessee, should the latter wish, at the end of the contract, as respectively provided in subsections b) and c) of its no. 1.

118 - On the other hand, in light of the established in article 10 of the said legal instrument, namely in subsections a) of its nos. 1 and 2, we learn that the lessee's obligations are to pay the rental fees and to use and enjoy the leased good, which means that, during the validity of a financial leasing contract having a vehicle as its object, only the lessee has its exclusive enjoyment.

119 - The lessee's obligations, in light of the said rules, point clearly to the understanding that it is this contractual subject that has the exclusive enjoyment of the vehicle that is the subject of the financial leasing contract, being the one who uses it as if it were the true owner of that good.

120 - The interpretation of no. 1 of article 3 of the SCTC, in light of all that, in this regard, has been stated above, taking into account particularly the legal relevance conferred to the principle of equivalence, does not allow the taxation in IUC of the lessor, who is nothing more than the formal owner of the vehicle, having, consequently, no polluting potential whatsoever, which means that the damages which ensue for the community, arising from the use of motor vehicles, must be assumed by their actual users, as costs that only they should bear. The lessee, that is, has the full use and enjoyment of the vehicle, as legally established, being its true user and effective generator of environmental damages, and should therefore be responsible for the corresponding tax, this being the understanding that should be drawn from the provisions of no. 2 of article 3 of the SCTC.

121 - Thus, the interpretation of no. 2 of article 3 of the SCTC will only allow for the perspective of the lessee as the one responsible for the payment of IUC, and it is important, in this regard, to note the provisions of article 19 of the SCTC, when, precisely, for purposes of the provisions of article 3 of the said Code, that is, for purposes of the personal incidence, it comes to impose on the entities that proceed with financial leasing the obligation to provide the TCA with data relating to the fiscal identification of the users of the leased vehicles, which shows, in particular, that, for purposes of the said personal incidence, it was intended to know who were, after all, the actual users of the leased vehicles, so that they, and not others, would bear the single circulation tax.

122 - In light of what has just been stated, it is our understanding that, if a financial leasing contract is in force on the date of taxability of the tax, having a motor vehicle as its object, the taxable person for that tax is, in light of the provisions of no. 2 of article 3 of the SCTC, the lessee, and not the lessor.

123 - In this framework, with the exception of the vehicle with registration number …-…-…, subject to the financial leasing contract no. …, signed on 14-08-2007, whose term occurred on 08-08-2012, consequently before the date of taxability of the corresponding IUC, which refers to the year 2013, all the other contracts relating to the eight remaining vehicles, with registration numbers …-…-…, …-…-…, …-…-…, …-…-…, …-…-…, …-…-…, …-…-… and …-…-…, were in force on the dates of taxability of IUC, and the payment thereof was not the responsibility of the Claimant, given that, in light of what has already been stated, the same was not, then, the taxable person for the tax.

M - OF THE TAXABLE PERSON FOR IUC AT THE TIME OF DISPOSAL OF THE VEHICLE SUBJECT TO FINANCIAL LEASING CONTRACT

124 - First and foremost, it is important to consider some particular situations related to some invoices and vehicles.

Let us see:

125 - Regarding the vehicle with registration number …-…-…, subject to the financial leasing contract no. …, sold as Total Loss to Tranquility Insurance Company, SA, as appears from invoice no. … of 02-07-2002, it will be important to know whether or not the procedures specifically and legally provided for in this regard were observed.

126 - It was, namely, expected that, under these circumstances, the said Insurance Company would assess the damaged vehicle; consider, or not, within the framework of the contractually established relationships, the vehicle as Total Loss; assign, in case of Total Loss, pertinent compensation to the case; place at the disposal of the Claimant the amount corresponding to the compensation; disaggregate such amount, should the salvage remain in the possession of the said Insurance Company, evidencing the amount of compensation for Total Loss, and the amount relating to the value of the Salvage, whose sum would correspond to the amount placed at the disposal of the Claimant.

127 - The said special procedures, concerning cases in which vehicles involved in accidents are considered in a situation of Total Loss, flow from, specifically and particularly, the provisions of article 8 of Decree-Law no. 94-B/98, of 17 April, which regulates the conditions of access to and exercise of insurance and reinsurance activity and no. 1 of article 41 of Decree-Law no. 291/2007 of 21 August, relating to the Mandatory Motor Third Party Liability System.

128 - In the case at issue, that is, with respect to the vehicle with registration number …-…-…, there is no documentation in the proceedings capable of supporting the verification of the specific procedures concerning the situation in question, thus considering it as not demonstrated that, on the date of taxability of IUC, the Claimant was not the taxable person for that tax, being thus responsible for its payment.

129 - As for the vehicle with registration number …-…-…, the absence of an invoice supporting the alleged sale of the said vehicle is noted, thus not being demonstrated that, on the date of taxability of the corresponding IUC, the Claimant was not the taxable person for that tax.

130 - As for the invoice-receipts attached to the proceedings, relating to the sale of the vehicles, it is important to state that not all of them present, as the TCA indeed notes, identity in their description, given that in some the mention "sale of the vehicle" appears, in others the mention "sale of equipment" is inscribed, but in all cases the registration number of the corresponding vehicle is referenced.

131 - This is, in fact, the use of different terminology to reference the same reality, which, by the way, also occurs in the financial leasing contracts identified in the proceedings, where the terms vehicle, good and equipment are indistinguishably used to designate the same contractual object, namely the respective motor vehicle, as can, in particular, be verified in contracts nos. … and …, where the terms good and equipment are used to refer to the vehicles to be acquired by each of the lessees.

132 - Having the said particularities been stated, it should be noted that, with respect to the sixty-seven remaining vehicles, bearing in mind what was stated regarding the vehicles with registration numbers …-…-… and …-…-…, the Claimant regarding their disposal, attached the respective invoices for sale and the corresponding financial leasing contracts, documents that should be viewed jointly and in articulation, bearing in mind the historical-empirical certainty of the evidence, it should also be noted that each of the invoice-receipts, in addition to containing all the legally required elements, indicate the no. of the financial leasing contract to which the leased vehicle - now sold - pertains, as well as the name of the buyer, which corresponds to that of the respective lessee.

The documents presented, particularly the copies of the invoice-receipts supporting the sales relating to the sixty-seven vehicles referenced above, that is, the vehicles whose ownership was transferred to the former-lessees on dates prior to those on which IUC was exigible, embody means of evidence with sufficient force and suitable to rebut the presumption founded on the register, as enshrined in no. 1 of article 3 of the SCTC, documents which moreover enjoy the presumption of truthfulness provided for in no. 1 of article 75 of the General Tax Law. From this, it follows that on the date on which IUC was exigible, those who held the ownership of the vehicles were not the Claimant, but the former-lessees, and the same was therefore not responsible for the payment of the tax in question.

N - OF THE MEANS OF EVIDENCE PRESENTED

REGARDING THE FINANCIAL LEASING CONTRACTS

133 - Regarding the financial leasing contracts in force on the date of taxability of the tax, allegedly numbering nine, but which ultimately amount to eight, insofar as they should be excepted therefrom, as has already been noted above, the financial leasing contract no. …, relating to the vehicle with registration number …-…-…, signed on 14-08-2007, whose term occurred on 08-08-2012, consequently before the date of taxability of the corresponding IUC, it should be understood that such contracts are suitable means and with sufficient force to prove the quality of the lessees, for purposes of the provisions of no. 2 of article 3 of the SCTC, that is, for purposes of their equation to vehicle owners and their consequent binding to payment of the tax in question. There are, moreover, no elements that allow understanding that the data inscribed in such contracts do not correspond to contractual truth, and it is also certain that the law, in this case, no. 1 of article 75 of the General Tax Law, attributes to such documents a presumption of truthfulness.

REGARDING THE INVOICES

134 - Always bearing in mind the verbal nature that purchase and sale contracts of motor vehicles may have, the proof of the sale of that good may be made by any means, namely through documentary form, this including, namely, the invoices relating to the sales of the vehicles, and it should be remembered that the elements necessary for the execution of registration are a different reality from the proof of the transaction subject to registration.

135 - Regarding the value of invoices as documents capable of proving the sales of motor vehicles, it is also worth recalling the provisions of Decree-Law no. 177/2014, of 15 December, when, in nos. 1 and 2 of its article 2, it expressly considers invoices as documents suitable to prove the sale of vehicles, which is quite revealing of the concerns inscribed in the law, regarding the negative consequences arising from the failure to regularize the registration of ownership of vehicles and, consequently, the need to regularize such situations.

136 - As a means of evidence that it proceeded with the sale of the sixty-seven vehicles aforementioned, subject to the financial leasing contracts identified in the present proceedings, the Claimant, in addition to the financial leasing contracts, attached copies of the invoice-receipts for the sale of those vehicles, many of them processed by Certified Programs, identified by the numbers …/DGCI and …/TCA, invoices which, it should be stated right away, do not allow considering that they contain elements indicative that the corresponding sales were not, in fact, carried out.

137 - The invoice-receipts attached to the case, as evidence of the sale of the vehicles, bearing in mind the business purpose of the Claimant and its business activity, substantially centred on the execution of financial leasing contracts, upon the conclusion of which the ownership of the said vehicles is, by rule, transferred to the respective lessees/buyers, show themselves to be entirely suitable to the mentioned business reality, and the sale of the vehicles which the invoices presented aim to prove is absolutely plausible, with no elements being identified that embody any simulated contract, rather allowing to conclude that we are before invoices that reproduce the real and true sale of the vehicles to the persons indicated therein.

138 - It will even be said that, in the case of the present proceedings, in light of the said business activity of the Claimant, it will not be surprising, far from it, the transfer of ownership of the vehicles identified in the case.

139 - Thus, nothing allows considering that the elements inscribed in the said invoices, namely those concerning the identification of the vehicles and the lessees/buyers, as well as those concerning the dates of sale, prior to the date of taxability of the corresponding IUC, are at variance with the reality that contractually occurred, everything indicating that they reflect and prove the facts mentioned therein, that is, the effective sale of the vehicles to the persons indicated therein. Furthermore,

140 - Invoices, being indispensable commercial documents, are also essential accounting documents, with significant implications in the fiscal domain, and it should be noted that, in the case of the present proceedings, having the Claimant, as it does, an activity of a business nature, the said invoices are subject to rigorous legal rules, whether of a commercial order, whether of an accounting and fiscal order.

141 - The documents at issue in the case, naturally inscribing themselves within the framework of commercial relationships between two entities, in this case between the Claimant and the former-lessees/buyers of the vehicles, aim, on the other hand, and in this case, to demonstrate to the Tax Administration the existence of the transactions in question, which confers on them a dimension and value qualitatively different, given that, should certain conditions be met, tax legislation understood it to be appropriate to consider them as true.

142 - As has already been underlined, tax legislation, namely that mentioned above, recognizes invoices with evidentiary credibility, and it should be stressed, because it is not a matter of little consequence, far from it, it is a fundamental matter, that, having such invoices been issued in accordance with commercial and tax legislation, which is not questioned by the Respondent, the law, in this case, no. 1 of article 75 of the General Tax Law, attributes to it a presumption of truthfulness.

143 - Thus, in light of the presumption of truthfulness conferred, in the domain of tax-legal relationships, on the facts inscribed in the said documents and being the transmission of the vehicles to their former-lessees/buyers held as true, it would be incumbent on the TCA, in light of the provisions of article 75, no. 2 of the General Tax Law, in the framework of the grounded and objective reasons it had, to demonstrate the falsity of such documents or the simulation of the sales mentioned therein.

144 - The documents presented by the Claimant, as means intended to prove the transactions of the vehicles in question, enjoying thus the said presumption of truthfulness, appear to have sufficient suitability, in order to demonstrate the said transactions, constituting, in our view, a suitable and capable means of evidence to rebut the presumption established in no. 1 of article 3 of the SCTC.

145 - In light of what has just been stated, and bearing in mind both the presumption established in no. 1 of article 3 of the SCTC, and the transfer of ownership of the vehicles in question, by mere effect of the contract, before the date of taxability of the tax, and the legal value of the vehicle register in the economy of the SCTC, the tax acts in question cannot merit our agreement, whether because an adequate interpretation and application of the legal rules of personal incidence was not taken into account, which embodies an error concerning the legal assumptions, whether because the said acts were based on a matter of fact clearly divergent from the actual reality, which embodies an error concerning the factual assumptions.

146 - Under these circumstances, bearing in mind, on the one hand, that the presumption enshrined in article 3, no. 1 of the SCTC was rebutted and that, on the other, the vehicles in question in the present proceedings were sold on a date prior to that of taxability of the tax, that is, at the moment at which the Tax Administration can demand the tax payment, it cannot be left unconsidered that, at the time of taxability of the tax, in light of the provisions of no. 3 of article 6, combined with no. 2 of article 4, both of the SCTC, the Claimant was not the taxable person for the tax in question.

147 - The TCA, when it understands that the taxable persons for IUC are, definitively, the persons in whose names the motor vehicles are registered, without considering that article 3, no. 1 of the SCTC embodies a presumption, nor taking into account the evidentiary elements which were presented to it, as appears from the proceedings, is proceeding with the illegal assessment of IUC, based on the erroneous interpretation and application of the rules of personal incidence of the Single Circulation Tax, contained in the said article 3 of the SCTC, whether at the level of the assumption, whether at the level of the determination, which configures the practice of a tax act lacking in legality due to error concerning the factual and legal assumptions, which determines the annulment of the corresponding tax acts, for violation of law.

148 - In sum, it will be said, in consonance with what has been stated above, that with the exception of the assessments that do not configure as illegal, namely those referring to the vehicle with registration number …-…-…, subject to the financial leasing contract no. …, signed on 14-08-2007, whose term occurred on 08-08-2012; to the vehicle considered as Total Loss, with registration number …-…-…, subject to the financial leasing contract no. …, and to the vehicle with registration number …-…-…, for which no proof was produced that sustains its alleged sale, all the remaining assessments, whether because, in eight cases, there were financial leasing contracts in force on the date of taxability of IUC, whether because, in the remaining cases, on the date of taxability of the said tax, the Claimant was not the true and actual owner of the vehicles in question. Note that the amount of IUC assessed, with reference to the three mentioned vehicles, corresponds, respectively, to the sum of € 57.41, € 18.32 and € 53.44, which totals € 129.17.

149 - Accordingly, bearing in mind all of the foregoing, this Arbitral Tribunal decides:

• To judge partially upheld, as proven, on the ground of violation of law, the request for arbitral ruling insofar as it concerns the annulment of the acts of assessment of IUC, relating to all the vehicles identified in the case and relating to the year 2013, with the exception of the vehicles with registration numbers …-…-…; …-…-… and …-…-…;

• To annul, consequently, the acts of assessment of IUC, relating to the year 2013, relating to the vehicles, as have been mentioned above;

• To condemn the Claimant and the Respondent in costs, which are fixed, for each, in the proportion of 2% for Claimant and 98% for Respondent.

VALUE OF THE CASE

In compliance with the provisions of articles 306, no. 2 of the CPC (formerly 315, no. 2) and 97-A, no. 1 of the CPPT and article 3, no. 2 of the Regulation of Costs in Tax Arbitration Proceedings, the value of the case is fixed at € 6,257.96.

COSTS

In accordance with the provisions of article 12, no. 2, in fine, and article 22, no. 4, both of the LRATM, and article 4 of the Regulation of Costs in Tax Arbitration Proceedings and Table I, which is attached thereto, the amount of total costs is fixed at € 612.00.

Let it be notified.

Lisbon, 17 August 2015

The Arbitrator

António Correia Valente