Summary
Full Decision
CLAIMANT: A – in liquidation
RESPONDENT: TAX AND CUSTOMS AUTHORITY
Arbitral Decision
I – STATEMENT OF FACTS
A) The Parties and Constitution of the Arbitral Tribunal
A – a company in liquidation, Legal Entity No. …, with registered address in …, hereinafter referred to as "Claimant, registered with the Tax Office of ..., which by merger incorporated company B, Legal Entity No. …", requested the constitution of a Single Arbitral Tribunal, pursuant to the provisions of article 2, no. 1, paragraph a) and article 10, nos. 1 and 2 of Decree-Law no. 10/2011, of 20 January, hereinafter referred to as "RJAT" and of Order no. 112 – A/2011, of 22 March, seeking the declaration of illegality of the levies of Unique Circulation Tax (IUC) relating to the tax periods from 2009 to 2012, attached to the case file as documents nos. 2 to 52 and which are hereby deemed fully reproduced, in the total amount payable of €1,367.82.
The request for constitution of the Arbitral Tribunal was presented by the Claimant on 17-12-2014, was accepted by the Honourable President of the CAAD on 19-12-2014 and immediately notified to the Tax and Customs Authority.
The Claimant opted not to designate an arbitrator, wherefore, pursuant to the provisions of no. 1 of article 6 of the RJAT, the present signatory was designated, on 10-02-2015, by the Deontological Council of the Centre for Administrative Arbitration as sole arbitrator. The appointment was accepted and the parties notified of the arbitrator's designation, and neither party manifested the intention to refuse the designation.
Thus, in accordance with the provisions of paragraph c), of no. 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 (RJAT), the Single Arbitral Tribunal was constituted on 26-02-2015. On the same date, the Tax Authority was notified, pursuant to the terms and for the purposes of the provisions of nos. 1 and 2 of article 17 of the RJAT, to submit its response within the legal time period.
The Tax Authority submitted its response on 07-04-2015, in which it presents its defence by way of objection, which is hereby deemed fully reproduced. On 27-04-2015 the parties were notified to pronounce themselves on the possibility of waiving the holding of the meeting referred to in article 18 of the RJAT.
On 07-05-2015 the Claimant presented a response to the Tax Authority's request for amendment of the value deducted in its response, following a previous arbitral ruling, reiterating that the total value in dispute in the present case file corresponds effectively to the total value of the levies and that, despite the Tax Authority's decision relating to the Gracious Claim referring to the cancellation in the Tax Authority's computer system of the IUC levies for the registration numbers ...-...-... (2009 to 2012) and ...-...-... (2010 to 2012), the Claimant was not notified of any cancellation thereof, to which is added the fact that the decision relating to the Gracious Claim was in the sense of total dismissal and not, as is customary in these situations, of partial approval (or dismissal).
Considering that the parties pronounced themselves in favour of waiving the meeting and submission of written submissions, an arbitral ruling was issued on 25-05-2015, waiving the holding of the meeting provided for in article 18 of the RJAT, setting the date thereof for 15 July 2015.
B) THE RELIEF SOUGHT BY THE CLAIMANT:
"A", herein Claimant, incorporated by merger company "B", pursuant to the presentation for commercial registration no. Ap. …/2003…, as evidenced by a Permanent Certificate accessible through access code no. ...;
By virtue of the merger effected, "A" acquired the entirety of the assets of company "B", namely, all rights and assets of the company, as well as all obligations to which the same was bound.
Therefore, "A - In Liquidation" has standing to request the constitution of the Arbitral Tribunal, inasmuch as it succeeded to the obligations of the company notified of the official levies of Unique Circulation Tax in the fiscal years 2009 to 2012, "B".
The Claimant formulates the present request for arbitral decision, arguing for the illegality, with the consequent annulment, of the levies of Unique Circulation Tax, relating to the tax periods of 2009, 2010, 2011 and 2012, hereinafter itemized:
a) Single Collection Document (DUC) no. … of 2009;
b) DUC no. … of 2010;
c) DUC no. … of 2011;
d) DUC no. … of 2012, all relating to the vehicle with registration number ...-...-..., in the total amount of € 849.20;
e) DUC no. … of 2009;
f) DUC no. … of 2010;
g) DUC no. … of 2011;
h) DUC no. … of 2012, all relating to the vehicle with registration number ...-...-..., in the total amount of €233.43;
i) DUC no. … of 2009;
j) DUC no. … of 2010;
k) DUC no. … of 2011;
l) DUC no. … of 2012, all relating to the vehicle with registration number ...-...-..., in the total amount of €230.56;
m) DUC no. … of 2010;
n) DUC no. … of 2011;
o) DUC no. … of 2012, all relating to the vehicle with registration number ...-...-..., in the amount of €54.63.
All these levies are attached to the case file as an annex to the arbitral request, contained in the summary table attached to the arbitral request as Annex II, documents which are hereby deemed fully reproduced.
In summary, it grounds its request, alleging the following:
a) The Claimant is not and has never been the owner of the vehicles in question, and, consequently, the taxpayer subject to this tax;
b) In the context of its activity the Claimant concluded with its clients loan contracts for the acquisition of vehicles, that is to say, credit facility contracts for the acquisition of vehicles, with the Claimant being merely the holder of a possible guarantee on the same: mortgage or retention of title;
c) In the context of the aforementioned commercial activity, the Claimant concluded loan contracts with the taxpayers whose identification numbers appear in the Table which it attached as Annex II to the arbitral request, which is hereby deemed fully reproduced;
d) For the acquisition of the vehicles with the registration numbers therein itemized, it concluded loan contracts, as copies of the contracts attached to the case file, and the Sales Invoice issued in the name of the loan borrower in the case of the sale of the vehicle with registration number ...-...-...; (see Annexes III and IV attached to the PI);
e) The Claimant had no intervention whatsoever in the contract that resulted in the transfer of ownership of the vehicles between the sellers and the buyers;
f) The Claimant was notified for payment of the official IUC levies relating to the vehicles identified in the request for arbitral decision (summary table attached to the arbitral request) and to the tax periods 2009, 2010, 2011 and 2012;
g) It submitted a Gracious Claim, which was considered groundless, having been notified of this decision on 19 September 2014;
h) Pursuant to the provisions of article 3, no. 1 and article 6 of the CIUC, the legal regime in force, resorting to the elements contained in the motor vehicle register, the legislator established, simultaneously, establishes a norm of subjective incidence that establishes, merely, a legal presumption, all the more so since in the legal tax order we can find the verb "consider" used with a presumptive sense;
i) It is, therefore, a presumption, the negation of which is permitted by article 73 of the LGT; the Claimant indicates, in this regard, several examples extracted from the legal order in force;
j) It invokes, furthermore, in its defence, that in the course of prior hearing it provided to the Tax Authority the loan contracts and the elements of tax identification of the said loan borrowers, elements necessary and sufficient to negate the presumption of ownership, whereby it cannot be considered as the taxpayer subject to this tax.
k) It concludes by petitioning for the declaration of illegality of these IUC levies, in the total amount of €1,367.82 and the condemnation of the Tax Authority to pay the costs of the proceedings.
C – THE RESPONSE OF THE RESPONDENT
The Respondent, duly notified for that purpose, submitted its response in a timely manner in which, by way of objection, it alleged, in summary, the following:
a) The Claimant's argument regarding the alleged error in the qualification of the taxpayer subject to this tax is not well-founded, inasmuch as the understanding advocated by the Claimant not only incurs a skewed reading of the letter of the law, but also the adoption of an interpretation that does not heed the systematic element, violating the unity of the regime enshrined in the entire CIUC and, more broadly, in the entire legal-tax system and further derives from an interpretation that ignores the rationale of the regime established in the article in question, and likewise, in the entire CIUC;
b) It bases its allegation on the provisions of nos. 1 and 2, of article 3 of the CIUC, pointing out that the legislator did not use the expression "are presumed", as it could have done, indeed in a manner similar to what occurs in other legal instruments, exemplifying some situations provided for in the law;
c) It understands, therefore, that in cases where the tax legislator uses the expression "are considered", it is not establishing a presumption, but rather a legislative choice to consider as owners those who appear as such in the register; to understand that the legislator established here a presumption would be unequivocally to carry out an interpretation contrary to law;
d) It concludes, therefore, that in the case of the present case file, the legislator expressly and intentionally established that those are to be considered as such the persons in whose names the same are registered, inasmuch as this is the interpretation that preserves the unity of the legal-tax system and that another interpretation would be to ignore the teleological element of interpretation of the law: the rationale of the regime established in the article in question, and likewise, in the entire CIUC; it reinforces this allegation by invoking that this is the understanding followed by the jurisprudence of our courts expressed in the judgment delivered by the Administrative and Tax Court of Penafiel, in the context of Case no. 210/13.0BEPNF;
e) It concludes that article 3 of the CIUC contains no legal presumption whatsoever, and for the groundlessness of the arbitral request, inasmuch as the tax acts in question do not suffer from any defect of violation of law, to the extent that in light of the provisions of article 3, nos. 1 and 2 of the CIUC and article 6 of the same code, it was the Claimant, in the capacity of owner, the taxpayer subject to the IUC, as attested by the Information relating to the history of ownership of the vehicles in question, issued by the Motor Vehicle Registration Authority;
f) In the Tax Authority's view it is undeniable that the Real Estate Registration Code applies subsidiarily to the Motor Vehicle Registration Regulation, however, the Real Estate Registration Code is not subsidiary legislation to the IUC Code, whereby the IUC came, pursuant to the provisions of article 3 of the CIUC, to be owed by the persons who appear in the register as owners of the vehicles;
g) Another interpretation would be to ignore the teleological element of interpretation of the law; it would, furthermore, be an interpretation contrary to the Constitution;
h) The Tax Authority alleges that, should this not be so understood, it would still have to be considered that the evidentiary documents submitted by the Claimant (copies of loan contracts with payment of installments and a sales invoice of the vehicle with registration number ...-...-...) are not capable of negating the presumption of the register, given the unilateral character of the invoice, the fact that it may evidence a supposed transaction that may not actually occur, due to lack of acceptance by the counterparty and, lastly, because also the loan contract may not be fully complied with, since its installments may not have been paid in full;
i) Finally, it further alleges the violation of the provisions of article 19 of the CIUC, which imposes an obligation of communication to the Tax Authority regarding the identification of the users of the vehicles, an obligation that the Claimant failed to comply with, whence is extracted, also, the consequent liability for administrative offense and the non-liability of the Tax Authority for the costs of the proceedings, for it was the claimant with its conduct that gave rise to the levies.
j) It concludes arguing for the groundlessness of the arbitral request and the maintenance of the tax acts impugned, absolving the respondent entity of the claim.
II - PROCEDURAL REQUIREMENTS
The Arbitral Tribunal is duly constituted. It is materially competent, pursuant to the provisions of article 2, no. 1, paragraph a) of Decree-Law no. 10/2011, of 20 January.
The Parties possess legal personality and capacity, are legitimate and are duly represented (See article 4 and article 10 no. 2 of DL no. 10/2011 and article 1 of Order no. 112/2011, of 22 March).
As regards the joinder of claims, seeking the joint assessment of the legality of the 15 IUC levies, relating to the years 2009 to 2012, although they constitute autonomous acts, verifying the requirements demanded by the provisions of no. 1, of article 3, of the RJAT and article 104 of the CPPT, joinder is admissible. Thus, joinder is accepted in the same arbitral request of the claims for declaration of illegality of all the tax acts of IUC levy and the respective compensatory interest associated therewith, given the identity of the tax and the assessment of the tax acts in question depends on the assessment of the same circumstances of fact and the application of the same rules of law. Thus, the legal requirements permitting joinder are satisfied, pursuant to the provisions of articles 104 of the CPPT and article 3, no. 1 of the RJAMT, considering the identity of the tax and the tribunal's competence, which is accepted by this Tribunal.
The proceedings do not suffer from defects that would invalidate them.
Taking into account the administrative tax proceedings, the documentary evidence attached to the case file, it now behooves to present the factual matter relevant to the understanding of the decision, which is fixed as follows.
III - FACTUAL FINDINGS
A) Proven Facts
As relevant factual matter, the present tribunal establishes the following facts as proven:
a) "A", herein Claimant, incorporated by merger company "B", pursuant to the presentation for commercial registration no. Ap. …/2003…., as results from the Permanent Certificate accessible through access code no. ....
b) By virtue of the merger effected, "A", acquired the entirety of the assets of company "B", whereby it is the holder of all rights and assets of the company, as well as all obligations to which the same was bound.
c) The Claimant is a Financial Credit Institution that was engaged, among others, in the conclusion of credit facility contracts for the purposes of acquisition of vehicles, namely through the conclusion of loan contracts.
d) In the context of the aforementioned commercial activity, the Claimant concluded loan contracts with the taxpayers whose identification numbers appear in the Table attached to the Arbitral request as Annex II,
e) The loan contracts were intended for the acquisition of vehicles with the registration numbers therein itemized, as copies of the loan contracts concluded and attached to the case file;
f) With reference to the vehicle with registration number ...-...-..., an Invoice was issued on 2003/04/29, by the Peugeot concessionaire designated by C, with registered address in …, in Lisbon, in the name of the holder of the loan contract D, which evidences the sale of the vehicle;
g) The financing contracts (loan) for acquisition, concluded between the present Claimant and the loan borrowers, had as their object motor vehicles that were acquired by the latter by the conclusion of a purchase and sale contract with the supplier, in a manner similar to what occurred with the Sales Invoice relating to the vehicle with registration number ...-...-..., attached to the case file;
h) Of the fifteen levies now in question, relating to four motor vehicles, only in relation to the vehicle with registration number ...-...-... and with reference to the date of the occurrence of the taxable event, an invoice for the sale to a third party had been issued by the seller (concessionaire of …), attached to the case file as Annex IV to the arbitral request, which is hereby deemed fully reproduced;
i) In relation to the remaining vehicles, due to the lapse of time that elapsed between the date of sale and the date of presentation of the present request for constitution of an Arbitral Tribunal, the Claimant no longer possessed in its archives the respective invoices; (see article 23 of the arbitral request - by admission of the Claimant);
j) Notified for payment of the IUC levies here impugned, the claimant filed a Gracious Claim, which was dismissed as per ruling attached to the case file, issued on 15 September 2014, attached to the case file as Annex I to the arbitral request;
k) From the documents attached consisting of the Administrative File it is proven that the situation described in the motor vehicle register, of the vehicles referenced in the levies impugned, was as follows:
i. Vehicle with registration number ...-...-... – appears as owner B SFAC, from 12-09-2000 to 12-06-2014;
ii. Vehicle with registration number ...-...-... - appears as owner B SFAC, from 06-06-2003;
iii. Vehicle with registration number ...-...-... - appears as owner B SFAC, from 06-06-2003 and from 11-08-2008 to 14-11-2014, appears as lessee: E;
iv. Vehicle with registration number ...-...-... - appears as owner F, from 28-08-2006 and with indication of end date of lease 14-11-2014.
B) FACTS NOT PROVEN
The tribunal considers not proven that the Tax Authority cancelled the IUC levies of the years 2009 to 2012, with reference to the vehicle with registration number ...-...-... and those of 2010 to 2012, with reference to the vehicle with registration number ...-...-..., given that nothing appears in the Administrative File that proves such cancellation, namely, the necessary notification to the Claimant of such cancellations.
There are no other facts not proven with relevance to the decision to be delivered.
C) JUSTIFICATION OF THE PROVEN FACTS
The facts described above were established as proven on the basis of the documents which the parties attached to the present proceedings, the Claimant as an annex to the claim filed and the Tax Authority in the response submitted and the respective Administrative File.
IV – ISSUES TO BE DECIDED AND LEGAL REASONING
It behooves, therefore, to assess and decide the issues to be resolved:
a) Preliminary issue: determination of the value of the proceedings;
b) Decision and reasoning of the legal issues raised by the parties.
As regards the preliminary issue raised by the Tax Authority regarding the rectification of the value of the proceedings, considering the elements attached to the case file, it is not possible to extract that the Tax Authority has effectively cancelled the said levies. In fact the only reference that is found in the case file to such supposed cancellation is that which appears on page 3 of the decision that assessed the gracious claim filed by the Claimant. However, this does not appear sufficient for this tribunal to decide on the alleged rectification of the value of the proceedings, inasmuch as it understands that such cancellation should have been notified in the terms legally provided to the Claimant, with the Tax Authority bearing the burden of proof of having effected such notification of the decision to cancel. Thus, this Tribunal considers that the value of the proceedings should be maintained as assigned by the Claimant, corresponding to the full value of the impugned levies.
As regards the legal issues raised by the parties, considering the positions assumed and the arguments presented by both, it is necessary to assess:
a) whether the norm of subjective incidence provided for in article 3 no. 1 of the CIUC provides for a defeasible presumption or, instead, a legal fiction, incapable, therefore, of being negated by proof to the contrary;
b) what is the legal value of the motor vehicle register;
c) what is the probative value of the documents attached to the case file by the Claimant to negate the presumption, namely, the loan contracts and the invoice relating to the sale of the vehicle with registration number ...-...-....
A) As regards the Interpretation of article 3 no. 1 of the CIUC
The Claimant invokes that the requirements of subjective incidence provided for in article 3 of the CIUC are not fulfilled, and, consequently, is not the taxpayer subject to IUC and, as a consequence, the levies must be annulled due to manifest lack of subjective liability for its payment, with an erroneous qualification of the subjective incidence of the tax occurring, with respect to the fiscal years in question.
For that purpose it alleges, in summary, that article 3 of the CIUC establishes an implicit presumption of ownership of the vehicles in favour of those in whose names the same are registered, a presumption which, by virtue of the application of the general rule provided for in article 73 of the General Tax Law, is defeasible by proof to the contrary. As for the Respondent, article 3 of the CIUC does not establish any implicit presumption, but a true legal fiction, incapable of being negated.
Now, with reference to this issue, there is already abundant arbitral jurisprudence produced in recent years, from which we highlight the decisions issued in cases nos. 14/2013-T, of 15 October, 26/2013-T of 19 July, 27/2013-T, of 10 September, 217/2013-T of 28 February and, more recently, in the decisions issued in cases 286/2013-T, of 2 May 2014, 293/2013-T, of 9 June 2014, 46/2014-T of 5 September, 246 and 247/2014 T, of 10 October, among others.
But, let us see what should be, in accordance with the principles of legal hermeneutics, the meaning and scope of the provisions of article 3 no. 1 of the CIUC. Article 3 no. 1 of the CIUC provides:
"The taxpayers subject to the tax are the owners of the vehicles, considering as such the natural or legal persons, of public or private law, in whose names the same are registered."
From the simple reading of number one of the aforementioned provision, it is verified, without great difficulty, that the key to the matter lies in the expression "considering as such" used by the legislator. Should it be understood that the legislator intended to establish an implicit presumption or a true legal fiction?
It is important to heed some reference concepts to find the most adequate answer to this question, such as that provided for in article 349 of the Civil Code, according to which "presumptions are the inferences that the law or the judge draws from a known fact to establish an unknown fact."
According to no. 2 of article 350 of the Civil Code, legal presumptions may be negated by proof to the contrary, except in cases where the law prohibits it.
Furthermore, with respect to, specifically, presumptions of tax incidence, according to article 73 of the General Tax Law, these always admit proof to the contrary.
A different situation, to which the legislator sometimes resorts, is that designated by "legal fictions", which consist of "a legal process that considers a situation or a fact as distinct from reality in order to attribute legal consequences to it"[1]
According to the thesis repeatedly defended by the Respondent Tax Authority in various proceedings identical to that discussed in the present case file, the fact that article 3, no. 1, of the CIUC establishes that are "considered" as owners, rather than "are presumed" as owners, reveals that the legislator, within its freedom of legislative formulation, expressly intended to determine that the persons in whose names the vehicles are registered are considered, without admissibility of any proof to the contrary, as owners thereof. And, further according to the Respondent, if the legislator intended to create a presumption and not a legal fiction, it would have written, as it does in various other instruments, that they are presumed to be owners and not that they are considered owners.
Well then, this Tribunal cannot endorse such understanding. And, let it not be said that this is a position only set forth in the successive arbitral cases that have dealt with this subject. In fact this same position was recently endorsed by the Central Administrative Court of the South, by judgment delivered on 19-03-2015, in case no. 08300/14, in which it is stated that "(…) the aforementioned article 3, no. 1, of the CIUC establishes a legal presumption that the holder of the motor vehicle register is its owner, and such presumption is defeasible, by virtue of article 73 of the LGT." And, the same judgment of the Central Administrative Court of the South adds "that the negation of the legal presumption complies with the rule contained in article 347 of the Civil Code, pursuant to which legal proof in full may only be contradicted by means of proof that shows that the fact of which it is the object is not true."
In fact, as has already been pointed out in various arbitral decisions issued, the analysis of the historical and teleological elements, in addition, naturally, to the literal element, of legislative interpretation, lead to the logical conclusion that the legislator did not intend to establish any legal fiction but only and solely a presumption, defeasible by proof to the contrary pursuant to the terms and for the purposes of the provisions of article 73 of the General Tax Law. Being a norm of tax incidence any other understanding would be clearly contrary to the principles governing the tax legal relationship.
Thus, as regards the historical element, it is important to note that the CIUC had its genesis in the creation, through DL 599/72, of 30 December, of the tax on vehicles, which already expressly established that the tax was owed by the owners of the vehicles, presumed as such the persons in whose names the same were registered or recorded.[2]
Likewise, article 2 of the Regulation of Circulation and Trucking Taxes (approved by Decree-Law no. 116/94) established that: "the taxpayers subject to the circulation tax and the trucking tax are the owners of the vehicles, being presumed as such, subject to proof to the contrary, the natural or legal persons in whose names the same are registered".
However in the CIUC, the legislator replaced the expression "being presumed" with the expression "considering as such", which in the Respondent's view translated the establishment of a legal fiction, incapable of being negated. But we do not consider that to be the case.
In fact, in the current version of the Code only the verb changed, the legislator now opting for the expression "considering as such". It is true that, between the previous legislative versions and the current one, the General Tax Law came into force, which expressly established the principle contained in article 73, which results in that in the matter of tax incidence any presumption always admits proof to the contrary. Hence, it becomes irrelevant the adoption of an express or implicit presumption, inasmuch as one as well as the other are equally defeasible.
As results already from various arbitral decisions, now reinforced by the jurisprudence of the superior courts, we are dealing with a defeasible presumption. Furthermore, as has already been said above, being a norm of tax incidence, it would never be admissible the establishment of an irrefutable presumption. As state, Diogo Leite Campos, Benjamim Silva Rodrigues and Jorge Lopes de Sousa, in the annotation to no. 3, of article 73, of the LGT, "presumptions in the matter of tax incidence may be explicit, revealed by the use of the expression is presumed or similar (…). However, presumptions may also be implicit in norms of incidence, namely of objective incidence, when certain values of personal or real property are considered as constituting taxable matter, in situations in which it is not unfeasible to ascertain the actual value".
And, there are many examples of norms in which the verb "consider" is used to establish defeasible presumptions, as occurs with the provisions no. 2 of article 21 of the CIRC, in article 89-A of the LGT or in article 40, no. 1 of the CIRS among others. The Respondent alleges, however, in the response submitted, that this same word "considering as such" is also normally used, by the legal tax order, to define situations distinct from presumptions. Now, this appears normal, namely, in the case of other tax norms in which the legislator used the formula "considers" or "are considered", but attributing it another sense, since these are expressions which, depending on the context, may assume a plurality of meanings, without from which the conclusion that the Respondent intends can be extracted.
Taking into account that the legal system should form a coherent whole, the examples referred to above, as well as the doctrine and jurisprudence indicated, permit concluding that it is not only when the verb "presume" is used that we are dealing with a presumption, but also the use of other terms or expressions, such as the term "considers" may serve as a basis for presumptions. And, as referred to above, being the literal element the first instrument of interpretation of the legal norm, in search of legislative thought, it is important to confront it with the other elements of interpretation, namely the rational or teleological element, the historical element and the systematic element.
It appears settled that, in the matter of tax incidence, presumptions may be revealed by the expression "is presumed" or by similar expression.[3]
By way of example, Jorge Lopes de Sousa notes that in article 40 no. 1 of the CIRS the expression "is presumed" is used, whereas in article 46, no. 2 of the same Code the expression "is considered" is used, with no difference whatsoever between one and the other expression, both meaning, in fact, the same: a legal presumption.[4]
Thus, notwithstanding the CIUC having opted for the expression "is considered" instead of the expression "is presumed", from this nothing different in substance is extracted, as both have the same meaning, namely, the establishment of a defeasible presumption.
If we heed the teleological element, an identical conclusion is required. In the statement of reasons of the Bill no. 118/X of 07/03/2007, underlying Law no. 22-A/2007, of 29 June, it is evident that it was intended to undertake a "global and coherent reform of the taxes related to the acquisition and ownership of motor vehicles" which results from the "imperative necessity of bringing clarity and coherence to this area of the tax system and the even more imperative necessity of subjecting it to the principles and concerns of an environmental and energy nature that today mark the discussion of motor vehicle taxation. (…) the two new taxes that are now created, the tax on vehicles and the unique circulation tax, constitute much more than the technical continuation of the figures created in the 70s and 80s that preceded them, primarily aimed at revenue raising, indifferent to the social cost resulting from motor vehicle circulation. They constitute something different, figures already of the century in which we live, with which it is certainly intended to raise public revenue, but to raise it in the measure of the cost that each individual causes to the community."
In this line of thought the legislator established the principle of equivalence, inscribed in article 1 of the CIUC, as a fundamental principle in the functioning of the tax, "thus making it clear that the tax, in its entirety, 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 raison d'être of this tax figure. It is this principle that dictates the burdensome nature of vehicles in terms of their ownership and until the time of scrappage". The IUC, as a true environmental tax, chose as its taxpayer the user, the polluter, in obedience to the polluter-pays principle.
Whereby it is verified that the structuring principle of the reform of motor vehicle taxation is precisely the incidence of taxation on the true user of the vehicle, not being compatible with this principle the "blind" reading of the letter of the law, which could lead, in fact, to taxing one who is not the owner and, thereby, one who is not the subject causing the "environmental and road cost" provoked by the vehicle, to which article 1 of the CIUC alludes.
Thus, in accordance with the literal, historical and teleological elements of interpretation of the law necessarily lead to the conclusion that the expression "is considered" has exactly the same meaning as the expression "is presumed", and should, therefore, be understood that article 3, no. 1, of the CIUC, establishes a true presumption of ownership and not any fiction, and, therefore, such presumption is defeasible. Whereby, the taxpayer subject to the tax is, in principle, the owner, because the law presumes that he himself uses the thing. But if it is proved that it is not the owner who makes use of the vehicle, but a third party, as occurs with lessees, then it shall be this person, the taxpayer subject to the tax.
Thus, as regards the subjective incidence of the tax, it is to be concluded that there are no changes relative to the situation previously in effect under the Municipal Tax on Vehicles, Circulation Tax and Trucking Tax, as indeed is widely recognized by the doctrine, a defeasible presumption continuing to apply in this matter.
This understanding is, furthermore, the only one that appears adequate and in accordance with the principle of substantive truth and justice, underlying tax relations, with the objective of taxing the real and effective owner and not one who, by circumstances of a diverse nature, is not, sometimes, but an apparent and false owner, because appearing in the motor vehicle register. In this sense, also the arbitral decisions issued in cases nos. 150/2014-T and 220/2014-T, confirm the same understanding already set forth in earlier arbitral decisions, among which, the one invoked in the case file by the Claimant. Still in this regard, and in the same sense, the Arbitral judgment no. 63-2014-T, of 15 September, states that: "(…) if the legislator had, as the Respondent argues, established in the law a non-presumptive qualification as to who is the owner of the vehicles (a legal fiction), it would thereby be establishing, through a different formulation, a rule entirely identical to the hypothetical rule referred to. It would be making the subjective incidence of the tax rest on a legal fiction, in total disconnection from any economic substance as a basis for the subjective incidence. (…) And, if this is so, it shall perforce also be concluded that article 3, no. 1, can only establish a presumption of ownership of the vehicle, even with all the negative consequences that this conclusion will surely entail, in terms of the efficiency of the administration of the tax."
For this reason, it must be permitted to the holder recorded in the motor vehicle register the possibility of presenting sufficient evidentiary elements for the demonstration that the effective owner is, after all, a person different from that which appears in the register, and which initially, and in principle, was supposed to be the true owner. Otherwise, the supremacy of the formal truth of the register over the substantive truth would be accepted, and it would be to admit the gross violation of the fundamental tax principles enunciated and, furthermore, of the principle contained in article 73, of the LGT according to which there are no irrefutable presumptions in the matter of fiscal incidence. To everything that has been left above exposed would be added the violation of the principles of legality, proportionality and justice, as well as the inquisitorial principle, enshrined, respectively, in articles 55 and 58 of the LGT. This interpretation is, furthermore, in harmony with the principle enunciated in article 11, no. 3, of the General Tax Law, which establishes, in cases of doubt about the interpretation of tax norms that "the economic substance of the tax facts" should be heeded and, on the other hand, with the principle of equality in the distribution of public burdens, which requires that the taxation of the generality of taxpayers, whenever possible, be based on the economic reality underlying the tax facts.»
In this regard, moreover, the position set forth in Arbitral Decision no. 286/2013-T, of 2 May 2014, is quite illuminating in stating that: "It is this principle (of equivalence) that dictates the burdensome nature of vehicles in terms of their ownership and until the time of scrappage, the common use of a specific taxable base, the review of the framework of fiscal benefits in effect and the assignment of a portion of the revenue to the municipalities of the respective use. Now, to argue, as the Respondent does, that the legislator, in article 3, no. 1 of the CIUC, fixed, whatever the technical means underlying it, the subjective incidence of the tax on the persons in whose names the vehicles are registered, with complete independence of whether or not they are, in the relevant tax period, holders of the right of use of the vehicle, especially of its ownership, would imply disregarding that purpose which presides over the normativity of taxation, well manifested in the objective incidence and in the taxable base associated with the various categories of vehicles (cf. articles 2 and 7 of the CIUC). For a register entry, without correspondence with the underlying titularity, has no value to give satisfaction and compliance with such purpose, for it is not the persons in whose names the vehicles are entered when they are not holders of rights over their use that cause environmental and road costs, but rather such environmental and road costs are caused by the actual users of the vehicles, pursuant to the relevant substantive legal situations, even if they do not appear, as they should, in the motor vehicle register. The register, in fact, in no way testifies to or serves as to the principle of equivalence established in article 1 of the CIUC. Indeed, to assume that the determinative element of the subjective incidence of the tax is simple and exclusively the motor vehicle register also does not permit asserting a link with any manifestation of taxable capacity relevant to, which, as a rule, in taxes not strictly commutative, is indispensable, since there must be, without prejudice to requirements of practicability, some actual link between the tax and a substantively relevant economic presupposition capable of grounding the tax. The raison d'être of the tax figure thus rules out the idea that the incidence thereof is tied strictly and exclusively to the very register entry of the titularity of the tax vehicles and not to the substantive situations attributive of the right of use of the vehicles (article 3, nos. 1 and 2 of the CIUC) to which the register is intended to give publicity (cf. article 1 and article 5 of Decree-Law no. 54/75, of 12 February, as subsequently amended, which regulates the motor vehicle register)."
Furthermore, it should be said that, in harmony with everything that has been left above exposed, the legislator instituted an explicit rule for lease contracts, in no. 2, of article 3 of the CIUC, according to which, during the validity of the lease contract the lessees are the taxpayers subject to the tax, during the validity of the contract; after the alienation of the vehicles, whether such alienation occurred in favor of the previous lessees, whether it occurred in favor of third parties designated by them, the new acquirers become taxpayers. Whereby, the lessor or financing company that supports the conclusion of lease or loan contracts for the acquisition of vehicles, is never a taxpayer subject to the IUC, with reference to the vehicles held in the respective contracts. For that purpose, the CIUC obliges the communication provided for in article 19, in order to hold the lessors and financing companies responsible for the provision to the Tax Authority of the elements necessary for the collection of the tax.
This is, also, the position of the arbitral tribunal in the present case file, endorsing the positions already previously set forth in the various arbitral decisions above mentioned, whereby, it is understood that the presumption inscribed in no. 1, of article 3 of the CIUC, constitutes a defeasible presumption, which corresponds to the interpretation most fitted to the pursuit of the objectives aimed at by the legislator. Any other understanding would imply accepting the possibility of taxing legal or natural persons without responsibility in the production of any environmental damage, while the real causers of those same damages would not be subject to the tax, entirely frustrating the regulatory purposes of the law itself, namely, its true ratio legis.
For all that is set out above, the understanding set forth in the judgment delivered by the Administrative and Tax Court of Penafiel, in the context of case no. 210/13.0BEPNF, invoked by the Tax and Customs Authority in the present case file, cannot be endorsed, namely, when it states that "the ownership and effective possession of the vehicle is irrelevant for the verification of the subjective and objective incidence and the taxable event of the tax". Judgment which is far from representing a settled understanding on this issue, and which is in contradiction with the jurisprudence set forth in the judgment of the Central Administrative Court of the South, of 19-03-2015, already mentioned above.
b) As regards the Legal Value of the Motor Vehicle Register
Pursuant to the provisions of no. 1, of article 1 of DL 54/75, of 12 February, which instituted the Register of Motor Vehicle Property, "the register of vehicles has essentially as its purpose to give publicity to the legal situation of motor vehicles and their respective trailers, with a view to the security of legal commerce". Article 7 of the Real Estate Registration Code, supplementary legislation to the motor vehicle register, adds 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".
The register of property does not have a constitutive nature, but merely declarative, permitting only the entry in the register to presume the existence of the right and its titularity. Hence, the presumption resulting from the register may be negated by proof to the contrary.
And this is so precisely because, pursuant to the provisions of article 408 of the Civil Code, except as otherwise provided in the law, the constitution or transfer of real rights over a determined thing is effected by the mere effect of the contract, with its validity not depending on registration in the register. In the case of a purchase and sale contract of a motor vehicle, with the law providing no exception for the same, the contract has real effect, with the acquiree becoming its owner, independently of the register, as well as the holder recorded in the register ceasing to be the owner, notwithstanding he may still appear, for some time or even much, in the register as such.
It should also be noted that the transfers effected are opposable to the Respondent, notwithstanding the provisions of no. 1, of article 5 of the Real Estate Registration Code, which provides: "facts subject to registration only produce effects against third parties when registered." This is because the Tax Authority is not a third party for purposes of registration, in the context provided for in the law. The notion of third parties for purposes of registration is enshrined in no. 4 of the same article 5: third parties, for purposes of registration, are those who have acquired from a common author rights incompatible with one another, which, manifestly is not the case with the Tax Authority.
The transfer of ownership of a movable asset, although subject to registration, as occurs with a motor vehicle, is effected by the mere effect of the contract, pursuant to the provisions of article 408, no. 1, of the Civil Code. The purchase and sale contract has a real nature, that is, the transfer of the ownership of the thing sold, or the transfer of the alienated right, has as its cause the contract itself. Motor vehicles are movable assets, the transfer of ownership of which does not obey any special formalism.
In Portuguese law the fact that determines the transfer of ownership of a movable asset (albeit subject to registration) is the contract expressed by the will of the parties. So much so is this the case that the buyer becomes the owner of the sold vehicle by the conclusion of the purchase and sale contract, independently of the register which is assumed as a condition of effectiveness and opposability to third parties acquiring.
Thus, proof of the existence of this purchase and sale contract may be effected by any means, with the invoice being a suitable accounting document for this purpose, as well as for many others, namely fiscal, since from this document the main taxes to which this entity is subject are processed, as occurs with the corporate income tax or the computation of the value added tax. In this sense, it is not accepted that its probative force be questioned only for the purpose of proof of the transfer of the ownership of the vehicle, under penalty of falling into a legal absurdity of, from the same document, recognizing that the transaction occurred for purposes of incidence of income tax but did not occur for purposes of proving the purchase and sale (precisely the same one that generated the said income tax). Moreover, the invoices presented by the Claimant benefit, also, from the presumption of veracity contained in article 75 of the LGT, which corresponds to a conscious design of the legislator in this matter, which cannot be forgotten or relegated to the background for reasons of mere tax convenience. A different matter are credit or debit notes whose nature is clearly distinct and may not serve as proof of the transfer of ownership of the assets. Since the presumption resulting from the register is defeasible, it remains to analyze whether in the case at hand in the present case file, such presumption, if any, was or was not negated.
C) As regards the Probative Value of the Documents Appearing in the Case File to Negate the Presumption:
As results from the factual matter proved in the present case file, at the date of the tax facts referenced in the years 2009 to 2012, the registral situation of the vehicles was as follows:
a) Vehicle with registration number ...-...-... – appears as owner B SFAC, from 12-09-2000 to 12-06-2014;
b) Vehicle with registration number ...-...-... - appears as owner B SFAC, from 06-06-2003;
c) Vehicle with registration number ...-...-... - appears as owner B SFAC, from 06-06-2003, but from 11-08-2008 to 14-11-2014, appears as lessee: E;
d) Vehicle with registration number ...-...-... - appears as owner F, from 28-08-2006 and with indication of end date of lease 14-11-2014.
Taking into account all that has been set out above regarding the applicable regime in this regard, it is noted that from the motor vehicle register, and with reference to the vehicles with registration numbers ...-...-... and ...-...-..., it expressly appears that, at the date of the tax facts, were lessees of the vehicles, respectively, E and F, whereby, these were the taxpayers subject to the tax.
In fact, such conclusion derives, without more, from the very registral entry and from the provisions of no. 2, of article 3 of the CIUC which clearly and objectively establishes as taxpayers subject to the IUC the lessees. Thus, in the case of these two vehicles, the Claimant is not even obliged to bear the burden of negating the presumption, it sufficing to apply the law in a literal sense and, in accordance with the registral entry, to levy and collect the tax from one who legally was obliged to bear the charge, that is, from the respective lessees, whose contracts appear in the case file submitted by the Claimant. Whereby, without need for further consideration, it appears that the levies relating to these two vehicles, respectively, in the amount of €230.56 and €54.63, are illegal and shall have to be annulled. Notwithstanding the Tax Authority itself referring in the decision on the gracious claim that the levies relating to this latter vehicle (...-...-...) would have been administratively annulled, the fact is that, from the elements attached to the case file there is no evidence of such annulment. On the contrary, it is proved that the decision was one of total dismissal of the gracious claim and the lack of notification to the Claimant of such annulment.
As for the vehicle with registration number ...-...-..., the Tax Authority likewise refers in the gracious claim that the respective IUC levies have been annulled. But as in the previous case, from the elements of the Administrative File no evidence of such annulment results, and it is certain that the gracious claim totally dismissed the request. Thus, it is important to analyze the Claimant's liability for its payment. Now, despite the registral entry showing as owner B SFAC, the fact is that the Claimant attached to the case file the respective loan contract, concluded with G, duly identified, with all the elements necessary for the collection of the respective tax. As has been said above, also in relation to this vehicle, it follows from the contract attached to the case file that at the date of the tax facts the taxpayer subject to the tax was the lessee/loan borrower and not the Claimant, by virtue of the provisions of no. 2, of article 3 of the CIUC, whereby, also these levies, in the global amount of €849.20, shall be annulled.
Finally, with reference to the vehicle with registration number ...-...-..., whose motor vehicle register has been in the ownership of B, SFAC since 2003, the Claimant attached to the case file the respective loan contract and the sales invoice of the vehicle to D. Will these documents be sufficient to negate the presumption?
Note that the Respondent invokes an understanding according to which the invoice, by itself, unaccompanied by receipt or proof of payment does not prove the sale, that is, the transfer of the ownership of the vehicle. Well then, in the case of the present case file, in addition to the invoice attached there is also a loan contract that proves the transaction, the conditions under which it occurred and, in a manner similar, to what has been said above, pursuant to the provisions of no. 2 of article 3 of the CIUC, as well as pursuant to the provisions of no. 1 of the same legal provision, the taxpayer subject to the tax is in any case the owner D, as results from the invoice attached to the case file, accompanied and reinforced by the loan contract likewise attached to the case file. Whereby, also these levies, in the global amount of €233.43 shall have to be annulled.
As for the allegation that "an invoice is not apt to prove the conclusion of a reciprocal contract such as is the purchase and sale, for that document does not by itself reveal an indispensable and unequivocal declaration of will (i.e., acceptance) by the supposed acquiree" it is important to note that, the invoked lack of probative value must be duly contextualized and analyzed in function of the constraints of the case at hand. And, in the case of the present case file, the fact is that the Claimant provides proof of the existence of the loan contract, relating to this same vehicle, in which the acquiree and the seller are duly identified and coincide with those contained in the attached invoice. It is certain, as the Respondent invokes, that there are many situations in which invoices do not evidence any legal transaction. Well then, in the case of the present case file the legal transaction is clearly demonstrated, if doubts resulted from the attached invoice, also, from the tenor of the loan contract above referenced we would reach the same conclusion.
Moreover, in the case at hand, no element permits us to conclude that the attached invoice does not evidence a legal transaction, when proof of the existence thereof was effected by the Claimant with the attachment of the loan contract. Finally, it will always be said that the invoice has the probative value sufficient that the law confers upon it, for all purposes, namely fiscal, until the falsity of the same is argued and proved. The Respondent's thesis, which limited itself to invoking that there are several situations in which invoices issued evidence transactions that never occurred, without concretely referring that the situation of the case file is one of those cases, does not receive protection from this tribunal.
In this regard, moreover, it should be recalled that the jurisprudence of the judgment of the Central Administrative Court of the South, already mentioned above, in which reference is made to the unilateral character of the invoice but soon thereafter makes clear that the proof of the invoice may be complemented with any other from which the existence, the payment or settlement of the transaction results. On this point, the cited jurisprudence leaves some (if not many) doubts, inasmuch as, it refers to invoices and debit notes on the same footing, when these are well differentiated documents. On the other hand, it says nothing regarding the presumption of veracity of invoices resulting from the provisions of article 75 of the LGT. Finally, it does not address a crucial question which is whether or not payment is an essential element for the sale of a movable asset to be realized. Now, if we heed the rules of civil law governing the transfer of ownership of movable assets, already above cited and duly explained, it is concluded that the transfer occurs by the mere effect of the contract, with the question of payment being relevant at the level of performance or non-performance of the contract, but which in no way prevents the transfer of ownership. With the law not providing any specific form for the conclusion of a purchase and sale contract of a movable asset, it must, necessarily, be accepted as proof of the said contract, the invoice issued in accordance with the law, especially when corroborated by the loan contract that financed it.
It is certain that, in the case of the present case file the proof attached by the Claimant (loan contracts and invoice of the vehicle above referenced) and the proof attached by the Tax Authority contained in the registral database permit us to attest to the illegality of the levies issued and their necessary annulment, pursuant to the terms and with the foundations above set out.
As for the issue raised by the Respondent regarding non-compliance with the provisions of article 19 of the CIUC, the Tribunal has no elements to be able to assess whether the Claimant complied or not, but if it did not, from this no other consequence is extracted than the application of any possible fine for the administrative offense verified.
As for the alleged liability for failures in the motor vehicle register (which we have seen do not even occur with respect to all vehicles) it will still be said that it is settled for the doctrine and for the jurisprudence of our superior courts that registration is not a condition of validity of the business subject to or underlying it. The transfer of ownership does not depend on it and it is not incumbent upon the transferor to promote registration, whereby no sanction can be imposed on it for non-compliance with that obligation by the acquiree (this one indeed obligated to promote registration).[5]
V – COSTS OF THE PROCEEDINGS
The Respondent, in its response, raises the issue of liability for payment of the costs in the event that the Tribunal should find the arbitral request to be well-founded, wishing in that case for the application of the provisions of article 527, no. 1 of the new Code of Civil Procedure, by virtue of article 29, no. 1 paragraph e) of the RJAT.
However, it is not well-founded, inasmuch as the respondent had the opportunity to revoke the illegal tax acts, from the outset in the course of the gracious claim and did not do so. The same possibility was available when it was notified of the presentation of the present arbitral request, but it did not exercise it either. Hence, the proceedings only continued because the Tax Authority so decided. The arguments it invokes in this matter are entirely without foundation.
Furthermore, with respect to the fixing of costs owed for the arbitral proceedings, the rules specially provided for in the RJAT and in the respective Regulation of Costs in Tax Arbitration Proceedings (RCPAT) apply, being it necessary to resort, if and when there is some case omission that justifies it, to the application of the rules of subsidiary law. It results from article 29, no. 1, paragraph e), of the RJAT, the possibility of subsidiary application of the Code of Civil Procedure to tax arbitral proceedings, in accordance with the nature of the cases omitted. There is no evidence of the existence of a case omission to be resolved, in the present case file, regarding the determination of the costs of the proceedings that would justify the application of the principle contained in article 527, no. 1 of the Code of Civil Procedure.
There do not appear to be any other relevant issues raised by the parties.
VI - DECISION
As a consequence of all the above set out, it results that all impugned levies are illegal, suffer from the defect of violation of law, due to error regarding the factual and legal presuppositions, whereby, they shall be subject to annulment.
In view of the above, it is decided to judge as entirely well-founded the request for declaration of illegality of the fifteen impugned tax levy acts in the present case file, above identified, with reference to the four vehicles likewise identified in the case file, relating to the years 2009 to 2012, in the total amount of €1,367.82, with all the legal consequences.
VALUE OF THE PROCEEDINGS: In accordance with the provisions of articles 305, no. 2 of the Code of Civil Procedure, article 97-A, no. 1, paragraph a), of the Code of Tax Procedure and Process and article 3, no. 2 of the Regulation of Costs in Tax Arbitration Proceedings, the value of the proceedings is fixed at €1,367.82.
COSTS: Pursuant to the provisions of article 22, no. 4, of the RJAT and in accordance with Table I annexed to the Regulation of Costs in Tax Arbitration Proceedings, the amount of costs is fixed at €306.00, charged to the Respondent Tax and Customs Authority.
Let it be recorded and notified.
Lisbon, 15 July 2015
The sole arbitrator,
(Maria do Rosário Anjos)
[1] In this sense, cf: PARDAL, F. RODRIGUES. "The use of presumptions in tax law", in Ciência e Técnica Fiscal, no. 325-327, page 20 et seq.
[2] In this sense, see article 3 of the Regulation of the Tax on Vehicles, annexed to the aforementioned DL 599/72, of 30 December.
[3] In this regard, cf. LOPES DE SOUSA, J. (2011) Code of Tax Procedure and Process Annotated and Commented. Volume I. 6th Edition. Áreas Editora: Lisbon. Page 589 et seq.
[4] Cf. Op. Cit., page 590 et seq.
[5] In this sense, see, among others, the following Judgments of the Supreme Court of Justice: Judgment of 31.05.1966, in Case no. 060727 (Rapporteur: Counsellor Lopes Cardoso), a decision specifically relating to the motor vehicle register; Judgment of 5.05.2005 (Rapporteur: Counsellor Araújo Barros) and Judgment of 14.11.2013, in Case no. 74/07.3TCGMR.G1.S1 (Rapporteur: Counsellor Serra Baptista) exemplary in affirming the predominance of the principle of substance over form, with proof, by any suitable means, of who is substantially the holder of the property right, which negates the presumption of registration, being valid.
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