IUC Vehicle Tax Subjective Incidence: Arbitral Decision on Registered Owner Liability (Case 83/2015-T)

ARBITRAL DECISION

I – REPORT

1.1. A… - …, S.A., legal entity no. …, with registered office at …, Avenue …, lot …, …, Lisbon (hereinafter referred to as "claimant"), having been notified of "various assessment notices for the Single Vehicle Circulation Tax ("IUC") on vehicles related to the aforementioned activity, against which it filed a gracious complaint, the proceedings being conducted under case number …2014…", and whose identification is set out in the Attached Table, filed on 9/2/2015 a request for constitution of an arbitral tribunal and for an arbitral pronouncement, in accordance with article 10, no. 2, of Decree-Law no. 10/2011, of 20/1 (Legal Regime for Arbitration in Tax Matters, hereinafter referred to as "LRATM"), in which the Tax and Customs Authority (AT) is named, with a view to "annulment of the IUC assessments identified in the Attached Table, due to violation of the provisions of article 3 of the IUC Code, regarding the subjective scope of tax imposition, and the consequent refund of the amount of €16,714.45, corresponding to €15,121.24 of tax paid unduly and €1,593.21 of undue compensatory interest, as well as the payment of indemnitory interest for the deprivation of the said amount, in accordance with article 43 of the LGT."

1.2. On 20/4/2015 the present Sole Arbitral Tribunal was constituted.

1.3. Pursuant to article 17, no. 1, of the LRATM, the AT was cited as respondent party to submit a response in accordance with the said article. The AT submitted its response on 22/5/2015, arguing for the total dismissal of the claimant's request and invoking breach of the provisions of article 10 of the LRATM.

1.4. Notified by order of 2/6/2015, the claimant made representations regarding the said invoked breach through its pleading of 16/6/2015.

1.5. In response to an arbitral order of 18/6/2015, in which a copy of the administrative file was requested, the AT submitted it on 23/6/2015.

1.6. By order of 1/7/2015, the Tribunal deemed it, in accordance with article 16, paragraph c), of the LRATM, to be unnecessary the meeting provided for in article 18 of the LRATM and that the case was ready for decision. The date of 8/7/2015 was also fixed for the pronouncement of the arbitral decision.

1.7. The Arbitral Tribunal was duly constituted, is materially competent, the case does not suffer from defects rendering it invalid, and the Parties have legal capacity and standing, being duly qualified.

II – REASONING: THE FACTUAL MATTERS

2.1. The claimant now alleges, in its initial petition, that: a) "it disagrees with all assessment acts that are the object of the present request [...], as the subjective requirements for the imposition of the tax are not met"; b) "it is not the taxpayer for IUC relating to the registrations in question in any of the years on which the official assessments that are the object of the request for arbitral pronouncement were made"; c) "the first 77 situations identified in the attached table share the cause of action consisting of the fact that the vehicle associated with the assessment was sold by the Claimant prior to the date of maturity of the IUC"; d) "pursuant to [article 6, no. 3, of the IUC Code], it follows that on the date of maturity of the tax, the Claimant was no longer the owner of the vehicles in question, whereby the taxpayer should be the new owner of each vehicle, or another equivalent holder in accordance with article 3, no. 2, of the IUC Code"; e) "in light of article 3, no. 1, of the IUC Code, [...] vehicles in question were sold by the Claimant prior to the occurrence of the taxable event and the consequent exigibility of the tax, whereby it should be imposed on the new owners of the vehicles"; f) "the following 50 situations [...] are reducible to the same cause of action, i.e., the fact that the vehicle associated with the assessment was the subject of a financial leasing contract that was in force on the date on which the taxable event occurred and the corresponding exigibility"; g) "from the combined application [of no. 1 and 2 of article 3 of the IUC Code] it follows [...] that the IUC matures on an annual basis, being that, although normally the respective taxpayer is the owner, if the vehicle was the subject of leasing, the taxpayer should be the financial lessee"; h) "having regard to the factuality presented, as well as the normative content of the said provisions of the IUC Code, it must be concluded that, where a financial leasing contract is in force in the situations marked during the period of taxation of the vehicle and, in particular, at the moment when the taxable events were triggered, the taxpayer for the tax was exclusively the financial lessee, and not the Claimant"; i) "the last situation identified in the attached table concerns the cause of action constituted on the basis of the existence of double collection [...], inasmuch as the tax in question, at the time of assessment, had already been the subject of assessment and payment by the Claimant in the past, as can be verified by the Tax Authority through access to the Claimant's tax records"; j) "once the extinguishing fact of the tax obligation is established, the assessment made by the Tax Administration should have been necessarily considered non-existent".

2.2. The claimant concludes that: a) "the assessments now subject to the request for arbitral pronouncement should not be imputed to it, and are therefore illegal"; b) the "request for annulment of the IUC assessments identified in the Attached Table, for violation of the provisions of article 3 of the IUC Code, regarding the subjective scope of tax imposition, and the consequent refund of the amount of €16,714.45, corresponding to €15,121.24 of tax paid unduly and €1,593.21 of undue compensatory interest, as well as the payment of indemnitory interest for the deprivation of the said amount, in accordance with article 43 of the LGT" should be declared well-founded.

2.3. For its part, the AT alleges, in its response: a) as a preliminary matter, that there is "failure to attach the assessments pertaining to the present request for arbitral pronouncement" given that "although the Claimant attaches an Attached Table in which the numbers of the assessments are listed, the IUC assessments are not attached to the present case"; b) that "such fact generates [...] the impossibility of identifying the contested tax acts, given that the scope of the gracious complaint process, the object and respective decision thereof, are different from the scope of the present request for arbitral pronouncement"; c) "while in the gracious complaint for IUC assessments 150 assessment acts were contested and examined, in the amount of €17,805.75, with 5 assessment acts being annulled, in the amount of €667.05, in the present request for arbitral pronouncement 128 IUC assessments are questioned, in the total amount of €16,714.45, thus raising legitimate doubt as to the identification of the assessments now contested"; c) that "article 10, no. 2, paragraph b), of the LRATM, approved by Decree-Law no. 10/2011, of 20 January, peremptorily provides that the request for arbitral pronouncement must contain «b) the identification of the tax act or acts that are the object of the request for arbitral pronouncement»"; c) that "the claimant failed to comply with the said legal provision, not having identified the IUC tax acts whose legality it comes to review"; d) that "the claimant did not attach the IUC assessments when it could and should have done so, that is, in the request for arbitral pronouncement, and now finds itself precluded from doing so at a later time"; e) that "the law sets time limits for the attachment of documents intended to serve as evidence, with article 423 of the new Civil Procedure Code providing that these should be presented with the pleading where the corresponding facts are alleged. Thus, after the filing of the request for arbitral pronouncement, the presentation of further documentary evidence became precluded on the part of the Claimant"; f) that, "should it not be understood thus [...] the response to the present request for arbitral pronouncement by the Respondent entity is confined only to the other documents attached by the Claimant"; g) that, "[as regards the assessments relating to vehicles subject to financial leasing] the Claimant has no merit [...] [because,] even if it were concluded that we are dealing with financial leasing contracts entered into by the Claimant, it was still incumbent on the latter to demonstrate that it had complied with the accessory obligation imposed by article 19 of the IUC Code"; h) that, "in the matter of financial leasing and for the purposes of defeating article 3 of the IUC Code, it is necessary that the financial lessors (such as the Claimant) comply with the obligation inherent in article 19 of that Code to exonerate themselves from the obligation to pay the tax. Now, the Claimant has made no proof of compliance with this obligation with respect to the motor vehicles now under analysis"; i) that, "[as regards the assessments relating to the sale of vehicles prior to the taxable event] the allegations cannot [...] proceed, because [the Claimant] incurs [...] [in] a distorted reading of the letter of the law", [being that the] interpretation [of the Claimant] does not take into account the systematic element, violating the unity of the regime enshrined throughout the IUC Code and, more broadly, throughout the entire tax-legal system and further derives from an interpretation that ignores the ratio of the regime enshrined in the article in question and, equally, throughout the IUC Code"; j) that "[as regards the assessments relating to financial leasing contracts], no merit applies [...] to the now Claimant [because] it did not attach any financial leasing contract [...] [and, further, because] proof of facts is not made by mere allegations [having limited itself] to attaching invoices, without making any proof or even demonstrating any indication of non-compliance and, above all, of the prior existence of the financial leasing contracts it alleges"; l) that "article 3 of the IUC Code does not contain any legal presumption" and that "[even if it is understood that there is a presumption and that it may be rebutted, the invoices, which are understood to be «non-conforming» due to lack of «uniform description», are not] sufficient proof to undermine the (alleged) legal presumption [...] whereby Documents 1 to 47 attached to the initial petition are challenged for all legal purposes"; m) that the "interpretation [of the claimant] does not take into account the systematic element, violating the unity of the regime", and that "it ignores the teleological element of interpretation of the law"; n) that "the interpretation conveyed by the Claimant [...] is shown to be contrary to the Constitution"; o) that "the transfer of ownership of motor vehicles is not susceptible to being controlled by the Respondent [or] in other words, IUC is not assessed in accordance with information generated by the Respondent itself"; p) that "the legal requirements conferring the right to indemnitory interest are not met"; q) that "there is no situation of double collection [as regards] the last vehicle listed in the Attached Table to the initial petition, with the registration number …-…-…".

2.4. The AT concludes, finally, that "the claimant did not prove the alienation of the vehicles by means of the invoices it attached to the case, [which] the claimant did not make any proof of the existence of financial leasing contracts, a fact for which it did not attach a single document", [that] the claimant violated the law by not updating, in defense of its claim, the elements contained in the vehicle registration, and [that] no proof was made of any double collection". Thus, it requests that "the exception invoked in accordance with the provisions of article 577, paragraph e), of the CPC, in the wording given by Law no. 41/2013, of 26 June, be ruled well-founded and proven, which gives rise to the dismissal of the instance in accordance with article 278, no. 1, d), of the same legal instrument", and that "the present request for arbitral pronouncement should further be ruled unfounded, with the tax assessment acts impugned remaining in the legal order and the Respondent being absolved accordingly from the request."

2.5. The following facts are considered proven:

i) The claimant is a financial credit institution that pursues its activity in the branch of motor vehicle financing, namely under the modality of granting loans for the acquisition of vehicles or conclusion of financial leasing contracts.

ii) In its initial petition, the claimant states that "it received various assessment notices for [IUC] on vehicles related to [its] activity [...], against which it filed a gracious complaint, the proceedings being conducted under case number …2014…" (see point 2 of the initial petition), and also states that "the present request relates to the assessment acts relating to several vehicles and, according to each one, in relation to the years 2009, 2010, 2011 and 2012". It does not identify in detail the specific assessment acts in question in these proceedings, but rather refers to the fact that, "for reasons of ease of presentation, as a result of the vast number of situations in question, [it remits] to the Attached Table [the identification of] each assessment act (by the number of the assessment notice), the year to which it relates, the vehicle registration number as well as the amount of tax associated with each act" (point 6).

iii) However, the said table was also not accompanied by copies of the assessments invoked (whose identification the AT would come to call into question in its response). Despite that fact – and the impossibility of allowing the attachment of new documents by the now claimant (see below) – with the sending and annexation of the administrative file (AF), at the request of the arbitral tribunal, it became possible to have confirmed identification of the tax acts in question (with the natural exclusion of the alleged assessments which, having been indicated in the table attached to the initial petition, were not the subject of the said gracious complaint and therefore cannot be found in the annexed AF).

iv) The said gracious complaint was partially granted (5 assessments annulled relating to the following vehicles and periods: …-…-… of 2011; …-…-… of 2012; …-…-… of 2012; …-…-… of 2012; and …-…-… of 2012), by order of 7/11/2014, as can be seen from reading the annexed AF.

v) Thus, the IUC assessments now in question, in the total amount of €16,573.99, relate to the following vehicles and periods: [extensive listing of vehicle registration numbers with years and amounts]... The values of the assessments are contained in the table attached to the initial petition (to which reference is made), are confirmed by the AF and were paid by the claimant.

vi) Prior to the year and month of taxation of the tax in question, the vehicles in question – which are not underlined in point v) and with the exception of the last indicated (…-…-…, of 2011), as regards which double collection is alleged – were the subject of sale to third parties, and are therefore not the property of the claimant, as can be seen from the copies of invoices contained in the annexed AF, as well as from Documents nos. 1 to 47 attached to the initial petition.

vii) As regards the assessments relating to vehicles which are underlined in the said point v), it is verified that, although the claimant did not bring to the proceedings the leasing contracts it alleges, the existence of the same is verified through the annexed AF (see AF1), in which the AT identifies, in all situations in question, the validity of such contracts on the date on which the taxable event occurred and the respective exigibility (see the columns relating to the dates of validity of the financial leases, in the "IUC Due" table, prepared by the AT based on the "AT databases and the commercial registry office" and which was annexed to the information in which partial granting of the gracious complaint no. …2014… was proposed).

2.6. It is considered not proven the (alleged) payment of the IUC assessment for 2011 relating to registration number …-…-… (assessment no. 2011-…; IUC + compensatory interest: €53.77), due to failure to present a document proving the said payment.

III – FIRST PRELIMINARY QUESTION: EXCEPTION RELATING TO ARTICLE 10 OF THE LRATM

Having in mind that the above-mentioned exception was invoked by the AT, it is justified to examine it previously.

Reading the provision of article 10, no. 2, paragraph b), of the LRATM, it seems that the claimant should have identified the IUC tax acts that it claims are in question. Namely, because it indicated, in a specific table ("Attached Table"): the number of each assessment notice; the registration number of each vehicle associated; the year to which each of the assessments relates; and the respective IUC value.

It is observed, however, that the claimant did not attach to the present proceedings the documents that support the said identification. Such documents are nonetheless (very) relevant because, as referred to, for example, in the Supreme Administrative Court judgment of 28/1/2003, in case 02A4013, even though "documents do not constitute facts, [they constitute] elements of proof of facts alleged".

Based on the foregoing, it may be concluded that the lack, in the initial petition, of documents supporting the identification of the tax act(s) that is/are the object of the request for arbitral pronouncement constitutes, in itself, a breach of paragraph d) of article 10 of the LRATM – which implies, in turn, concluding that there is a breach of the provision of paragraph b) of the said article (i.e., without the elements of proof of the official assessments that the claimant invoked to have existed, the said acts cannot be considered identified).

Indeed, as referred to, for example, in the arbitral decision handed down in case no. 130/2014-T, of 15/10/2014, "[in accordance with] the principle contained in paragraphs c) and d) of no. 2 of article 10 of the LRATM, [...] the moment of presentation of the request for constitution of the arbitral tribunal is the appropriate time for exposition of the questions of fact and law that are the object of the request for arbitral pronouncement and for presentation of elements of proof of the facts invoked and indication of the means of proof to be produced."

In the same sense, the Supreme Administrative Court judgment of 2/4/2009, in case 685/08, states that, "pursuant to no. 1 of article 523 of the CPC [current article 423, no. 1, of the CPC, applicable by force of article 2, paragraph e), of the CTPP and article 29, no. 1, paragraph e), of the LRATM], documents intended to serve as evidence of the grounds of the action or the defense must be presented with the pleading in which the corresponding facts are alleged."

Furthermore – as the AT refers to in its response – new documents cannot be attached subsequently by the claimant, as it was stated in the "interlocutory decision handed down by the Collective Arbitral Tribunal chaired by magistrate Jorge Lopes de Sousa, on 2012-10-25, in the context of the arbitral proceedings which, under case no. 75/2012-T, were conducted in this Center for Administrative Arbitration, «(...) As results from the express tenor of paragraphs c) and d) of no. 2 of article 10 of the LRATM, the moment of presentation of the request for constitution of the arbitral tribunal is the appropriate time for exposition of the questions of fact and law that are the object of the request for arbitral pronouncement and for presentation of elements of proof of the facts invoked and indication of the means of proof to be produced. For this reason, there is no legal support for [...] granting of a time limit for presentation of new documents.»" (Underlining ours).

Despite what is referred to in article 10, no. 2, paragraph d), of the LRATM (and article 423, no. 1, of the CPC), the claimant, in its response to the exception invoked by the AT, sustains that, "[if any omission existed in the petition] the arbitral tribunal [...] would have, at a moment prior to the notification of the AT [to respond, in accordance with article 17 of the LRATM], given notice to the claimant of the existence of deficiencies or insaneable nullities, namely those provided for in no. 2 of article 10 of the LRATM."

It is true that, as noted by Jorge Lopes de Sousa, in "Commentary on the legal regime of tax arbitration" (in: Villa-Lobos, Nuno; Vieira, Mónica Brito (Coords.) – Guide to Tax Arbitration. Coimbra, Almedina, 2013, p. 193), "before receiving the request, the arbitral tribunal should ascertain whether it suffers from deficiencies or curable irregularities, namely if it satisfies all the requirements indicated in no. 2 of article 10 of the LRATM, and should provide for the remedying of all deficiencies or irregularities that can be remedied (no. 2 of article 110 of the CTPP, subsidiarily applicable)", and that it is "admissible the summary dismissal of the petition for judicial review". And it is also true that, as the author refers, "the request for pronouncement should be summarily dismissed when it is manifest that it is inepta [see articles 98, no. 1, paragraph a), of the CTPP, and 89, no. 1, paragraph a), of the CAAP]" (ibidem; underlined).

However, in the specific case under analysis, the request was not manifestly inepta at that initial stage. It should only be considered as such if at that date there were no conditions to remedy the claimant's omission. But such conditions still existed: although the claimant could not present new documents (see above), the missing documents could reach the arbitral case if they were contained in an Administrative File (AF) or additional information to be sent by the AT (see article 17, no. 2, of the LRATM).

This was precisely what occurred in the present case: with the sending, by the AT, of the administrative file, the present tribunal was able to have access to documents proving the existence and accuracy of the assessments (with the exception of three: see below) invoked by the claimant.

IV – SECOND PRELIMINARY QUESTION: DELIMITATION OF THE REQUEST

As the AT verifies in its response, the gracious complaint no. …2014… was filed against 150 assessments from the years 2009 to 2012, in the amount of €17,805.75 (5 of these would be annulled, in the total amount of €667.05), but, in this proceeding, the attached table and the claimant's request refer to 128 assessments, in the amount of €16,714.45.

Considering that the claimant's request is bound – as it itself states in its initial petition (see points 6 and 7) – to the assessments indicated in the attached table, that the supporting documents of the same were not attached in the initial petition, and that there is no perfect coincidence between the list of that table and the set of assessments that are the object of the above-mentioned complaint process, a delimitation of the request is justified, allowing its utilization (without incurring excess or omission of pronouncement), to the extent possible, and given the limitations as to proof that were mentioned above.

Thus, for the reasons set out, only the assessments that, being contained in the table attached to the initial petition, were the subject of gracious complaint no. …2014… will be considered. Consequently, those which, although contained in the said table, were not accompanied by supporting documents in the initial petition nor form part of the set of assessments that is contained in the annexed AF are excluded (which makes it impossible to prove the existence and accuracy of the assessment acts indicated).

In summary, in addition to the 5 assessments, in the amount of €667.05, already annulled by the AT in the gracious complaint – relating to the following vehicles: registration number …-…-… (Year 2011; IUC €134.09); …-…-… (2012; €137.17); …-…-… (2012; €146.80); …-…-… (2012; €194.93); …-…-… (2012; €54.06) – the following assessments will also be excluded from analysis in this arbitral proceeding:

A) 3 assessments invoked in the table attached to the initial petition, but without supporting documents nor referred to in the AF, and supposedly relating to the registration numbers (years and amounts): …-…-… (2012; IUC + compensatory interest: €32.56), …-…-… (2010; €53.61) and …-…-… (2011; €54.29).

B) 19 assessments that were the subject of a gracious complaint but are not contained in the table attached to the initial petition: [extensive list of assessments with registration numbers, years, and amounts].

Thus, the remaining assessments (125 in total) will be analyzed here, indicated in the said table attached to the initial petition (because, although supporting documents of the assessments were not attached in the initial petition, those are referenced in the AF annexed to the proceedings): [extensive list of assessments with registration numbers, years, and amounts]... (The underlined assessments are those in which the claimant alleges "IUC during the validity of the contract"; for all other cases, the claimant alleges "IUC with maturity date after the sale of the vehicle"). To the assessments indicated is furthermore added, that relating to registration number …-…-… (Year 2011; IUC + compensatory interest: €53.77), regarding which the claimant alleges "IUC already paid".

In these terms, the value of the case should, as provided in article 12, no. 2, of the LRATM, be reduced to the sum of the value of the IUC assessments described in the preceding paragraph (plus their respective compensatory interest), that is: €16,714.45 – (€32.56 + €53.61 + €54.29) = €16,573.99. The new value of the case does not imply any change in the amount of costs.

V – REASONING: THE LAW

In the present case, there are six controversial questions of law: 1) whether article 3 of the IUC Code contains a presumption and whether rebuttal of the same was made; 2) whether, as the AT alleges, the claimant's interpretation does not take into account the systematic and teleological elements of interpretation of the law; 3) whether, as the AT also alleges, "in the matter of financial leasing and for the purposes of defeating article 3 of the IUC Code, it is necessary that the financial lessors (such as the Claimant) comply with the obligation inherent in article 19 of that Code to exonerate themselves from the obligation to pay the tax"; 4) whether, as the AT also alleges, "the interpretation conveyed by the Claimant [...] is shown to be contrary to the Constitution"; 5) whether there is double collection as regards the IUC assessment for the year 2011 relating to registration number …-…-…; 6) whether, in the present case, indemnitory interest is owed to the claimant.

Let us proceed then.

1. and 2) The first two questions of law converge in the direction of interpretation of article 3 of the IUC Code, so it is necessary to: a) ascertain whether the provision of subjective scope of tax imposition, contained in the said article 3, establishes or does not establish a presumption; b) ascertain whether, when one considers that this provision establishes a presumption, such violates the "unity of the regime", or disregards the systematic element and the teleological element; c) ascertain – admitting that the presumption exists (and that it is a presumption juris tantum) – whether rebuttal of the same was made.

a) Article 3, nos. 1 and 2, of the IUC Code, has the following wording, which is reproduced here:

"Article 3 – Subjective Scope of Tax Imposition

1 - The taxpayers for the tax are the owners of vehicles, being understood as such the natural or legal persons, of public or private law, in whose name the same are registered.

2 - Equated to owners are the financial lessees, the buyers with reservation of ownership, as well as other holders of purchase option rights by force of the leasing contract".

The interpretation of the cited legal text is naturally essential for the resolution of the case under analysis. To that extent, it is necessary to resort to article 11, no. 1, of the LGT, and, by its referral, to article 9 of the Civil Code (CC).

Now, pursuant to article 9 of the CC, interpretation begins with the letter of the law and aims, through it, to reconstruct the "legislative thought". This is to say (regardless of the objectivism-subjectivism debate) that literal analysis is the basis of the interpretive task and the systematic, historical or teleological elements are guides for orientation of the said task.

The literal grasp of the legal text in question does not generate – even though the separation of this from the ascertainment, even if minimal, of its respective meaning is highly debatable – the notion that the expression "considering-se as such" means something different from "presuming-se as such". Indeed, one would hardly find authors who, in a task of pre-understanding of the said legal text, would instinctively reject the identity between the two expressions.

Confirming the indistinction (both literal and in meaning) of the words "considering" and "presuming" (presumption), see, for example, the following articles of the Civil Code: 314, 369 no. 2, 374 no. 1, 376 no. 2, and 1629. And, with special interest, the case of the expression "is deemed", contained in article 21, no. 2, of the CIRC. As noted by Diogo Leite Campos, Benjamim Silva Rodrigues and Jorge Lopes de Sousa, with respect to that article of the CIRC: "besides this provision showing that what is at issue in the taxation of capital gains is to ascertain the real value (the market value), the limitation to the ascertainment of real value derived from the rules of determination of the taxable value provided in the CIS cannot but be considered as a presumption in matters of tax imposition, whose rebuttal is permitted by article 73 of the LGT" (General Tax Law, Annotated and Commented, 4th ed., 2012, pp. 651-2).

b) These are merely some examples that allow the conclusion that it is precisely for reasons related to the "unity of the legal system" (the systematic element) that one cannot affirm that only when the verb "presume" is used is one dealing with a presumption, given that the use of other terms or expressions (literally similar) can also serve as the basis for presumptions. And among these, the expressions "is considered as" or "considering as" assume, as has been seen, prominence.

If literal analysis is merely the basis of the interpretive task, it naturally appears essential to evaluate the text in light of the other elements (or sub-elements of the so-called logical element). Indeed, the AT also alleges that the claimant's interpretation "does not take into account the systematic element, violating the unity of the regime enshrined throughout the IUC Code and, more broadly, throughout the entire tax-legal system", and "that in light of a teleological interpretation of the regime enshrined throughout the IUC Code, the interpretation advocated by the Claimant [...] is manifestly wrong".

It is therefore justified to ascertain whether the interpretation that considers the existence of a presumption in article 3 of the IUC Code collides with the teleological element, that is, with the purposes (or with the sociological relevance) of what was intended with the rule in question. Now, such purposes are clearly identified at the beginning of the IUC Code: "The single vehicle circulation tax follows the principle of equivalence, seeking to charge taxpayers in proportion to the environmental and road costs that they cause, in implementation of a general rule of tax equality" (see article 1 of the IUC Code).

What can be inferred from this article 1? It can be inferred that the close link of IUC to the principle of equivalence (or the principle of benefit) does not permit the exclusive association of the "taxpayers" referred to there with the figure of owners but rather with the figure of users (or of economic owners). As was well noted in the arbitral decision of case no. 73/2013-T: "in truth, the ratio legis of the tax [IUC] rather points in the direction of being the users of vehicles, the «economic owner» in the words of Diogo Leite de Campos, the actual owners or the financial lessees, who are to be taxed, for these are the ones who have the polluting potential causing environmental costs to the community."

Indeed, if the said ratio legis were otherwise, how could one understand, for example, the obligation (on the part of entities that carry out vehicle leasing) – and for the purposes of the provisions of article 3 of the IUC Code and of article 3, no. 1, of Law no. 22-A/2007, of 29/6 – to supply to the DGI the data relating to the tax identification of the users of the said vehicles (see article 19)? Would it be that where it says "users", one should instead read, disregarding the systematic element, "owners with registration in their name"...?

c) From the foregoing, the conclusion follows that limiting the taxpayers of this tax only to the owners of vehicles in whose names the same are registered – ignoring situations where these no longer coincide with the actual owners or actual users of the same – constitutes a restriction which, in light of the purposes of IUC, finds no basis for support. And, even if the AT alleges the "intention [of the legislator] was that, for the purposes of IUC, those be considered owners who, as such, appear in the motor vehicle register", it is necessary to keep in mind that such registration, in light of what was said previously, generates only a rebuttable presumption, that is, a presumption that can be defeated by the presentation of proof to the contrary. In this sense, see, for example, the judgment of the Court of Auditors of 19/3/2015, case 8300/14: "Article 3, no. 1, of the IUC Code, enshrines a legal presumption that the holder of the motor vehicle register is its owner, and such presumption is rebuttable".

It would, moreover, be unjustified to impose a kind of irrebuttable presumption, since, without an apparent reason, one would be imposing a (admittedly debatable) formal truth at the expense of what could actually have been and would have been proven; and, on the other hand, it would depart from the AT's duty of compliance with the inquisitorial principle established in article 58 of the LGT, that is, the duty of performance of the necessary steps for a correct determination of the factual reality on which its decision should be based (which means, in the present case, the determination of the actual and effective owner of the vehicle).

Furthermore, if it were not permitted to the seller to rebut the presumption contained in article 3 of the IUC Code, one would be benefiting, without a plausible reason, the purchasers who, in possession of correctly completed and signed contract forms and enjoying the advantages associated with their condition as owners, would attempt to exempt themselves, through a "registral formalism", from the payment of tolls or fines.

In this regard, it is also worth noting that motor vehicle registration does not have constitutive effect, functioning, as was said before, as a rebuttable presumption that the holder of the registration is, effectively, the owner of the vehicle. In this sense, see, for example, the judgment of the Supreme Court of Justice of 19/2/2004, case 03B4639: "Registration does not have constitutive effect, as it is intended to give publicity to the registered act, functioning (only) as a mere rebuttable presumption, (presumption «juris tantum») of the existence of the right (articles 1, no. 1 and 7, of the Constitution and 350, no. 2, of the Civil Code) as well as of the respective ownership, all in accordance therewith."

In the same sense, the arbitral decision handed down in case no. 14/2013-T stated, in terms that are accompanied: "the essential function of motor vehicle registration is to give publicity to the legal situation of vehicles, with registration not having constitutive effect, functioning (only) as a mere rebuttable presumption of the existence of the right, as well as of the respective ownership, all in accordance therewith. The presumption that the registered right belongs to the person in whose name it is inscribed can be rebutted by proof to the contrary. Not meeting the AT the requirements of the notion of third party for the purposes of registration [a circumstance that could prevent the full effectiveness of purchase and sale contracts entered into], it cannot avail itself of the absence of updating of the registration of the right of ownership to call into question the full effectiveness of the purchase and sale contract and to require from the seller (former owner) payment of IUC owed by the buyer (new owner) provided that the presumption of its ownership is rebutted through sufficient proof of the sale."

Now, in the case under analysis, it is verified that the rebuttal of the presumption (by means of "sufficient proof" of the sales) was made. Indeed, despite what the AT alleges in points 138 to 142 of its response, the Tribunal sees no reason to question the invoices presented by the claimant, given that it is considered that the same are clearly demonstrative that this was not, at the time of the tax, the owner of the vehicles. Note also that the AT, despite "raising doubts" about some of the invoices (see points 141 and 142 regarding the alleged lack of "uniform description"), did not challenge them, invoking, namely, their falsity or the simulation of the sales.

It is concluded, therefore – and as was referred to in the proven factual matters [point vi)] – that prior to the year and month of taxation of the tax in question, the vehicles in question were the subject of sale to third parties, and are therefore not the property of the claimant, as can be seen from the copies of invoices contained in the annexed AF, as well as from Documents nos. 1 to 47 attached to the initial petition.

Also in this regard, it is justified to note that, as was well noted in the arbitral decision of case no. 27/2013-T, dated 10/9/2013, "the documents presented, particularly the copies of the invoices that support, from the outset, the sales [...] [of the] vehicles aforementioned, [...] embody means of proof with sufficient force and adequate to rebut the presumption based on the register, as provided in no. 1 of article 3 of the IUC Code, documents which, moreover, enjoy the presumption of truthfulness provided for in no. 1 of article 75 of the LGT."

Finally, note that, as well stated in the arbitral decision of case no. 230/2014-T, dated 22/7/2014, "the documentary elements, consisting of copies of the respective sales invoices – which were not challenged by the AT – enjoy the probative force provided for in article 376 of the Civil Code and the presumption of truthfulness conferred by article 75, no. 1, of the LGT, thus having sufficiency and force to rebut the presumption that supported the assessments made. These operations of transfer of ownership are opposable to the Tax and Customs Authority, because, although the facts subject to registration only produce effects as regards third parties when registered, given the provision of article 5, no. 1, of the Real Estate Registration Code [applicable by referral from the Motor Vehicle Registration Code], the Tax Authority is not a third party for the purposes of registration, since it does not find itself in the situation provided for in no. 2 of the said article 5 of the Real Estate Registration Code, applicable by force of the Motor Vehicle Registration Code, that is: it did not acquire from a common author rights incompatible with one another. As to proof of sale of vehicles, it can be made by any means, since the Law does not require a specific form, namely, written form."

1. The respondent also alleges that, "in the matter of financial leasing and for the purposes of defeating article 3 of the IUC Code, it is necessary that the financial lessors (such as the Claimant) comply with the obligation inherent in article 19 of that Code to exonerate themselves from the obligation to pay the tax".

This conclusion of the AT does not proceed, given that, as was well referred to in the arbitral decision handed down in case no. 14/2013-T, of 15/10/2013, "the financial lessee is equated to owner for the purposes of no. 1 of article 3 of the IUC Code, which is to say for the purpose of being the taxpayer for IUC (see no. 2 of article 3). [...] not having the lessor, by legal and contractual imposition, the potential for use of the vehicle and the lessee having the exclusive enjoyment of the motor vehicle, we reaffirm the conclusion to which we had already arrived that [...] the ratio legis of the IUC requires that, in accordance with the said no. 2 of article 3 of this Code, it is the lessee who is responsible for payment of the tax, since it is the one who has the potential for use of the vehicle and causes the road and environmental costs inherent thereto. The same conclusion is reached when one verifies the importance given to users of leased vehicles in article 19 of the IUC Code. Indeed, pursuant to the provision of this article, entities that carry out, in particular, financial leasing of vehicles are obligated to provide to the AT (former DGCI), the tax identity of the users of the leased vehicles for the purposes of the provision of article 3 of the IUC Code (subjective scope of tax imposition), as well as of no. 1 of article 3 of the Law of its approval, since pursuant to this provision of Law no. 22-A/2007, if the revenue generated by IUC is imposed on vehicles subject to long-term rental or operating lease, it should be allocated to the municipality of residence of the respective user (underlined). [...] [But, despite this obligation, such does not prevent that,] on the date of occurrence of the taxable event, a financial leasing contract [which has as its object a motor vehicle is in force,] for the purposes of the provision of article 3, nos. 1 and 2, of the IUC Code, [and that the] taxpayer for IUC is the lessee even though the registration of the right of ownership of the vehicle is made in the name of the leasing entity, provided that the latter proves the existence of the said contract." (Italics ours).

Based on the foregoing, the allegation of the AT relating to article 19 of the IUC Code does not proceed, given that it aims to superimpose a formal obligation on a substantial reality clearly demonstrative of the claimant's condition as a lessor in the underlying contracts.

However, the respondent further alleges that the claimant limited itself to "attaching invoices [...] [but] did not attach any financial leasing contract [whereby] the effect sought by the Claimant is merely speculative."

However, and as was said in point vii) of the proven facts, it is verified that, "as regards [the] assessments [relating to vehicles subject to leasing contracts], although the claimant did not bring to the proceedings the leasing contracts it alleges, the existence of the same is verified through the annexed AF (see AF1), in which the AT identifies, in all situations in question, the validity of such contracts on the date on which the taxable event occurred and the respective exigibility (see the columns relating to the dates of validity of the financial leases, in the "IUC Due" table, prepared by the AT based on the "AT databases and the commercial registry office" and which was annexed to the information in which partial granting of the gracious complaint no. …2014… was proposed)."

It is concluded, therefore, that this allegation of the respondent is also unfounded.

1. In light of what was set out above [in 1) and 2)], it is concluded that there is no interpretation "contrary to the Constitution", contrary to what the respondent alleged in points 113 to 121 of its response.

2. As regards the alleged double collection (in the assessment numbered 2011-…), agreement is reached – because the proceedings themselves confirm it – with what the AT says in its response. Indeed, there is no "situation of double collection – [as regards] the last vehicle listed in the Attached Table to the initial petition, with the registration number …-…-… (IUC of 2011) – [because] the only payment document attached by the Claimant refers to the IUC of the year 2009".

3. A final note to assess, under article 24, no. 5, of the LRATM, the request for payment of indemnitory interest in favor of the claimant (article 43 of the LGT and 61 of the CTPP).

In this regard, the arbitral decision handed down in case no. 26/2013-T, of 19/7/2013 (which dealt with a situation similar to that now under review), recalled: "The right to indemnitory interest to which the above-mentioned provision of the LGT alludes presupposes that tax has been paid in an amount superior to that owed and that such derives from an error, of fact or of law, attributable to the services of the AT. [...] even though it is acknowledged that the tax paid by the claimant is not owed, because it is not the taxpayer for the tax obligation, determining, in consequence, the respective refund, it is not apparent that, at its origin, is found the error attributable to the services which determines such right [to indemnitory interest] in favor of the taxpayer. Indeed, in promoting the official assessment of the IUC considering the claimant as the taxpayer for this tax, the AT merely limited itself to giving effect to the provision of no. 1 of article 3 of the IUC Code, which, as abundantly referred to above, imputes such quality to the persons in whose name the vehicles are registered."

Considering this reasoning – with which complete agreement is expressed – it is also concluded, as regards the present case, that the above-mentioned request for payment of indemnitory interest is unfounded.

VI – DECISION

Based on the foregoing, it is decided:

• To rule well-founded the request for arbitral pronouncement as regards the assessments challenged and that were contained in the gracious complaint process, with the consequent annulment, with all legal effects, of the said assessment acts (except the IUC assessment act numbered 2011 - …) and the respective refund of the amounts unduly paid.

• To rule unfounded the request in the part that concerns the recognition of the right to indemnitory interest in favor of the claimant.

The value of the case is fixed at €16,573.99 (sixteen thousand five hundred and seventy-three euros and ninety-nine cents), in accordance with the provisions of article 32 of the CAAP and article 97-A of the CTPP, applicable by force of the provisions of article 29, no. 1, paragraphs a) and b), of the LRATM, and of article 3, no. 2, of the Regulation of Costs in Tax Arbitration Proceedings (RCPAT).

Costs are charged to the respondent, in the amount of €1,224.00 (one thousand two hundred and twenty-four euros), in accordance with Table I of the RCPAT, in compliance with the provisions of articles 12, no. 2, and 22, no. 4, both of the LRATM, and of the provision in article 4, no. 4, of the said Regulation.

Notify.

Lisbon, 8 July 2015.

The Arbitrator

(Miguel Patrício)

Text prepared by computer, in accordance with the provisions of article 131, no. 5, of the CPC, applicable by referral from article 29, no. 1, paragraph e), of the LRATM.

The drafting of the present decision is governed by the spelling prior to the Orthographic Agreement of 1990.