Summary
Full Decision
ARBITRAL DECISION
I – REPORT
A..., SA, taxpayer no. ..., with registered office at Rua ..., no. 2, … LISBON, hereinafter referred to as Claimant, filed a petition for establishment of a tax arbitration tribunal and a request for arbitral decision, pursuant to the provisions of Articles 2(1)(a) and 10(1)(a), both of Decree-Law No. 10/2011, of 20 January (Legal Framework for Tax Arbitration, hereinafter abbreviated as RJAT), requesting a declaration of illegality of the assessments consisting of thirty Single Vehicle Circulation Tax (IUC) assessment acts, identified in the Attached Schedule, which is fully reproduced as Annex A and which forms an integral part of this Petition, issued by the Tax and Customs Authority, concerning seventeen motor vehicles identified in Annex A, and relating to the years 2013 and 2014, in the total amount of €1,477.65, as well as payment of compensatory interest on the amounts paid.
The petition for establishment of the arbitration tribunal was accepted by the President of CAAD and automatically notified to the Tax and Customs Authority on 23-12-2014.
Pursuant to the provisions of Articles 5(2)(a), 6(1), and 11(1)(a) of the RJAT, the Ethics Council appointed the undersigned as arbitrator of the sole arbitration tribunal, who communicated acceptance of the appointment within the applicable time period.
On 10-02-2015 the parties were duly notified of this appointment and did not express a wish to refuse the designation of the arbitrator, in accordance with Articles 11(1)(a) and (b) of the RJAT and Articles 6 and 7 of the Code of Ethics.
Accordingly, in compliance with Article 11(1)(c) of the RJAT, the sole arbitration tribunal was constituted on 25-02-2015.
On 04-09-2015, the tribunal held the hearing provided for in Article 18 of the RJAT and also heard the witness presented by the Claimant.
The parties submitted written arguments.
The arbitration tribunal was regularly constituted and is materially competent, in accordance with the provisions of Articles 2(1)(a) and 30(1) of Decree-Law No. 10/2011, of 20 January.
The parties have legal personality and capacity, are legitimate and are represented (Articles 4 and 10(2) of the same Act and Article 1 of Ordinance No. 112-A/2011, of 22 March).
The proceedings are free from nullities and no exceptions have been raised.
The arguments supporting the Claimant's request for arbitral decision are, in summary, as follows:
Claimant's Arguments
11.1 All these additional tax assessment acts are based on the same facts and, likewise, on the same legal grounds.
11.2 All presuppose the same tax-legal understanding: that, while the respective financial lease contracts are in effect, the present Claimant, as lessor of the vehicles in question, is responsible for the payment of IUC, rather than the corresponding lessee.
11.3 Given this identity of tax facts, factual and legal grounds, and likewise of the competent tribunal for the decision, and considering also the large number of vehicles and the volume of documentation necessary to prove the facts alleged herein, the Claimant chose, pursuant to Articles 3 of the RJAT and 104 of the Code of Procedural and Substantive Tax Law, to consolidate the additional assessments whose legality is contested in a single request for arbitral decision.
11.4 Requesting that the Arbitration Tribunal, pursuant to the cited provisions and taking into account the principle of procedural economy, issue, within the scope of the present arbitration proceedings, a judgment on the legality of the 30 assessment acts at issue herein.
11.5 As a preliminary matter, the Claimant alleges its procedural standing to submit the request for arbitral decision based on the transfer of the business unit of B…, SA, branch in Portugal, to the present Claimant, as evidenced by supporting documents attached.
11.6 A substantial part of its activity is devoted to entering into, among others, financial lease contracts intended for the acquisition, by companies and individuals, of motor vehicles.
11.7 These contracts generally follow a common pattern, typical of this type of financing: the Claimant, after being contacted by the customer – who at this stage has already chosen the type of vehicle it wishes to acquire, its characteristics (make, model, accessories, etc.) and even its price – acquires the vehicle from the supplier indicated by the customer, and subsequently proceeds to deliver it to the customer who assumes the status of lessee.
11.8 During the period stipulated in the contract, this lessee maintains temporary enjoyment of the vehicle – which remains the property of the Claimant – by making payments to the Claimant in the form of lease payments; and may acquire the vehicle at the end of the contract by paying a residual amount.
11.9 A key point of this type of contract is that the Claimant has no enjoyment of the acquired automobile whatsoever: the vehicle that is the subject of the contract remains, during the duration of the contract, in the exclusive enjoyment of the customer/lessee.
11.10 The motor vehicles identified in the list attached as Annex A were given on financial lease, by the Claimant, to customers also identified in column L) thereof, cf. the financial lease contracts attached as documents nos. 4 to 6.
11.11 Such lease was in effect in the year and month in which the obligation to pay the IUC associated with the respective vehicle became due.
11.12 The legal ownership belonged to the Claimant but the usufruct and use thereof were exclusively the lessee's.
11.13 The Claimant was notified to proceed with payment of the IUCs relating to the assessment acts identified in the table attached as Annex A.
11.14 That is, the Tax and Customs Authority demanded payment of the IUCs even though it knew that financial lease contracts encumbered these motor vehicles, as evidenced by registration with the Property Registry Office.
11.15 It is therefore evident that the Claimant could not be responsible for payment of the IUC which, nevertheless, it paid, and therefore requests its refund.
11.16 Indeed, the responsibility for payment of IUC does not fall to the Claimant because, during the term of the lease contract, it should be considered the obligation of whoever actually uses the vehicle, as supported by the legal arguments developed herein.
Response of the Respondent
12.1 In its Response, the Tax and Customs Authority contends that, pursuant to Article 3(1) of the CIUC, there is a responsibility of owners as taxpayers, and such are considered to be the persons in whose names the vehicles are registered.
12.2 As regards the value of vehicle registration in determining the IUC taxpayer, the AT contends that the Claimant's arguments: a) constitute a biased reading of the letter of the law; b) do not account for the systematic element, thereby violating the unity of the regime established throughout the IUC and, more broadly, throughout the entire tax-legal system; and, finally, c) are further based on an interpretation that ignores the ratio of the regime established in Article 3(1) of the CIUC.
12.3 The tax legislator, in establishing in Article 3(1) who are the IUC taxpayers, expressly and intentionally established that these are the owners (or in the situations provided in paragraph 2, the persons mentioned therein), and such are considered to be the persons in whose names the vehicles are registered.
12.4 The legislator did not use the expression "it is presumed" as it could have, for example, in the following terms: "the taxpayers of the tax are the owners of vehicles, and such are presumed to be natural or legal persons, of public or private law, in whose names the vehicles are registered".
12.5 Accordingly, it is imperative to conclude that the legislator expressly and intentionally established that such persons (in whose names the vehicles are registered) are to be considered as such (as owners or in the situations provided in paragraph 2, the persons stated therein), because this is the interpretation that preserves the unity of the legal system.
12.6 Accordingly, this interpretation has already been adopted by the jurisprudence of our courts, and we reproduce for this purpose part of the judgment of the Administrative and Tax Court of Penafiel, delivered in Case No. ....0BEPNF. (See Article 24 of the Response).
12.7 On the systematic element of interpretation, the Respondent alleges that the solution advocated by the Claimant is untenable and finds no legal support, as results not only from Article 31(1) but also from the provision of Article 6(1) when it states "as evidenced by registration or enrollment".
12.8 Finally, with regard to the "ratio", it must be concluded that the tax legislator intended expressly and deliberately that those considered as owners, lessees, buyers with reservation of title, or holders of purchase options in long-term rental be the persons in whose names the vehicles are registered.
12.9 It further adds that the argument advanced by the Claimant represents a violation of the principle of proportionality, insofar as it disregards it in comparison with the principle of tax capacity, when in fact the Claimant has the necessary and adequate legal mechanisms to safeguard its capacity (vehicle registration), which it has not exercised.
12.10 Even if it is admitted that the rebuttal of the presumption is admissible, as the Claimant contends, it must be said that the evidence submitted with the proceedings does not prove the existence of the financial lease contracts on the date of the tax assessment.
12.11 Indeed, based on the contracts submitted with the proceedings and considering the start dates and payment schedules stipulated, the financial lease contracts would have long since terminated, and no documents were submitted proving their extension or the sale of the vehicles.
12.12 As this evidence was not provided in the request for arbitral decision, that possibility is now precluded.
12.13 In this regard, compensatory interest shall not be due because, even if it is understood that the tax is not owed, there is no error attributable to the service because the AT merely complied with the provision of Article 3(1) of the CIUC.
12.14 Consequently, the Claimant should be condemned to pay the arbitration costs, in line with what was decided in a similar matter in Case No. 72/2013-T of this Arbitration Center.
Having reviewed all the foregoing, it is now necessary to render a final decision.
A. FACTUAL MATTERS
A.1. Facts Deemed Proven
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The assessment acts that are the subject of the present arbitration petition were directed to A..., SA, with number ..., which, through the transfer of the business unit of B... SA – Branch in Portugal (previously designated C..., SA – Branch in Portugal), Tax Number ..., assumed ownership of the contracts previously entered into by this branch (cf. Annexes B and C attached to the present arbitration petition).
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Accordingly, the Claimant assumed the position of lessor of all lease contracts that were in effect within the legal sphere of B... SA – Branch in Portugal, including the contracts relating to the vehicles identified in Annex A, whose IUC is the subject of arbitral decision.
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The motor vehicles identified in the list attached as Annex A were given on financial lease by the Claimant to customers also identified in column L) thereof, cf. the financial lease contracts attached to the arbitration petition as documents nos. 18 to 34.
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With regard to the deadline for assessment of IUC relating to the vehicle..., for the period of 2013, the lease contract concluded with D..., Lda was still in effect at the end of the month in which the tax was due.
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The Claimant was notified to proceed with payment of the IUCs relating to the assessment acts identified in Annex A of the arbitration petition.
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The Claimant paid in full the said tax assessments and compensatory interest.
Facts Deemed Not Proven
The Claimant did not prove that the lease contracts identified in documents nos. 18, 19, 20, 21, 22, and 24 to 34 were in effect at the end of the month in which the tax was due.
A.2. Reasoning
The facts mentioned above are proven by documents and statements of the parties (not contested or disputed), and no other facts considered relevant to the decision in the present proceedings have been proven.
B. ON THE LAW
Given the positions of the Parties as expressed in the arguments presented, the central issue is whether, during the term of a financial lease contract, the party assuming the status of IUC taxpayer is the owner of the vehicle (lessor entity) or the lessee.
This matter has already been extensively addressed in Tax Arbitration Jurisprudence. See, for example, the various decisions of CAAD published on www.caad.org.pt, particularly those rendered in cases nos. 14/2013, 228/2014, 222/2014, 230/2014, and 230/2014. In the present decision, we will follow the interpretation and conclusions of those decisions.
For its synthesis and clarity of reasoning, we unreservedly adhere to the framework established in the arbitral decision in Case No. 230/2014-T, which we cite and to which we refer:
"The general and unanimous sense of such jurisprudence is to consider that Article 3(1) of the CIUC establishes a rebuttable presumption of ownership with respect to the entries or registrations appearing in the Motor Vehicle Registry Office and/or in the IMTT database on the date of the taxable event.
That is: when IUC is assessed based on the entries in the registry or in harmony with the information contained in the IMTT databases, the taxpayer may exonerate himself from payment by demonstrating the non-correspondence between reality and those entries and elements upon which the Tax Authority relied to make the assessments.
There is no reason to reverse or alter the essential sense of this jurisprudence.
Let us then examine, once again and more closely, the question:
Article 3 of the CIUC (Single Vehicle Circulation Tax Code) provides:
Article 3
Subjective Scope
1 – The taxpayers of the tax are the owners of vehicles, and such are considered to be the natural or legal persons, of public or private law, in whose names the vehicles are registered.
2 – Financial lessees, buyers with reservation of title, and other holders of purchase options under lease contracts are equated with owners".
On the other hand, Article 11(1) of the LGT establishes that "in determining the meaning of tax rules and in qualifying the facts to which they apply, the general rules and principles of interpretation and application of laws are to be observed".
Resolving doubts that arise in the application of legal rules presupposes the performance of an interpretive activity.
It is thus necessary to consider what is the best interpretation[1] of Article 3(1) of the CIUC, in light, first and foremost, of the literal element, that is, the one aimed at detecting the legislative thought that is objectified in the rule, in order to verify whether it contemplates a presumption or whether it definitively establishes that the taxpayer is the owner appearing in the registry.
The question that arises in the present case is whether the expression "is considered" used by the legislator in the CIUC, instead of the expression "is presumed", which appeared in the legislation preceding the CIUC, has removed the nature of presumption from the legal provision at issue.
In our view, and contrary to the learned position of the AT, the answer must necessarily be negative, since analysis of our legal system makes it clear that the two expressions have been used by the legislator with equivalent meaning, whether at the level of rebuttable presumptions or in the context of irrebuttable presumptions, and therefore nothing enables us to draw the conclusion sought by the Tax Authority on mere semantic grounds.
Indeed, this is the case in various legal rules that establish presumptions using the verb "to consider", of which we indicate, merely by way of example, the following:
~ in the field of civil law - Article 243(3) of the Civil Code, which establishes that "a third party who acquired the right after registration of the action of simulation is always considered to be in bad faith, where this applies";
~ likewise in the field of industrial property law, when Article 59(1) of the Industrial Property Code provides that "(…) inventions for which a patent was filed during the year following the date on which the inventor left the company are considered to have been made during the execution of the employment contract (…)";
~ and, finally, in the field of tax law, when Article 89-A(3) and (4) of the LGT provide that the burden of proof that declared income corresponds to reality rests on the taxpayer and that, if such proof is not made, it is presumed ("is considered" in the letter of the Law) that the income is that resulting from the table contained in paragraph 4 of the said article.
This conclusion of total equivalence of meaning between the two expressions, which the legislator uses interchangeably, satisfies the condition established in Article 9(2) of the Civil Code, since the minimum of verbal correspondence is assured for purposes of determining legislative intent.
It is then necessary to submit the rule in question to the other elements of logical interpretation, namely, the historical element, the rational or teleological element, and the systematic element.
Discussing the interpretive activity, Francisco Ferrara says that it "is the most difficult and delicate operation to which a jurist can devote himself, and demands fine tact, keen sense, fortunate intuition, much experience and perfect mastery not only of positive material, but also of the spirit of a particular legislation. (…) Interpretation must be objective, balanced, without passion, bold at times, but not revolutionary, acute, but always respectful of the law" (See Essay on the Theory of Interpretation of Laws, translation by Manuel de Andrade, (2nd ed.), Arménio Amado, Editor, Coimbra, 1963, p. 129).
As Batista Machado states, "the legal provision presents itself to the jurist as a linguistic statement, as a set of words constituting a text. Interpretation obviously consists in extracting from that text a particular sense or content of thought.
The text has multiple meanings (polysemy of the text) and frequently contains ambiguous or obscure expressions. Even when apparently clear at first reading, its application to concrete life situations often gives rise to unforeseen and unpredictable interpretation difficulties. Furthermore, although apparently clear in its verbal expression and having only one meaning, account must still be taken of the possibility that the verbal expression may have betrayed legislative intent – a phenomenon more frequent than might appear at first sight" (See Introduction to Law and Legitimizing Discourse, pp.175/176).
"The purpose of interpretation is to determine the objective meaning of the law, the vis potestas legis. (…) The law is not what the legislator intended or intended to express, but only that which he expressed in the form of law. (…) On the other hand, the legal command has an autonomous value that may not coincide with the intention of the framers and drafters of the law, and may lead to consequences unforeseen and unintended by the legislators. (…) The interpreter must seek not what the legislator intended, but what appears objectively intended in the law: the mens legis and not the mens legislatoris" (See Francesco Ferrara, Essay, pp. 134/135).
Understanding a law "is not merely to grasp mechanically the apparent and immediate sense that results from the verbal connection; it is to inquire deeply into legislative thought, to descend from the verbal surface to the intimate concept that the text contains and to develop it in all its possible directions" (loc. cit., p.128).
In order to unveil the true meaning and scope of legal texts, the interpreter employs interpretive factors which are essentially the grammatical element (the text, or the "letter of the law") and the logical element, which in turn is subdivided into the rational (or teleological) element, the systematic element, and the historical element. (Cf. Baptista Machado, Loc. Cit., p. 181; Oliveira Ascensão, The Law – Introduction and General Theory, 2nd Ed., Calouste Gulbenkian Foundation, Lisbon, p.361).
Among us, it is Article 9 of the Civil Code (CC) that provides the rules and fundamental elements for the correct and adequate interpretation of legal rules.
The text of Article 9(1) of the CC begins by saying that interpretation should not be limited to the letter of the law, but should reconstitute from it the "legislative intent".
On the expression "legislative intent", Batista Machado tells us that Article 9 of the CC "did not take a position in the controversy between the subjectivist doctrine and the objectivist doctrine. This is evidenced by the fact that it refers neither to the "will of the legislator" nor to the "will of the law", but instead points as the purpose of the interpretive activity the discovery of "legislative intent" (art. 9, 1). This expression, deliberately neutral, means exactly that the legislator did not wish to commit itself" (loc. cit., p. 188).
P. de Lima and A. Varela express the same view in their annotation to Article 9 of the CC (Cf. Annotated Civil Code – vol. I, Coimbra ed., 1967, p. 16).
And regarding Article 9(3) of the CC, Batista Machado further states: "(…) this paragraph 3 thus proposes to us a model of ideal legislator who established the most correct (most correct, just or reasonable) solutions and knows how to express itself correctly. This model clearly has objectivist characteristics, since the concrete legislator is not taken as the point of reference (so often incorrect, precipitous, unfortunate) but an abstract legislator: wise, provident, rational and just" (Work and loc. cit. p. 189/190).
Immediately thereafter, this renowned Master draws attention to the fact that paragraph 1 of Article 9 mentions three more elements of interpretation: the "unity of the legal system", the "circumstances in which the law was drafted", and the "specific conditions of the time in which it is applied" (loc. cit, p. 190).
As for the "circumstances of the time in which the law was drafted", Batista Machado further explains that this expression "represents what is traditionally called the occasio legis: the conjunctural factors of a political, social and economic nature that determined or motivated the legislative measure in question" (loc. cit., p.190).
As for the "specific conditions of the time in which it is applied", this element of interpretation "has decidedly an updating connotation" (loc. cit., p. 190), which coincides with the opinion expressed by P. de Lima and A. Varela in their annotations to Article 9 of the CC.
As for the "unity of the legal system", Baptista Machado considers this the most important interpretive factor: "(…) its consideration as a decisive factor would always be imposed on us by the principle of evaluative or axiological coherence of the legal order" (loc. cit., p. 191).
It is also this author who tells us, regarding the literal or grammatical element (text or "letter of the law"), that it "is the starting point of interpretation. As such, it has from the outset a negative function: to eliminate those meanings that have no support, or at least no correspondence or resonance in the words of the law.
But it also has a positive function, as follows: if the text has only one meaning, that is the meaning of the rule – with the proviso, however, that it may be concluded on the basis of other rules that the wording of the text has betrayed the intent of the legislator" (loc. cit., p. 182).
Referring to the rational or teleological element, this author says it consists "in the raison d'être of the law (ratio legis), in the purpose aimed at by the legislator in enacting the rule. Knowledge of this purpose, especially when accompanied by knowledge of the circumstances (political, social, economic, moral, etc.) in which the rule was enacted or the political-economic-social situation that motivated the legislative decision (occasio legis) constitutes a subsidy of the greatest importance for determining the meaning of the rule. Suffice it to recall that clarification of the ratio legis reveals to us the assessment or weighing of the various interests regulated by the rule and, therefore, the relative weight of those interests, the choice among them reflected in the solution that the rule expresses" (loc. cit., pp. 182/183).
As for the systematic element (context of the law and parallel provisions), "this element comprises the consideration of the other provisions that form the normative complex of the institute in which the rule to be interpreted is integrated, that is, those that regulate the same matter (context of the law), as well as the consideration of legal provisions that regulate parallel normative problems or related institutes (parallel provisions). It also includes the systematic place that the rule to be interpreted occupies in the overall legal order, as well as its consonance with the spirit or intrinsic unity of the entire legal system.
This interpretive aid is based on the postulate of the intrinsic coherence of the legal order, in particular on the fact that the rules contained in a codification follow by principle a unitary thought" (Batista Machado, loc.cit., p. 183).
"(…) In particular, we must take into account the articulation of the various laws of the country, because a fundamental requirement of all sound legislation is that laws adapt to one another and do not result in a collection of disconnected provisions" (Joseph Kohler, cited by Manuel de Andrade, in Essay, p. 27).
Descending to the case at bar and the legal and juridical framework underlying it:
Through analysis of the historical element, one can extract the conclusion that, from the entry into force of Decree-Law 59/72, of 30 December, the first to regulate this matter, up to Decree-Law No. 116/94, of 3 May, the last preceding the CIUC [cf. Law No. 22-A/2007, as amended by Law 67-A/2007 and 3-B/2010], a presumption [our emphasis] was established that the IUC taxpayers are the persons in whose names the vehicles were registered on the date of assessment.
It is therefore evident that tax law has always had the objective of taxing the true and actual owner and user of the vehicle, and it is immaterial which expression is used, as they have in our legal order a coincident meaning.
The same may be said when we resort to elements of interpretation of a rational or teleological nature.
Indeed, the current and new framework of vehicle taxation establishes principles aimed at subjecting vehicle owners to bear the costs of damage caused by them to roads and the environment, as is evident from the wording of Article 1 of the CIUC.
Now, the consideration of these principles, in particular the principle of equivalence, which deserve constitutional protection and recognition in community law, and are also recognized in other branches of the legal system, determines that the aforementioned costs should be borne by the real owners, the causes of the said damage, which completely excludes an interpretation that would prevent the presumed owners from proving that they are no longer so because ownership is in the legal sphere of another[5].
Thus, also, from the interpretation made in light of elements of a rational and teleological nature, mindful of what the rationality of the system ensures and the purposes aimed at by the new CIUC, it is clear that Article 3(1) of the CIUC establishes a rebuttable legal presumption.
In light of the foregoing, it is important to conclude that the ratio legis of the tax points to the taxation of the actual owners-users of vehicles, and therefore the expression "is considered" is used in the provision at issue in a sense similar to "is presumed", for which reason there is no doubt that a legal presumption is established.
(…)
B – Financial Leasing and the IUC Taxpayer
As we have seen, the law provides that the taxpayers shall be the owners of vehicles [Article 3(1) of the CIUC], equating to an owner the financial lessee, the buyer with reservation of title, and other holders of purchase options.
Returning to the interpretation of the law and what has been explained, recognizing in particular that the IUC is an environmental and road tax [cf. Article 1 of the CIUC, in addition to other provisions of this compendium from which the same conclusion emerges, such as Article 7 (reference to carbon emission levels) and Articles 9 et seq. (dealing with rates, there is constant reference to carbon emission levels)].
It can therefore be concluded that the tax reference, the tax capacity, is based on the vehicle and, consequently, on whoever uses it.
And if that is the case, it makes no sense to tax the financial lessor – the formal owner of the vehicle or a "quasi-owner" but not its economic owner, so to speak – and leave outside of this taxation the one who truly acts as owner, using the vehicle as his own property, namely the financial lessee. It is this party that uses or enjoys the vehicle and all the comforts (and discomforts...) that it provides.
Through analysis of the historical element, one can extract the conclusion that, from the entry into force of Decree-Law 59/72, of 30 December, the first to regulate this matter, up to Decree-Law No. 116/94, of 3 May, the last preceding the CIUC [cf. Law No. 22-A/2007, as amended by Law 67-A/2007 and 3-B/2010], a presumption [our emphasis] was established that the IUC taxpayers are the persons in whose names the vehicles were registered on the date of assessment.
It is therefore evident that tax law has always had the objective of taxing the true and actual owner and user (financial lessee, for example) of the vehicle, and it is immaterial which expression is used, as they have in our legal order a coincident meaning.
The same may be said when we resort to elements of interpretation of a rational or teleological nature. Indeed, the current and new framework of vehicle taxation establishes principles aimed at, as we have seen, subjecting vehicle owners to bear the costs of damage caused by them to roads and the environment, as is evident from the wording of Article 1 of the CIUC.
Now, the consideration of these principles, in particular the principle of equivalence, which deserve constitutional protection and recognition in community law, and are also recognized in other branches of the legal system, determines that the aforementioned costs should be borne by the "real owners" and users of vehicles, the causes of the said damage, which completely excludes an interpretation that would prevent the presumed owners from proving that they are no longer so because ownership is in the legal sphere of another.
Thus, also, from the interpretation made in light of elements of a rational and teleological nature, mindful of what the rationality of the system ensures and the purposes aimed at by the new CIUC, it is clear that Article 3(1) of the CIUC establishes a rebuttable legal presumption.
In light of the foregoing, it is important to conclude that the ratio legis of the tax points to the taxation of the actual owners-users-financial lessees of vehicles, and therefore the expression "is considered" is used in the provision at issue in a sense similar to "is presumed", for which reason there is no doubt that a legal presumption is established."
We further add that this interpretation is confirmed by the provision of Article 19 of the CIUC which determines that entities that engage in financial leasing, operational leasing, or long-term rental of vehicles are required to provide to the General Tax Authority data relating to the tax identification of the users of the leased vehicles. That is, the leasing entity must inform the AT of the conclusion, in this case, of the financial lease contracts so that it may proceed to assess the tax to the lessee.
In conclusion, if on the date the tax-generating event occurs a financial lease contract is in effect with a motor vehicle as its subject matter, the taxpayer is not the lessor but, under Article 3(2) of the CIUC, the lessee, because it is the latter who has the enjoyment of the vehicle, regardless of whether the registration of the right of ownership remains in the name of the lessor.
In the case, the Claimant only proved that on the date of the tax-generating event relating to assessment no. 2013... (2013), the financial lease contract concluded with D..., Lda was in effect, and therefore the said assessment should be annulled on the grounds of illegality and error in its prerequisites.
C. Compensatory Interest
The Appellant proceeded to pay in full the said IUC assessments, and therefore requests the refund of these undue amounts, plus compensatory interest at the legal rate, under Article 43 of the LGT and Article 61 of the CPPT.
In the case at bar, it is clear that, as a consequence of the illegality of assessment no. 2013... (2013), there is ground for refund of the tax, pursuant to the aforementioned Articles 24(1)(b) of the RJAT and 100 of the LGT, as this is essential to "restore the situation that would exist if the tax act subject to the arbitral decision had not been carried out".
As for compensatory interest, the Claimant failed to prove that it made the notification referred to in Article 19 of the CIUC, and therefore the AT, with the information and elements it had, proceeded to assess the tax, in the terms legally provided, that is, taxing the Claimant based on the information it knew, namely the ownership recorded in the Motor Vehicle Registry.
Consequently, the Claimant is not entitled to compensatory interest, under Article 43(1) of the LGT and Article 61 of the CPPT.
D. DECISION
Therefore, it is decided in this Arbitration Tribunal:
a) To find meritorious the request for a declaration of illegality of IUC assessment no. 2013... (2013), and condemn the AT to refund the tax and compensatory interest paid, in the total amount of €33.82;
b) To find unmeritorious the request for a declaration of illegality of the remaining IUC assessments identified in Annex A of the request for arbitral decision;
c) To find unmeritorious the request for payment of compensatory interest.
E. Value of the Proceedings
The value of the proceedings is fixed at €1,477.65, under Article 97-A(1)(a) of the Code of Procedural and Substantive Tax Law, applicable by virtue of Article 29(1)(a) and (b) of the RJAT and Article 3(2) of the Regulation of Costs in Tax Arbitration Proceedings.
F. Costs
The arbitration fee is fixed at €306.00, under Table I of the Regulation of Costs in Tax Arbitration Proceedings, to be paid by the Claimant and Respondent in the amounts of €299.00 and €7.00, respectively.
Let notification be made.
Lisbon,
4 November 2015
The Arbitrator
(Amândio Silva)
[1] The origin of the tax legal relationship presupposes the cumulative verification of the three prerequisites necessary for its emergence, namely: the real element, the personal element, and the temporal element. (In this sense, see, among many other authors, Freitas Pereira, M.H., Tax Law, 3rd Edition, Almedina, Coimbra, 2009.)
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