Summary
Full Decision
REQUESTER: A...
RESPONDENT: TAX AND CUSTOMS AUTHORITY
ARBITRAL DECISION
I – REPORT
A) The Parties and the Constitution of the Arbitral Tribunal
A..., Taxpayer no. …, with tax domicile at Travessa …, hereinafter referred to as "Requester," requested the constitution of a Singular Arbitral Tribunal, under 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, with respect to the decision rejecting the Administrative Reclamation issued by the Tax and Customs Authority (ATA), seeking the declaration of illegality of the Single Vehicle Tax (IUC) assessments relating to the tax periods from 2009 to 2012, attached to the arbitration petition as documents nos. 6 to 9 and which are hereby deemed entirely reproduced, in the total amount to be paid of €32.65.
The request for constitution of the Arbitral Tribunal was submitted by the Requester on 13-12-2014, was accepted by His Excellency the President of CAAD and immediately notified to the Tax and Customs Authority.
The Requester chose not to appoint an arbitrator; therefore, under the provisions of no. 1 of article 6 of the RJAT, the undersigned was appointed on 23-02-2015, by the Ethics Council of the Administrative Arbitration Centre as singular arbitrator. The appointment was accepted and the parties were notified of the appointment of the arbitrator, neither party having expressed the wish to refuse the appointment.
Thus, in accordance with the provisions of paragraph c), of no. 1, of article 11, of Decree-Law no. 10/2011, of 20 January, with the wording introduced by article 228 of Law no. 66-B/2012, of 31 December (RJAT), the Singular Arbitral Tribunal was constituted on 12-03-2015. On the same date, the ATA was notified, in the terms and for the purposes of the provisions of nos. 1 and 2 of article 17 of the RJAT, to submit a reply within the legal deadline. After the legal deadline had elapsed, the ATA did not submit a reply in the present proceedings.
On 25-05-2015 an arbitral order was issued dispensing with the holding of the meeting provided for in article 18 of the RJAT, given that the issues to be decided in the proceedings are exclusively of law and the facts invoked are duly proven by documentary evidence, to which is added the absence of any testimonial evidence to be produced. The parties were notified of this order, which also fixed a deadline of 15 days, equal and successive, for the parties, if they so wished, to submit written submissions. Only the Requester submitted submissions, which were filed on 27-05-2015.
In the same arbitral order aforementioned, the Tribunal fixed the date for issuing the arbitral decision until 20 July 2015.
B) THE REQUEST FORMULATED BY THE REQUESTER:
The Requester, dissatisfied with the rejection of the Administrative Reclamation issued by the ATA, hereby submits a request for arbitral pronouncement seeking the illegality, with the consequent annulment, of the Single Vehicle Tax assessments relating to the tax periods of 2009, 2010, 2011 and 2012, relating to the motor vehicle of brand Renault 5 Campos (c40004) with registration …-…-…, hereinafter itemized:
a) IUC no. …, relating to the year 2009, in the amount of € 7.20;
b)
c) IUC no. …, relating to the year 2010, in the amount of € 7.30;
d) IUC no. …, relating to the year 2011, in the amount of € 7.46;
e) IUC no. …, relating to the year 2012, in the amount of € 7.63.
All these assessments are attached to the arbitration petition as documents nos. 6 to 9, which are hereby deemed entirely reproduced.
In summary, the Requester bases its request on the following grounds:
a) The Requester is not the owner of the aforementioned vehicle since 15-12-2006, and therefore cannot be considered the liable party for this tax with respect to the years in question, namely 2009 to 2012, since through the car dealership B..., Motor Vehicle Sales, with registered office at Avenue …, in …, the motor vehicle of brand Renault 5 Campos (c40004), with registration …-…-…, of which it was the owner, was sold on 15-12-2006 to Mr. C..., NIF ..., with residence on Street ….
b) On the aforementioned date, all necessary documentation was signed between the parties to effect the transfer of the vehicle, and the purchasing party was responsible for registering it in its own name within a maximum period of 30 days, and from that date forward, having considered such procedure as completed, the Requester had no further contact with the identified vehicle or with the then acquirer.
c) Despite having provided all elements to the ATA during the exercise of the right to prior hearing, the Requester was surprised by a notification to proceed with the assessment of the Single Vehicle Tax relating to that vehicle.
d) From article 3 of the Single Vehicle Tax Code (CIUC), there results a presumption that the liable party for this tax is the owner of the vehicle that is registered in the Motor Vehicle Registry; however, this presumption is rebuttable, since the registration of the acquisition is not a condition for the transfer of ownership and does not affect its validity. The obligation to register falls to the owner and has as its purpose the giving of publicity, no more than that; the acquirer at the time of acquisition of the vehicle had full awareness of this obligation and therefore even committed himself to undertake it through a Statement of Responsibility signed by him on 15 September 2006 (see doc. 2);
e) From the elements contained in the records and provided by the Requester herein, it is evident that at the date of tax exigibility to which the questioned assessments relate, the Requester was no longer the owner of the vehicle in question, since the respective transfer had already previously taken place in accordance with civil law. The means of proof presented by the Requester, constituted by copies of the declaration for registration of ownership and of the statement of responsibility for the transfer of ownership, have in their favor the presumption of truthfulness conferred upon them in accordance with no. 1 of article 75 of the General Tax Law, which therefore appear suitable and with sufficient force to rebut the presumption on which those assessments are based, and for this reason should be subject to annulment with the consequent restitution of the tax improperly levied to the Requester.
f) It concludes by petitioning the declaration of illegality of these IUC assessments, in the total amount of €32.65, as well as the reimbursement of the amounts improperly paid for this purpose, in the total amount of €32.66, plus the court fee charged with the submission of the present request and the procedural costs to which the same may give rise.
C – THE RESPONSE OF THE RESPONDENT
The Respondent, duly notified for this purpose, did not submit a Response in the present proceedings, nor written submissions, within the deadline fixed by the Arbitral Tribunal.
Nevertheless, in accordance with the provisions of no. 6 of article 110 of the CPPT, applicable pursuant to article 29, no. 1 of the RJAT, the failure to answer does not constitute an admission of the facts alleged by the challenger.
II - PROCEDURAL REQUIREMENTS
The Arbitral Tribunal is duly constituted. It is materially competent in accordance with article 2, no. 1, paragraph a) of Decree-Law no. 10/2011, of 20 January.
The Parties enjoy legal personality and capacity, are legitimate and are duly represented (see article 4 and 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 4 Single Vehicle Tax assessments relating to the years 2009 to 2012, although they constitute autonomous acts, verifying the requirements set out in the provisions of no. 1 of article 3 of the RJAT and article 104 of the CPPT, the joinder is to be admitted. Thus, the joinder of requests for a declaration of illegality of all tax assessment acts of Single Vehicle Tax and respective compensatory interest that may possibly be associated, given the identity of the tax and the assessment of the tax acts in question depends on the assessment of the same factual circumstances and the application of the same legal rules, is accepted in the same arbitration request. The legal requirements permitting the joinder of claims are thus met in accordance with the provisions of article 104 of the CPPT and article 3, no. 1 of the RJAT, considering the identity of the tax and the jurisdiction of the tribunal, which is accepted by this Tribunal.
The proceedings do not suffer from defects that invalidate them.
Taking into account the documentary evidence submitted to the proceedings by the requester, it is necessary to establish the factual matter relevant for the decision, which is established as follows.
III - FACTUAL BASIS
A) Proved Facts
As relevant factual matter, this tribunal establishes the following facts as proved:
a) The Requester proceeded with the sale of the motor vehicle of brand Renault 5 Campos (c40004), with registration …-…-…, of which it was the owner, on 15-12-2006;
b) The vehicle was acquired by Mr. C..., NIF ..., with residence on Street …;
c) This contract was intermediated by the car dealership B... - Motor Vehicle Sales, with registered office at Avenue …, in …;
d) The purchase and sale contract was formalized by documents nos. 1 and 2 attached to the proceedings by the Requester, namely: Request – declaration for registration of ownership (verbal purchase and sale contract), dated 15 December 2006 and Statement of Responsibility, drawn up on the letterhead of the Car Dealership and signed by the purchaser C..., in which he assumes all responsibility with respect to the vehicle in question (duly identified therein) and "the commitment to transfer the ownership thereof within a period of less than 30 days";
e) The acquirer failed to fulfill the obligation to register, and therefore the Requester continued to appear in the registration records as the owner of the vehicle;
f) On 17-05-2013 the Requester was notified by the Finance Service of ..., for prior hearing, of the draft assessment of IUC relating to the aforementioned vehicle identified in a), with reference to the years 2009 to 2012, on the grounds of being the owner of the vehicle in the years in question, based on the elements available to the ATA at that date (see document no. 3 attached to the proceedings);
g) On 14 June 2013 the Requester, in the exercise of its right to a hearing, sent in writing to the Finance Service of ..., the written reply that is attached to the arbitration request, accompanied by the documents aforementioned as documents nos. 1 and 2 (Request – declaration for registration of ownership and Statement of responsibility) and also the proof of CTT of the purchaser's address and the proof of the seizure of the vehicle, dated 28/11/2008, effected in automovelonline.mj.pt, whose information was that it was awaiting conclusion;
h) The Requester was notified to pay the official assessments of IUC in the total amount of €32.65;
i) The Requester paid all the tax assessments challenged, as evidenced by the proof attached to the proceedings;
j) On 03-02-2014 the Requester submitted an Administrative Reclamation addressed to the Director of Finance of …, reiterating the same grounds already raised in the reply sent within the deadline for prior hearing;
k) By official notice of 23 September 2014 and sent on 24 September 2014 to the Requester, the latter was notified of the rejection of the Administrative Reclamation, in the terms and grounds contained in the document attached to the proceedings with no. 11 and which is hereby deemed entirely reproduced;
l) In accordance with the order referred to in the previous paragraph the following is stated: "Thus, and because the vehicle whose IUC is in dispute was registered in the name of the claimant in the periods to which the taxes relate, it appears that the same are due, in the terms combined from no. 1 of article 3 and no. 1 of article 4 of the CIUC";
m) According to information contained in the databases of the Institute of Mobility and Transport, I.P., the vehicle in question has been seized due to lack of valid insurance since July 2008.
B) UNPROVED FACTS
There are no other unproved facts with relevance for the decision to be issued.
C) BASIS OF THE PROVED FACTS
The facts described above were established as proved on the basis of the documents that the Requester submitted to the proceedings.
IV – ISSUES TO BE DECIDED AND LEGAL BASIS
It is therefore necessary to assess and decide the issues to be resolved, as they are configured in the arbitration request and considering the content of the order rejecting the Administrative Reclamation here challenged:
a) Interpretation of the rule of subjective incidence provided for in article 3, no. 1, of the CIUC, that is, to determine whether this rule provides for a rebuttable presumption or, conversely, a legal fiction not susceptible to being rebutted by proof to the contrary;
b) The legal significance of the registration of motor vehicles;
c) The probative value of the documents submitted to the proceedings by the Requester to rebut the presumption.
A) As to the Interpretation of article 3, no. 1 of the CIUC
The Requester argues that the requirements of subjective incidence provided for in article 3 of the CIUC are not met, and therefore is not the liable party for IUC and, as a consequence, the assessments should be annulled due to manifest lack of subjective responsibility for their payment, since from December 2006 onwards it is no longer the owner of the motor vehicle subject to the assessments challenged.
For this purpose it argues, in summary, that article 3 of the CIUC establishes an implicit presumption of ownership of vehicles in favor of those in whose name they are registered, a presumption that, by virtue of the application of the general rule provided for in article 73 of the General Tax Law, is rebuttable by proof to the contrary. As for the Respondent, as far as can be inferred from the content of the rejection of the Administrative Reclamation, article 3 of the CIUC does not establish any implicit presumption, but a true legal fiction, irrebuttable, and therefore the holder of the vehicle registration is the debtor of the tax regardless of whether or not they are its owner.
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.
Let us determine what should be the meaning and scope of the provisions of article 3, no. 1 of the CIUC, in accordance with the principles of legal hermeneutics. Article 3, no. 1 of the CIUC provides:
"The liable parties for the tax are the owners of the vehicles, being considered as such the natural or legal persons, of public or private law, in whose name the same are registered."
From a simple reading of number one of the indicated provision it is verified, without major difficulty, that the key point is in the expression "considered as" 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 consider some reference concepts to find the most appropriate answer to this question, such as the provisions of 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."
Already according to no. 2 of article 350 of the Civil Code, legal presumptions may be rebutted by proof to the contrary, except in cases where the law prohibits it.
Additionally, with respect to presumptions of tax incidence in particular, according to article 73 of the General Tax Law, these always admit proof to the contrary.
A different situation, to which sometimes the legislator resorts, is the one designated as "legal fictions," which consist of "a legal process that considers a situation or a fact as different from reality in order to assign legal consequences to it."[1]
According to the thesis repeatedly defended by the Respondent AT in various cases identical to the one discussed in the present proceedings and which formed the basis for the rejection of the Administrative Reclamation addressed to the Requester herein, the fact that article 3, no. 1 of the CIUC establishes that it is "considered as" owners rather than "presumed to be" owners reveals that the legislator, within its legislative freedom of configuration, intended expressly to determine that the persons in whose name the vehicles are registered are considered, without the admissibility of any proof to the contrary, owners of the same. And, still according to this thesis, if the legislator intended to create a presumption and not a legal fiction, it would have written, as it does in several other statutes, that they are presumed to be owners and not that they are considered owners.
Well, this is not the understanding of this Tribunal. And it should not be said that this is a position only embodied in the successive arbitral proceedings that have examined this issue. In fact, this same position was recently upheld by the Southern Central Administrative Court, by judgment issued on 19-03-2015, in case no. 08300/14, in which it is stated that "(…) the aforementioned article 3, no. 1, of the CIUC enshrines a legal presumption that the holder of the vehicle registration is its owner, and such presumption is rebuttable, by virtue of article 73 of the LGT." And adds, the same judgment of the TCA South, "that the rebuttal of the legal presumption is subject to the rule contained in article 347 of the C. Civil, whereby full legal proof can only be contradicted by means of proof that shows that the fact which is the subject matter thereof is not true."
It falls to the Requester the burden of proving that at the date of the tax facts it was no longer the owner of the vehicle in question in the present proceedings.
In fact, as has been emphasized in several arbitral decisions issued, the analysis of the historical and teleological elements, in addition, of course, 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, rebuttable by proof to the contrary in the terms and for the purposes of the provisions of article 73 of the General Tax Law. As it is a rule of tax incidence, any other understanding would be clearly contrary to the principles governing the tax legal relationship.
Thus, as to 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 enshrined that the tax was due by the owners of the vehicles, being presumed as such the persons in whose name the same were registered or listed.[2]
Similarly, article 2 of the Regulation of Circulation Taxes and Trucking Tax (approved by Decree-Law no. 116/94) established that: "the liable parties for 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 name they are registered."
However, in the CIUC, the legislator replaced the expression "being presumed as" with the expression "being considered as," which in the view of the Respondent translated the establishment of a legal fiction, irrebuttable. But we do not consider that to be the case.
In fact, in the current version of the Code only the verb changed, with the legislator now opting for the expression "being considered as." It is certain that between the earlier legislative versions and the current one, the LGT came into force, which expressly enshrined the principle contained in article 73, from which it follows that in the matter of tax incidence any presumption always admits proof to the contrary. Therefore, it becomes irrelevant whether an express or implicit presumption is adopted, since one as well as the other are equally rebuttable.
As is evident from various arbitral decisions already issued, now reinforced by the jurisprudence of the superior courts, we are before a rebuttable presumption. Furthermore, as has already been said above, as it is a rule of tax incidence, it would never be admissible to establish an irrebuttable presumption. As Diogo Leite Campos, Benjamim Silva Rodrigues and Jorge Lopes de Sousa affirm, 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 'it is presumed' or similar (…). However, presumptions may also be implicit in rules of incidence, particularly of objective incidence, when certain values of movable or immovable property are considered as constituting taxable matter, in situations where it is not unfeasible to ascertain the real value."
And there are many examples of rules in which the verb "consider" is used to establish rebuttable presumptions, as occurs with the provisions of 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 argues, however, in the reply presented, that this same word "being considered as" is also normally used, by the tax legal order, to define situations distinct from presumptions. Well, this is normal, particularly in the case of other tax rules in which the legislator used the formula "considers itself" or "are considered," but assigning it another meaning, since these are expressions that, depending on context, may assume a plurality of meanings, without which the conclusion intended by the Respondent can be drawn.
Taking into account that the legal system should form a coherent whole, the examples cited above, as well as the doctrine and jurisprudence indicated, allow us to conclude that it is not only when the verb "presume" is used that we are before a presumption, but also the use of other terms or expressions, such as the term "considers itself" may serve as the basis for presumptions. And, as referred to above, the literal element being 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 well established that in the matter of tax incidence, presumptions may be revealed by the expression "it is presumed" or by similar expression.[3]
As an example, Jorge Lopes de Sousa refers that in article 40, no. 1 of the CIRS the expression "it is presumed" is used, while in article 46, no. 2 of the same Code use is made of the expression "is considered," there being no difference between one and the other expression, both meaning, after all, the same: a legal presumption.[4] Thus, although the CIUC opted for the expression "is considered" instead of "is presumed," no fundamental change is derived from this, with both having the same meaning, that is, the establishment of a rebuttable presumption.
If we take into account the teleological element, an identical conclusion is imperative.
In the preamble to the Proposal of Law 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 "comprehensive and coherent reform of taxes related to the acquisition and ownership of motor vehicles," which results from the "imperious necessity to bring clarity and coherence to this area of the tax system and the necessity, more imperative still, to subordinate 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 single vehicle tax, constitute much more than the technical continuation of the figures created in the 70s and 80s that preceded them, aimed predominantly 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 enshrined the principle of equivalence, inscribed in article 1 of the CIUC, as a fundamental principle in the functioning of the tax, "thus making clear that the tax, as a whole, is subordinated to the idea that taxpayers should be burdened in the measure of the cost they cause to the environment and to the road network, being this the reason for being of this tax figure. It is this principle that dictates the burdening of vehicles in accordance with their ownership and until the moment of scrapping." The IUC, as a true environmental tax, chose as the liable party the user, the polluter, in obedience to the polluter-pays principle.
It is thus 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, which is not consonant with the "blind" reading of the letter of the law, which could lead, after all, to taxing whoever is not the owner and, in that way, whoever is not the subject causing the "environmental and road cost" caused 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 "being considered as" has exactly the same meaning as the expression "being presumed as," and should therefore be understood that article 3, no. 1 of the CIUC enshrines a true presumption of ownership and not any fiction, and therefore such presumption is rebuttable.
Therefore, the liable party for the tax is, in principle, the owner, because the law presumes that they themselves use the property. But if it is proven that it is not the owner who makes use of the vehicle, but a third party, as happens with lessees, then it will be this party, the liable party for the tax. With even greater reason if the presumed owner rebuts the presumption by proving that they were no longer the owner at the date of the tax facts, neither can they be considered liable party for the tax.
Thus, as to the subjective incidence of the tax, it is to be concluded that there are no changes to the situation previously in force under the Municipal Tax on Vehicles, Circulation Tax and Trucking Tax, as is indeed widely recognized by doctrine, and a rebuttable presumption continues to apply in this matter.
This understanding is also the only one that appears adequate and in accordance with the principle of material truth and justice, underlying tax relationships, with the objective of taxing the real and effective owner and not the one who, by circumstances of a different nature, is often nothing more than an apparent and false owner, by appearing on the vehicle registration. In this sense too, the arbitral decisions issued in cases nos. 150/2014-T and 220/2014-T confirm the same understanding already embodied in earlier arbitral decisions, among which is the one invoked in the proceedings by the Requester. Still on this matter, and in the same sense, the arbitral judgment no. 63-2014-T, of 15 September, states that: "(…) if the legislator had, as the Respondent claims, established in the law a non-presumptive qualification of who is the owner of the vehicles (a legal fiction), it would thereby be establishing, through a different formulation, a rule in all respects identical to the aforementioned hypothetical rule. It would be making the subjective incidence of the tax rest on a legal fiction, in total disconnect from any economic substance as a basis of the subjective incidence. (…) And if so, it will necessarily 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 such conclusion will certainly entail in terms of efficiency of the administration of the tax."
For this reason, the person registered in the vehicle registration must be allowed the possibility of presenting sufficient evidence to demonstrate that the actual owner is, after all, a different person from the one listed on the registration, and which initially, and in principle, was presumed to be the true owner. Otherwise, one would accept the supremacy of the formal truth of the registration over material truth, and would be admitting the gross violation of the fundamental tax principles stated above, and still of the principle contained in article 73 of the LGT according to which there are no irrebuttable presumptions in the matter of tax incidence. To all that has been left above would be added the violation of the principles of legality, proportionality and justice, as well as that of the inquisitorial principle, enshrined, respectively, in articles 55 and 58 of the LGT. This interpretation is also in harmony with the principle stated in article 11, no. 3, of the General Tax Law, which establishes, in cases of doubt about the interpretation of tax norms, that "account should be taken of the economic substance of the tax facts" 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.
On this matter, the position set out 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 burdening of vehicles in accordance with their ownership and until the moment of scrapping, the common use of a specific tax base, the review of the framework of tax benefits in force and the allocation of a portion of revenue to the municipalities of the respective use. Now, to claim, 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 name the vehicles are registered, with total independence from whether or not they are, in the relevant tax period, holders of the right to use the vehicle, especially of its ownership, would imply disregarding that purpose that governs the normativity of the tax, well manifested in the objective incidence and in the tax base associated with the various categories of vehicles (see articles 2 and 7 of the CIUC). The reason is that a registration entry, without correspondence with the underlying ownership, has no value to provide satisfaction and fulfillment of such purpose, since it is not the persons in whose name the vehicles are registered 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, in accordance with the relevant substantive legal situations, even if they do not appear, as they should, on the vehicle registration. The registration, in truth, in no way attests to or serves the principle of equivalence established in article 1 of the CIUC. Indeed, to assume that the determining element of the subjective incidence of the tax is simple and exclusively the vehicle registration also does not allow for the assertion of a connection with any manifestation of relevant taxable capacity, which, as a rule, in taxes that are not strictly commutative, is indispensable, since there must exist, without prejudice to requirements of practicality, some effective connection between the tax and a prerequisite economically relevant capable of founding the tax. The reason for being of the tax figure therefore rules out the idea that its incidence is tied strictly and exclusively to the registration entry itself of the ownership of taxable vehicles and not to the substantive situations attributing the right to use the vehicles (article 3, nos. 1 and 2 of the CIUC) to which the registration is intended to give publicity (see article 1 and article 5 of Decree-Law no. 54/75, of 12 February, as amended, which regulates vehicle registration)."
This is also the position of the arbitral tribunal in the present proceedings, endorsing the positions already previously embodied in the various arbitral decisions aforementioned, whereby it is understood that the presumption inscribed in no. 1 of article 3 of the CIUC configures a rebuttable presumption, which corresponds to the interpretation most suited to the pursuit of the objectives sought 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 causes of such damage would not be subject to the tax, thereby completely frustrating the regulatory purposes of the law itself, that is, its true ratio legis.
b) As to the legal significance of vehicle registration
In accordance with the provisions of no. 1 of article 1 of DL 54/75, of 12 February, which instituted the Vehicle Ownership Registry, "the registration of vehicles has essentially the purpose of giving 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 Property Registry Code, which is supplementary legislation of vehicle registration, adds that "the definitive registration constitutes a presumption that the right exists and belongs to the registered holder, in the precise terms in which the registration defines it."
The registration of ownership does not have a constitutive nature, but merely declarative, allowing only the inscription in the registry to presume the existence of the right and its ownership. Therefore, the presumption resulting from the registration may be rebutted by proof to the contrary.
And this is so precisely because, in accordance with the provisions of article 408 of the Civil Code, except for the exceptions provided by law, the establishment or transfer of real rights over a determined thing is given by the mere effect of the contract, its validity not being dependent on the registration in the registry. In the case of a purchase and sale contract of a motor vehicle, the law not providing any exception for the same, the contract has real effect, the acquirer becoming its owner independently of registration, and likewise the person registered in the registry ceases to be the owner, notwithstanding the fact that they may still appear, for some time or even much longer, in the registry as such.
It should also be noted that the transfers effected are enforceable against the ATA, despite the provision of no. 1 of article 5 of the Property Registry Code, which provides: "facts subject to registration only produce effects against third parties when registered." This is because the ATA is not a third party for purposes of registration, in the context provided by 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 each other, which is manifestly not the case of the TA.
The transfer of ownership of a movable property, even if subject to registration, as occurs with a motor vehicle, operates by the mere effect of the contract, in accordance with 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 ownership of the thing sold, or the transfer of the right alienated, has as its cause the contract itself. Motor vehicles are movable property, the transfer of ownership of which is not subject to any special formality. This question is of fundamental importance, also, for the determination of the means of proof necessary and sufficient for the rebuttal of the presumption.
In Portuguese law, the fact that determines the transfer of ownership of movable property (even if subject to registration) is the contract expressed by the will of the parties. So much so that the buyer becomes the owner of the sold vehicle through the celebration of the purchase and sale contract, independently of registration, which is assumed as a condition of effectiveness and enforceability against third party acquirers.
Thus, the proof of the existence of this purchase and sale contract may be effected by any suitable means. Since the presumption resulting from the registration is rebuttable, it remains to analyze whether in the case in question in the present proceedings the presumption, if it exists, was or was not rebutted.
C) As to the probative value of the documents in the records to rebut the presumption:
As results from the factual matter proved in the present proceedings, at the date of the tax facts referenced to the years 2009 to 2012, the Requester was no longer the owner of the vehicle, since he had alienated it in December 2006 in favor of Mr. C..., taxpayer no. ..., with residence on Street ….
In the case of the present proceedings, the Requester submits proof of the existence of the purchase and sale contract, the date on which the same was celebrated, and the complete identification of the acquirer, as is contained in the Request for vehicle registration (declaration of sale) duly completed and signed by the contracting parties. To which is added the fact that the seller and now Requester took the care to require the signing of a statement of responsibility from which results, among other things, the express mention of the obligation of the acquirer to promote the registration within a maximum period of thirty days.
Now, if we take into account the rules of civil law governing the transfer of ownership of movable property, already cited above and duly explained, it is concluded that the transfer occurs by the mere effect of the contract, the question of vehicle registration, although mandatory, being a condition of publicity and not of validity nor of effectiveness of the purchase and sale transaction. As the law does not provide for any specific form for the celebration of a purchase and sale contract of movable property, it must necessarily be accepted as sufficient proof for the rebuttal of the presumption the documents submitted to the proceedings as documents nos. 1 and 2 attached to the arbitration request – Declaration of sale / Request for submission to registration and Statement of responsibility.
Therefore, in the case of the present proceedings, the evidence submitted by the Requester is sufficient to rebut the presumption resulting from the registration. It should also be emphasized that the obligation to register falls to the buyer; therefore, having the Requester acted prudently, no more was required of him. Indeed, it is well established for doctrine and for the jurisprudence of our superior courts that registration is not a condition for the validity of transactions subject to it or underlying it. The transfer of ownership does not depend on it and it is not the responsibility of the transferor to promote the registration; therefore no sanction can be imposed on him for the non-fulfillment of that obligation by the acquirer (the latter is indeed obliged to promote the registration). [5]
In these terms, the assessments must be considered illegal due to error regarding the factual and legal presuppositions on which they are based, namely, due to error in the qualification of the liable party responsible for payment of the tax.
Finally, it should be noted that the ATA had knowledge of the probative elements submitted to the present proceedings in timely fashion to prevent the issuance of definitive tax assessments. Nevertheless, after the prior hearing, it disregarded these elements and persisted in issuing the assessments. It maintained the same error of assessment in the decision rejecting the Administrative Reclamation.
Therefore, having rebutted the presumption, it is necessary to consider that the IUC assessments claimed and here challenged should be annulled.
It does not appear that there are other relevant issues raised by the parties.
V - DECISION
In these terms, this Arbitral Tribunal decides:
a) To judge the challenge and the arbitration request as well-founded and, as a consequence, to annul the assessments challenged, relating to the years 2009 to 2012, with respect to the vehicle identified in the proceedings;
b) To order the Respondent to reimburse the Requester for the amounts paid as IUC, in the total amount of €32.66, plus legal interest;
c) To order the Respondent to pay the procedural costs, in accordance with the provisions of article 2, 3 and 4, no. 6, of the Regulation of Costs in Tax Arbitration Proceedings.
VALUE OF THE CASE: In accordance with the provisions of article 305, no. 2 of the CPC, article 97-A, no. 1, paragraph a), of the CPPT and article 3, no. 2 of the Regulation of Costs in Tax Arbitration Proceedings, the value of the case is fixed at €32.66.
COSTS: In accordance with the provisions of article 22, no. 4, of the RJAT and in accordance with Table I attached to the Regulation of Costs in Tax Arbitration Proceedings, the amount of costs is fixed at €306.00, to be borne by the Respondent Tax and Customs Authority.
Register and notify.
Lisbon, 20 July 2015
The Singular Arbitrator,
(Maria do Rosário Anjos)
[1] In this sense, see: PARDAL, F. RODRIGUES. "The use of presumptions in tax law," in Science and Tax Technique, no. 325-327, page 20 et seq.
[2] In this sense, see article 3 of the Regulation of the Tax on Vehicles, attached to the aforementioned DL 599/72, of 30 December.
[3] On this matter, see LOPES DE SOUSA, J. (2011) Tax Procedure and Process Code Annotated and Commented. Volume I. 6th Edition. Áreas Publisher: Lisbon. Page 589 et seq.
[4] See cited work, page 590 et seq.
[5] In this sense, see, among others, the following STJ Judgments: STJ Judgment of 31.05.1966, in Case no. 060727 (Reporter: Advisor Lopes Cardoso), decision specifically referring to vehicle registration; STJ Judgment of 5.05.2005 (Reporter: Advisor Araújo Barros) and STJ Judgment of 14.11.2013, in Case no. 74/07.3TCGMR.G1.S1 (Reporter: Advisor Serra Baptista) excellent in affirming the predominance of the principle of substance over form, with evidence, by any suitable means, of who is substantively the holder of the right of ownership being valid, which rebuts the presumption of registration.
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