Summary
Full Decision
CASE No. 845/2014
Arbitral Decision
I. Report
-
On 30 December 2014, the company A..., PORTUGUESE BRANCH, NIPC ..., filed a request for the constitution of a sole arbitrator tribunal, pursuant to the combined provisions of Articles 2 and 10 of Decree-Law No. 10/2011, of 20 January (Legal Regime for Tax Arbitration, hereinafter referred to only as RJAT), with a view to the declaration of illegality of the decisions rejecting the gracious complaints No. ...2014..., ...2014..., ...2014..., ...2014..., ...2014..., ...2014..., ...2014..., ...2014..., ...2014... and ...2014..., and, consequently, of the levies of the Single Vehicle Circulation Tax ("IUC"), in the total amount of EUR 53,166.06 and compensatory interest, calculated on the said amount, until effective and complete restitution thereof and compensation for litigation costs.
-
Pursuant to Article 6(1) of the RJAT, the Ethics Council of the Arbitration Centre designated the arbitrator who signs hereof, notifying the parties.
-
The tribunal is properly constituted to hear and decide the subject matter of the case.
-
The allegations sustaining the Claimant's request for arbitral pronouncement are, in summary, as follows:
4.1 The Claimant is a permanent establishment of a non-resident commercial company under German law in Portugal, whose principal activity is the granting of financing to the public (i.e. companies and individuals) for the acquisition of vehicles of the brands "A..." and "B...".
4.2 In accordance with the instructions received from its Customers, the Claimant acquires from the dealers marketing the aforementioned brands the specific vehicles that will be the subject of the contracts, delivering them subsequently to the respective Customer, who assumes the quality of lessee and user of the vehicle.
4.3 During the period defined in the Contract and as stipulated therein, the lessee is the user of the vehicle – which remains the property of the Claimant – against remuneration to be delivered to the Claimant in the form of rents, and the lessee may acquire the vehicle, at the end of the contract, by paying a residual value.
4.4 When the vehicle is acquired by the lessee or by a third party, the Claimant issues the respective sales invoice, in accordance with Articles 29(1)(b) and 36(5) of the VAT Code ("CIVA"), thereby transferring the legal ownership of the vehicle to the acquirer.
4.5 In this context, with the acquisition of the vehicle at the end of the contract, the customer (or, alternatively, a third party) also becomes its legal owner, it being certain that, throughout the duration of the contract, the customer was always the user of the vehicle, with the Claimant never enjoying the use thereof at any time.
4.6 Within the scope of its activity, the Claimant further finances the acquisition of vehicles of the said brands through the conclusion of mere credit contracts, in which case the ownership of the said vehicles is immediately transferred to the respective acquirers and users, although the Claimant may have the benefit of a retention of title over such vehicles as mere guarantee of performance of the contract.
4.7 Finally, in certain cases the Claimant grants the use of vehicles of the said brands through the conclusion of long-term rental contracts – i.e., contracts whose duration is not less than one year – without a purchase option.
4.8 At the end of 2013, the Claimant was notified of the official levies of IUC and compensatory interest, relating to the years 2009, 2010, 2011, 2012 and 2013 identified above.
4.9 In order to prevent coercive collection of the levied tax, the Claimant proceeded to pay it in full within the respective voluntary payment period.
4.10 However, not agreeing with the said tax acts, the Claimant contested the legality thereof before the Tax Administration, requesting their annulment, in the gracious complaint procedures identified above.
4.11 On 24 and 25 July 2014, the Claimant was notified of the draft decisions on the gracious complaints in question, with a view to exercising the right to prior hearing.
4.12 Following the exercise of the respective right to prior hearing, the Claimant was notified, on 22 and 25 August 2014, of new draft decisions on the gracious complaints in question, in which the Tax Administration sustained the rejection of such complaints regarding the IUC levies identified above.
4.13 In the view of the Tax Administration, the Claimant is the taxable person responsible for payment of the tax levied on the vehicles in question in cases where it appears in the vehicle register as the owner thereof and in cases where it has not fully complied with the accessory obligation, provided for in Article 19 of the CIUC, relating to the communication to the Tax Administration of data relating to the tax identification of the users of the vehicles.
4.14 In this context, the Tax Administration stated in the said draft decisions the responsibility of the Claimant regarding the tax levied on the following vehicles, as a consequence of the alleged non-compliance with the accessory obligation provided for in Article 19 of the CIUC:
[GRACIOUS COMPLAINT NO. ...2014...
Registration - IUC Levy
...]
4.15 The Tax Administration further stated that the Claimant is the taxable person responsible for the tax levied on the following vehicles, pursuant to Article 3(1) of the CIUC, insofar as on the date of the relevant tax facts it did not assume the position of lessor or financier of the respective acquisition:
[GRACIOUS COMPLAINT NO. ...2014...
Registration - IUC Levy
...]
4.16 On 8 September 2014, the Claimant exercised its respective right to prior hearing, reiterating the grounds that, in its view, support the illegality of the said tax acts and attaching to the procedures in question relevant probative elements for that purpose.
4.17 On 30 September and 7 October 2014, the Claimant was notified of the decisions rejecting the gracious complaints in question, in which the Tax Administration maintained the position previously assumed in the respective draft decisions, reiterating the grounds previously adduced to support the legality of the contested tax acts and stating that in the prior hearing the Claimant did not attach elements capable of altering the direction of the decision.
4.18 Specifically, the Tax Administration states that Article 3(1) of the CIUC fictitiously determines the subjective incidence of the tax according to the vehicle register organised by the Institute of Mobility and Transport, I.P. and by the Institute of Registers and Notary, I.P., and that entities that carry out financial leasing, operational leasing or long-term rental of vehicles must communicate the tax identification of vehicle users, pursuant to Article 19 of the CIUC, under penalty of being considered the taxable person responsible for payment of the tax levied on the vehicles that are the subject of such contracts.
4.19 As a preliminary matter, given the plurality of tax acts that are the subject of these proceedings, the Claimant supports the admissibility of the present cumulation of claims, pursuant to Article 3(1) of the RJAT.
4.20 Given that, in light of the content of the acts rejecting the gracious complaints that preceded them, the declaration of illegality of the tax acts in question depends fundamentally on the appraisal of identical facts and, also, on the same tax-legal question: in light of Articles 1, 3, 4(1) and (2), 6(1) and (3), and 17(1) of the CIUC, the official levy acts of IUC in question are based on an erroneous determination of the taxable person of this tax, being, consequently, illegal and voidable under Article 135 of the CPA.
4.21 As to the subjective incidence of IUC, Article 3 of the CIUC provides as follows:
"The taxable persons of 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 they are registered" [No. 1];
"Financial lessees, acquirers with retention of title, as well as other holders of purchase option rights by virtue of a leasing contract are equated to owners" [No. 2]
4.22 As to the temporal incidence, Article 4 of the CIUC establishes that:
"The single vehicle circulation tax is of annual periodicity, being due in full in each year to which it relates" [No. 1];
"The taxation period corresponds to the year that begins on the date of registration or on each of its anniversaries, with respect to vehicles in categories A, B, C, D and E" [No. 2].
4.23 With respect to the taxable event and exigibility of IUC, Article 6 of the CIUC provides that:
"The taxable event of the tax is constituted by the ownership of the vehicle, as evidenced by the registration or record in national territory" [No. 1];
"The tax is deemed exigible on the first day of the taxation period referred to in Article 4(2)" [No. 3].
4.24 Finally, as to the levy and payment of IUC, Article 17 of the CIUC provides that:
"In the year of registration or recording of the vehicle in national territory, the tax is levied by the taxable person of the tax within 30 days following the end of the period legally required for its registration" [No. 1];
"In subsequent years the tax must be levied by the end of the month in which it becomes exigible, pursuant to Article 4(2)" [No. 2].
4.25 In this context, Article 3 of the CIUC establishes a mere presumption that the owner of the vehicle – as it appears in the vehicle register – will be the user thereof, assuming that, according to a normal judgment, that legal owner will also be the economic owner.
4.26 Thus, whenever the legal ownership of the vehicle coincides with the respective economic ownership, the legal owner being, simultaneously, the user of the vehicle, he will be the taxable person of the tax.
4.27 However, whenever the legal owner of the vehicle does not correspond to the respective economic owner, the latter will become the taxable person of the tax, because it will be his action that, materialising the potential polluting effect underlying the use of the vehicle, justifies the incidence of the tax.
4.28 The structuring of the subjective incidence of IUC with a view to burdening the user of the vehicle and not the respective legal owner is, moreover, evident from Article 3(2) of the CIUC, which establishes as taxable persons of the tax the financial lessees, acquirers of vehicles with retention of title and holders of purchase option rights by virtue of a leasing contract.
4.29 The fact that the economic owners of the vehicles are the taxable persons of IUC also results from Article 3(1) of Law No. 22-A/2007, of 29 June, the diploma that approved the CIUC and the Code of the Tax on Vehicles:
"The revenue generated by the IUC levied on vehicles in categories A, E, F and G belongs to the municipality of residence of the taxable person or equivalent, as well as 70% of the component relating to cylinder capacity levied on vehicles in category B, unless such revenue is levied on vehicles that are the subject of long-term rental or operational leasing, in which case it must be allocated to the municipality of residence of the respective user".
4.30 It should further be noted that, assuming the vehicle register has a merely declarative character, aiming only to publicise the situation of vehicles, functioning as a mere rebuttable presumption of the existence of a right, the Tax Administration is not even legitimised to demand the tax from whoever, by mere outdating of the vehicle register, continues to appear therein as the legal owner, whenever sufficient information is brought to its knowledge as to the identity of the new owner of the vehicle.
4.31 In this context, in light of the reasoning of the decisions rejecting the gracious complaints and of the IUC levies in question, it is clear that the Tax Administration erroneously imputed to the Claimant the quality of taxable person of the IUC levied on the vehicles identified above.
4.32 It should be noted that, contrary to what the Tax Administration contends, non-compliance with the accessory obligation provided for in Article 19 of the CIUC does not determine that entities that carry out financial leasing, operational leasing or long-term rental of vehicles, appearing as such in the vehicle register as owners of such vehicles, without however being their respective users, become the taxable persons responsible for payment of the IUC levied on the vehicles in question.
4.33 Indeed, the acceptance of such understanding by the Tax Administration would result, in practice, in the application of a disproportionate sanction devoid of legal basis, founded on a mere formal irregularity that could always be remedied – as was indeed the case in the case at hand in these proceedings – in the gracious complaint, by communication to the Tax Administration of the identifying elements of the actual user of the vehicles in question.
4.34 Furthermore, such a sanction, not only having no legal basis, has the further consequence that is intolerablethe creation of a rule of subjective incidence in disregard of the principle of legality in the creation of taxes, inherent in Article 103(2) of the Constitution of the Portuguese Republic, which is hereby invoked for the proper legal effects.
4.35 That is: the reality that must be considered for purposes of taxation is that in force on the date of first registration or on each of its anniversaries, regardless of compliance with formal communication obligations and the date on which such information is provided.
4.36 Finally, it should be noted that the probative elements presented by the Claimant – copies of the financing contracts and copies of the sales invoices of the vehicles – meet the requirements established in commercial and tax law, corresponding to accounting elements of the Claimant that, pursuant to Article 75(2) of the LGT, are presumed to be true, it being noted moreover that the Tax Administration at no time undermined that presumption, being fit and sufficient to rebut the presumption established in Article 3(1) of the CIUC.
4.37 That is: in light of the documents made available by the Claimant, the Tax Administration was in possession of sufficient elements not only to consider the presumption inherent in Article 3(1) of the CIUC to be rebutted, but also to proceed with the correct identification of the taxable persons responsible for payment of the tax in question.
4.38 Pursuant to Article 133 of the CPA:
"Acts lacking any of the essential elements or for which the law expressly prescribes such form of invalidity are void" [Article 133];
"Acts that are null are in particular: acts consequent to previously annulled or revoked administrative acts, provided that there are no third-party beneficiaries with legitimate interest in maintaining the consequent act" [Article 133(2)(i)].
4.39 Consequently, once the IUC levies in question are annulled, the nullity of the respective compensatory interest levies cannot fail to be recognised, pursuant to Article 133(2)(i) of the CPA.
4.40 In any event, should it not be concluded that the said compensatory interest levies are null pursuant to Article 133(2)(i) of the CPA, which, without granting, is admitted for mere due diligence, such acts should in any case be annulled because the legal requirements provided for in Article 35 of the LGT are not met.
4.41 Pursuant to Article 43(1) of the LGT:
"Compensatory interest is due when it is determined, in gracious complaint or judicial challenge, that there was error attributable to the services resulting in payment of the tax debt in an amount greater than that legally due".
4.42 In turn, pursuant to Article 61(3) of the CPPT:
"Interest is counted from the date of payment of the tax due until the date of issue of the respective credit note".
4.43 As the tax acts that are the subject of these proceedings are afflicted by the vice of violation of law, as extensively demonstrated, no doubt will remain that the Claimant has the right to compensation for the harm resulting from the unavailability of the amounts of IUC and compensatory interest unduly paid, on the basis of error attributable to the services of the Tax Administration, pursuant to Article 43(1) of the LGT.
- In turn, the Respondent Tax and Customs Authority presented a response, in which it defended itself in the following terms:
5.1 It first invokes the exception of untimeliness of the request for arbitral pronouncement filed by the Claimant with respect to 5 of the 10 Gracious Complaint procedures, namely:
• No. ...2014...;
• No. ...2014...;
• No. ...2014...;
• No. ...2014...; and
• No. ...2014....
5.2 Indeed, in all those proceedings the Respondent proceeded to notify the Claimant of the decisions of partial rejection.
5.3 Such notifications were received by the Claimant on 30-9-2014, as evidenced by the delivery receipts signed by it and incorporated in the files of Gracious Complaint:
• No. ...2014... (cf. pp. 904 to 906 of the respective administrative file);
• No. ...2014... (cf. pp. 1000 to 1002 of the respective administrative file);
• No. ...2014... (cf. pp. 1006 to 1008 of the respective administrative file);
• No. ...2014... (cf. pp. 894 to 896 of the respective administrative file); and
• No. ...2014... (cf. pp. 898 to 900 of the respective administrative file).
5.4 Pursuant to Article 10(1-a) of the RJAT, the request for arbitral pronouncement must be filed, in this case, within 90 days from the notification of the decision of partial rejection of the Gracious Complaints.
5.5 Considering that, pursuant to the law, the period began on the day following notification (i.e., on 2014-10-01), it is clear that the request for arbitral pronouncement should have been presented by 2014-12-29.
5.6 However, this did not happen with respect to the five identified Gracious Complaints, because the request for arbitral pronouncement was presented to the Administrative Arbitration Centre ("CAAD") on 2014-12-30 at 12:42 hours and accepted by the latter at 21:51 hours of the same day, as revealed by the CAAD's own procedural management system.
5.7 Thus, as the Claimant has not timely filed the request for arbitral pronouncement with respect to those five Gracious Complaints, the definitive consolidation in the legal order of the respective decisions of partial rejection was generated, because 'tempus regit actum'.
5.8 As such, the Claimant is now precluded from seeing the legality of 5 of the 10 acts placed in question in these proceedings examined, under penalty of fraud against the law.
5.9 As to the merits of the case, the Respondent contends that the tax legislator, in establishing in Article 3(1) who are the taxable persons of IUC, expressly and intentionally established that these are the owners (or in the situations provided for in No. 2, the persons mentioned therein), being considered as such the persons in whose name they are registered.
5.10 In these terms, it is imperative to conclude that, in the case of these arbitral pronouncement proceedings, the legislator expressly and intentionally established that they are considered as such [as owners or in the situations provided for in No. 2, the persons mentioned therein] the persons in whose name they [the vehicles] are registered, because this is the interpretation that preserves the unity of the tax-legal system.
5.11 To understand that the legislator established here a presumption would unequivocally be an interpretation contra legem.
5.12 It is, rather, a clear option of legislative policy adopted by the legislator, whose intention, within its freedom of legislative formation, was that, for purposes of IUC, those who appear as such in the vehicle register be considered owners.
5.13 This meaning, therefore, that the presumption of vehicle ownership derives solely, directly and exclusively from the vehicle registration regime itself, and not from the tax legislation on vehicles which constitutes a collateral aspect of that regime.
5.14 Accordingly, the rebuttal of the presumption of vehicle ownership necessarily must be directed to, or rather, against what appears in the vehicle register itself, and not against the mere tax effect that derives from the vehicle registration information, as, in essence, the Claimant ultimately tries to do.
5.14 The systematic element of interpretation of law also demonstrates that the solution propounded by the Claimant is intolerable, finding no support in the law for the understanding advocated by the Claimant.
5.15 This results not only from the aforementioned No. 1 of Article 3 of the CIUC, but also from other provisions enshrined in the said Code.
5.16 In these terms, and in the same sense, Article 6 of the CIUC establishes, under the heading "Taxable Event and Exigibility", in its No. 1, that: "The taxable event of the tax is constituted by the ownership of the vehicle, as evidenced by the registration or record in national territory".
5.17 From the articulation between the scope of the subjective incidence of IUC and the fact constitutive of the corresponding tax obligation it follows unequivocally that only legal situations that are subject to registration (without prejudice to the permanence of a vehicle in national territory for a period exceeding 183 days, provided for in Article 6(2)) give rise to the birth of the tax obligation.
5.18 In turn, No. 3 of the same article provides that "the tax is deemed exigible on the first day of the taxation period referred to in Article 4(2)".
5.19 In the same sense, the legislative solution adopted by the tax legislator in Article 3/2 of the CIUC militated by making the equiparations established therein coincide with the situations in which the vehicle register requires registration thereof.
5.20 Such position is further evident in the circumstance that the vehicle register to which the Respondent has or may have access and the certificate in which must appear the acts subject to registration, whose exhibition may be required by the same Respondent from the interested party, contain all the elements intended for the determination of the taxable person, without need of access to contracts of a private nature that confer such rights, enumerated by the CIUC as constitutive of the legal situation of taxable person of this Tax.
5.21 In these terms, the non-updating of the register, pursuant to the provisions of Article 42 of the Vehicle Registration Regulation, will be imputable in the legal sphere of the taxable person of IUC and not in that of the Portuguese State, as the active subject of this Tax.
5.22 Even admitting that, from the point of view of civil law and property register rules, the absence of registration does not affect the acquisition of the quality of owner and that registration is not a condition of validity of contracts with real effect, pursuant to what is established in the CIUC (which in the case at hand constitutes special law, which, under the general rules of law, derogates the general rule), the tax legislator intentionally and expressly wanted to be considered as owners, lessees, acquirers with retention of title or holders of the purchase option right in long-term rental, the persons in whose name the vehicles are registered.
5.23 The Respondent further invokes that, in light of a teleological interpretation of the regime enshrined throughout the CIUC, the interpretation propounded by the Claimant to the effect that the taxable person of the tax is the actual owner, regardless of whether he does not appear in the vehicle register as such, is manifestly wrong.
5.24 Indeed, the CIUC carried out a reform of the vehicle taxation regime in Portugal, substantially altering the vehicle taxation regime, so that the taxable persons of the tax became the owners appearing in the property register, regardless of the circulation of the vehicles on the public road.
5.25 That is, IUC came to be due by the persons who appear in the register as owners of the vehicles.
5.26 Thus, the tax acts in question do not suffer from any vice of violation of law, in that in light of the provisions of Article 3(1) and (2) of the CIUC and Article 6 of the same code, it was the Claimant, in the quality of owner appearing in the Vehicle Registration Office, the taxable person of IUC.
5.27 However, even if this were not the case – which is only admitted by mere academic hypothesis – and accepting that it is admissible to rebut the presumption in light of the jurisprudence already established at this arbitration centre, it will still be necessary, in any case, to examine the documents attached by the Claimant and their probative value with a view to such rebuttal.
5.28 With a view to such rebuttal, the Claimant came to instruct its Gracious Complaints with the attachment of copies of invoices.
5.29 But invoices are not suitable to prove the conclusion of a synallagmatic contract such as purchase and sale, because such documents do not reveal by themselves an indispensable and unequivocal declaration of intention (i.e., acceptance) on the part of the presumed acquirers.
5.30 Furthermore, the rules of the vehicle register have not yet reached the point where mere invoices unilaterally issued can replace the application for vehicle registration, which is a document approved by official template.
5.31 Now, invoices do not constitute contracts of purchase and sale.
5.32 The unequivocal declaration of intention of the presumed acquirers should be evidenced by the attachment of a copy of the aforementioned official template for registration of vehicle ownership, as it is a document signed by the intervening parties.
5.32 The Claimant did not attach copies of the said official template for registration of vehicle ownership when it could and should have done so, that is, in the request for arbitral pronouncement, and is now precluded from the possibility of doing so at a later time, in light of Article 423 of the CPC which provides that such documents should be presented with the pleading in which the corresponding facts are alleged.
5.33 Furthermore, the lack of the synallagmatic character of invoices could be remedied by proof of receipt of the price contained therein by the Claimant.
5.34 The Claimant further alleges the illegality of the IUC levies (due to violation of Article 3(2) of the CIUC) relating to the vehicles listed in article 63 of the initial pleading in that the same were the subject of financial leasing contracts concluded by the Claimant.
5.35 First, even if it were concluded that we are dealing with financial leasing contracts granted 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 CIUC.
5.34 Indeed, the application of Article 3 of the CIUC must be combined with the provisions of Article 19 of the same code, in which it is established that "for purposes of Article 3 of this code (…), entities that carry out financial leasing, operational leasing or long-term rental of vehicles are obligated to provide to the Directorate-General of Taxes the data relating to the identification of the users of the leased vehicles".
5.35 Thus, to follow the thesis advocated by the Claimant as to the fact that Article 3 of the CIUC establishes a rebuttable presumption, it is then necessary to conclude that the operation of that article (i.e., the rebuttal of the presumption) also depends on compliance with the provisions of Article 19 of the CIUC, as is apparent from its literal element ("for purposes of Article 3 of this code (…)".
5.36 Now, the Claimant provided no proof of compliance with this obligation with respect to motor vehicles with the registrations:
• …-…-…
• …-…-…
• …-…-… and
• …-…-…
5.37 As to financial leasing, the Claimant could only be exonerated from the tax if it had complied with the specific obligation provided for in that provision of the CIUC.
5.38 In this undertaking, that is, as the Claimant has not complied with that obligation, it is necessary to conclude that the Claimant is the taxable person of the tax.
5.39 Furthermore, it does not correspond to the truth of the facts that underlying all the vehicles listed in Article 63 of the initial pleading are financial leasing contracts or leasing contracts that grant a purchase option.
5.40 Both as revealed by the heading itself of the documents, and as results from the content of the clauses of those documents, no financial leasing contracts or leasing contracts with a purchase option at the end were concluded with respect to motor vehicles with the registrations:
· …-…-…
· …-…-…
· …-…-…
· …-…-…
· …-…-…
· …-…-…
· …-…-… and
· …-…-…
5.41 Indeed, with respect to the vehicles just listed, the Claimant merely granted simple loan contracts (or "credit contracts", as expressly stated therein), and in their clauses there is no mention of the purchase option right.
5.42 Thirdly, notwithstanding the fact that the Claimant has concluded financial leasing contracts with respect to the vehicles hereinafter identified, it is certain that the Claimant is responsible for the payment of the respective IUC, since the communication of the existence of financial leasing referred to in Article 19 of the CIUC was complied with after the anniversary of the registration in the year/period in question was verified, that is, after the occurrence of the taxable event.
5.43 Indeed, the following motor vehicles are in this situation:
• …-…-…
• …-…-…
• …-…-…
• …-…-… and
• …-…-…
5.44 Fourth and finally, with respect to the motor vehicle with registration …-…-… (and although it was initially the subject of a financial leasing contract, it is certain that such contract terminated on 2009-06-15, with the ownership of the vehicle passing to the Claimant on that occasion, so that the levy relating to the 2010 period is shown to be due on behalf of the Claimant.
5.45 The Claimant alleges the illegality of the compensatory interest levies in that the Claimant acted without fault, since – in its view – the interpretation it made of the rules at issue is a legitimate, plausible and good faith interpretation, so the prerequisites on which compensatory interest provided for in Article 35 of the LGT are not verified in the present case.
5.46 Well then, with respect to the absence of censurable conduct on the part of the Claimant, it is manifest that it has no reason whatsoever.
5.47 Since the tax due was only officially levied by the Respondent after a management of divergences.
5.48 Now, whenever, due to a fact attributable to the taxpayer, the levy of tax is delayed, there will accrue to it the corresponding interest, without prejudice to the penalty imposed, pursuant to the provisions of Article 35 of the LGT.
5.49 Although it is true that the requirement of compensatory interest depends on the existence of a nexus of causality between the conduct of the taxpayer and the said harmful consequence to the State, it is certain, however, that the imputability required for holding the taxpayer responsible for payment of compensatory interest depends on the existence of fault on the part of the taxpayer and such fault exists when given conduct constitutes a fact qualified by law as unlawful, not because fault is merely presumed, but because it is something that in general or prima facie is connected to the unlawful-typical character of the respective fact.
5.50 Article 35(8) of the LGT provides that compensatory interest integrates the tax debt itself with which they are jointly levied.
5.51 Thus, official levy acts relating to compensatory interest form an integral part of the tax debt itself, and are therefore levied together with the levy of this and forming together the entirety of the amount owed.
5.52 Thus, the Respondent contends that the tax acts should be upheld and that the compensatory interest in question is due, because there was a delay in those levies, there also being a nexus of causality between the conduct of the taxpayer and the consequences referred to as harmful to the State, as creditor.
5.53 In addition to all the above, it should further be noted that if the interpretation conveyed by the Claimant were to be accepted, then the same would be contrary to the Constitution, in that such interpretation translates into a violation of the principle of trust, the principle of legal certainty, the principle of efficiency of the tax system and the principle of proportionality.
5.54 On the other hand, the transmission of the ownership of motor vehicles is not susceptible to being controlled by the Respondent, because there is no accessory obligation of a declarative nature as to this matter, contrary to the control that is capable of being carried out, for example, by way of prior payment of Municipal Tax on Transfer of Real Property as to the matter of transmission of real property.
5.55 Now, as the Claimant has not taken care to update the vehicle register, as it could and was incumbent upon it [Article 5(1-a) of Decree-Law 54/75, of 12 February, and Article 118(4) of the Road Code], and has not ordered the cancellation of the registrations of the vehicles here in question, it is necessary to conclude that the Claimant did not proceed with the care that was required of it.
5.56 And by not having proceeded with the care that was required of it, it led inexorably the Respondent to limit itself to giving effect to the legal obligations to which it is bound and, in parallel, to follow the registration information that was provided to it by those who ought to.
5.57 Therefore, it was not the Respondent who gave rise to the filing of the request for arbitral pronouncement, but rather the Claimant itself.
5.58 Consequently, the Claimant should be condemned to pay the arbitration costs arising from this request for arbitral pronouncement, pursuant to Article 527(1) of the CPC ex vi of Article 29(1-e) of the RJAT.
5.59 The same reasoning applies with respect to the request for condemnation to payment of compensatory interest filed by the Claimants.
5.60 Indeed, in light of Articles 43 of the LGT and 61 of the CPPT, the right to compensatory interest depends on the verification of the following requirements: (i) the tax being paid; (ii) the respective levy having been annulled, in whole or in part, in a gracious or judicial proceeding; (iii) determination, in a gracious or judicial proceeding, that the annulment is founded on error attributable to the services.
5.61 From all that has been set out above it is clear that the tax acts in question are valid and legal, because they conform to the legal regime in force on the date of the tax facts, so that, in this case, no error attributable to the services occurred.
5.62 Thus, the legal requirements that confer the right to compensatory interest are not met.
5.63 But even if this were not the case – in which it does not concede – that the tax is not due from the Claimant because the Claimant is not the taxable person of the tax obligation, still, and just as was decided by the aforementioned Arbitral Tribunal constituted in the framework of Case No. 26/2013-T, it is undeniable that the Respondent merely complied with Article 3(1) of the CIUC, which attributes such quality to the persons in whose name the vehicles are registered, so that also for this reason it will necessarily fail to recognise the right to payment of compensatory interest.
- On 21-04-2015, the Claimant presented a response to the exceptions raised by the Respondent, in summary, in the following terms:
6.1 In the view of the Tax and Customs Authority, the period for filing the request for arbitral pronouncement on the decisions rejecting the gracious complaints No. ...2014..., ...2014..., ...2014..., ...2014... and ...2014... ended on 29 December 2014, and therefore the request for arbitral pronouncement at the origin of these proceedings is untimely, filed on 30 December 2014, insofar as it relates to the request for declaration of illegality and annulment of those tax acts.
6.2 This position supported by the Worthy Representatives of the Tax and Customs Authority ignores that the end of the period for filing a request for arbitral pronouncement that falls on judicial holidays is transferred to the first business day after such period of holidays, as results from Articles 10(1-a) and 29(1-a) of the RJAT, 20(1) of the Code of Tax Procedure and Process ("CPPT"), 279(e) of the Civil Code ("CC") and 28 of Law No. 6/2013, of 26 August.
6.3 Precisely in this sense, the Arbitral Tribunal stated the following in the framework of the Arbitral Decision handed down in Case No. 205/2013-T on 7 March 2014:
"The Respondent invokes that the end of the period for payment was April 2013 and that, having the request for arbitral pronouncement been filed on 29 August 2013, the 90-day period provided for in art. 10(1) of the RJAT, combined with art. 102(1)(a) of the CPPT, had already elapsed, with the dilatory exception provided for in al. h) of art. 89 of the CPTA being verified, applicable by force of al. c) of art. 29 of the RJAT.
However, it must be observed that, pursuant to art. 20(1) of the Code of Tax Procedure and Process, applicable by force of art. 29(1-a) of the RJAT, the period for judicial challenge is counted pursuant to art. 279 of the Civil Code. Now, pursuant to al. e) of this legal provision, the period that ends in judicial holidays transfers to the first business day following the end of those holidays, in cases in which the act must be performed in court.
In this sense, the Supreme Administrative Court decided in the judgment handed down in case 01534/13, of 15.01.2014, the summary of which reads:
'The period for filing judicial challenge is a period of caducity, of substantive nature and, as established in No. 1 of art. 20 of the CPPT, is counted in accordance with the provisions of art. 279 of the CC, so that, pursuant to al. e) of this provision, if it ends in judicial holidays, its end transfers to the first business day following these' (www.dgsi.pt). In the same sense, the judgment of the same court dated 22.05.2013, case 0405/13, can be seen, where it is written that 'when the period for challenge ends on a Sunday or public holiday or in judicial holidays, its end transfers to the first business day following'.
Thus, the exception of caducity raised by the Respondent is rejected'.
6.4 In the same sense, LOPES DE SOUSA affirms the following:
"As regards the period for filing the request for constitution of an arbitral tribunal, provided for in article 10, being prior to the procedure, this article 3-A [of the RJAT] will not apply, but rather the regime of article 279 of the Civil Code, by referral from article 29(1-a) of the RJAT and article 20(1) of the CPPT" – cf. Guide to Tax Arbitration, Coord. NUNO VILLA-LOBOS and MÓNICA BRITO VIEIRA, 2013, Almedina, page 174.
6.5 Therefore, the period for filing the request for arbitral pronouncement on the acts of rejection of gracious complaints No. ...2014..., ...2014..., ...2014... and ...2014..., which would end on 29 December 2014, transferred to 5 January 2015, the first business day after the period of judicial holidays that ran between 22 December 2014 and 3 January 2015, pursuant to Articles 10(1-a) and 29(1-a) of the RJAT, 20(1) of the CPPT, 279(e) of the CC and 28 of Law No. 6/2013, of 26 August.
6.6 Thus the Claimant concludes with the complete timeliness of the request for arbitral pronouncement at the origin of these proceedings, filed with the Administrative Arbitration Centre on 30 December 2014, and with the consequent lack of merit of the exception raised by the Worthy Representatives of the Tax and Customs Authority.
- The meeting provided for in art. 16 of the RJAT was dispensed with, with the Claimant and the Respondent submitting written statements in which they reiterated the positions assumed in their pleadings.
II - Procedural Prerequisites
- The prerequisites necessary for an arbitral decision to be issued are met. Indeed:
8.1. The sole arbitrator tribunal is properly constituted. It is materially competent, pursuant to art. 2(1-a) of the RJAT.
8.2. The parties have legal personality and capacity, are legitimate and are legally represented (cf. arts. 4 and 10(2) of the RJAT and art. 1 of Ordinance 112/2011, of 22 March.
8.3. With the requirements required by the provisions of art. 3(1) of the RJAT being met, the cumulation of requests for annulment of the tax acts that are its subject is admitted in this proceeding.
8.4. The proceeding does not suffer from vices that would invalidate it.
III - Proven Facts
- Before proceeding to the merits of the case, it is necessary to present the factual matter relevant to its understanding and decision, which, having examined the documentary evidence and the attached tax administrative file, and in light of the facts alleged, is fixed as follows:
9.1. At the end of 2013, the Claimant was notified of the following official levies of IUC and compensatory interest for the years 2009, 2010, 2011, 2012 and 2013, with respect to which it filed the following gracious complaints:
[GRACIOUS COMPLAINT NO. ...2014...
Registration - IUC Levy - Compensatory Interest Levy - Value (EUR)
...]
[GRACIOUS COMPLAINT NO. ...2014...
Registration - IUC Levy - Compensatory Interest Levy - Value (EUR)
...]
[GRACIOUS COMPLAINT NO. ...2014...
Registration - IUC Levy - Compensatory Interest Levy - Value (EUR)
...]
[GRACIOUS COMPLAINT NO. ...2014...
Registration - IUC Levy - Compensatory Interest Levy - Value (EUR)
...]
[GRACIOUS COMPLAINT NO. ...2014...
Registration - IUC Levy - Compensatory Interest Levy - Value (EUR)
...]
[GRACIOUS COMPLAINT NO. ...2014...
Registration - IUC Levy - Compensatory Interest Levy - Value (EUR)
...]
[GRACIOUS COMPLAINT NO. ...2014...
Registration - IUC Levy - Compensatory Interest Levy - Value (EUR)
...]
[GRACIOUS COMPLAINT NO. ...2014...
Registration - IUC Levy - Compensatory Interest Levy - Value (EUR)
...]
[GRACIOUS COMPLAINT NO. ...2014...
Registration - IUC Levy - Compensatory Interest Levy - Value (EUR)
...]
[GRACIOUS COMPLAINT NO. ...2014...
Registration - IUC Levy - Compensatory Interest Levy - Value (EUR)
...]
[Document continues with detailed tables of vehicle registrations, IUC levies, compensatory interest levies, and corresponding monetary values in EUR across multiple gracious complaints numbered ...2014...]
Frequently Asked Questions
Automatically Created