Estimation ex officio by the Spanish Administrative Court of the prescription in favour of the taxpayer


Decision issued by the Spanish Central Economic Administrative court in relation to the audit open by the Spanish Tax Authorities to the company BCY in relation to VAT of the years 2006 to 2009.

Despite the fact that the Court considered proven that the Company has uncredited having made purchases of bricks required for the volume of the same that has sold, it considered that that sold material excess isn’t real, understands that prior to the issues raised in the present appeal, we must remember that in accordance with article 69 of the Spanish General Tax Law, the prescription must be assessed ex officio.

In this sense, as the date of the audit proceedings is initiated on 15/10/2010, the two first quarters of 2006 were already prescribed in accordance with the recent doctrine of this Court as the submission of the Annual VAT Summary (390 form) which does not interrupt the computation of the period of limitation of the right of the Spanish Tax Authorities to liquidate.

The monthly or quarterly VAT returns (303 forms) and the Annual VAT Summary (390 form), may not match because while the presentation of the periodic VAT returns (303 forms) is a formal obligation that is a necessary instrument for the fulfilment of the material obligation for payment of the tax debt, the presentation of the Annual VAT Summary is the fulfilment of an obligation that facilitates the management of VAT, but whose immediate objective is not the payment of the debt which results in each settlement period. In this way, not to be a reliable performance of the taxpayer conducive to the payment of the tax debt, since in the annual summary there is not any payment, its submission does not interrupt the period of limitation of the right of the Spanish Tax Authorities to determine the tax debt. According to this criterion, each statement period ordered by over four years from the end of the deadline for submission of the VAT returns (303 forms).

For this reason, and even when this circumstance does not have effect in relation to the settlement done to the entity, we cannot say the same thing regarding the penalty imposed, since it determines the basis of the penalty on an annual basis for each of the tested years. Thus, in relation to the tax year 2006 and the present Declaration of prescription, aborts the imposition of penalty agreement, and the Tax Authorities must check which of the invoices issued by that is sanctioned correspond to the third and fourth quarters of 2006, which are the only ones that shall be punishable.

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