Regularising management procedures
The administration may reiterate with a new settlement the first one that was annulled for substantive reasons, provided that to do so it does not complete what has been done, nor does it carry out new verifications or requirements to integrate its actions. Failure to comply with this limitation entails the annulment of the new assessment.
The second management procedure
Upon receiving a new tax assessment on the same subject matter, cause and facts as the initial one, the taxpayer, dissatisfied, lodges a contentious-administrative appeal with the National High Court, once administrative channels have been exhausted.
In the background, it should be noted, as relevant facts, that the previous assessments were annulled for material reasons (among them, an annual assessment is made instead of quarterly provisional assessments being made for each VAT assessment period) and that all of them have been the result of a new limited verification procedure, carried out from the outset.
In the statement of claim, the claimant can question the possibility of the Administration making another assessment, initiating new or successive procedures for the application of taxes, once the first one has been annulled, as well as the lack of any interruptive effect of the statute of limitations. The Audiencia Nacional, after analysing the facts and the applicable case law, states that:
- Although the substantive defect directly affects the structure of the tax itself and is not a minor irregularity, it does not fall within the cases of radical or absolute nullity of the rule and case law follows the same line of interpretation. Consequently, if the assessment has defects that are merely null and voidable, everything that has been done interrupts the running of the limitation period.
- Case law allows that, once an initial assessment has been annulled for substantive reasons, the administration may regularise again, without processing the procedure again and without completing the relevant investigation. This is an act of execution, and the administration must limit itself to pronouncing a new correct decision, in accordance with the criteria set out in the annulling decision. Consequently, the administration cannot complete what has already been done, nor can it carry out new verifications or new requirements to integrate its actions.
- In relation to the consequences of the administration proceeding in another way (non-compliance) and not limiting itself to settling with what it had at its disposal, this Court considers that the settlement should be annulled. The following arguments support its position:
- if the consequence is not annulment, the case law of the Supreme Court.
- This decision is based on the principle of good administration, which requires sufficiently diligent conduct to definitively avoid possible dysfunctions arising from its actions;
- it calls for the full effectiveness of guarantees and of the taxpayer’s legally and constitutionally recognised rights.
- Both the rule and the regulation, although they only speak of the time limit, set the execution time at one month. This period is short and does not coincide with any of those generally envisaged for the rest of the tax enforcement procedures, therefore, although it is not expressly stated, a prompt enforcement decision is being considered and not the repetition of a new procedure.
Based on these arguments, the Court ruled that, as the Administration had disregarded the principle of preservation of acts and without assessing whether it could make a new assessment with what it had, it decided, in contravention of case law and without being authorised to do so by any regulation, to reopen a new limited verification procedure, subjecting the taxpayer once again to the tax application procedure, the decision of the TEAC(*) and the associated assessment should be annulled.
If you have any doubts about this subject, please do not hesitate to contact us, by telephone to Carles Monfort Codina or by e-mail to cmc@btsasociados.com, we will be delighted to help you.