The Supreme Court prevents the Treasury from registering homes or companies “to see what is found”
The high court denies the treasury the possibility of entering business headquarters or private homes on the grounds that the owner pays below the average for the sector
The Supreme Court prevents the Treasury from registering homes or companies “to see what is found” | Economy | Five days
The Supreme Court has just concluded that the Treasury inspectors cannot enter to register a private address or a company “to see what is found” under the sole argument that the owner is taxed below the average figures for his sector.
This has just been ruled by the Second Section of the Contentious-Administrative Chamber, annulling a judicial order that authorized the Tax Agency to enter the domicile of a company that declared lower taxes than the rest of its competitors.
The matter, anticipated by this newspaper, represents an important setback for the tax inspection strategy, which has been measuring the income declared by taxpayers in order to increase the inspection of those businesses that offer unusually low figures for their business environment. On the one hand, by directly warning them of the anomalies detected to order them to review their tax returns and, on the other, using this data as justification to request the judges house searches in search of evidence of tax fraud.
The ruling, a presentation by the magistrate Francisco José Navarro Sanchís, establishes the requirements that must be met by both the application for entry and registration at the domicile or at the registered office of a company, formulated by the Tax Agency, as well as the judicial order that it authorizes . “According to the ruling, it is not possible to authorize entry for prospective, statistical or indefinite purposes, to see what is found , for the discovery of data that is ignored, without precisely identifying what specific information is to be obtained, so it is not the entries proceed to find out what the proven has ”.
The Supreme Court prevents the Treasury from registering homes or companies “to see what is found” | Economy | Five days
The case
The Supreme Court’s ruling is in favor of a Cordovan hospitality business, Taberna La Montillana SL, in which the Tax Agency detected that its average profitability was 1.95 euros for each euro allocated to purchases, compared to 3.03 euros on average achieved by businesses in the industry nationwide
“Therefore, the declared commercial margin is considerably lower than that declared by the companies in the sector, which leads us to think that the taxpayer may have been hiding actually made sales,” the Treasury concluded.
In turn, the declared cash collection turned out to be 25 times lower than the average, which made the treasury suspect that 24 of every 25 euros received in cash went, without declaring, to the pockets of the business administrators.
As a result, he requested a search warrant from the corporate headquarters in search of an accounting in B, which the judge authorized and the business owners appealed, now obtaining the reason.
Sentence
“The hunch or presentiment of the Administration that, by paying a taxpayer below the average for the sector, makes him incur a kind of presumption iuris et de jure of tax fraud, is a fact that by itself is not enough, nor to establish a causal relationship or scheme that leads to that fraud – not even in the presumption of unfulfilled duties, which must be clarified through the corresponding procedure, with subsequent judicial control – and even less to anchor in such circumstance the need to entry into the home for the collation of data that supports or refutes the suspicion harbored by the Administration ”, includes the ruling.
The court adds that when the suspicion is based on a science “so evanescent and lax, of such arcane origin, with a statistical or comparative base not contrasted nor, that is known, published, they must be firmly established, at least, as a starting point , what are the criteria that lead the administration to cling to that emphatic conclusion, if one takes into account that the deviation from the mean can reach different levels of intensity and not suppose, with such isolated data, any presumption of fraud ”.
“You cannot access the address defined in article 18.2 of the Spanish Constitution with a merely prospective or indeterminate purpose, just in case, since the fundamental nature of the right that the Constitution protects and exceptionally allows to sacrifice or exclude, must be in presence of a constitutionally protected asset –and the duty to contribute of article 31.1 of the Constitution is one of them, expressed in general terms ”, he concludes.
The ruling accepts, yes, that “from the comparison of the hypothetical situation, suspected or derived from merely fragmentary information, born from the projection of generic data in documents or statistical tables and whose reliability, in the absence of more solid elements of conviction We have to question by force, it is not a sufficient basis to serve as an enabling title to the Administration – to request – and to the judge – to grant – entry into the home ”.