Greece vs “O.P.A.P. PROVISION OF SERVICES S.A.”, February 2020, Supreme Administrative Court, Case No A 320/2020

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The tax authorities had issued a TP adjustment for FY 2013 later than 18 month after initiating an audit of “O.P.A.P. PROVISION OF SERVICES S.A.”

“O.P.A.P. PROVISION OF SERVICES S.A.” disagreed with legal basis for the assessment and filed an appeal.

Judgement of the Supreme Court

The Supreme Court allowed the appeal of “O.P.A.P. PROVISION OF SERVICES S.A.” and dismissed the assessment issued by the tax authorities. Since, the tax authorities had not carried out and completed its own tax audit within 18 months, these cases were considered definitively closed and time-barred after the 18-month period has passed. In other words, for these cases, the limitation period of the State’s audit right is 18 months and not five years.

According to the Supreme Court, a re-inspection could only be carried out after the 18-month period, but within the normal five-year limitation if serious offenses were found concerning money laundering from criminal activities or transactions with non-existent tax companies or issuing or receiving fake-fictitious tax data.


“Because Article 5 (paragraphs 2, 5 and 6) of the Tax Authority’s Administrative Order POL. 1159/2011 (as subsequently amended, as explained in paragraph 8) stipulates that the tax authority’s audits are carried out and completed within 18 months from the date of submission of the tax certificate to the database of the General Tax Administration, with the exception of the cases of prosecution of members of the Board of Directors, in accordance with the provisions on money laundering, the receipt or issue of false – fictitious data, transactions with non-existent tax companies and the proven detection of violations of Articles 39 and 39A of Law No. 2238/1994 (in these cases the audit could be carried out within the limitation period of the respective financial year). Consequently, Article 6 (paragraph 1(a)) of the same above-mentioned Decree provided that if within 18 months from the issuance of the unqualified tax compliance report no tax infringements are detected by the tax authority’s audits provided for in Article 5, the fiscal year in question is deemed to have expired and, in principle, no further audit is possible, except in the case of indications of the above-mentioned significant infringements referred to in paragraph 6 of Article 5 of the said Decree….”

an audit of the tax authority could be carried out (and should have been completed) by 31 March at the latest. 2015, (b) if such an audit was not carried out within 18 months of the submission of the above-mentioned certificate, the contested financial year was deemed to have lapsed, and there were no exceptional cases of an audit even after the lapse, within the limitation period, i.e. the detection of evidence or indications of infringements of Para. 6 of article 5 of the A.Y.O. POL. 1159/2011, (c) the provisions of article 65A of the law are not applicable in this case. 4174/2013, which does not impose a time limit (except for the limitation period) on the checks carried out, since, according to Article 72 par. 40(a) of the same law, as added by Article 50 para. 2 of Law No. 4223/2013 and in force (even) after its replacement by Article 56 par. 4 of Law No. 4410/2016, the provisions of Article 65A on the tax certificate are applicable for fiscal years from 1.1.2014, (d) the provision of a time limitation of the audits for the fiscal years up to 31.12.2013 by the provisions of Articles 5 (paragraphs 2 and 5) and 6 (paragraph 1, subparagraph a) of D.O. POL. 1159/2011 (which remained in force for these years even after article 65A), is not outside the legislative authority, as has been accepted in an opinion of the State Legal Council, which unlawfully refers to the contested decision of the Board, and (e) any non-application of the above-mentioned contested provisions of A.Y.O. POL. 1159/2011 in the present case would be contrary to the principles of legal certainty and legitimate expectations, as well as to article 9 (paras. 2 and 5) of Law No. 4174/2013. The above plea, as supplemented by the additional plea of 25.10.2019, must be upheld as well founded in law, in accordance with what has been held in paragraphs 14 and 15 above, and in substance, in view of the above factual allegations and the evidence submitted in support thereof by the applicant and not contested by the Administration. Accordingly, the appeal should be allowed, the examination of the other grounds of appeal being superfluous, and the decision 4580/4.9.2017 of the Head of the AADC’s D.E.D. should be annulled, dismissing the appeal filed by the applicant company on 7.4.2017 against the final act 1238156/346/6.3.2017 of corrective assessment of income tax for the financial year 2013 by the Head of the C.E.M.E.P., and the latter act. Any unduly paid tax (principal and/or additional) must be refunded to the applicant, with legal effect from the date of the lodging of the appeal (in which a request to that effect is made) or, in the event of subsequent payment, from the lodging of the appeal, and with interest at the rate applicable under Article 53 (paragraphs 2 and 4) of the Code of Fiscal Procedure. Finally, the interventions lodged must be upheld.
Mr Ioannis Dimitrakopoulos, Judge Advocate General, dissented, arguing as follows: The above ground of appeal, as supplemented by the additional ground of appeal filed on 25.10.2019, which is based on the inapplicable provisions of paragraphs 2 and 5 of Article 5 and case (a) of paragraph 1 of Article 6 of D.O. POL. 1159/2011, must be rejected as unlawful, in accordance with the minority view expressed in paragraphs 14 and 15 above, in the light of which the Board of Appeal rightly rejected the abovementioned plea in the applicant’s appeal, irrespective of any specific grounds. Furthermore, on the basis of the same dissenting opinion, the interventions lodged must also be dismissed as unfounded.”

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Greece 320-2020 Feb 2020

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