Roj:
STS 3632/2018 - ECLI:EN:TS:2018:3632
Id Cendoj: 28079130022018100224
Organ: Tribunal Supremo. Contentious Chamber
Headquarters: Madrid
Section: 2
Date:
15/10/2018
Appeal No.:
4561/2017
Decision No.: 1504/2018
Procedure: Contentious-Administrative Appeal
(L.O. 7/2015)
Speaker:
ANGEL AGUALLO AVILÉS
Type of decision: Ruling
Case decisions: TEAR, Madrid, 25-09-2015,
STSJ M
6167/2017, ATS 1150/2018, STS 3632/2018
SUPREME
COURT
Chamber for Contentious-Administrative
Proceedings, Second Section
Judgement no. 1.504/2018
Date of judgment: 15/10/2018 Type of proceeding:
R. CASACION
Case number: 4561/2017 Judgment/Agreement:
Date of vote and Judgment: 02/10/2018
Speaker: Excmo. D. Ángel Aguallo Avilés
Origin: T.S.J. MADRID SALA CONT/ADM. SECTION 5
Counsel for the Administration of Justice: Ms Gloria Sancho Mayo Transcribed
by:
Note:
R. CASACION
núm.: 4561/2017
Speaker:
Excmo. Sr. D. Ángel Aguallo Avilés
Counsel for the Administration of Justice: Honourable Ms. Gloria
Sancho Mayo
SUPREME
COURT
Contentious-Administrative Chamber Second Section
Judgment no. 1504/2018
Honourable Members
D. Nicolás Maurandi Guillén, President
Mr. José
Díaz Delgado
Mr. Ángel Aguallo Avilés
D. Francisco
José Navarro Sanchís
Mr. Jesús Cudero Blas
D. Rafael
Toledano Cantero
D. Dimitry Teodor Berberoff Ayuda In Madrid, on 15 October 2018.
This Chamber has heard appeal no.
4561/2017, brought by
Celina Casanova Machimbarrena, in the name and on behalf
of Matías , against the judgment of
the Administrative Chamber
(Fifth Section) of the High Court
of Justice of Madrid dated 14 June 2017
(ES:TSJM:2017:6167), handed down
in the ordinary proceedings no. 1278/2015, brought
against the decision of the
Regional Economic-Administrative Tribunal
["TEAR"] of Madrid of
25 September 2015, which dismissed claim no. NUM000 brought against the sanctioning decision (A23 Ref. No. NUM001 and settlement
code NUM001). NUM001 and settlement
code NUM002 ) of the Regional Inspection Unit of the
AEAT of Madrid, for a tax infringement relating to personal income tax ('IRPF') for the years
2008 and 2009, for a total amount
(with reduction for conformity) of EUR 41 383.62. The respondent was the Administración General del Estado, represented
and assisted by the Abogacía del Estado.
The Judge-Rapporteur was Mr Ángel Aguallo Avilés.
FACTUAL
BACKGROUND
FIRST - The decision under
appeal, the facts of the dispute and the decision of
the TEAR of Madrid.
1. This appeal is against the
judgment handed down on 14 June 2017 by the Fifth
Section of the Chamber for
Contentious-Administrative Matters
of the High Court of Justice
of Madrid, dismissing
appeal no. 1278/2015.
2. The facts of the
dispute, as regards the issues raised by
the appeal before us, are as follows:
(a) On 17 May 2013, the Regional Inspection Unit, Special Delegation of Madrid, of the
AEAT, initiated a compliance
report against Mr Matías on the
basis of the following data:
(1) Mr.
Matías holds 50% of the shares of the
company REPRESENTACIONES CRETA, S.L
["REPRESENTACIONES CRETA"], and his spouse, Mrs. Felicidad , the other 50%. Both are the joint administrators
of the aforementioned
entity, which has been registered under lAE 983 (Agencias de
Colocación de Artistas) since 12/12/2005, its corporate purpose
being, according to its articles
of association: the representation and empowerment of novilleros, matadors and rejoneadores, as well
as bullfighting management,
intermediation and consultancy;
the leasing of bullrings, their maintenance, marketing and exploitation;
and the purchase, sale,
leasing and exploitation of
all types of real estate, both rustic and urban, as well as real estate management, intermediation and consultancy.
(2) It is on
record that the registered office and fiscal address of REPRESENTACIONES CRETA, coincides with
the one declared
as the habitual residence by Mr. Matías in the years subject to
verification, 2008 and 2009.
(3) In those years, REPRESENTACIONES
CRETA declared net operating
income of EUR 223,500.12
and EUR 240,621.56, respectively, related
to professional activities in which the intervention of Mr. Matías was the essential element
of the provision
of the corresponding
service.
(4) It is common
ground that Mr. Matías does not receive
any remuneration for the performance of his duties,
either as an employee or as a participant in the entity, the income
recorded as employment income in his 2008 and 2009
personal income tax returns corresponding, as declared therein, to the benefits
received in his capacity as a pensioner.
However, Mr. Matías
states in various media that appear in the record, that
he carries out the functions of
proxy of the bullfighter Mr. Eloy during the years audited,
services that
REPRESENTACIONES CRETA invoices to
the companies MAGÍSTICA and
MITRADITI, S.L., entities through
which the aforementioned bullfighter organises his economic
activity.
(5) As
personal resources, in 2008 and 2009,
REPRESENTACIONES CRETA has hired exclusively
the spouse of Mr. Matías, partner and joint administrator, Mrs.
Felicidad, and the daughter
of both, Mrs. Asunción, with no other employee
for the provision
of proxy services. From this, the Inspectorate
deduces that the provision of professional
services could not be carried out without the
intervention of Mr. Matías
, as these are services of a very personal nature that require
exclusively the presence of the
professional, who constitutes the essence of the
services provided to third parties.
And with regard to
the material means, REPRESENTACIONES
CRETA did not contribute any material assets to the
exercise of the activity, as the only ones
accounted for consist of a car and a building intended for rental, not
assigned, therefore, to the activities
of proxy and representation.
The Inspectorate concludes from the foregoing
that the company cannot itself provide the services which
constitute its activity without the participation of Mr Matias.
(6) In the course of
the inspection procedure, with regard to the
services provided by Mr. Matías to REPRESENTACIONES
CRETA, a market valuation procedure was carried
out of the
related transaction between the taxpayer
and that company, as the requirements and conditions established in the applicable regulations were met: Article 41 of Law 35/2006, of 28 November, on Personal Income Tax and partial amendment of the
Corporate Income Tax, Non-Resident Income Tax and Wealth Tax (BOE of 29 November)
["LIRPF"], as well as Article
16 of Royal Legislative Decree
4/2004, of 5 March, approving
the revised text of the
Corporate Income Tax Act (BOE of
11 March) ["TRLIS"], as amended by Law 36/2006, of 29 November, on measures for
the prevention of fiscal fraud (BOE of 30 November).
Specifically, the transaction to be valued were
the professional services of proxy, whether in administrative tasks of contracting or accompanying the aforementioned bullfighter in the bullring, provided by Mr. Matías to the related company
REPRESENTACIONES CRETA, and which the
latter proceeded to invoice.
The price of the
related transaction agreed between the parties, in the opinion of
the Inspectorate, is not in line with the normal market value, because
the income received from third
parties by REPRESENTACIONES
CRETA, on the occasion of the
interventions of Mr.
Matías, agreed between independent parties, is notably higher
than the income received by Mr. Matías, both as an employee of
the company and as a partner and administrator of the same.
The Inspectorate estimates that the market
values of the related transactions,
to be added to the taxable
base, in the economic activity income component of Mr. Matías's personal income tax return, are: in 2008,
108,002.96 euros, and in 2009, 177,169.78 euros.
(7) In parallel to the
aforementioned actions, verification and investigation actions were carried
out in relation to REPRESENTACIONES CRETA for Corporate Income Tax, for the
periods 2008 and 2009, carrying
out the market
valuation of the related transaction
at the headquarters of said entity,
with the result finished in the certificate of conformity.
b) As a consequence of the facts described
above, the Tax Inspectorate opened a disciplinary case (abbreviated procedure) against Mr. Matías on 17 May
2013, in which it fixed as tax debts not paid
by the taxpayer
in the personal income tax return, the
amount of 43,184.80 euros
in 2008 and 75. 75,054.41 in 2009 (basis of the penalty), an
infringement of Article 191 of the Ley 58/2003, de 17 de diciembre, General Tributaria
(BOE de 18 de diciembre) ["LGT"] is found to have
been committed, which is classified
as minor, and a penalty is proposed (Article
191. 2 LGT) of 21,592.40 euros for
2008 and 37,527.06 euros for 2009, figures which, after applying the reduction for
conformity (article
188.1.b) LGT), are 15,114.68 euros and 26,268.94 euros, respectively,
which results in a total amount to be paid
of 41,383.62 euros.
The facts summarised above, in the Inspectorate's
opinion, show "that the concurrence of the legal entities
and the more than incorrect valuation of the related
transactions has allowed the taxpayer to
avoid the progressive and higher personal income tax rates".
Consequently, it is considered that
there is "the necessary subjective
element to presume the existence of
a tax infringement, given that, with
the existence of the company,
the rules of remuneration of said company in favour of the
partner established between the two
have allowed the obtaining of
an undue financial advantage and the consequent damage to the
Public Treasury", so that "there are indications of guilt in the actions
of the natural person and indications of active collaboration of the company
in the actions of the natural person".
For all these reasons,
"it is understood that the conduct of
the taxpayer was voluntary, as it is considered
that a different conduct was required
of him, based
on the concurrent
circumstances and that there is at least
negligence to any degree in the
actions of Mr. Matías for the purposes
of the provisions
of article 183.1 of the LGT".
In relation to the
documentation obligation (required as of 19 February 2009), the file
instructor (Unit Q9), taking
into account article 16. 2 TTRLIS, the seventh additional provision, paragraph two, of the
aforementioned Law 36/2006,
Article 18 of Royal Decree 1777/2004, of 30 July, approving the Corporate Income
Tax Regulations
["RIS"], Royal Decree 1793/2008, of 3 November, amending the RIS, and Royal Decree 897/2010, of 9 July, amending the RIS in relation to documentation obligations for related-party transactions, reaches the following
conclusion:
"In the present case, for the financial
year 2009, there is no documentation obligation as the consideration for the set of transactions
between REPRESENTACIONES CRETA S.L and its partner Mr. Matías , does not exceed
the amount of 250,000 euros market value fixed in Article 18.4 e) of the RIS.
As the taxpayer is
exempt from the obligation to document transactions
between related persons or entities,
the penalty system provided for in Article 16.10 of R.D- Leg. 4/2004, so that, consequently, there would be no possible modal competition of offences, resolved in favour of the
special law, i.e., we would be outside
the provisions of the aforementioned
article 16.10 of R.D-Leg. 4/2004, so that the punishability of the conduct
would be, if applicable, within the application of the penalty
regime of Law 58/2003, General Taxation, articles 191 to 195".
c) The aforementioned proposal was ratified
by resolution of the Coordinating
Inspector, dated 10 July
2013, which reiterates the following with
regard to the typical conduct:
"As stated in the sanction
proposal, the sanctioning regime established in Article 16.10 of the TRLIS is
not applicable in the 2009 financial year, given that
there is no obligation to keep
at the disposal of the Tax
Administration the documentation that, in accordance with the provisions of Art. 16 section 2 of the TRLIS has been established in art. 20 of the RIS, because
the consideration for the set of
operations between
REPRESENTACIONES CRETA, SL and its partner Mr. Matías , does not exceed the
amount of 250,000€ market value fixed
in art. 18.4 e) of the RIS.
Excluding the sanction of
article 16.10 of the TRLIS, only the sanction established
in article 191 of Law 58/2003, General Tax Law, is applicable".
And, in relation to the
facts and the culpability that is inferred from
them, it says, among other
things, what we transcribe below:
"The taxpayer Mr. Matías has a 50%
share in the capital of
REPRESENTACIONES CRETA, SL, at the same time as being the joint and several
Administrator. Mr. Matías provides,
through the aforementioned company, the proxy services of the bullfighter
Don Eloy. That is to say, it
is the company
that invoices these services. However, as has been demonstrated in the verification and investigation, these services have been provided
by the company
thanks to the very personal intervention of Don Matías, or in other words,
the company does not have
the material and human resources
necessary to provide these services
without the participation of Don Matías. However, as has been demonstrated in the proceedings carried out by the
Inspectorate, the remuneration agreed between the company
and Don Matías does not correspond to the
market value. The proxy services have been invoiced
to the companies
MAGISTICA, SL (...) and MITRADITI, SL (...). The bullfighter Don Eloy organises his economic activity
through the latter two companies.
The income obtained from the
provision of these services by REPRESENTACIONES CRETA, SL amounts
to 223.500,12€ and 292.621,56€ in the
financial years 2008 and
2009 respectively. On the other hand,
Mr. Matías has not obtained
any type of remuneration for the performance of his duties
from REPRESENTACIONES CRETA, SL, neither
as an employee nor as a shareholder in the entity".
"With regard to
the participation of Mr. Matías in the irregularity described, we have to
say that, despite the legal independence between the taxpayer and the company, Mr. Matías is a shareholder of 50% of the
share capital of the company, as well as its joint and several
Administrator. This position
with respect to the company
gives him total and
absolute knowledge of its activities, its obligations and the consequences of non-compliance. Mr. Matías is the one
who created the company, together
with his spouse, Ms. Felicidad, who owns the other
50%, and both of them control it, because they are also the joint
administrators. The company REPRESENTACIONES CRETA, SL does
not contribute, in the opinion of
the inspection, any relevant added
value to the very personal activity of the
taxpayer, given that the services
provided by the same require
the presence of Don Matías, given that it constitutes
the essence of the professional
services provided to the bullfighter
Don Eloy. The company does not provide
any material means, given that the
only assets it has are a car and a property for rent, nor
any human means, other than the
taxpayer himself, to provide the
services of proxy, so that it would
not be possible to provide the
services which constitute its activity without the presence of
Don Matías . Consequently, it
is concluded that Don Matías could have provided the
services directly to third parties
without the intervention of his company REPRESENTACIONES
CRETA, SL. If he has decided
to provide them through it,
it is because
with an incorrect
valuation of the services provided
to it, he could avoid the
progressive and higher tax rates of
the IRPF. It is, therefore, the absence of
the required rigour in the valuation
of the related
transactions described above, which is
the reproach made against the
attitude followed by Don Matías.
In the attitude displayed
by Mr. Matías, the subjective element necessary to impose
the sanction corresponding to the infringements indicated can be seen to be present. The failure by
Mr. Matías to comply with the rules for the valuation
of related-party transactions is considered to be a voluntary attitude, since he was required
to behave differently and that there is, at the
very least, fault in any degree
of negligence in the actions of
the taxpayer for the purposes
of the provisions
of Article 183.1 of the LGT, not
being able to appreciate good
faith in his conduct in order to comply with
his tax obligations.
Since none of the
causes for exclusion of liability provided
for in Article 179.2 and 3 of the LGT were
found to exist, it is
considered that the imposition of a sanction is
appropriate".
3. Against the aforementioned penalty decision, Mr. Matías filed an economic-administrative
claim (number NUM000 ), which was rejected
by the TEAR of Madrid in its decision of 25 September 2015. With regard only to
the issue raised in these proceedings, the TEAR states the following:
"The claimant alludes
to the specific
sanctioning regime introduced in this matter by the
wording of Article 16.10 of Royal
Legislative Decree 4/2004, by
Law 36/2006. However, that sanctioning regime operates in the event of
non-compliance with the formal documentation obligations that the same regulation
introduced in this area, obligations which "shall be enforceable from 3 months following the entry into
force of the regulation that develops them"
(Seventh Additional Provision of Law
36/2006), and which were regulated by Royal Decree 1793/2008, which came into force
on 19 November 2008, so that the documentation
obligations regulated in sections 3 and 6 of Chapter V of the
Title of the Corporate Income
Tax Regulations come into force on
19 February 2009. For this reason, since
that specific penalty regime is associated with
formal obligations that are
newly introduced into the legal system by RD 1793/2008, it cannot be understood
that said penalty regime is applicable to
the 2008 period in which there was
no formal obligation that could be breached and which that penalty
regime was intended to punish.
Consequently, the claimant's claim regarding the application
of the penalty
system established in article 16.10 of the TRLIS for the
2008 tax period must be rejected.
"In the 2009 tax period
there is no dispute between the parties
over the fact that, in accordance
with the regulations in force at that time, the taxpayer was exempt
from the obligation to document
the related-party transactions as the normal market value of
the transactions did not exceed
the amount of €250,000 established in article 18.4. e) of the Corporate Income
Tax Regulations, approved by Royal Decree 1777/2004, amended by Royal Decree 1793/2008 and in the new wording given to the
same by Royal Decree 897/2010, of 9 July, which simplified
the documentation obligations for related-party transactions and applicable for tax periods ending
on or after 19 February 2009.
The discrepancy between the plaintiff and the Administration lies in the fact
that while the latter considers
that as there is no breach of
the documentation obligations, it interprets that the taxpayer must
be penalised in accordance with the general system provided for in the General Tax Law and specifically
for the conduct
typified in Article 191 of the Law
consisting of failing to pay
the tax debt
resulting from the correct self-assessment
within the established period, on the contrary,
the interested party understands that the 4th rule of Article 16. 10 of the aforementioned
TRLIS is applicable in this case, and his conduct is not
punishable for any reason, neither
under Art. 16.10 of the TRIS nor under
191 of the LGT, even though it
consisted of failing to pay
the tax debt.
This TEARM considers the interpretation
made by the
Administration to be appropriate, as the aforementioned rule 4 of Article 16. 10 of the TRLIS refers to cases in which there is no breach
of the obligation
to document by the taxpayer
and the value declared by him
in his tax return coincides with that which is
derived from the documentation of the related
transaction, but which is nevertheless
an incorrect normal market value, which
has required the Administration to make a valuation correction which is not punishable
either by this article 16.10 TRLIS or by the
general penalty system of the LGT. In other words, as the taxpayer is
exempt from the obligation to provide documentation,
the immediate conclusion is that
it is outside
the scope of the penalties
set out in section 10 of the TRLIS.
Consequently, the claimant's claim that his
conduct in the 2009 tax period should
not be penalised on the basis of
article 16.10.4 of the TRLIS should be rejected".
SECOND.- The ruling of
the court of first instance.
1. Against the aforementioned
rejection decision, Mr.
Matías filed an
administrative appeal before the
Chamber of that jurisdiction of the High Court
of Justice of Madrid, which rejected it through
the judgement now under appeal, in which, upholding the penalty decision,
it ratifies, in essence, the criterion
of the TEAR of Madrid, appreciating the existence of
typicality of the sanctioned conduct insofar as the penalty regime
of Article 16.10 TRLIS is not applicable
and Article 191 LGT is applicable.
The judgment reasoned, inter alia, in relation to the issue
being debated in these proceedings, as follows:
"THIRD.-
[...] The appellant then raises the absence of typicality,
to which effect he points out that the
matter in question is regulated by
art. 16 TRLIS, to which
art. 41 of the Personal Income Tax Act
expressly refers, the main characteristic
of this system
of penalties being that the
mere circumstance that the value used
by the obligors
departs from what the Administration
considers to be the normal value in each case, which always involves a component of appreciation,
is not considered
an infringement. What the rule penalises
is not the
difference in value assessed by the
tax authorities, but the failure
to comply with the documentation
obligations associated with the legal regime for related-party
transactions, which is made clear
in art. 16.10 TRLIS by providing
for two cases of exclusion from
the general penalty regime in the area
of related-party transactions.
Thus, with regard to
the 2008 financial year, it requests
the annulment of the sanction
given that the 2008 events sanctioned now would not have
constituted an infringement if they had been
carried out at the time of being
sanctioned. And with regard to the
2009 financial year, it alleges that
if there was no documentation obligation, it would be difficult to find the
infringement regulated by art. 16 TRLIS, which consists precisely of not keeping
such documentation or, if documentation
was kept, not adjusting the
declared value to what results
from it.
[...]
FIFTH.-
[...] Having established the above, we
must now examine, following a logical legal order, the plea
of the appeal which raises the lack of criminal offence due to
the application of the penalty
system regulated in art. 16
of the revised
text of the
Law on Corporation
Tax, approved by Royal Legislative Decree
4/2004, of 5 March, in the wording given by
Law 36/2006.
Article 16.10 of RDL 4/2004, as amended by Law 36/2006, provides as follows: [...].
Well, the issue raised
by the appellant
has already been analysed by this
Section in the judgment of 16 May 2007 (Appeal
No 1140/2015 ), which in turn
refers in part to the judgment
of 8 September 2015, which brought Appeal No 548/2013 to an end.
Consequently, by application of the principles
of unity of doctrine, legal certainty and equality, the arguments
set out in the Sixth Ground of
Law of the
judgment delivered in
Appeal No 1140/2015, which reads
as follows, must now be reiterated:
"As the previous precept
makes clear, the tax infringements
that it typifies
are related to the documentation that would be determined
by regulation as established in Article 16.2 of the TRLIS and that documentation has not been required
of the appellant,
since, as the appealed agreement makes clear, the
penalty regime regulated by Article
16. 10 of the TRLIS, introduced by Law
36/2006, for periods commencing after 1/12/2006 for transactions carried out before 19/02/2009, although there was an obligation
on the shareholder
and the company to value the
related transaction at the normal market price, it was
not compulsory to complete the specific documentation and therefore it is
not possible to impose penalties
for tax infringements
linked to documentation that was not required.
In this regard, the
Seventh Additional Provision, section 2 of Law 36/2006, provides 2. The documentation obligations referred to in section 2 of Article
16(2) of the Consolidated Text of the Corporate Income
Tax Law, approved by Royal Legislative Decree 4/2004, of 5 March, as amended by this
Law, shall be enforceable from 3 months after the entry into force
of the regulation
implementing them. Until that date, the provisions in force at the date of entry into
force of this Law on
documentation of related-party transactions and penalties shall apply, and the valuations made by taxpayers when
they correctly apply any of
the valuation methods provided for in Article 16(4) of the aforementioned
consolidated text, as amended by this
Law, shall not constitute a tax infringement.
It should be borne in mind that Royal Decree 1793/2008, of 3 November, amending the Corporate
Income Tax Regulations, approved by Royal Decree 1777/2004 of 30 March, which articulates the regulatory development of the documentation
referred to in Article 16. 2 of the TRLIS, came into force on
20/11/2008, the day after its publication in the BOE, in accordance with DF 2 of the
same Regulation and the Administration is right in that
the penalty regime of article
16.10 of the TRLIS is not applicable
to related-party transactions carried out in 2007 and 2008.
On the other hand,
in relation to the specific serious
tax infringement referred to by
the appellant, the Constitutional Court in Ruling 145/13 of 11/07/2013, which resolved the question of
unconstitutionality against
Article 16. 2 and 10 of
Royal Legislative Decree 4/2004, as drafted by Law
36/2006, states that the second type
of administrative infringement
is the declaration
of a value different from the normal market value, i.e. the discrepancy between the value declared
for certain taxes -corporations, personal income or non-resident
income- and that resulting from the previous documentation
(second paragraph of section 10), which confirms the linking of
the infringement with documentation that was not
required for the related-party transactions carried out between the
partner and his company in 2007 and 2008.
And finally, the compatibility
between the infringements of article 191.1 of the LGT and article 16.10 of the TRLIS, has already been resolved and rejected by this
Section in judgement 889 of 8/09/2015, handed down in appeal 548/2013, in which
the legality of the sanctioning
agreement issued against a natural person for the infringement
of article 191. 1 of Law 58/2003, for payment of
less than the amount that
would have resulted had the
majority shareholder's related-party transaction with his company
been correctly valued at the market
price between independent parties.
In the aforementioned ruling, as far as is relevant here,
it is stated:
Well, the sanctioning agreement challenged here is not
based on the breach of
any specific documentation obligation related to the
carrying out of related-party transactions, but is a direct consequence
of the lower
taxation resulting from the valuation
of such transactions
at a price lower than the normal market price, which
is different. The original wording of Article 16 of
RDL 4/2004 already required
transactions carried out between related
persons or entities to be valued at their normal market value, and if the valuation
lower than the normal market value results in lower taxation, the unpaid tax
debt together with late payment interest and also the penalty are payable, as there is no rule against penalising if the
necessary requirements for the existence
of an infringement
are met. The fact that in the
fiscal years subject to verification the documentation obligations that were later legally
imposed did not exist does
not mean that the Administration cannot apply the
legal rules then in force
and sanction the non-payment of the
tax debt deriving from the
incorrect valuation of a related-party transaction.
But none of those
infringements has given rise to the
imposition of the sanction under
appeal here, which is based on
Article 191 of the LGT, a precept which typifies the infringement consisting of failing
to pay in due time the tax
debt which should result from
the correct self-assessment of the tax.
[...]
However, there is no coincidence
between the offence provided for in art. 191 LGT and that typified in the second paragraph of art. 16.10 of RDL 4/2004, as the former consists
of the non-payment of all
or part of
the tax debt,
while the latter penalises the declaration of a market value
other than that which derives from the documentation
provided for in the aforementioned article 16.2 [...].
Therefore, we are not dealing
with a legal modification
that is more favourable to the
offending party, but rather with
a new infringement, as the very wording of
Article 16.10 RDL 4/2004 makes
clear when it states the
coexistence of the new infringement with that of
Article 191 LGT. 191 of the LGT, which results from the
fact that the sanction corresponding
to the new infringement is incompatible with that which
may proceed, where appropriate, by the application
of the aforementioned
art. 191 of the LGT, the latter infringement
to which, therefore, the sanction provided for in art. 16.10 RDL 4/2004 cannot
be imposed".
The arguments just transcribed are fully applicable to the
present case and show that the penalty regime
of art. 16.10 RDL 4/2004 was
not in force in 2008, the regime established
in the General Tax Law being applicable
in that period. Contrary to what
is alleged in the complaint, it should be pointed
out that the aforementioned art. 16.10 does not establish
a more favourable penalty regime than that
which existed previously, as it introduces a
new tax offence which coexists with the offence
under art. 191 of the General Tax Law, although both
are incompatible with each other, so that art. 10.2 of the LGT is
not applicable to the case.
With regard to the
financial year 2009, it is not
disputed that the taxpayer had
no documentation obligation
since the consideration for all the transactions
between the company and the partner did not
exceed the amount of 250,000.00 euros market value fixed
in art. 18.4.e) of the Corporation Tax Regulations. In view of this, the
appellant claims that he cannot be penalised because the new regime excludes the possibility
of penalising under art. 191 of the LGT, but that
thesis is not shared by
the Chamber by virtue of
the arguments transcribed above, it being appropriate
to reiterate that the original wording of art. 16 of Royal Legislative Decree
4/2004 already made it compulsory to
value transactions carried out between
related persons or entities at their normal market value, for which
reason, if the valuation lower
than this value leads to lower taxation, both the unpaid
tax debt and the interest for
late payment are payable,
as well as the penalty, since no rule prevents a penalty being imposed if
the requirements for the existence
of an infringement
are met. And in this case, the assessment of the related
transaction carried out by the
Inspection in relation to the financial
year 2009 has shown that the appellant
did not pay
the debt that should have
resulted from the correct self-assessment
of personal income tax within the
deadline, an action that constitutes
the offence typified in art. 191 of the LGT, and therefore the decision adopted
on this matter
by the Administration
is in accordance with the law.
To understand otherwise would imply leaving without
sanction a conduct which -as will be seen later- was
directly aimed at avoiding payment of the tax
debt, which is not admissible".
2. In summary, according to the
ruling, (i) the penalty regime of article 16.10 TRLIS relates to the keeping
of certain documentation that is established by regulation ( article 16. 2 TRLIS), and, for the periods concerned
(taking into account the seventh
additional provision, 2, of Law 36/2006, and Royal Decree 1793/208), although there was an
obligation on the shareholder and the company to
value the related-party transaction at the normal market price, it was
not obligatory to fill in said
specific documentation,
so it is not possible to
impose penalties for the tax
infringements typified
in the aforementioned provision; (ii) that STC 145/2013, which resolves the question
of unconstitutionality raised against Article 16, paragraphs 2 and 10,
TRLIS, in its wording by Law 36/2006, confirms the linking
of the infringement
with documentation that was not
required for related-party transactions carried out between
a partner and his company in the years under examination;
(iii) that Article 16 TRLIS requires transactions carried out between related
persons or entities to be valued at their normal market value, so that "if the
valuation lower than the normal market value entails
lower taxation, the unpaid tax
debt together with late payment interest and also the penalty are payable, as there is no rule preventing a penalty if the
necessary requirements for the existence
of an infringement
are met"; (iv) that "the fact that in the
fiscal years subject to verification the documentation obligations that were later legally
imposed did not exist does
not mean that the Administration cannot apply the
legal rules then in force
and sanction the non-payment of the
tax debt deriving from the
incorrect valuation of a related-party transaction"; (v) that none of the
offences typified in Article 16. 10 TRLIS "has given
rise to the
imposition of the penalty appealed
against, which is based on
art. 191 LGT, a precept which
typifies the infringement consisting of failing to
pay in due time the tax debt
that should result from the
correct self-assessment of the tax";
(vi) that there is no coincidence between the infringement
provided for in art. 191
LGT and that typified in the second paragraph
of art. 16.10 TRLIS, as the
former "consists of the non-payment
of all or
part of the
tax debt, while the latter
penalises the declaration of a market value other
than that derived from the
documentation provided for" in art. 16. 2 TRLIS; (vii)
that we are not dealing with
a legal modification that
is more favourable to the offending
party, but rather with a new offence, as the very wording of
Article 16. 10 TRLIS when proclaiming the coexistence of the new infringement with that of
Article 191 LGT, which results from the
fact that the sanction corresponding
to the new infringement is incompatible with that which
may proceed, where appropriate, from the application
of Article 191 LGT, the latter infringement
to which, therefore, the sanction provided for in Article 16. 10 TRLIS; (viii) that, in definitive, the penalty regime of Article 16.10 TRLIS was not in force
in 2008, the regime established in the LGT being applicable in that period, and, contrary to what
is alleged in the claim, the
aforementioned precept does not establish
a more favourable penalty regime with respect
to that existing
previously, as it
introduces a new tax infringement
that coexists with the infringement
of Article 191 LGT, although both are incompatible with each other,
so that Article 10. 2 LGT; (ix) that, with
regard to the financial year
2009, despite the fact that the
taxpayer does not dispute that he had no documentation obligation, he claims that he cannot be penalised because the new regime excludes the possibility
of penalising under Article 191 LGT, a thesis that cannot
be shared because the original wording of Article 16 TRLIS already obliged the valuation of
transactions carried out between related
persons or entities at their normal market value,
"for which reason,
if the valuation
lower than that value entails
lower taxation, both the unpaid
tax debt and the late payment interest are payable, as well as the penalty,
since there is no rule that prevents a penalty being imposed if
the requirements for the existence
of an infringement
are met"; (x) that, in
this case, the assessment of the
related transaction carried out by
the Inspection in relation to the
financial year 2009 has shown that the
appellant did not pay within
the deadline the debt that
should result from the correct
self-assessment of the Personal Income Tax, an action
that constitutes the infringement typified in Art. 191 of the LGT; and (xi), in short, that
to understand otherwise would imply leaving without
sanction a conduct that in this case was directly aimed
at avoiding payment of the tax
debt, which is not admissible.
THIRD.- Preparation and admissibility of the appeal.
1. Don
Matías prepared an appeal
in cassation by letter of 28 July
2017.
2. In that document, the appellant's
legal representation identified
as "infringed rules" Article
16.10.4 TRLIS and Article 191 LGT, in the wording in force at the time of accrual of
the Personal Income Tax regularised by the Tax
Inspectorate, fiscal years
2008 and 2009, that is, at
31/12/2008 and 31/12/2009.
3. The Court of First
Instance considered the appeal to be prepared by order
of 14 September 2017, and the Admission Section
of this Third
Chamber of the Supreme Court admitted it in another of 7 February
2018, in which it found that this
appeal meets the circumstance of objective interest for the formation
of jurisprudence provided for in section 2. c) of Article 88 of Law
29/1998, of 13 July, regulating Contentious-Administrative
Jurisdiction (LJCA), but exclusively in relation to the infringement
relating to the financial year
2009, not that of 2008, "given that the doctrine of this Chamber
on the duty
of the Tax
Administration to apply retroactively the penalty rule that is more favourable
or beneficial to the interested party is well
known and does not require any
clarification, specification
or precision", specifying that the question of
interest is the following:
"To determine whether, not having failed
to comply with the specific
documentation obligations required in relation to related-party transactions, the corrections made by the Tax
Administration with respect to the
same from which a lack of
income is derived, allow it to sanction
the taxpayer in accordance with the provisions of Article 191 of Law 58/2003, of 17 December, General Tax Law".
The aforementioned order identifies as legal rules which,
in principle, will be subject to interpretation,
Articles 16.10.4 TRLIS and 191 LGT.
FOURTH.- Filing of the
appeal in cassation.
1. The
procedural representation of
Mr. Matías filed the appeal
in cassation by letter of 3 April 2018, which complies with the legal requirements. In this document, after describing the facts, he explains
that what the appellant has argued, both in administrative
and judicial proceedings, is
that the application of article 191 LGT was not appropriate, but rather that
of article 16.10.4 TRLIS,
"a special rule that prevails over the
general rule", "since this
matter of related-party transactions is expressly regulated
in article 16 [TR]LIS, to which article 41 expressly refers" LIRPF.
He then explains why,
in his opinion, article 16.10.4 TRLIS should be interpreted in the sense that tax
assessments arising from valuation adjustments of related-party transactions that are not subject
to the documentation
obligation of article 16.2 TRLIS cannot give rise to
the offence typified in article 191
LGT, consisting of failing to pay
the tax debt.
In this regard, it argues as follows:
1.1 That number 4 of
section 10 of Article 16 TRLIS establishes that when it
is appropriate to make valuation
adjustments in related transactions without the non-compliance that constitutes the infringement set out in that section
10 having occurred and that valuation adjustment involves a failure to pay,
the same shall not constitute
the commission of the infringement
of Article 191 LGT.
1.2 That the infringement
typified in section
10 of Article 16 TRLIS consists either in not providing the
documentation referred to in section 2 of that provision,
or in providing it incompletely, inaccurately or with false data, or in the value derived
from that documentation not being the value
declared in the corresponding tax.
1.3 Article 16(2) of the TRLIS stipulates that related-party transactions must be documented in accordance with the regulations
and, in accordance with Article 18(4)(e) of the RIS, there is no obligation to document related-party
transactions between individuals where the overall amount
of such transactions
does not exceed EUR 250,000.
1.4 In cases
where it is not compulsory
to prepare documentation of related-party transactions, the requirement laid down in Article 16.10.4 of the TRLIS that
the following should not have
occurred is automatically met
1.5 That this means
that the requirement of Article 16.10.4 of the TRLIS that "the breach constituting
this infringement has not occurred" is automatically met, since if
there is no obligation to prepare documentation of related-party transactions, there is no breach
of this obligation.
1.5 This means that
the three conditions set out in paragraph 4 of Article 16.10 TRLIS are met for Article 191 LGT not to be considered
applicable, namely: (i) the tax authorities
have made a valuation adjustment in the context of
related-party transactions;
(ii) the breach constituting the infringement has not occurred (if
there is no duty to document
related-party transactions,
such a breach cannot be committed); and (iii) the valuation
adjustment has led to a failure to make
a tax payment.
1.6 That the interpretation
upheld is that which can be deduced from the
wording of Article 16.10.4 of the TRLIS, and that if the law
had intended that valuation adjustments not subject to the
documentation obligation should be penalised in accordance with Article 191 of the LGT, it would
have expressly established this, but the rule does
not exclude this, leaving no room for doubt
as to the fact that number
4 of Article 16.10 of the TRLIS applies
to all related-party
transactions, whether or not they
are required to be documented.
1.7 That the interpretation
advocated is the most in line with the purpose
of the provision,
which is to establish a specific system of penalties for
related-party transactions.
This purpose is accredited, not only by
its strategic location in Article 16 TRLIS itself, but also
by the express
reference in section 10 of the precept
to the provisions
of Articles 188.1, 188.3
and 203 of the LGT to establish the
possibility of sanctioning in accordance with this precept
the cases of resistance, refusal, excuse or obstruction in the event of
non-compliance with requirements made in the framework of
the normal market value checks carried
out by the
Administration. It is obvious, it
is said, that all these
references would be meaningless if the penalty regime
for related-party transactions were fully included in the general tax penalty regime.
It is therefore, it
is said, a special penalty regime that applies
to all related-party
transactions to the exclusion of
the general penalty regime, which makes
it meaningless to apply Article
16.10.4 TRLIS to some related-party transactions and not to apply
it to others.
It is reiterated
that the purpose of the
rule is to establish a single penalty regime for all
related-party transactions,
without exception, that if any
exception had been desired it
would have been expressly fixed and, in short, that since this has not been done, it must be considered
that the aforementioned provision is a special rule as opposed to the
offences generally typified in the GLT.
1.8 That the interpretation
advocated is the most in line with the principle
of legality of penalties set out in Article 25 of the Spanish
Constitution (EC), which, according to the
Constitutional Court, implies the requirement
to configure penalty laws as precisely as possible so that citizens can know in advance the scope of
what is proscribed
and thus foresee the consequences of actions (STC 135/2010, of 2 December is
cited).
This requirement, it is specified, has the necessary consequence
that the interpretation of the penalising rules must be as close as possible to the
terms in which they are expressed, since otherwise the purpose pursued
by the principle
of legality would be frustrated; and the interpretation proposed by the
appellant would be the most in line with the wording
of Article 16.10.4 TRLIS, that is, with
the interpretation that any taxpayer
would draw from the reading
of the same.
2. Next, it is argued
that the contested judgment, by infringing Article
16.10.4 TRLIS, in connection with
Article 191 LGT, has also infringed the fundamental right of the
plaintiff not to be penalised for actions which
at the time they were committed were not classified
as an administrative offence,
as set out in Article 25
EC. To that end, it is
alleged, in summary, as follows.
2.1 That the plaintiff
was imposed, in relation to Personal Income Tax for
2009, a penalty in accordance
with Article 191 LGT for a tax assessment
arising from a valuation adjustment of a related transaction
which was not subject to
the documentation obligation, a penalty which was challenged,
on the grounds,
inter alia, of infringement of Article 16.10.4 TRLIS.
2.2 The judgment of
the court of first instance
upholds the penalty with arguments
set out in the fifth ground which
cannot be shared because: (i) it considers the infringement
of Article 16.10 TRLIS as if it were
an infringement of Article 16.10 TRLIS. 10 TRLIS
as if it were a formal breach totally unconnected to a failure to
pay, when the rule defines the infringement on the basis of a valuation adjustment that can determine a failure to pay the
tax debt, which is why
it expressly provides that in this case Article 191 LGT does not apply;
and (ii) because it understands that in the event
of a failure to pay, Article
191 LGT is applied before Article 16.10.2 TRLIS, when this provision
provides precisely the opposite.
On this last point,
it is insisted
that the incompatibility established is that of
article 191 of the LGT on the
part of the
taxable bases that have given rise
to the penalty
of article 16.10.2 TRLIS,
and not the other way round, as the contested ruling
would have it. But all
of the above,
it should be noted, refers to
number 2 of Article 16.10 TRLIS, when what was being
discussed in the claim was the
application of number 4 of that
provision. And the wording of that
paragraph establishes very clearly, in the appellant's opinion, that when
the documentation obligations have not been breached,
no penalty can be imposed by virtue of
Article 191 LGT.
Thus, it is concluded,
when the ruling of the
court of first instance confirms the penalty
for Personal Income Tax for 2009, it
is considering that Article 191 of the LGT can be applied on the
basis of a settlement issued for a valuation
adjustment of a related transaction that was not
obliged to be documented, thereby incurring in the infringement of Article 16. 10.4 TRLIS, as well
as infringement of the fundamental right of the plaintiff,
contained in Article 25 EC,
not to be penalised for an
action which at the time it was
carried out was not classified
as an administrative offence,
by express mandate of the aforementioned
Article 16.10.4 TRLIS.
3. Finally, the appellant clarifies
that his claim consists of the cassation
of the contested
judgment in the part relating to
the penalty imposed for the
2009 personal income tax settlement, derived from the valuation
adjustment of the transactions of Mr. Matías with the company REPRESENTACIONES
CRETA, transactions which were of a related
nature in accordance with Article 16 TRLIS and which did not
have to be documented in accordance with paragraph 2 of that provision.
And to this end,
it requests the following ruling
from this Chamber: "[...] [i]n accordance
with article 16.10. 4°
[TR]LIS, the tax settlements derived from the valuation
adjustments relating to related transactions
for which there is no obligation
to document cannot give rise
to the commission
of the infraction
set out in article 191 LGT consisting of failing
to pay the
tax debt within the established
period".
FIFTH: Opposition to the
defendant's appeal in cassation.
1. The State Attorney, in the exercise of
the representation that he holds, has opposed the appeal in cassation by letter
of 28 May 2018, which
observes the legal requirements.
In this brief, he began by defining
the purpose of the appeal and recalling that the order of
admission only found an objective
interest in the formation of jurisprudence
with regard to the infringement
relating to the 2009 tax period.
Even so, it specifies that as the specific penalty system established by Article 16.10 TRLIS is associated with formal obligations which, as a novelty, are introduced into the legal system by Royal Decree 1793/2008, this penalty system cannot be understood to be applicable to the 2008 period,
in which there was no formal obligation that could be breached
and which the penalty system was intended to
punish.
He also stresses that
it is not
in dispute that in 2009 the
taxpayer was exempt from the
obligation to document the related
transactions as the normal market value of
the same did not exceed
the amount of 250,000 euros established in Article 18.4.e) RIS, as amended by Royal Decree 1793/2008 and in the new wording given to the
same by Royal Decree 897/2010, which simplified the documentation obligations for related transactions
and applicable for tax periods ending
on or after 19 February 2009.
Having made both clarifications,
the Abogado del Estado summarises
the facts that have given
rise to the
present proceedings and, subsequently, he rules on the alleged infringement
of Article 16.10.4 of the TRLIS and Article 191 of the LGT.
2. To do so, it starts
from the original wording, in March 2004, of article 16 TRLIS, relating to the "Valuation
rules: related-party transactions",
section 1 of which allowed the
tax authorities the possibility of valuing, within
the limitation period, at their normal market value, transactions
carried out between related persons or entities,
without containing any provision on
the documentation obligations of the taxpayer and, more importantly, on the documentation obligations of the taxpayer, more importantly, on possible specific infringements related to a breach of
the obligation to document or
to a discrepancy between the documentation
kept by the
taxpayer and his tax return, with
possible corrections in valuations resulting from an inspection
or investigation by the tax
authorities.
2.1 It goes on
to stress that Law 36/2006, which is applicable to
the 2007 tax period and subsequent ones, amended Article
16 TRLIS in two basic aspects. Firstly, it substantially corrected, in part, the provisions of paragraph 1 of that article,
which already begins by stating,
in its new sub-paragraph 1,
in an imperative manner, that "transactions carried out between
related persons or entities shall
be valued at their normal market value", this being understood
as "that which would have been
agreed by independent persons or entities in conditions of free competition". Secondly, paragraph 2 stipulates that 'related persons
or entities shall keep at the
disposal of the tax authorities
such documentation as may be established by regulation'.
2.2 On this basis, the new paragraph 10, first subparagraph, of Article 16 provides,
for the first
time, fully empowered by Article 183(1) of the General Tax Code, for
a system of penalties for tax
evasion. 1 LGT, a specific
penalty regime in relation to related-party
transactions, establishing
a first infringement directly related to non-compliance with the formal documentation obligations enshrined in paragraph 2, the penalty for
which will depend on whether
or not value
adjustments have to be made by
the tax authorities
with regard to the related-party
transactions subject to tax, and which
takes the form of a series of specific penalties; and a second infringement (independent of the failure
to comply with the formal documentation obligation referred to in the first subparagraph),
set out in the second subparagraph of the first
paragraph, related to the failure
to declare in the corresponding tax the normal market value derived from
the documentation provided for in that article and kept by the
taxpayer.
2. 3 In order to punish
those two offences - it is
explained - it is always assumed
that there is a prior obligation to provide documentation
(in one case, not provided or provided
incompletely, inaccurately or with false information),
in the other case, a discrepancy between the two; in the
other, a discrepancy between the normal market value derived
from that documentation and the tax return) from
which, in this specific case, the appellant was exempt,
which places him outside the scope
of the penalties
provided for in that provision, but not that
provided for in Article 191 of the LGT since, although there is no formal documentation obligation, the obligation to value
transactions carried out between related
persons at their normal market value, enshrined
in Article 16. 1.1 TRLIS subsists,
in any case, for all tax periods
beginning in 2007 and may well give rise
to the commission
of the tax
infringement of the aforementioned Article 191 of the LGT.
2.4 In order to reason
the above statement, the State Attorney analyses and interprets the content of
Article 16.10 TRLIS, applicable
for tax periods
commencing on or after 1 December 2006; a provision and sections that have remained
in force until the repeal of
the TRLIS by the new Law 27/2014, of 27 November, on Corporate Income
Tax. A simple examination of the first
paragraph of Article 16.10 TRLIS -he explains-
shows that it begins by typifying
"ex novo" two infringements: a first, essential and basic one, clearly related
to the documentation
obligations of related-party transactions enshrined in paragraph 2 of that Article
16 (failure to provide, incomplete, inaccurate or false provision of such documentation);
and a second infringement arising from the
discrepancy between the normal market value derived from
the documentation provided for in that article (carried
by the interested
party) and the tax return filed.
Both infringements - it specifies - are considered serious and their sanction, based essentially on non-compliance with a pre-existing documentation obligation, will depend on
whether (i) no valuation corrections should be made (sub-section 1), (ii) such valuation
corrections should be made (sub-section 2), (ii) that these
valuation adjustments should be made (sub-section 2), which may also constitute
an infringement of Articles 191, 192, 193 and 195
of the LGT, or, finally, (iii)
that, although an assessment adjustment
should also be made, there has been no failure to comply with
these formal obligations,
and this conduct cannot be considered to constitute a tax infringement of the aforementioned
provisions.
2.4.1 The first case consists of non-compliance with formal documentation obligations (related to the
first and basic infringement set out in Article 16(10)), without the tax administration
making value adjustments in respect of transactions subject to tax
(sub-section 1), and constitutes
a serious infringement punishable in general terms by a financial fine of EUR 1. 500 euros for each item of
information and 15,000 euros for
each set of omitted, inaccurate or false information relating to each
of the documentation
obligations established by regulation for
the group or for each
entity in its capacity as a taxable person or taxpayer.
2.4.2 The second case consists of failure
to comply with formal documentation obligations (also related to the
first and basic infringement of Article 16.10) when, unlike the previous
case, the tax administration makes valuation adjustments to transactions subject to tax
(sub-section 2), which constitutes a serious infringement punishable by a proportional fine of 15% of the
amount of the amounts resulting
from the valuation adjustments for each transaction,
with a minimum of double the
penalty that would be applicable under number 1 above. In this case, the sub-paragraph in question, implicitly admitting that the conduct of
the obligor can also be covered by Articles 191, 192, 193 and 195
of the LGT, gives prevalence, due to its
specificity, to the special rule and the penalty foreseen
for these cases, related to the
documentation obligations of related-party transactions in Article 16.
10.2º, clearly stating that this sanction
will be incompatible with that which may
be applicable, where appropriate, for the application of the aforementioned
articles of the GLT for the
part of the
bases that would have given rise
to the imposition
of the infringement
foreseen in this number. The possible
modal competition of infringements is clearly resolved in favour of the special
rule.
2.4.3 Lastly, the third
and most problematic case, which is the
basis for the appellant's claim, that of sub-section
4 of Article 16.10 of the TRLIS, again
based on the prior and pre-existing formal
documentation obligation in
Article 16.2, refers to the case where
the tax administration
makes valuation adjustments in respect of taxable related-party
transactions, without the non-compliance which constitutes this infringement having occurred.
The non-compliance that constitutes this infringement, which has not occurred, is
essentially, once again, that of the
formal documentation obligations,
the basic premise of the first
of the infringements
typified in Article
16.10 TRLIS and on which the admitted question
revolves. In this case, although it is
not understood, therefore, that the specific infringement of Article 16.10, first paragraph, of the
TRLIS has occurred, if it is necessary,
in spite of everything, to make a valuation adjustment (regularisation without penalty), and this adjustment leads to a lack of
income, improper obtaining of tax
refunds or improper determination or accreditation of items to
be offset in future tax returns,
or the net income is incorrectly
declared without
This will not constitute
an infringement of Articles 191, 192, 193 or 195 of the
LGT, for the part of the
taxable income that would have
given rise to an adjustment
of the value
of the tax
base.
Basically, the exclusion, in any event, of
any reproach of penalties for
this last valuation adjustment is based on
the principle of reasonable interpretation
of the tax
legislation, which determines
the non-requirement of liability under
Article 179(2)(d) of the LGT, once it has been established that there has been no failure to comply with
the documentation obligations required by the applicable
legislation.
2.5 In the opinion of
the Abogado del Estado, the
correct interpretation of Article 16.10. 4º TRLIS, which is the
specific subject of the question
which raises an objective appeal, cannot make us lose sight
of the obvious
fact, which serves as the basis for the
judgment under appeal, that, for it
to come into play, it is
always necessary for there to
be a formal obligation to provide documentation, If there is
no such documentation obligation in respect of related-party transactions, as is the case here and is not disputed,
the taxpayer is completely outside
the scope of the penalties
set out in Article 16(10) of the TRLIS.
2.6 This being the
case - it is concluded - and given that, in any event,
for all tax
periods commencing after the reform of
Article 16.10 by Law 36/2006 (i.e. 2007 onwards), the interested party is obliged
to value transactions carried out between related
persons or entities at their market value (section
1.1.1). 1), there is nothing to prevent
the tax authorities,
if the necessary
requirements for the existence of
an infringement are met (which is
not in dispute in this
appeal), from penalising the possible conduct
of the person
concerned in breach of this obligation,
and from considering the tax infringement
under Article 191 of the LGT to
have occurred, if this has led to a failure to
pay all or
part of the
tax debt that should have
resulted from the correct self-assessment
of the tax
within the period established in the tax regulations.
2.7 In this regard, the
abogado del Estado considers that
the question referred to the
Chamber by the order for
admission should be qualified when, in its operative part, it states that,
'there having been no failure to comply with
the specific documentation obligations required in relation to the transactions
carried out, the corrections made by the
tax authorities', in the sense that
such failure derives from a prior and pre-existing obligation to document
the related transactions. If this is not
the case, as is the case here due
to the exemption
from that obligation, the valuation adjustments made by the
tax authorities in respect of the
related transactions would, in any event,
allow the taxpayer to be penalised for non-compliance with its general obligation to value the
related transactions at the normal market value of Article
16.1.1 TRLIS, if the requirements for the existence of
the infringement are met, in accordance with Article 191 LGT, as was done here. To hold otherwise,
as the contested judgment states, would mean leaving without penalty a conduct that was
directly aimed at avoiding payment of the tax
debt, which is not admissible.
3. Finally, the State Attorney
opposes the interpretation of Article 16.10.4 TRLIS requested by the appellant,
and proposes that this Court should
declare that for the exclusion of
liability contained in that provision to be applicable, it is necessary
for there to be a prior and pre-existing
formal obligation to document the related
transactions, fulfilled by the interested
party, so that if the interested
party is exempt from that
documentation obligation, neither that section
nor Article 16. 10 TRLIS as
a whole, which does not preclude
the existence in any case of the
general obligation of the interested party to value
the related transactions at the normal market value of
article 16.1.1 TRLIS and that
his conduct contrary to compliance
with this obligation, following the valuation adjustment
made by the
Tax Administration, if it results
in a lack of income and the applicable requirements are met, may be considered
as a tax infringement of article 191 LGT, punishable under the terms established
in said precept.
SIXTH.- Appointment for deliberation, voting and ruling.
By virtue of the
power conferred by article 92.6 LJCA, the Section did
not consider it necessary to
hold a public hearing, and therefore the proceedings were left pending
to be scheduled for voting and ruling, a circumstance that was stated
in the order of 6 June 2018, and for this purpose the
2nd of October 2018 was scheduled for
the voting and ruling of the
appeal, date on which, effectively and after deliberation,
the same was voted on
and ruled, with the result that
is now expressed.
GROUNDS OF
LAW
FIRST.- Subject matter of the present
appeal and question with objective appeal interest.
The purpose of this
judgment is to determine whether or not the
judgment handed down by the
Chamber of this court of
the Madrid High Court of Justice, challenged
in cassation by the legal representation of Mr Matías, is
or is not
in accordance with the law.
The First Section of
the Chamber for Contentious-Administrative Proceedings of this Court, in FJ 4 of the Admission
Order of 7 February 2018, assessed the presence of
an objective interest for the
formation of case law "in relation exclusively to the infringement relating to the
financial year 2009",
and, in relation to art.
16.10.4.º TRLIS in the applicable
wording ratione temporis - namely, the wording in force in 2009 of Royal
Legislative Decree 4/2004, of
5 March -, it delimited the cassation issue
raised by the present appeal in the following terms:
"To determine whether, not having failed
to comply with the specific
documentation obligations required in relation to related-party transactions, the corrections made by the Tax
Administration in respect thereof from which
a lack of income arises, allow it to
penalise the taxpayer in accordance with the provisions
of Article 191 LGT".
And the aforementioned order of admission
also identified as legal
rules that should be interpreted in this ruling articles 16.10.4 TRLIS and
191 LGT.
In order to answer
the question raised in the appeal, it is necessary
to begin by contextualising the provision contained
in art. 16.10.4 TRLIS -and, more generally, the penalty system
provided for in section 10 of art. 16 TRLIS- whose interpretation constitutes the main object of
the present appeal.
SECOND.-The necessary contextualisation
of the special
penalty regime contained in art. 16.10 TRLIS. Its
exclusive application to parties who must
keep and maintain at the disposal of
the tax authorities
the documentation relating to related-party
transactions.
This is not the
first time that this Chamber has had to rule on
section 10 of art. 16 TRLIS
in the wording given to this
provision by Law 36/2006, of 29 November, on measures
for the prevention
of tax fraud.
On the occasion
of the appeal lodged at the time by the Consejo Superior de
Colegios Oficiales de Titulares Mercantiles de
España against Royal Decree
1793/2008, of 3 November, which amended the
Corporate Income Tax Regulations, approved by Royal Decree 1777/2004, of 30 July, this Chamber
-by Order of 8 February 2011 (rec. núm. 8/2009) - raised a question of unconstitutionality
with regard to sections 2 and 10 of art. 16 TRLIS on the grounds that
the provisions contained therein could infringe the principles of legality
of penalties - both with regard
to infringements and penalties - and of proportionality established in
art. 25.1 EC.
In the resolution of the aforementioned
question of unconstitutionality, the Plenary of the
Constitutional Court - in
STC 145/2013, of 11 July - emphasised, in what is of interest
here, "that paragraph 10 of art. 16 LIS cannot be read in isolation, but in connection with the rest of
the precept" ( STC
145/2013, FJ 6). And in the exegesis of art. 16.10 TRLIS in the light of the rest
of the sections
that make up the precept, the
emphasis was placed, fundamentally, on the need to
reconcile it with the provisions
contained in sections 1, 2
and 3 of the aforementioned article.
Specifically, the Plenary of
the Court stated: "Number 1 of paragraph 1 of Article 16 LIS establishes that "transactions carried out between related
persons or entities shall be valued at their normal market value", this being understood
as "that which would have been
agreed by independent persons or entities under
conditions of free competition" ( STC 145/2013 , FJ 2). Thus, "in view of section 1, it
is clear that the penalty
regime established [in section 10 of art. 16 TRLIS] refers, not to
any conduct in tax matters, but
to those specifically related to the so-called
'related-party transactions'"
( STC 145/2013, FJ 6). "Paragraph 2 then provides that
"related persons or entities must
keep at the disposal of the
tax authorities such documentation as may be established by regulation". The second paragraph
of this section
(added by Royal Decree-Law 6/2010, of 9 April and
later amended by Royal Decree-Law 13/2010, of 3 December) exempts from the
documentation obligations related persons or entities whose
turnover is less than ten million
euros" ( STC 145/2013, FJ 2). Consequently -explained the highest
interpreter of the Constitution-, art. 16 TRLIS
"identifies with a not inconsiderable degree of exhaustiveness
the "related persons or entities"
and, therefore, the persons liable to incur the
liability to penalties regulated in section 10" ( STC 145/2013, FJ 6).
Having delimited the scope
of the penalty
provided for in art. 16.10
TRLIS and established the potential offenders, it systematised the regulation of the two
types of offences contained in section 10, a systematisation that should also
be mentioned here:
"Section 10 of Article
16 LIS establishes, on the one hand,
that "it constitutes a tax offence not to
provide or to provide incomplete, inaccurate or false information in the documentation which, in accordance with the provisions of section 2 of
this article and its implementing regulations, must be kept at the disposal
of the Tax
Administration by related persons or entities" (first paragraph); on the other,
that "it also constitutes a tax offence if
the normal market value derived from
the documentation provided for in this article and its implementing regulations is not the declared
value" (second paragraph). In both cases, the Law classifies
the infringement as "serious" and, when it is not
appropriate to make valuation corrections in respect of transactions subject to a series of taxes (corporate
income tax, personal income tax or
non-resident income tax), it imposes
a "financial fine of fixed financial penalty of fi1. 500 euros for each item
of information and 15,000
euros for each set of omitted, inaccurate
or false information relating to each
of the documentation
obligations established by regulation for
the group or for each
entity in its capacity as taxable person or taxpayer"
(number 1). In any case, in
accordance with the last paragraph
of number 1 of the third
paragraph (added by Royal Decree-Law 6/2010, of 9 April), such fines may in no case exceed the lesser of
the following two amounts: 10 per cent of the total amount
of the transactions
carried out in the tax period
or 1 per cent of the net turnover. When the tax
administration's valuation adjustments are applicable, the penalty is
a "proportional pecuniary
fine of 15% of the amount of
the amounts resulting from the valuation adjustments
for each transaction, with a minimum of double
the penalty that would be applicable
by application of number 1 above"
(number 2). For the rest, the
remaining provisions of Article 16.10 LIS (both in number 2 and in numbers 3, 4 and 5) delimit the scope of
compatibility of this specific penalty regime for linked transactions
with the general provisions on penalties
contained in Articles 188.1
, 188.3 , 191 , 192 , 193 , 195 and 203 of Law 58/2003, of 17 December, general tax law " ( STC 145/2013, FJ 2).
Of all the statements
made by the
Plenary of the Constitutional Court in STC 145/2013, which we have just
reproduced, it is worth highlighting
two points which are undoubtedly crucial in order to answer
the objective question of appeal which is the
subject of the present appeal: firstly, that paragraphs
1 to 3 of art. 16 TRLIS circumscribe the application of the special penalty
regime established in section 10 of the
provision within very precise and perfectly delimited margins, and do so both from a material point of view
(the offences described above apply exclusively to related-party transactions) and from a subjective point of view (only
to those obliged ex lege to keep documentation relating to such
transactions). The appellant is therefore
wrong when he claims in the appeal that the special
penalty regime applies to all
related transactions or when he states
that Article 16.10 TRLIS establishes a single penalty regime for all
related transactions, without any exception
whatsoever (i.e., regardless
of whether or not they
are obliged to keep the documentation
referred to in Article 16.2 TRLIS). And it is wrong insofar
as it makes an isolated or
unconnected interpretation
- not contextualised - of art. 16.10 TRLIS which does not take
into account the subjective scope of application
of the special
penalty regime whose application it claims.
And, secondly, but inextricably
linked to the above, related
persons or entities which, by virtue of
art. 16.2.2.2 TRLIS, are exempt from
documentation obligations
are outside the scope of the
penalties provided for in section 10 of art. 16 TRLIS. We reiterate once again: the types of
infringements and penalties
contained in art. 16. 10 TRLIS are applicable, exclusively, to the parties
who must keep and maintain at the disposal of
the Tax Administration
the documentation relating to related-party
transactions: "section
3 - the Plenary of the Court
clearly explained, in this sense, in FJ 6 of STC 145/2013 - identifies with a not inconsiderable
degree of exhaustiveness the "related persons or entities" and, therefore, the parties liable to incur the
punitive liability regulated
in section 10. In turn, the second subparagraph
of paragraph 2 specifies the 'persons or entities'
which, being 'related', are exempted from the obligation
to provide documentation and, consequently,
are outside the scope of the
penalties provided for in paragraph 10. Therefore, in addition to the material limitation of the
scope of the penalty with
a statement of the protected legal interest, there is a detailed definition
of the subjective
or personal aspect of the legal conduct
provided for, that is to
say, the identification of the undertakings which may commit
the infringement. The very same
Order admits that the Law
sufficiently predetermines the
persons included within the "perimeter" of the sanctioning regulation" ( STC 145/2013, FJ 6).
It is worth remembering
that, as we have already made
clear in this ruling, there is
no dispute between the parties - and at no point in the proceedings has it been questioned
- that in the 2009 tax period the
appellant was exempt from the
obligation to document the related
transactions as the normal market value of
the same did not exceed
the amount of 250,000 euros and, therefore, outside the "perimeter" of the sanctioning regulation that we are concerned with here.
Well, from the conclusion
that the appellant -and like him all those
taxpayers who, under art. 16.10.2 TRLIS, are exempt
from the documentation obligations established in Royal Decree
1777/2004- is outside the scope of
the specific penalty regime established in art. 16. 10 TRLIS two
corollaries follow: firstly, that the
exemption from liability provided for in art. 16.10.4 TRLIS is not applicable; and, secondly, that the action of
the taxpayer being subsumable in the type of
offence provided for in art. 191 LGT, this precept -and the penalising consequences established therein- are fully applicable.
THIRD.- The non-application of the total exemption
from liability contained in art. 16.10.4 TRLIS to
taxpayers exempted from keeping documentation
relating to related-party transactions (and, consequently, the non-existence in these cases of a concurrence of rules between arts. 16.10.4
TRLIS and 191 LGT).
In the wording applicable
in 2009 -i.e. after the entry
into force of Law 36/2006, of 29 November-, art. 16.10.4
TRLIS established the following:
"When the tax
authorities make valuation adjustments in respect of transactions
subject to corporation tax, personal income tax or
non-resident income tax without the
non-compliance constituting
this offence having occurred and the adjustment leads to non-payment, unduly obtaining tax refunds or
improper determination or accreditation of items to
be offset in future returns, or
incorrect declaration of net income without
causing a lack of payment or
improper obtaining of refunds due
to amounts pending offset, deduction or application having been offset in a verification or investigation procedure, such conduct shall
not constitute the commission of the infringements
of Articles 191, 192, 193 or 195 of Law
58/2003, of 17 December,
General Taxation, for the part of
the bases that would have given
rise to the
valuation adjustment".
In relation to this
provision, first of all, it
should be made clear that the
total exemption from liability established by this rule and, in particular, the factual assumption that gives rise
to its application,
must be interpreted in the light of the
main conclusion we have reached
in the previous legal ground: art. 16.10.4 TRLIS must
be understood to refer exclusively to those taxpayers
who, being obliged to keep
and maintain documentation relating to related-party
transactions, comply with this obligation
under the terms established in art. 16.2
TRLIS and developed by the corresponding regulations.
Three conclusions can be drawn unequivocally from this premise: (1) firstly, that it is
not correct to interpret, as the appellant does
in his appeal, that in
cases such as his, in which it is
not compulsory to keep the
documentation of related-party transactions, the requirement of art. 16.10. 4º TRLIS relating to the fact
that "the breach constituting this infringement has not occurred", since if there
is no obligation to prepare documentation of related-party transactions, there is no breach of
this obligation; (2) secondly, that the Administration was right in the
interpretation that it made from
the outset - and subsequently corroborated by the TEARM - of the rule contained
in the 4th paragraph of art. 16.10 TRLIS; and (3) thirdly,
thirdly, finally, that neither can it be claimed that
in these cases there is a competition of rules or laws
between arts. 16.10.4 TRLIS and 191 LGT to be resolved, supposedly, by applying the
principle of speciality in favour of the application
of the first
of these precepts, with the consequent total exemption from liability for the
acts carried out by the
appellant in the 2009 tax period. As the first conclusion
is, at this point in our ruling,
obvious, we will focus our
argument on the explanation of the other
two corollaries that we have
just briefly outlined.
3.1.- As regards the second
conclusion, bearing in mind, in effect, that, in good exegesis, the application of art. 16.10.4 TRLIS presupposes
that there is a prior formal obligation on the part
of the taxpayer
to keep the
documentation relating to related-party transactions, the legal consequence established in
ordinal 4 of art. 16. 10 TRLIS will
only be applicable when the following
three circumstances apply: (a) that the taxpayer has not failed to
comply with this formal documentation obligation; (b) that the value declared
by him in his tax return
coincides with that stated in the documentation
of the related-party
transaction; and (c) that, despite the existence
of this documentary
coincidence, the normal market value attributed
to the related-party
transaction is incorrect and has required a valuation adjustment by the tax
authorities. If these three circumstances
are met, art. 16.10.4 TRLIS provides
that the conduct of the
taxpayer shall not be punishable either in accordance with the specific
penalty regime contained in art. 16.10.1 and 2 TRLIS or
in accordance with the general penalty regime established in the LGT (and, in particular, in arts. 191, 192, 193 or 195 of this
legal text). Or, in other words, the
4th ordinal of art. 16.10 TRLIS establishes
a total exemption from liability for the
taxpayer in these cases
(and, we wish to emphasise, only
in these cases).
3.2.- If what we
have just done is what we
consider to be the correct interpretation
of art. 16.10.4 TRLIS, it is clear that
in cases in which, in accordance
with the TRLIS, the taxpayer is
not under the obligation to document the
related-party transaction, it cannot be claimed
that there is what the
criminal doctrine has been described
as apparent concurrence of rules or laws
between arts. 16.10.4 TRLIS and 191 LGT to be resolved by applying some of
the principles established in art. 8 of the Criminal Code (CC).
At this point, it
is worth mentioning the statements we made
in relation to the apparent concurrence
of rules or laws in our judgment
of 22 September 2011
(appeal no. 4289/2009) (ECLI: ES:TS:2011:5949). Specifically,
on that occasion
-in FD 5 A) of the ruling-, we stated
the following:
"Certainly, the question of the
typification of the conduct of
the appellant entity admitted, as the lower court
judgment points out, two different
solutions; but only in the abstract.
Because there is no doubt that
we are faced with what is
described in the field of criminal law as a concurrence of laws, apparent
concurrence, or apparent conflict of laws, which
occurs in those cases in which a given factual situation is logically
subsumable in several precepts, one of
which, however, displaces the others".
"The so-called conflicto
or concurrence of rules, as the Second Chamber of this Court
has said, occurs when two or
more legal precepts apply to the same
factual situation, in whose
respective hypotheses the situation in conflicto is entirely subsumable"
[ Judgment of 22 May 2009 (appeal
no. 10084/2008 ), FD 144]. The possibility,
from a purely logical perspective, of subsuming a conduct under more than one rule, however, must be only apparent (Judgment of the
Second Chamber of the Supreme Court of 15 February
2000 (Case No. 1678/1999), FD 4). From a legal point of view, because
ultimately only one of the
rules is applicable, in so far as the disvalue
represented by the unlawful conduct
is fully covered by one
of the concurrent
precepts, the application of which excludes the application of the others".
The "conflict of rules -in effect- must be resolved with the application of only one
of them, which excludes the others (which
is why some
speak of apparent conflict, since this finally
disappears in favour of a single rule)" ( judgment
of 22 May 2009, cit., same
FD).
Competition of laws, in short, whose general basis, according to the best
doctrine, lies, on the one hand,
in the idea that the legal system is a system free of contradiction, and, on the other,
in the ne bis in idem principle (in this sense, judgment
of 22 May 2009, cit., same
FD), that is to say, in the
axiom that the same subject
cannot be punished twice for the
same act. Guarantee of not
being subjected to bis in idem, which, as is well
known, despite its lack of
express mention in art.
25.1 of the Spanish Constitution (EC), "is part of
the fundamental right to the principle
of the right
to a fair trial",
"is part of
the fundamental right to the principle
of legality in criminal and
punitive matters ( art. 25. 1 EC)" ( STC 2/2003,
of 16 January, FJ 3; in the same sense,
SSTC 221/1997, of 4 December,
FJ 3; 177/1999, of 11 October,
FJ 3; 229/2003, of 18 December,
FJ 3), "given its connection with the guarantees of criminality and legality of offences"
( STC 2/2003, of 16 January,
FJ 3; in similar terms SSTC 154/1990, of 15 October, FJ 3; 150/1991, of 4 July, FJ 9; 204/1996, of 16 December, FJ 2) recognised in that constitutional precept, and is also applicable
in the field of administrative law on penalties (STC 2/2003, of 16 January, FJ 3 a)).
This conflict of laws
must be resolved by applying the generic
principle of speciality, which is broken down
into a series of rules which, as is known,
are currently contained in Article 8 of the
Criminal Code, and which respond to the
same idea, namely that in the event
of a conflict of laws, the
rule which is more precisely adapted to the alleged
fact expresses in a more complex way the
assessment made of it by
the legal system and prevails over the
rule which provides for it in a more vague and abstract manner. The rules or criteria
for determining the only applicable
rule are as follows: (a) the
criterion of speciality (lex specialis derogat lex generalis), by virtue of
which "[t]he special
rule shall apply in preference to the
general rule"; (b) the criterion
of subsidiarity, whereby "[t]he subsidiary
rule shall apply only in the absence
of the principal rule, whether such subsidiarity
is expressly declared or tacitly
deducible"; c) the criterion
of consumption (lex consumens derogat lex consumpta), according to which, "[t]he broader or more complex criminal precept will absorb those
that punish the offences consumed
in that one"; d) and, finally, the so-called criterion of alternativity (also known as relative or improper subsidiarity
or consumption), which means that,
in the absence of the previous
criteria, "the more serious criminal precept will exclude those
that punish the act with
a lesser penalty".
It should be clarified that the fact
that these rules are contained in a provision of the CC and that
the GLT does not expressly refer
to it does
not imply, however, that they
should not be used in the sphere
of the administrative penalty procedure, given that the
aforementioned art. 8 of the CC merely includes
interpretation criteria to determine the applicable law or legal provision that had already
been assumed by the criminal doctrine and applied by the
case law of the Supreme Court. This has long been
made clear by the Second
Chamber of this Court when
it stated that "[t]he [special]
criminal precept must be applied in preference to the general one, as has already been paladinly established in number 1 of Article 8 of
the Criminal Code and had already been
included in case law when Article 68 of the previous
Criminal Code advocated a principle of alternativity
against which the principle of
speciality already had a preferential character (judgments of 25 January 1990 and 20 February 1992)" (Judgments of 25 January 1990 and 20 February 1992). (Judgment of 18 March 1997 (rec. cas. no.
1004/1996), FD One).
Well, despite the fact
that, as we have just recalled,
the so-called concurrence of laws, apparent concurrence or apparent conflict of laws is
fully applicable in the field of
administrative sanctioning proceedings,
it is clear
that it does
not apply in the case in question, insofar as the factual situation that makes its application
possible does not arise in this
case. Indeed, insofar as
art. 16.10.4 TRLIS is not applicable to the
appellant - we insist, because it cannot be claimed
that he complied with documentation obligations that he did not have
- it cannot be inferred that in his case there is the factual situation that calls for the
application of the apparent concurrence
of rules, namely: that a given factual situation is logically
subsumable in several precepts, one of
which, nevertheless,
displaces the others. The appellant's conduct, if it
were, would be punishable exclusively under one provision:
art. 191 LGT, which belongs
to the general system of penalties.
This will be dealt with in the
following legal grounds.
FOURTH.- In the absence of
the specific sanctioning regime contained in art. 16.10 TRLIS, the
general sanctioning regime provided for in the LGT should be applied. The subsumption
of the appellant's
conduct in the type of art. 191 of the LGT.
Excluding the application in the present case of the total exemption
from liability provided for in art. 16.10.4
TRLIS, we must decide whether, in the absence of the
specific penalty regime contained in art. 16.10
TRLIS, the general penalty regime established in the LGT should be applied and, more specifically, whether the appellant's
conduct can be subsumed in the type of
art. 191 LGT, with the penalty consequences that derive from this subsumption.
In this respect, we
agree with the interpretation made at the time by the Tax
Administration, confirmed by the judgment
of the Court
of First Instance, and which the State Attorney
accurately extracts in his opposition to the appeal lodged.
Existing, in any event, for all
tax periods commencing after the reform of Art. 16 TRLIS by Law 36/2006 - including the 2009 tax year of
interest here - the obligation for taxpayers to
value related-party transactions between related persons or entities at their market value,
there is nothing to prevent
the tax authorities,
in those cases in which (1)
the normal market value attributed to the related-party
transaction is incorrect and has required a valuation correction by the tax
authorities and (2) the necessary requirements are met to assess
the existence of the tax
infringement provided for in art. 191 LGT - i.e., the objective and subjective elements that make
up the type of offence - to
penalise the taxpayer ex art. 191 LGT.
In the case before this Court, it
is not disputed
that the value declared by the appellant
gave rise to a valuation adjustment by the
Administration in the corresponding inspection procedure, nor has it been disputed
that this adjustment, as required by art. 191 LGT, determined a lack of payment
within the period established in the tax regulations
of part of
the tax debt
that should result from the
correct self-assessment of the tax,
nor, in fin, has the existence of
the culpability necessary to impose
a penalty, on which this Court
has consistently ruled, been called into
question.
Consequently, we must conclude
that the application of the offence provided
for in art. 191 of the LGT and of the penalty that
such conduct entails - in the present case, that corresponding to the minor tax
offence established in art.
191.2 LGT - is in accordance
with the principles governing the exercise of
ius puniendi by the Administration and, ultimately,
in accordance with the requirements arising from the
principle of typicality recognised in art.
25.1 EC, the infringement of which the
appellant also alleges to be a violation.
FIFTH.-
Interpretative criteria on Articles 16.10.4 TRLIS and 191 LGT (and, in particular, on the relationship
between these two provisions).
In accordance with the foregoing, and in accordance with Article 93.1 LJCA, the following interpretation of the legal precepts
concerned in this dispute should be established:
1) The application of the total exemption
from liability contained in art. 16.10.4º TRLIS presupposes
the obligation of the taxpayer
to keep and maintain at the disposal of the
Tax Administration the documentation relating to related-party
transactions established in
art. 16.2 TRLIS and developed by
Royal Decree 1777/2004. In cases, therefore,
in which the taxpayer is exempt
from compliance with this formal obligation, art. 16.10.4 TRLIS does
not apply.
2) The exclusion of
liability provided for in paragraph 4 of art. 16.10 TRLIS is only applicable when the following
three circumstances apply: (a) the taxpayer has not failed to comply
with the formal obligation to keep
the corresponding documentation ex art. 16. 2 TRLIS; (b) that
the value declared by him
in his tax return coincides with that stated in the documentation of the related-party
transaction; and (c) that, despite the existence
of this documentary
coincidence, the normal market value attributed
to the related-party
transaction is incorrect and has required a valuation correction by the tax
authorities. If these three circumstances
are met, the conduct of the
taxpayer will not be punishable either in accordance with the specific
penalty regime contained in art. 16.10.1 and 2 TRLIS or
in accordance with the general penalty regime established in the LGT.
3) In the absence of
the application of the special
sanctioning regime established in art. 16.10 TRLIS, the
general sanctioning regime established in the LGT and, in
particular, art. 191 LGT should be applied, provided that the objective
and subjective elements of the type
of offence that we have
been establishing in our case law concur.
SIXTH.- Resolution of the
claims made in the proceedings.
The logical consequence of the foregoing
can be none other than the dismissal
of the appeal lodged by the
legal representation of Mr.
Matías, as the court decision under appeal has correctly interpreted the legal system by considering (a) that article 16.10.4 TRLIS is not applicable
because the appellant is exempt
from the formal obligation to keep
and maintain at the disposal of the
tax authorities the documentation relating to related-party
transactions established in
article 16.2 TRLIS and developed
in article 16.2 TRLIS. 16.2 TRLIS and developed by Royal Decree 1777/2004, and (b) that,
in the absence of the application
of the special
penalty regime established in art. 16.10 TRLIS, it
is appropriate to apply the
general penalty regime established in the LGT and, in
particular, in this case, art. 191 LGT, provided that the
objective and subjective elements of the
type of offence
that we have
established in our case law are present, as the Court of
First Instance has found and is not
the subject of controversy.
SEVENTH - Decision on costs.
Pursuant to the provisions
of article 93.4 LJCA, there is no express
declaration of an order for
costs in the cassation, as no bad faith or recklessness
in the procedural conduct of any of
the parties is to be found.
RULING
In view of the
foregoing, in the name of the
King and by the authority conferred on it by
the Constitution, this Court has decided as follows
FIRST.- To establish the
interpretative criteria expressed
in the fifth legal ground of this
judgement.
SECOND. To declare that the appeal lodged by the legal representation
of Mr Matías , against the judgment
of the Administrative Chamber (Fifth Section) of the
High Court of Justice of Madrid dated 14 June 2017, handed down in the ordinary
proceedings no. 1278/2015, filed
against the decision of the
Regional Economic-Administrative Tribunal of Madrid of 25 September 2015, rejecting the claim filed
against the sanctioning decision of the Regional Inspection Unit of the AEAT of
Madrid, for a tax infringement related to Personal Income Tax for the
years 2008 and 2009.
THIRD - No ruling on the
costs of the appeal. This decision shall be notified to the
parties and inserted in the legislative collection.
It is so decided and firmed.
D. Nicolás Maurandi Guillén
Mr José Díaz
Delgado Mr Ángel Aguallo
Avilés. Ángel Aguallo Avilés
D. Francisco
José Navarro Sanchís Mr. Jesús Cudero Blas
D. Mr.
Rafael Toledano Cantero Mr. Dimitry Teodor Berberoff Ayuda
PUBLICATION:
The foregoing judgment has been read and published by the Honourable
Judge Mr Ángel Aguallo Avilés, the Chamber being in open court, which, as Counsel for the
Administration of Justice, I hereby certify.