- Dr Luis Jimena Quesada
Professor of Constitutional Law at the Universitat de València - Carlos Ortega Carballo
Legal Secretary of the European Court of Human Rights - Dr Cristóbal Borrero Moro
Professor of Financial and Tax Law of the Universitat de València - Joaquín Moreno Grau
Legal Secretary of the Court of Justice of the European Union - Dr Juan Martín Queralt
Professor of Financial and Tax Law at the Universitat de València
The taxpayer's obligation to provide information, and its practical implementation
In the LGT, the obligation to provide information is outlined in articles 93 and 142. Failure to comply will result in the imposition of a penalty. The information provided serves as the basis for tax assessment. In certain cases, the penalty procedures may overlap with the assessment of the offence and the penalty, which exceeds the amount of €120,000, could therefore may classified as a criminal offence. What solutions are then considered? Firstly, the right not to testify against oneself and, secondly, a veto on the evidence obtained through coercion. When this duty to inform is used, one acts under the pressure that non-compliance will lead to significant penalties.
In this regard, the STS of 14 March 2019, which aligns with the doctrine of the Constitutional Court and the Court of Human Rights, states that the information obtained through coercion cannot be used in the subsequent administrative sanctioning procedure, where the infringement and, consequently, the sanction will be declared. Neither can the coercively obtained information be used in criminal proceedings. It is also worth noting that, despite not being judgments of a tax nature, the application of the CJEU’s doctrine through the extraction of principles from other legal spheres is particularly relevant in two judgments. The first case concerns the regulation of financial discipline. Its structure is similar to that of Spanish tax law, as in Italy, in the event of a breach of the obligation to inform the Tax Agency, a sanctioning procedure is opened. The second case, concerning the right to remain silent, addressed the matter of public income derived from the acquisition of shares. An administrator is required to attend an administrative hearing and a decision will be made as to whether disciplinary proceedings should be initiated against the administrator (and not the company).
- The right to remain silent
The issue in both cases is the exercise of the right not to provide testimony against oneself. In the first case, the CJEU establishes that the right in question must be exercised at the initial stage, specifically at the time of injunction. In the second case, the consequence of not having been able to exercise the right to remain silent during the injunction phase is that it has no binding effect in the second sanctioning process. It cannot be used, as it is similar to Spanish law. It may be possible to link these two forms of defence in cases were self-incrimination is a factor. While not explicitly stated in the Charter, the right to a fair trial inherently encompasses this principle. In this context, we are referring to an administrative sanction with criminal implications, reflecting the punitive nature of such sanctions. An example of this punitive nature of the the sanction can be found in CJEU 524/2014, which classified a fine of 30% of untaxed VAT as criminal when it was an administrative sanction.
In Spain, article 191 of the LGT establishes penalties of more than 50%, with very serious conduct being punishable by an amount of 100 to 150%. With regard to areas of of overlap with European Union law, article 51 of the charter can only be invoked with EU law is applied in harmonised matters that have a clear link with EU law. In the case of non-harmonised tax matters, there is no clear link, which can lead to cross-border issues and potential infringements of fundamental treaty rights.
In conclusion, the rulings on the EUD do not provide useful support for applying them in Spain, as there is no guarantee that information will be provided to the AEAT. The right to information is not directly connected to the right to penalties, but the liquidation phase serves as an intermediary. If we were to apply this directly, it would limit the AEAT’s ability to verify and audit taxes, which could impact the accuracy of tax assessments. The approach taken by the Supreme Court and the Constitutional Court seems reasonable in balancing the right not to declare with the right to not be sanctioned. At least in terms of objectives, there is a reassuring alignment that is not always present across different courts.
