Acourt may annul a sanction imposed for an infringement when it finds a violation of the principle of proportionality established by European Union Law. This has been determined by the Supreme Court, which establishes jurisprudence with two recent rulings in which it amends the Administration, which limited itself to complying with a rule that was not adapted to the circumstances, applying what was established by the CJEU.
Sentence 1103/2023 dismisses the appeal of the State lawyer against a ruling by the Superior Court of Justice of Catalonia, which upheld the appeal of a company against the decision of the Regional Economic-Administrative Court of Catalonia, which rejected the challenge Whatsapp Database to the sanction imposed on it. had been imposed by the Treasury for not recording certain VAT amounts in one of its quarterly self-assessments. The fact constitutes a violation of section four of article 170.2 of the VAT Regulatory Law and article 171.1 of that regulation establishes a fixed percentage of 10% on the quota corresponding to operations not recorded in the self-assessment. That was the sanction proposed by the Administration and appealed by the company.
The Superior Court of Justice of Catalonia points out that the sanction, "based on automatic parameters that do not allow the singular circumstances of the case to be considered, in particular the absence of economic damage to the Tax Administration and the absence of indications of tax fraud," is disproportionate.
In this particular, "the amount of VAT that should have been charged on the occasion of the operation carried out, increasing by the same amount the amounts of VAT accrued and borne, resulting in a tax rate of 0 euros ." Given that the norm does not allow the sanction to be graduated, taking into account the aforementioned circumstances, the TSJ considers the principle of proportionality to have been violated, “which is why it deserves annulment.” The State's lawyer, who is appealing the sentence, considers that, if a problem of proportionality was observed, a question of unconstitutionality should have been raised to the Constitutional Court .
The Supreme Court observes that European Union Law has been applied and, specifically, the judgments Farkas C 564/2015 and Warzywna C 935/19 , which underline the importance of proportionality and the adequacy of sanctions to the circumstances of the victims. facts and the sanctioned. Neither in the Farkas case nor in those that have been prosecuted by the TS (both the one that gave rise to this ruling and another, whose pronouncement occurred a day before) is there a loss of income for the Administration nor are there indications of fraud . In both cases, “the sanction has been imposed for the omission of a formal, purely procedural requirement.” The imposition of sanctions, according to the CJEU, “should not go beyond what is necessary to guarantee the correct collection of the tax and avoid fraud” and – the ruling points out – “here it goes further because it is imposed outside the idea to protect collection or prevent fraud.