On April 5, 2017, the ECJ issued its decision in the case ().
Context: Reference for a preliminary ruling — Taxation — Value added tax — Directive 2006/112/EC — Articles 2 and 273 — National legislation providing for an administrative penalty and a criminal penalty for the same offences, relating to the non-payment of value added tax — Charter of Fundamental Rights of the European Union — Article 50 — Ne bis in idem principle — Identity of the accused or penalised person — Absence
Article in the EU VAT Directive
Article 273 in the EU VAT Directive 2006/112/EC.
Article 273
Member States may impose other obligations which they deem necessary to ensure the correct collection of VAT and to prevent evasion, subject to the requirement of equal treatment as between domestic transactions and transactions carried out between Member States by taxable persons and provided that such obligations do not, in trade between Member States, give rise to formalities connected with the crossing of frontiers.
The option under the first paragraph may not be relied upon in order to impose additional invoicing obligations over and above those laid down in Chapter 3.
Facts
C-217/15
- During the tax periods at issue in the main proceedings, Mr Orsi was the legal representative of S.A. COM Servizi Ambiente e Commercio Srl and Mr Baldetti that of Evoluzione Maglia Srl.
- Proceedings have been brought against Mr Orsi and Mr Baldetti before the Tribunale di Santa Maria Capua Vetere (District Court, Santa Maria Capua Vetere, Italy) with respect to the offence provided for in and punishable under Article 10b of Legislative Decree No 74/2000, read in conjunction with Article 10a thereof, on the ground that they failed, in their capacity as legal representatives of those companies, to pay within the time limit stipulated by law, VAT due on the basis of the annual return in respect of the tax periods at issue in the main proceedings. The amount of unpaid VAT, in each case, is more than EUR 1 million.
- Those criminal proceedings were brought after the Agenzia delle Entrate (tax authorities) reported those offences to the Procura della Repubblica (public prosecutor). During those criminal proceedings, a precautionary seizure was carried out of the assets of both Mr Orsi and Mr Baldetti. Both Mr Orsi and Mr Baldetti submitted an application for review of that seizure.
- Before those criminal proceedings were initiated, the amounts of VAT at issue in the main proceedings were subject to an assessment by the tax authorities, which not only calculated that tax liability, but also imposed a tax penalty on S.A. COM Servizi Ambiente e Commercio and on Evoluzione Maglia, equivalent to 30% of the amount of VAT owed. Following a transaction relating to those assessment measures, they became definitive, without being contested.
Questions
On a proper construction of Article 4 of Protocol No 7 to the ECHR and Article 50 of the Charter, is the provision made under Article 10b of Legislative Decree No 74/2000 consistent with EU law, in so far as it permits the criminal liability of a person to whom a final assessment by the tax authorities of the State has already been issued imposing an administrative penalty … to be assessed in respect of the same act or omission (non-payment of VAT)?
AG Opinion
Article 50 of the Charter of Fundamental Rights of the European Union, is not applicable where there are two sets of proceedings and both administrative and criminal penalties in respect of the same offence and the tax penalties are imposed on a legal person, such as a company, while the criminal proceedings are brought against a natural person, even if that person is the legal representative of the company.
Decision
Article 50 of the Charter of Fundamental Rights of the European Union must be interpreted as not precluding national legislation, such as that at issue in the main proceedings, which permits criminal proceedings to be brought for non-payment of value added tax, after the imposition of a definitive tax penalty with respect to the same act or omission, where that penalty was imposed on a company with legal personality, while those criminal proceedings were brought against a natural person.
Summary
Article 50 of the Charter of Fundamental Rights of the European Union must be interpreted as not precluding national legislation allowing criminal proceedings to be instituted for failure to pay VAT, after a final tax penalty has been imposed for the same acts , when this sanction has been imposed on a company with legal personality while criminal proceedings are being instituted against a natural person.
Source
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