Tax Newsletter - September 2018 | Decisions

Audit procedure

After maximum period for completion of audit work has run, subsequent referral of the case to public prosecutor’s office does not toll statute of limitations

Central Economic-Administrative Tribunal (TEAC). Decision of July 23, 2018

Following the interpretation determined by the Supreme Court in its judgments of November 3, 2011 and March 15, 2012, TEAC concluded that, after the maximum period for completion of audit work as set out in the repealed Law 1/1998, of February 26, 1998 on taxpayers’ rights and safeguards (i.e. 12 months) has run, the statute of limitations for AEAT's right to make an assessment is not considered to be tolled as a result of the notification of commencement of audit work and, therefore, a subsequent referral of the case to the public prosecutor's office cannot be held to have the effect of tolling the statute of limitations period.

Tax on retail sales of hydrocarbons

Entities acting as intermediaries between taxable person and end customer are not authorized to apply for a tax refund

Central Economic-Administrative Tribunal. Decision of July 23, 2018

TEAC recalled that, for taxes that are legally  required to be charged to other individuals or entities, as in the case of the tax on retail sales of certain hydrocarbons, the individual or entity that has paid the tax is the party entitled to obtain a refund of incorrectly charged taxes if the following requirements are met: (i) the tax must have been charged on an invoice or document serving as an invoice –where the legislation governing the tax so provides-, (ii) the incorrectly charged amount of tax must have been paid over and not refunded by the tax authorities to the person to whom they were charged or to a third party; and (iii) the party with tax obligations that paid the charge must not be entitled to deduct their input tax.

On that basis, TEAC reiterated the interpretation determined in its Decision of February 15, 2017 and concluded that the entities acting as intermediaries between the taxable person for the tax on retail sales of hydrocarbon and the end customer are not entitled to apply for a refund of the tax, because when making the supply they charge the whole of the tax via the price to those acquiring the taxed products. It is therefore the end customers who bear the economic burden of the tax and are entitled to the refund of the tax on retail sales of hydrocarbons.

This same interpretation was determined by the Supreme Court in its judgment dated February 13, 2018.