Access to justice in taxation cases
After the approval of a plethora of tax laws, in order to accelerate the procedure of collecting every pending tax penalty in general, an administrative procedure has been introduced and therefore it's strict implementation is nowadays the only means of access to the so called administrative tax trial.
I will briefly describe this administrative procedure.
According to article 63 of law 3174/2013 a specific administrative procedure is introduced – compalsory recaurse. In paragraph 1 of the aforementioned article it is defined that the person who is liable for the payment of the tax, in case he defies any act has issued against him through the tax administration or in case of silent refusal he is obligated to submit compalsory recaurse asking for the re examination of the act in terms of the administrative procedure through the Internal Reexamination Authority of the Tax Administration.
The apply is submitted to the tax authority that published the act or omitted its publication and has to refer to reasons and documents on to which the tax payer bases the apply. The apply has to be submitted within a 30 day period from the acts date of notification or omission.
I should also state that this by virtue of the aforementioned provision, delayis not suspended between the 1st and the 31st of August.
It is pointed out that the appeal is necessary to include the applicants data for communication (address, e mail.) and also the attorneys data. The applicant alongside with this appeal submitts to Tax Authority an electronic file that includes:
The submitted compalsory recourse
The petition
The documentation invoked, accompanied by a statutory declaration in which the exact content of the electronic folder must be presented in full detail.
Subsequently, Tax Administration forwards the applicant' s application, within seven days, along with the attached documents and its legal reasoning report to the Internal Re examination Authority of Tax Administration in order for the latter to rule.
After the appeal, the payment of 50% of the tax under scruting is suspeded in condition that the other 50% has already been paid.
The tax payer has the right to simultaneously submit a petition for the suspension of the payment.
The Internal Reexamination Authority is able to postpone the payment until it issues a final decision only on the grounds that the payment could cause an irreversible damage to the tax payer and it is valid until the final issue of the decision.
The Tax Cases Settlement Directory in order to evaluate irreversible damage is taking the following facts into account.
-for a person: global income from every source for the two previous years needs to be declared and also the property and possessions of husband or wife and of minor children, by the time the appeal was submitted.
-for a legal entity: global income from every source for the previous two years needs to be declared and also the property of legal entities the applicant is part of.
The ruling on the petition is issued within 30 days from the submission of the application to the Tax Authority, otherwise it is considered that the request is rejected. If no decision is issued within 30 days from the submission of the application, then the application is also considered as rejected. Postponing of the payment does not exempt the tax payer from the obligation to pay the interest, due to delayed tax payment.
If the Internal Reexamination Authority deems it necessary it may adress formal invitation to the tax payer in order to attend a hearing before the Authority.
In the case that new evidence are brought before the Authority or invoces new facts hither to unknown to him, the tax payer must also be invitated for hearing. If no decision is issued within the aforementioned delay then the application is considered as being rejected by the Reexamination Authority and the tax payer takes notice of the rejection upon the expiration of the delay.
If by virtue of the aforementioned ruling of the Tax Authority is modified, annuled partly or totally, the Internal Reexamination Authority needs to sufficiently justify its decision in legal terms and based on true allegations.
In the rejection case of the compalsory recourse, motivation may consist in the acceptance of the claims of the tax imposing act.
In any case the decision must at least include the final tax obligations, the assigned amount and the delay for the payment.
I must emphasise on the fact that Tax Administration is not entitled to make an appeal against the decision of the Internal Reexamination Authority.
The tax payer may appeal against the decision or the tacite rejection of the Authority due to expiry of the appanded time before the Administrative Court according to the provisions of the Administrative Procedure Code.
Direct appeal against the acts of Tax Administration before the Administrative Courts is inadmissable.
The tax payer submits an appeal before the Administrative Court within 30 days from the notification of the decision or the tacite rejection of the compalsory recourse due to expiration of time, for the administrative settlement of the case. It is noteworthy that the tax payer is obliged on notify on the appeal by means of bailiff attaching to the notification a copy of the appeal to the Tax Cases Settlement Directorate, within 20 days from the expiration of the appeal delay. If he fails to do this, the administrative court will reject the appeal as inadmissable (paragr1, artkl 126 Administrative Procedure Code). If by accident the aforementioned notification is made to the Tax Authority, the court will also reject the appeal since the litigant of the tax payer is then the Tax Cases Settlement Directorate.
As we can see, the tax payer' s access to the administrative courts appears to have become extremelly difficult, if we take into account the multitude of citizens residing in regions where no committees of this kind function, both Athens or Thessaloniki, the situation seems to get even worse because the cost of the expenses of this administrative procedure could be considered deterrent, even more so when one considers the further costs of the judicial procedure before the administrative courts.
At this point it is worth mentioning that while the reason for instituting all of these committees and remedial procedures was the decongestion of the administrative courts from the plethora of the pendant taxation cases under litigation and also the settlement of taxation cases faster for the benefit of the citizens, this practice was proven inadequate. This is because it adds another stage in the whole procedure of taxation justice and therefore has an extra cost of time.
To further explain, at least 95percent of the cases that are submitted in front of these committees are rejected due to the expiration of the delay within which these committees have to rule. Consequantly, the applicants have a tacite rejection in their hands while also in the meantime have lost an average 6 months time until they finally pursuit their appeal before the Administrative Courts. Therefore, a procedure that was introduced in order to accelerate justice has proven to be inadequate and lead to opposite results.
A question is also raised as to which was the real reason of the formation of this committees since neither are they adequately stuffed to deal with the volume of taxation cases nor do they have the time (due to lack of stuffl) to rule within the imposed deadlines. The submission of the electronic folder in magnetic media also creates more problems to elderly tax payers if they decide not to appeal by themselves and resort to an attorney at law and therefore pay extra costs.
With the complaetin of this procedure the tax payer is brought before the Administrative Courts not only for the ordinary court procedure but also for preliminary protection.
In my presentation I will only refer to the level of temporary court protection which is out of most importance to taxpayers considering that 4 to 5 years may pass until court rulings are issued in the first or second instance.
Therefore, it is a prerequisite for the suspension of the implementation of an administrative act to have the relative appeal submitted previously.
A prerequisite of the admission of the appeal is the payment of a fee which ammounts to two percent of the contested sum and up to the point of ten thousand euros. The appeal is rejected as inadmissable if by the time of its deport the applicant has not paid 1/3 of the aforementioned fee and the remaining 2/3 until the first hearing of the case.
The submission of the suspension appeal respectively demands the payment of 100€ fee and also the notification of the case file to the litigant Tax Authority.
By virtue of article 202 of the Administrative Procedure Code, the petition is only accepted if the applicant invokes and proves that the direct execution of the offended act will cause him irreversible damage or if the court stimulates that the appeal is obviously sound. Especially regarding tax, customs and financial in general cases the court orders the stay of the execution of the act as far as it implied the enforcing of one or more obligatory measures of payment or the administrative measures for the cohersin of the collection or the securing of the payment of the debt if only the applicant proves that the damage he is referring to, derives from those very measures. In any case the application is rejected if a) the appeal is manifestedly inadmissable or unsound, even if the damage to the applicant from the direct execution of the offended act is irreversible and b) if during the evaluation of the damage to the applicant, third party interest and public interests is considered that the negative impact of the acceptance will be graver than the benefit of the applicant.
At this point and because of the aforementioned provisions regarding irreversible damage and identification of it with the implementation of one or more obligatory measures of payment or administrative measures to enforce or secure the collection of the debt, if the applicant is able to prove that the damage he claims derives from these measures, the Council of Estate has adopted a rather strict interpretation of the clause, with the 496/2011 ruling.
In this decision it is mentioned that the new adjustment of paragraph 2 of the Administrative Procedure Code regarding taxes, customs and financial, in general cases, restrictions are imposed to the authority of the court of suspension regarding the manner in which it may provide temporary court protection to the applicant. In such categories, in the case of acceptance of the claim for temporary court protection the execution of the disputed act is not suspended. However, it is forbidden for the administration to proceed to the measures described in paragraph 1. This is the case when the applicant cites as a reason for suspension the irreversible damage caused by the specific measures. In this case suspension is possible only regarding to those specific measures.
On the contrary, the combination of the provisions of this paragraph and paragraph 1 leads to the conclusion that in financial cases the suspension of the contested act is faesible.
In full, whenever the court rules that the recourse is legitime. This also serves the economy of administrative acts, as it basically prevents the Administration from implementing measures that often sum up to great amounts of money, when it is highly possible for the state to be defeated during the ordinary trial. The case of apparent soundness of the main law suit occures especially when it is based on fixed jurisprudence or in jurisprudence of the plenary session of the Council of the State and does not occur if there is a vague possibility for the case to thrive. In this context the adjustment of paragraph 2 of article 202 of the code of administrative procedure does not limit beyond proportions the right of temporary judiciary protection and therefore does not violate articles 20 paragr 1 and 25 paragraph 1 of the Constitution. Because if the measures in which the state may resort to in case of non payment of its claim, are described in the legislation (especially the code of public income and are specific, the prohibition, after the invocation of specific claims, on imposing one or more of these measures ensures adequate temporary judiciary protection for the applicant.
To further explain, with the aforementioned decision the provision was interpreted in the following manner. Suspension is granted only in case the applicant of the suspension of the execution is the main owner of land property and only for the part that comprises his main residence and (or) professional facilities. In every other situation the appeal is rejected and alongside the right of one to sleep peacefully knowing that until his case goes to trial he doesn't have payments due. Moreover, money deposited can also be confiscated or bound and also part of ones salary or pensions down to the amount that can sustain a decent sustenance of the applicant.
In this way, drastic limitations are imposed as to the courts authority to grant temporary judiciary protection and consequently all the tax cases are de facto directly executable.
At this point and in the light that the aforementioned provision was interpreted by the Council of Estate, to my opinion, judge of a first instance administrative Court, I am deeply concerned what the provision meant to achieve and how, us judges should properly implement it.
To further explain myself, there was a case assigned to a colleague that raised my eyebrow and in a way made me angry!
The applicant for the suspension of the execution is a renowned attorney in Athens, he appealed against the decision that imposed a penalty of 167 thousand euros for providing legal services without issuing receipts, the penalty equaled the attorney's fee for his legal services. As the applicant stated in court there were pending appeals against the imposing of fines for the same reasons that summed up to the amount of one and a half million euros. The applicant is the owner of a house in Ekali (one of Athens most prestigious regions) that spans over 319 square meters, a summer residence in Mykonos island spanning 200 square meters, another house in Drosia (equally luxurious neighborhood to Ekali) spanning 156 square meters. He also owns an apartment in kolonaki (again a premium region in the city centre) that he uses as his law firm headquarters, the apartment spans over 319 square meters. His property also consists of another two apartments in Galatsi region (a region of middle class population and prices) and 3 vehicles. At the time the attorney declared that the annual income of his family along with his wife income did not surpass 38 thousand euros!
The colleague partly accepted and suspended the payment of the fine from procedures that would include confiscation against his prestigious house in ekali and his law office in kolonaki.
It makes me wonder though if the aforementioned provision, in the way it was interpreted by the council of the state, was correctly put to use in this case of an applicant that had continuously been evading taxation and the state was not able to tax him as it should.
In this way one law income taxpayer whose actual standards and cost of living, contradicts his tax statement, something that hints direct tax evading practice on an outrageous amount, even if he falls in the hands of the tax control mechanisms will always be able to draw benefit from the provision and have his property's main assets secured against execution (primary residence, business office). In similar situations my personal viewpoint is that the administrative judge should find a way to reject these appeals in whole.
["Πρόσβαση στη φορολογική διοικητική δίκη (Access tojusticeintaxationcases)" -
Ομιλία της Μαριλένας Ειρηνάκη, Πρωτοδίκη Δ.Δ. Αθήνας στο Workshop Taxation Working Group in Thessaloniki Greece 8-9 October 2015 Association of European Administrative Judges, πηγή: www.ddikastes.gr/]
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