Co-decision procedure

A new landscape forms a decision by the Council of State ( ) on the subject of the continuation of tax control and after 5 years, where additional information on virtual is available . In accordance with the decision of the Board of Directors , the tax authority, while already having information within the five-year limitation on the virtuality of the transactions of the undertaking which appealed from replies from foreign authorities to previous requests for mutual administrative assistance in time after the five years. On the occasion of an action by an entrepreneur, the S.E. – in confrontation with the Income Tax Code – found it unjustified to extend the limitation period from 5 to 10 years, due to additional information from abroad, according to the ertnews. The Court ruled that the information received by the tax authority in response to the new request could not justify extending the limitation from five to ten years. A particular interest is the reasoning developed by the Court of Justice for the ‘brake’ in extending the limitation period. It points out that: ‘in any other case, and irrespective of the difficulty and complexity of the case, the objective difficulties faced at the critical time by the tax authority and the lack of cooperation of the taxpayer, the information received by the tax authority in the context of mutual administrative assistance cannot justify the extension of the limitation from five to ten years, because otherwise, in breach of the principle of legal certainty, the tax authority could determine by actions and, in particular, its omissions, the duration of the limitation’. The Code is worth noting that the Income Tax Code stipulates that the lengthening of the limitation from 5 to 10 years applies to information that comes to the knowledge of the control mechanism from abroad for which it could not access. However, all administrative assistance procedures must be carried out before the five years have elapsed. In particular, in order to extend to the decade, the tax authority should already have submitted the request or requests for mutual administrative assistance to the competent foreign authority within the time during which it has to act, i.e. within five years and the data to come after the end of the period up to five years and up to the completion of the decade. The current legislative regime provides for the period of limitation: Where additional information came to the knowledge of the tax authorities shows that the income of the taxpayer exceeds what was declared, a 10-year limitation shall apply. The additional data may be derived, for example, from foreign banks to which the tax administration could not have access. The STE’s plenary has considered that the data on the balances and movements of bank accounts in the country, regardless of whether they constitute income acquisition, are not “additional elements”, i.e. they cannot justify the extension of the five-year limitation to ten years. This is because the audit authorities have access to bank account movements. The limitation period shall be increased to 15 years if no income tax declaration has been submitted. For enterprises that have voluntarily joined the electronic billing system, a 3 year limitation shall apply instead of the five-year period for the rest as an incentive to join the electronic billing system.