Summary
Full Decision
ARBITRAL DECISION
The arbiters Dr. Jorge Manuel Lopes de Sousa (arbitration president, appointed by the other Arbiters), Dr. António Nunes dos Reis and Prof. Doctor António Carlos dos Santos, appointed, respectively, by the Claimant and the Respondent, to constitute the Arbitral Tribunal, constituted on 21-10-2016, agree as follows:
1. REPORT
A… LDA, with the NIPC …, and registered office at…, Rua…, …, … … …, having submitted on 21-12-2015 and 20-01-2016 administrative complaints relating to additional VAT assessments, relating to the tax periods 201401M to 201502M and 201309M to 201312M, respectively, presented, invoking implied rejection, a request for arbitral decision, with a view to declaring the illegality of such assessments and condemning the Tax and Customs Authority to pay compensatory interest owed to delays in VAT refunds.
The Respondent is the TAX AND CUSTOMS AUTHORITY.
The Claimant appointed as Arbitrator Dr. António Nunes dos Reis, under the provisions of Article 6, No. 2, paragraph b), of the RJAT.
The request to constitute the Arbitral Tribunal was accepted by the President of CAAD and automatically notified to the Tax and Customs Authority on 04-08-2016.
Pursuant to the provisions of paragraph b) of No. 2 of Article 6 and No. 3 of the RJAT, and within the period set out in No. 1 of Article 13 of the RJAT, the top official of the Tax Administration Service appointed Prof. Doctor António Carlos dos Santos as Arbitrator.
The Arbiters appointed by the Parties agreed to appoint Advisor Jorge Lopes de Sousa as arbitration president, who accepted the appointment.
Pursuant to the provisions of No. 7 of Article 11 of the RJAT, the President of CAAD informed the Parties of this appointment on 04-10-2016.
Thus, in accordance with the provisions of No. 7 Article 11 of the RJAT, with the period set out in No. 1 of Article 13 of the RJAT having elapsed without the Parties making any submissions, the Collective Arbitral Tribunal was constituted on 21-10-2016.
The Tax and Customs Authority submitted a response in which it raised exceptions of lack of material jurisdiction of the Arbitral Tribunal and of procedural timeliness of the request for arbitral decision and argued that the request for arbitral decision should be ruled unfounded.
On 10-01-2017, a hearing was held in which witnesses were examined and it was decided that the proceedings would continue with written submissions.
The Parties submitted their submissions.
The Tax and Customs Authority joined to the record the administrative file relating only to the tax facts of periods 201309, 201310, 201311 and 201312. However, the Taxpayer also submitted an administrative complaint relating to the tax facts of periods 201401 to 201502, which are also the subject of the challenge.
By order of 24-02-2017, the Tax and Customs Authority was notified, on the same date, to, within a period of 10 days, join to the record the administrative file relating to the administrative complaint relating to periods 201401 to 201502.
On 24-03-2017, the Tax and Customs Authority came to inform that "the transmission of the missing administrative file will be carried out in due course in physical digital format, given that the respective extension is divided by a large number of files, mostly exceeding the megabytes space permitted to be sent by the email accounts bound to the undersigned signatories".
However, the Tax and Customs Authority did not send the administrative file regarding the facts relating to periods 201401 to 201502.
With regard to the documents joined by the Tax and Customs Administration with the submissions and by both Parties thereafter, in particular those that reproduce images apparently extracted from "google maps", these will not be considered as evidence, for having been presented untimely (as they could have been joined with the response), and the Claimant questions their credibility.
Furthermore, in a dispute of mere legality, as provided for in the RJAT for arbitral tribunals operating in CAAD, in which only the declaration of illegality of acts of the types provided for in paragraphs a) and b) of No. 1 of Article 2 thereof is sought, the legality of the challenged act as it occurred must be assessed, with the reasoning that was used in it, other possible reasoning that could serve as support for other acts, with a decisory content totally or partially coinciding with the act practiced, not being relevant. Therefore, reasoning invoked after the fact, following the end of the tax procedure in which the act whose declaration of illegality is requested was practiced, is irrelevant, including that advanced in the jurisdictional proceedings. ([1])
Thus, the relevant reasoning for assessing the legality of acts is that which was invoked in the underlying tax procedures for the challenged acts.
The Arbitral Tribunal was duly constituted.
The parties are duly represented, enjoy legal personality and capacity and are legitimate (Articles 4 and 10, No. 2, of the same decree and Article 1 of Administrative Order No. 112-A/2011, of 22 March).
It is important to examine as a priority the exceptions raised.
2. QUESTION OF LACK OF MATERIAL JURISDICTION OF THE ARBITRAL TRIBUNAL
2.1. Positions of the Parties
As a preliminary question to the examination of the merits in the present proceedings, the Tax and Customs Authority raises the partial lack of jurisdiction of this arbitral tribunal, as a matter of substance.
The Tax and Customs Authority alleges, in summary, the following:
– the object of the present request for arbitral decision amounts to the partial rejection of the refunds that the Claimant had formulated when submitting the periodic declarations, in which it requested the refund of the amounts itemized therein;
– the Arbitral Tribunal lacks material jurisdiction to rule on such a request;
– the "liquidation statement" amounts to nothing more than the result of the settlement of accounts between the refund requested by the Claimant and the corrections made by the tax inspection services after assessing the legitimacy of the said refund requests;
– "liquidation statements" do not amount to acts of assessment of taxes for purposes of determining whether they are affected by any illegality;
– the right to VAT refund does not assume the character of a true potestative right that imposes itself, without more, inexorably on the one who must provide it;
– there is a fundamental matter, which concerns the assessment of the legitimacy of the refund vis-à-vis the taxpayers and this legitimacy is assessed, in particular, according to the legitimacy of the exercise of the right to deduction, in VAT;
– Article 2 of the RJAT does not provide for the jurisdiction of arbitral tribunals to rule on the claim of the now Claimant regarding the request it formulates, since the act of partial rejection of the refund requests does not amount to tax assessment acts;
– in the context of value-added tax, the taxpayer has the duty to assess tax in all operations it carries out, and the right to deduct the tax borne in the inputs of its activity;
– in the so-called "liquidation statements", which amount to nothing more than an accounting or settlement of accounts, it is expressly stated: "You are hereby notified of the VAT assessment relating to the period to which the operations pertain, as a result of which there is a refund due in the amount ascertained, as per the explanatory note above.";
– the amount ascertained in the wrongly termed assessment amounts to the amount to be refunded and not the amount of corrections made when assessing the legitimacy of the refund through the inspection procedures mentioned above;
– tax assessment acts, in the context of this tax, formally are never called liquidation statements but only as self-assessments or when made by the administration as additional assessments;
– such liquidation statements do not produce legal effects of their own, being instrumental reality to the assessment of the refund requests made by the now Claimant;
– here they produce legal effects of their own but only as partial rejections of the refund given the terms, in particular, of the said notifications.
The Claimant responded to this exception in its submission, stating the following, in summary:
– from the documents issued by the Tax and Customs Authority that were notified to it, there is an explicit indication that these are assessments, which could be challenged through administrative complaint or judicial review:
– in those documents, furthermore, reference is made, for the determination of the "ascertained value", to the "Total taxable base" and "Total tax in favor of the State";
– to arrive at these Ascertained Values, the Tax Authority, within an inspection procedure, made a series of corrective operations that altered the Claimant's tax situation:
· it assessed, in the various invoices in which it considered there to be no proof of an intra-community transaction, the VAT corresponding to that transaction;
· determined, period by period, the new taxable bases, naturally different from those declared by the Claimant, and corrected the tax in favor of the State;
· promoted a new assessment of tax based on the ascertained values;
– these Ascertained values are different from those declared by the Claimant in its Periodic Declaration, where it made the self-assessment of VAT, which produced all its legal effects, and gave rise to a different final result (assessment) that can be materialized either in a lower tax credit, or even in tax to be paid (as occurred in the tax period 201502);
– the fact that there is tax to be refunded does not transform an assessment into a settlement of accounts, because if it did, one would conclude that the Tax Authority, in general, had stopped making "assessments" and started making... "settlements of accounts";
– the concept of settlement of accounts, which is not found in tax legislation, but is used in "administrative language", relates to the financial effects of assessments, reflecting, in terms of collection, the financial flows resulting from them and, therefore, is not confused with the assessment, being only a consequence of the assessment;
– there is no "settlement of accounts" without prior assessment, although there may, however, be an assessment without settlement of accounts;
– in the case, the assessments were made pursuant to No. 1, Article 87 of the VAT Code;
– the additional assessment of the difference does not mean that from this necessarily results tax to be paid, and may also correspond to a smaller refund;
– in the case, as appears from the documents in question, we are dealing with VAT assessments;
– it is the illegalities with which the controversial assessments are affected that are contested in the present request for arbitral decision, not relating to any possible illegality related to the formal conditions of the refund request;
– the request for arbitral decision is limited to declaring the illegality of the assessments notified, considering the expression "having as a consequence the issue of the corresponding refunds", as the identification of the normal consequence of that declaration of illegality and not as another request;
– a refund contested by the Tax Administration is equivalent to an assessment.
2.2. Decision on the Exception of Lack of Jurisdiction
The Tax and Customs Authority notified the Claimant of the documents, bearing the name "VAT LIQUIDATION STATEMENT", in each of which reference is made, among other things, to a "LIQUIDATION NUMBER" and a "LIQUIDATION DATE".
In those documents, signed by the Director-General of the Tax and Customs Authority, it is further stated:
"You are hereby notified of the VAT assessment relating to the period to which the operations pertain, as a result of which there is a refund due in the amount ascertained, as per the explanatory note above.
We further inform you that, in accordance with the instructions transmitted to the Institute for the Management of the Treasury and Public Credit, I.P.; the refund was carried out by transfer to the account relating to the NIB identified above, contained in the registry, so any clarification regarding the same transfer should be requested from the credit institution where the identified bank account is located.
From the assessment made, you may present, to the competent Finance Service, administrative complaint or judicial review in accordance with Articles 70 and 102 of the CPPT.
The Director-General,
Helena Alves Borges"
It is thus unequivocal that the Tax and Customs Authority practiced acts that it considered to be assessments and that it repeatedly referred to as such.
Article 124 of Law No. 3-B/2010, of 28 April, authorized the Government to legislate "in order to institute arbitration as an alternative form of jurisdictional resolution of conflicts in tax matters", so that the tax arbitral process would constitute an alternative procedural means to judicial review and to the action for recognition of a right or legitimate interest in tax matters.
Decree-Law No. 10/2011, of 20 January (RJAT), implemented the mentioned legislative authorization with a more restricted scope than initially envisaged, not including in particular alternative jurisdiction to the action for recognition of a right or legitimate interest in tax matters, and "instituted tax arbitration limited to certain matters, listed in Article 2 thereof" making the binding of the tax administration depend on "administrative order of the members of the Government responsible for the areas of finance and justice, which establishes, in particular the type and maximum value of the disputes covered" ([2]).
The scope of tax arbitral jurisdiction is thus delimited, in the first place, by the provisions of Article 2 of the RJAT which enumerates, in its No. 1, the criteria for material distribution of jurisdiction, covering the examination of claims directed at declaring the illegality of acts of assessment of taxes ([3]).
Given the voluntary nature of submission to arbitral jurisdiction, in a second place, "the jurisdiction of the arbitral tribunals operating in CAAD is also limited by the terms to which the Tax Administration bound itself to that jurisdiction, implemented in Administrative Order No. 112-A/2011, of 22 March, as Article 4, No. 1 of the RJAT provides that "the binding of the tax administration to the jurisdiction of the tribunals constituted in accordance with this law depends on administrative order of the members of the Government responsible for the areas of finance and justice" ([4]).
The cited Administrative Order provides, in Article 2, that "The services and bodies referred to in the previous article bind themselves to the jurisdiction of the arbitral tribunals operating in CAAD that have as their object the examination of claims relating to taxes the administration of which is entrusted to them referred to in No. 1 of Article 2 of Decree-Law No. 10/2011, of 20 January, with the exception of the following: ...", indicated in the subsequent paragraphs of the same article.
The jurisdiction of the arbitral tribunals operating in CAAD is not expressly provided for in the examination of the legality of acts of rejection of requests for refunds of sums paid.
However, in the case at hand, as seen from the documents issued by the Tax and Customs Authority, it performed an operation of accounting VAT to be refunded which it called "VAT LIQUIDATION STATEMENT", to which it assigned a "LIQUIDATION NUMBER" and a "LIQUIDATION DATE", and stated, in the final part, that the Claimant "are hereby notified of the VAT assessment relating to the period to which the operations pertain, as a result of which there is a refund due in the amount ascertained, as per the explanatory note above" and "From the assessment made, you may present, to the competent Finance Service, administrative complaint or judicial review in accordance with Articles 70 and 102 of the CPPT".
That is: in light of the documentary evidence available, one must conclude that, in this case, for better or worse, acts of assessment were practiced. Such acts, embodied in the documents notified to the Claimant, are the subject of the request for declaration of illegality that is made in the present proceedings, and are covered by the provision of paragraph a) of Article 2 of the RJAT.
The RJAT and Administrative Order No. 112-A/2011, define the jurisdiction of the arbitral tribunals operating in CAAD through the type of act and not through the tax issues that need to be examined to ascertain its legality.
The legality of such acts is capable of being examined and falls directly within the scope of the jurisdiction of the arbitral tribunals operating in CAAD, so the invoked exception of absolute lack of jurisdiction must be ruled unfounded.
Moreover, the designation of assessment acts given by the Director-General of the Tax and Customs Authority to the acts it practiced is adequate and appropriate, as taught by JOSÉ XAVIER DE BASTO and GONÇALO AVELÃS NUNES, "a refund contested by the tax administration in every respect is equivalent to an assessment of tax and the means of responding against that act of the administration, which denies or revokes a refund, are identical to those that the law places at the disposal of taxpayers to annul, in whole or in part the tax assessment" ([5]), a thesis which is in line with the application, determined by Article 22, Nos. 11 and 13, of the VAT Code, to acts of rejection of refund requests of the administrative and contentious challenge procedures of VAT assessment acts, provided for in Article 93 of the same Code. ([6])
Thus, the exception raised by the Tax and Customs Authority is ruled unfounded.
3. QUESTION OF PROCEDURAL TIMELINESS OF THE PRESENTATION OF THE REQUEST FOR CONSTITUTION OF THE ARBITRAL TRIBUNAL
The Claimant submitted administrative complaints of the VAT assessment acts that were notified to it, in line with one of the challenge options that were indicated to it in the notifications.
The administrative complaints were submitted by the Claimant on 21-12-2015 and 20-01-2016 and were not decided until 12-07-2016, the date on which the Claimant submitted the request for constitution of the tribunal which gave rise to the present proceedings.
In accordance with the provisions of Article 57, Nos. 1 and 5, of the General Tax Law, administrative complaints are presumed rejected four months after the dates on which they were submitted.
For this reason, implied rejections of the administrative complaints were formed on 21-04-2016 and 20-05-2016, respectively.
In cases where an administrative complaint is submitted and an implied rejection occurs, the period for submission of a request for constitution of the tribunal, which is 90 days, is counted from the date of formation of the implied rejection, as results from the express terms of paragraph a) of No. 1 of Article 10 of the RJAT and the reference made therein to paragraph d) of No. 1 of Article 102 of the CPPT.
For this reason, it is manifest that on 12-07-2016, the date of submission of the request for constitution of the tribunal, the 90-day period from the formation of the implied rejection had not yet elapsed in relation to any administrative complaint.
And, obviously, it is within this period that the Claimant should present the request for constitution of the tribunal, formulating the request for declaration of illegality of the assessment acts, as Article 2 of the RJAT does not even refer to implied rejections of administrative complaints as the subject of requests for declaration of illegality.
In fact, decisions rejecting administrative complaints may only be the subject of challenge in cases where, being express, they have maintained or altered assessment acts, which are always the object (mediate or immediate) of the request for declaration of illegality.
For this reason, the Claimant's action in challenging the assessments that were notified to it, within the 90-day period from the implied rejection of the administrative complaints, is perfectly correct.
The exception of procedural timeliness raised by the Tax and Customs Authority is thus unfounded.
4. MATTER OF FACT
4.1. Facts Established
The following facts are considered established:
a) The Claimant's business purpose is the trade, import and export of cleaning, hygiene, beauty and other non-specified food products;
b) The Claimant is classified in the activity of wholesale trade in other non-specified food products, CAE 46382.
c) For VAT purposes, the Claimant is classified in the normal regime of monthly periodicity, since 14-01-2002;
d) From the beginning of activity until period 2013-08 it received refunds totaling approximately € 13,700,000.00;
e) The VAT credits declared and the successive refund requests are justified by active operations consisting of intra-community transactions and exports and also by passive operations, justified by acquisitions of goods in national territory;
f) The Claimant requested VAT refunds relating to the tax periods referring to 2013-09 to 2013-12 and 2014-01 to 2015-02;
g) The Tax and Customs Authority conducted a tax inspection of the Claimant, relating to the year 2013, in which it prepared the Tax Inspection Report contained in the administrative file, the content of which is given as reproduced, in which reference is made, among other things, to the following:
I - CONCLUSIONS OF THE INSPECTION ACTION
As a result of the analysis of VAT refund requests requested by the taxpayer "A…, Lda. ", NIPC:…, relating to periods 2013-09, 2013-10, 2013-11 and 2013-12, irregularities were found that resulted in tax corrections, in the total amount of € 391,570.43.
(...)
II. 3.3. Activity Developed
In the period from September 2013 to December 2013, the active operations declared by A… have almost exclusively as destination the external market. It registered in the accounting intra-community transactions of goods and exports, in the amounts of € 2,618,718.79 and € 1,380,840.71, respectively. The acquisitions of goods that justified the intra-community transactions and exports were made in national territory and are documented exclusively by invoices issued by the company "B…, S.A.", NIPC: … (hereinafter referred to simply as B…).
• Intra-Community Transactions of Goods
The intra-community transactions of goods recorded in the accounting of A… are documented by invoices issued to the following customers:
In accounting terms, A… recorded expenses relating to the transport of goods, in the total amount of € 5,995.00, based on invoices issued exclusively by the company "O…, Lda.", relating to the operations declared with the Spanish companies "D…" and J…", in the months of September, October and December 2013 (Annex I - sheets 5 to 7), by subcontracting services to other carriers, namely, the companies "P…." and "Q...".
The transport documents presented by A…, state that the goods were transported from Portugal to another Member State, by road and most of the transport services provided by third parties, the carriers. In accordance with the Convention relating to the Contract of International Carriage of Goods by Road (dated 19-05-1956), it is necessary to present the shipping declarations, commonly referred to as CMR, validly completed and certified, as these are the documents that prove the transport of goods.
In accordance with Article 6 of the Convention relating to the Contract of International Carriage of Goods by Road, the shipping declaration must contain the identification of the carrier and the common designation of the nature of the goods and the mode of packaging, which was not verified in some of the CMRs presented by A….
In addition to the formal irregularities existing in the CMRs presented by A…, relating to intra-community transactions, other incongruities were verified, which call into question the exemption provided for in paragraph a) of Article 14 of the VAT Regime for Intra-Community Transactions (RITI), as mentioned below.
• Exports
The exports of goods recorded in the accounting of A… are documented by invoices issued to the following customers:
For each export, an electronic customs export declaration (DAU) was completed. These declarations are certified by the Customs Services of the Tax and Customs Authority.
• Acquisitions of Goods
As for the exclusive supplier of goods to A…, B…, the following was found:
—> A… is B…'s largest national customer, which has as a member of its board of directors, Y…, also a partner and manager of A… (Annex I - sheets 8 to 15);
—> Both A… and B… carry out their activities in the same location, at …;
—> In the periodic VAT declarations submitted by B…, intra-community acquisitions of goods were declared, with the main EU suppliers being the Spanish companies "C…" and "D…", which are also the main EU customers of A…;
—> B… also makes exports in amounts higher than A…, with Angolan customers "Z…" and "S…" being identified, the latter Angolan company also being a customer of A….
Under the duty of cooperation provided for in Article 59 of the General Tax Law, B… was notified (Office No. … of 2014-04-08), to send to the Finance Department of Lisbon, among others, copies of documents related to the acquisitions of goods it sold to A… (Annex I - sheets 16 to 18).
These items were provided in digital format (Pen Drive). However, only documents for acquisitions made by B…, relating to products that were transmitted by A… to other Member States, were sent.
According to the documents presented, the products transmitted by A…, in greater quantity, to the EU market, were purchased by B… from national companies representing the brands of those products.
III - DESCRIPTION OF FACTS AND GROUNDS FOR PURELY ARITHMETIC CORRECTIONS
III.1. Description of Facts and Grounds
The activity carried out by A… consists of the acquisition of hygiene and cleaning products for their subsequent sale in the external market, intra-community transactions of goods and exports, benefiting from the tax exemptions, provided for in Article 14 of the RITI and Article 14 of the VAT Code, respectively.
All acquisitions of goods were made from a single company, B..., with which A… maintains a privileged relationship, given that one of the members of the board of directors of B… is also a partner and manager of A… and that these companies carry out their activities in the same location (…).
As mentioned previously, various incongruities were found in the documents presented by A…, relating to intra-community transactions, which call into question the exemption provided for in paragraph a) of Article 14 of the VAT Regime for Intra-Community Transactions (RITI). The incongruities found were as follows:
—> The Spanish company "F…", a customer of A…, although registered in the Commercial Register of … (managed by AA…), is not registered for VIES purposes;
—> In the recapitulative declarations submitted by A…, relating to periods 2013-11 and 2013-12, the invoices for intra-community transactions to the Spanish company "F…", were declared as transactions to the English company "E…";
—> The Spanish company "G…" has been ceased in the VIES system, since 2013-11-21, however, sales were declared by A… to the said Spanish company on dates after the cessation date indicated in the VIES system;
—> The Spanish company "J…" made acquisitions from A… before being registered in the VIES system;
—> Spanish carriers involved in the transport of goods ceased or not registered for VIES purposes - "BB…" (ES…), "CC…" (ES …) and "DD…" (ES…);
—> Some of the shipping declarations (CMR) presented have various irregularities in their completion, namely, due to lack of proper identification of the carrier that carried out the transport service or by not mentioning the type of goods transported;
—> The proof of transport and delivery of goods by A… presents a series of irregularities. This proof is based on:
• The presentation of copies of the first copy of the CMRs (intended for the shipper), stamped (application of color stamps on copies of the CMRs) and/or signed and dated (with blue pen) in the space reserved for the receiver of the goods (field 24 of the CMR);
• The presentation of declarations relating to the transport of goods carried out in vehicles of the customers themselves, without any other element that allows demonstrating that the vehicles used are of their ownership and have the capacity to accommodate the goods transported;
• The presentation of declarations issued by customers confirming the receipt of goods, in which the majority of these declarations consist of copies, without any reference date and without identification of the persons who issued them, making it impossible to credibly attest that they were issued by the customers.
In tax terms, intra-community transactions of goods are exempt from tax, in accordance with paragraph a) of Article 14 of the VAT Regime for Intra-Community Transactions (RITI). For this exemption to apply, the following conditions must be cumulatively met:
—> The transactions must be carried out on a paid basis, by taxpayers classified in the normal VAT regime;
—> The goods are dispatched or transported by the seller, by the purchaser or on their account, from national territory to another Member State;
—> The purchaser of the goods is registered for VAT purposes in another Member State, has communicated to the seller their (valid) tax identification number and is covered there by a taxation regime for intra-community acquisitions of goods.
The verification of such conditions, with a view to applying the exemption in transactions, is the responsibility of the seller taxpayer, who must be able to prove unequivocally all elements required in the aforementioned article of the RITI, namely the transport of goods to another Member State, under pain of the operation being considered located in national territory and as such subject to tax.
On 2014-04-23, the partner-manager of A…, Y… came to clarify, by email, the procedures adopted by the company, regarding the completion of transport documents and confirmation of delivery of goods to its EU customers. Following is a transcript of the clarifications provided by the said partner-manager of A… (Annex I -sheet 19).
"...regarding the processing of CMRs, we hereby inform the following:
1 – The carrier contracted by our customer comes to the warehouse where the goods that are subject to transmission are located, to effect the respective loading:
2 – While the goods are being loaded, the driver delivers the originals of the CMR(s) to the logistics manager;
3 – After the loading of the cargo, the logistics manager of the warehouse fills in all fields of the CMR(s), which is signed by him and by the driver of the contracted vehicle, validating all fields:
4 – To confirm proper receipt of the transported goods, and after delivery, we ask our customer, while waiting for the duplicate CMR to arrive, to send us a stamped and signed copy of the same:
5 – Subsequently the customer sends a declaration stating that the goods arrived in good condition, mentioning the number of the sales invoice, and the respective value.
These are the routines practiced in the preparation and receipt of CMRs...."
This clarification was not signed by the said partner-manager, and is contradictory in relation to what was found in the documentation presented by A…, for proof of transport and delivery of goods to EU customers, as well as, the method adopted does not correspond to the procedures used in the documentary circuit of shipping declarations.
The shipping declaration (CMR) must be issued in at least three copies. Currently, four or more copies of the CMR have been found. The distribution of these copies is as follows:
- The 1st copy of the CMR for the shipper of the goods;
- The 2nd copy of the CMR for the recipient of the goods;
- The 3rd copy of the CMR for the carrier;
- The remaining copies, normally, serve as proof of the transport service and are delivered by the carriers to the companies that contracted these services.
These copies of the CMR must be duly completed, signed and stamped by the shipper and the carrier, before the start of transport, with the 1st copy of the CMR remaining in the possession of the shipper, while the remaining copies accompany the goods and are signed, stamped and dated by the recipient of the goods, upon delivery.
The legal representative of A… was notified (Office No. … of 2014-05-20), to clarify, among others, the issues that had been raised to him regarding proof of transport and delivery of goods to its EU customers (Annex I - sheets 20 and 21). In response to the notification, the partner-manager of A… (entry 2014… of 2014-05-29), Y…, sent clarifications regarding the issues raised to him (Annex I -sheets 22 and 23). However, from reading these clarifications, in particular, regarding the obtaining of evidence of delivery of goods to EU customers, the taxpayer did not add anything new, compared to the previous clarifications, in fact, merely transcribed the same "routines practiced in the preparation and receipt of CMRs" (Annex I - sheet 22, page 44).
Given the foregoing, it was necessary to proceed:
- To consultation and collection of documents from carriers related to the transport of goods invoiced by A… to its customers, based in the Lisbon district, covered by Inspection Orders;
- To requests for intra-community administrative cooperation, to other Member States, for various customers of A….
From the combination of all documentation collected from the carriers, with the documentation and information obtained from the Member States, it was found that the majority of the incongruities found in the documents presented by A… continue to subsist, in particular in the actual proof of the departure of goods from Portugal to another Member State.
Following is a description of the irregular situations found, relating to each EU customer of A….
III.1.1. "C…" (ES…)3
This Spanish company has been registered in the VIES system since 22/03/2000, with headquarters in …, Km 2 (Annex II -sheet 1).
According to the cadastral information, the activity carried out by "C…" (hereinafter referred to as C…) consists of the wholesale trade in various products, including hygiene and cleaning products.
From September to December 2013, A… invoiced to the Spanish company C…, hygiene and cleaning products in the total amount of € 743,747.72, through the following invoices (Annex II-sheets 2, 5, 9,13, 17, 21, 25, 29,33, 37,41, 44 and 48):
• Proof of Transport and Receipt of Goods
According to the originals of the 1st copy of the CMRs presented by A…, the goods supplied to C…, were transported from Portugal (…) to Spain (…), exclusively by Spanish carriers, which are identified below (Annex II-sheets 3, 6, 10, 14, 18, 22, 26, 30, 34, 38, 42, 45 and 49):
For confirmation of receipt of goods by C…, A… presented (Annex II-sheets 4, 7, 11,15, 19,23,27, 31, 35, 39, 43, 46 and 50):
—> For seven of the invoices it issued, copies of the first copy of the CMRs, stamped and initialed by the Spanish company (it is a reddish color stamp), without any reference date to receipt of goods, and;
—> For the remaining six invoices it issued, the original fourth copy of the CMRs, stamped and initialed by the Spanish company (the same reddish color stamp), also without reference to the date corresponding to receipt of goods.
The copies of CMR No. … A (JJ…), handwritten with the identification of the "KK…", collected from A… (1st and 4th copy of the CMR) do not have the same handwriting. In the fourth copy of said CMR, relating to proof of delivery of goods to C…, fields 22, 23 and 24 are not included, relating to the identification of the shipper, the carrier and the receiver of the goods, which appears in the first copy of the same CMR (Annex II - sheets 26 and 27). However, all copies issued of the shipping declaration (CMR) must contain the same graphic form, and CMR No. … A cannot be considered credible proof of the carrying out of transport and delivery of goods invoiced by A… to C… (Invoice No. … of 2013-11-19).
Attached to each shipping declaration (CMR) is a declaration relating to receipt of goods in the warehouse of the Spanish company C…, which mentions the sending of a copy of the respective CMR. These declarations are documented on letterhead paper of the Spanish company (possible copy on letterhead), all dated 2014-01-17, without identifying the person responsible for issuing them and without any date relating to receipt of goods (Annex II - sheets 8, 12, 16,20, 24, 28, 32, 36, 40, 47 and 51).
As A… received from C… on 2014-01-17 the shipping declarations (CMR), which confirm delivery of goods to the said Spanish company, purchased between September and December 2013, the reason for continuing to have copies of the first copy of the CMRs, stamped and initialed (reddish color stamp) by C…, to justify delivery of goods is not apparent.
With regard to these declarations justifying receipt of goods, it was also found that the logo of C… used in the issuance thereof is different, depending on the copies of the CMRs presented by A…, that is, in the declarations accompanying copies of the first copy of the CMRs, the logo of C… is different from that contained in the declaration accompanying the original fourth copy of the CMRs (Annex II - sheets 19, 20, 23 and 24, by way of example).
• Intra-Community Administrative Cooperation
From the analysis of documents sent and information obtained from the Tax Agency of Spain (response to the request for intra-community administrative cooperation), it was found that (Annex II - sheets 52 to 65):
—> The Tax Agency of Spain requested that C… present documents relating to commercial relations with A…. In the documents presented by C… and sent by said Tax Agency, there are no documents relating to the contracting of transport services, despite the Spanish company having informed that it was they who contracted these services;
—> In the documents presented by C… and sent by said Tax Agency, there are the shipping declarations intended for the purchaser/recipient of the goods (2nd copy of the CMR), stamped, initialed and without any reference date as to receipt of goods. In these copies, the stamp used by the Spanish company, in field 24 of the CMRs, is different from that contained in the copies presented by A…, to prove transport and delivery of goods (copies of 1st copy of CMRs or originals of 4th copy of CMRs);
è The information from the Tax Agency of Spain states that the carriers contained in the CMRs presented by C… are Spanish and the most used for transport services is the company "II…", S.A.", which is linked to C… and has the same tax address, raising some doubts as to the carrying out of these transports.
• Conclusions on the Transactions Declared to Customer C…
From the joint analysis of the documents presented by A…, with the documents sent and information obtained from the Tax Agency of Spain (response to the request for intra-community administrative cooperation), it is concluded that there are no credible evidence regarding the carrying out of transports from … (Portugal) to … (Spain), for the following reasons:
—> The copies of CMRs collected from A… (copies of 1st copy and 4th copy) show divergences in relation to those presented by C… (2nd copy of the CMR), in the application of a different stamp in the field intended for the recipient of goods (field 24 of CMRs) (Annex II - sheets 50 and 53, by way of example);
—> The 4th copy of CMR No. … A (JJ…) presented by A…, does not have the same graphic form of the 1st and 2nd copies of this CMR (Annex II - sheets 26, 27 and 59);
—> The declarations presented by A…, relating to receipt of goods by C…, are impersonal, and there are two different "models", depending on the copy of the CMR presented by A…, to prove delivery of the goods invoiced to the Spanish company (copy of 1st copy or original 4th copy).
To benefit from the tax exemption in intra-community transactions of goods, the conditions provided for in paragraph a) of Article 14 of the RITI must be cumulatively met and these operations must be duly documented, which was not verified in the intra-community operations, carried out by A… and C…, due to the lack of consistency in the documents presented by these companies, which do not clearly and unequivocally prove that the goods loaded in Portugal were actually unloaded in Spain.
Thus, the goods invoiced by A… to C… are taxed in national territory, in accordance with Article 6 of the VAT Code, with tax assessed and due, on the date of invoice issuance, in accordance with Articles 7 and 8 of the VAT Code.
Pursuant to paragraph a) of No. 1 of Article 1 of the VAT Code, the tax inherent to these transactions was assessed, applying the tax rates referred to in paragraphs a) and c) of Article 18 of the same decree.
The amount of tax assessed was € € 151,589.50, divided by the following periods (Annex II -sheets 66 and 67):
III.1.2. N… (ES …)/D… (ES…)
(...)
III.1.2.2. D…(ES…)
Between September and December 2013, A… invoiced to D…, hygiene and cleaning products in the value of € 692,665.16, through the following invoices (Annex III - sheets 6, 10, 14, 15, 19, 23, 26, 30, 31, 35, 39, 40, 44 and 48):
Invoice No. 2934, dated 21/10/2013 does not have an associated CMR, with only declarations attached to said invoice, in which one of these declarations contains the name and signature of the manager, LL… and the identification of a vehicle with license plate … (trailer …), as per Annex III - sheets 23 to 25.
A situation identical to that found in N…, whose arguments referred to above, regarding the deficient proof of transport of goods in N…'s own vehicle, also apply to the transport of products by D…, in its own truck, that is, the declaration presented by A…, based on the Circular Office 30009 of 10/12/1999 of the VAT Services Department, to justify transport of goods from Portugal to Spain, in the purchaser's own vehicle, lacks additional proof relating to the vehicle that transported those goods, namely, whether it has the capacity to accommodate the goods and whether D… is the owner or lessee of the vehicle with license plate … (trailer …), as if this is not the case the service would be provided by a third party (carrier) which would require the corresponding CMR.
• Proof of Transport and Receipt of Goods
According to the originals of the 1st copy of the CMRs presented by A…, the goods supplied to D…, were transported from Portugal (…) to Spain (…), by the following national and Spanish carriers (Annex III - sheets 7, 11, 20, 27, 32,36, 41, 45 and 49):
By consulting the registry of the System of Information on Intra-Community Transactions (VIES) it was found that "RR…" (ES…), operator in its own name, with activity in road transport of goods, has been ceased since 2007-11-19, while the Spanish carrier "DD…" (ES…) is not registered for VIES purposes (Annex III - sheets 51 and 52).
For confirmation of receipt of goods by D…, A… presented:
—> Copy of the first copy of the CMRs, stamped, signed and dated by the Spanish company (it is the blue color stamp used in the majority of copies) (Annex III - sheets 8, 12, 16,21,28, 33, 37, 42, 46 and 50);
—> Copies of the declarations of D… certifying receipt of goods invoiced by A…, stamped and initialed by the manager of said Spanish company, LL…, without any reference date of issuance. In these declarations the only elements that are not part of the copy were handwritten, in a "flat" text and refer to the number of the invoice issued by A… and the corresponding date of issuance thereof (Annex III-sheets 9, 13, 17, 18, 22, 29, 34, 38,43, 47).
• Intra-Community Administrative Cooperation
In response to the request for intra-community administrative cooperation, the Tax Agency of Spain sent only copies of the documents presented by D…, without any additional information.
The CMRs presented relating to Spanish carriers, ceased or not registered for VIES purposes, cannot be considered credible evidence as to the carrying out of goods transport services from Portugal to Spain, and no information was obtained from the Tax Agency of Spain, capable of validating the actual carrying out of these transports.
Similarly, the transport of goods in a truck of D…'s own, based only on a declaration and on tolls (copies of receipts sent by the Tax Agency of Spain), without identification of the owner or lessee of the truck and without the possibility of making any connection between said receipts and the goods transmissions, the actual transport of which is intended to be validated, cannot be considered credible evidence that transport from Portugal to Spain was actually carried out (Annex III - sheets 53 to 56).
• Conclusions on the Transactions Declared to Customer D…
The goods transactions carried out by A… to D…, whose documents presented are insufficient to validate and prove the actual carrying out of transports from Portugal to Spain (an indispensable requirement for VAT exemption), are taxed in national territory, in accordance with Article 6 of the VAT Code, with tax assessed and due, on the date of invoice issuance, in accordance with Articles 7 and 8 of the VAT Code.
Thus, the tax inherent to these transmissions is assessed, pursuant to paragraph a) of No. 1 of Article 1 of the VAT Code, applying the tax rates referred to in paragraphs a) and c) of Article 18 of the same decree, with the amount of tax being € 34,254.44, divided by the following periods (Annex III - sheet 57):
III.1.3. E... (GB…)/F… (ES…)
These two companies are controlled by the same person, AA….
The Spanish company "F…", although registered in the Commercial Register of Tarragona, is not registered for VIES purposes (Annex IV - sheets 1 and 2).
In declarative terms, A… mentioned only in the recapitulative VAT declarations, intra-community transactions of goods to the English company "E….", having included in the amounts declared, the values it invoiced to the Spanish company "F…".
In accounting terms, A… recorded in the same customers account (account 21.1.1.2.19), the invoices it issued for the companies "E… ." and "F…" (Annex IV- sheets 3 and 4).
III.1.3.1.E... (GB…)
This English company has been registered in the VIES system since 2008-07-21 and is located in …(……).
According to the cadastral information, the activity carried out by "E…. (hereinafter referred to as E…) consists of the wholesale trade in perfumes and hygiene and cleaning products (Annex IV - sheet 5).
From September to December 2013, A… invoiced to E..., perfumes and hygiene and cleaning products in the total amount of € 312,869.84, through the following invoices (Annex IV - sheets 6, 10, 14, 18 and 22):
• Proof of Transport and Receipt of Goods
According to the originals of the 1st copy of the CMRs presented by A…, the goods supplied to E…, were transported from Portugal (…) to the United Kingdom, by the following national carriers (Annex IV-sheets 7, 11, 15, 19,23):
For confirmation of receipt of goods by E…, A… presented:
—> Copy of the first copy of the CMRs signed and dated, with no stamp that could identify the English company as the receiver of the goods, or any identification of the person who received these goods. Both the signature of the goods receiver, as well as the date of delivery of the goods, were handwritten on said copies of the CMRs, with blue pen (Annex IV-sheets 8, 12, 16 and 20);
—> Declarations issued by E…, on letterhead paper, certifying receipt of goods invoiced by A…, signed without identifying the person who issued them (Annex IV-sheets 9, 13, 17,21 and 24).
• Intra-Community Administrative Cooperation
In response to the request for intra-community administrative cooperation, the Tax Authorities of the United Kingdom informed that (Annex IV - sheet 25):
—> E… assumed ownership of the goods in Portugal and sent them to a rented space in a warehouse located in Portuguese territory, a place where these goods remained for some weeks;
—> Subsequently the goods are dispatched by E… to its customers, located in other EU countries;
—> This method allows E… to maintain the business, without A… having knowledge of who their customers are.
• Conclusions on the Transactions Declared to Customer E… Based on the elements presented by A… (copies of 1st copy of CMRs signed by the recipient and in the declarations of the same, on letterhead paper, certifying receipt of goods), we would have to consider the operations as intra-community transactions with goods having been transported from Portugal to the United Kingdom.
Based on the statements made by E… to the Tax Authorities of the United Kingdom, we conclude that in fact the goods did not leave national territory, at the time of their transmission.
Based on the foregoing, the exemption cannot be granted to the operations declared for this operator, in accordance with Article 14 of the RITI.
Thus, the tax inherent to these transmissions is assessed, pursuant to paragraph a) of No. 1 of Article 1 of the VAT Code, applying the tax rate referred to in paragraph c) of Article 18 of the same decree.
The tax assessed in these transmissions was € 71,960.07, divided by the following periods (Annex IV-sheet 26):
III.1.3.2. F… (ES…)
As mentioned above, the Spanish company "F…", although registered in the Commercial Register of Tarragona, is not registered for VIES purposes.
Its Corporate Purpose consists of the importation, exportation, distribution and marketing of drugstore products, perfumery, hygiene and cleaning and the commercial intermediation of the same products.
Between November and December 2013, A… invoiced to the Spanish company "F…" (hereinafter referred to as F…), hygiene and cleaning products, in the total amount of € 76,402.56, through the following invoices (Annex IV - sheets 27, 31 and 35):
* Proof of Transport and Delivery of Goods
According to the original of the 1st copy of the CMRs presented by A…, the goods supplied to F…, were transported from Portugal to Spain, by national carriers, which are identified below (Annex IV - sheets 28, 32 and 36):
In the CMR without number, "ZZ…" was handwritten in the field intended for carrier identification (field 16). The license plate … of the vehicle indicated for carrying out the transport is the property of the company "AAA…." (NIF:…). This is a CMR that is not validly completed.
For confirmation of receipt of goods by F…, A… presented:
—> Copy of the first copy of the CMRs signed and dated, with no stamp that could identify the Spanish company as the receiver of the goods, or any identification of the person who received the goods. Both the signature of the goods receiver, as well as the date of delivery of the goods, were handwritten on said copies of the CMRs, with blue pen (Annex IV-sheets 29, 33 and 37);
—> Declarations issued by F…, on letterhead paper, certifying receipt of goods invoiced by A…. These declarations are dated and signed, without identifying the person who issued them (Annex IV - sheets 30, 34 and 38).
CMR No. … issued by the carrier "YY…" (based in the Lisbon district), supports the transport of the goods invoiced by A… to E…, through invoice No. 2964 of 2013-11-29. Between the copy of this CMR presented by A… to justify delivery of goods to E…, and the copy of the same CMR collected from said carrier, the following divergences were found (fields 3, 4 and 24 of the CMR) (Annex IV -sheets 33 and 39):
—> The copy of CMR No. … collected from the carrier "YY...", states that the goods loaded in …, on 29 November 2013 should be delivered in … (Spain). However, these goods were unloaded in … (Portugal) on the same day they were loaded, having been received by the company "BBB… .";
—> The copy of the first copy of CMR No. … presented by A…, states that the goods loaded in …, on 29 November 2013 should be delivered in Tarragona (Spain), having been unloaded on 2 December 2013, making it impossible to identify the place of unloading or the person who received these goods.
• Intra-Community Administrative Cooperation
From the information obtained from the Tax Agency of Spain regarding F…, in response to the request for intra-community administrative cooperation, it stands out that this Spanish company submitted several applications to obtain registration as a community operator in VIES (last on 2014-09-08) (Annex IV - sheet 40). All these applications have been rejected, due to the lack of an adequate structure for the development of the declared commercial activity and also due to various irregularities detected in the documents that document the commercial operations of this Spanish company.
• Conclusions on the Transactions Declared to Customer F…
In addition to F… not being registered as a community operator, the documents analyzed relating to the dispatch and delivery of goods do not prove that the goods invoiced by A… to this Spanish company left Portugal.
F…, as the acquirer from another Member State, does not meet the conditions stipulated in paragraph a) of Article 14 of the RITI, given that it is not registered for VIES purposes, and A… cannot benefit from the exemption provided for in the same article in the transactions it carried out with said Spanish company.
Thus, the goods transactions invoiced by A… to F… are taxed in national territory, in accordance with Article 6, No. 1, of the VAT Code, with tax assessed and due, on the date of invoice issuance, in accordance with Articles 7 and 8 of the VAT Code.
Pursuant to paragraph a) of No. 1 of Article 1 of the VAT Code, the tax inherent to these transmissions was assessed, applying the tax rates referred to in paragraphs a) and c) of Article 18 of the same decree.
The amount of tax assessed was € 12,934.43, divided by periods 2013-11 and 2013-12 (Annex IV -sheet 41):
III.1.4. G… (ES B…)
This Spanish company was registered in the VIES system, between 01/08/2007 and 21/11/2013, the date it was ceased. It was located in … - … …(Annex V - sheet 1).
According to cadastral information, the activity carried out by "G…" (hereinafter referred to as G…) consisted of the wholesale trade in various products, including hygiene and cleaning products.
From September to December 2013, A… invoiced to G…, hygiene and cleaning products in the total amount of € 287,529.87, through the following invoices (Annex V - sheets 2, 6, 10, 14, 18 and 22):
As of 2013-11-22, G… as the purchaser from another Member State, does not meet the conditions stipulated in paragraph a) of Article 14 of the RITI, given that it was ceased, on 2013-11-21, for VIES purposes.
• Proof of Transport and Receipt of Goods
According to the original of the 1st copy of the CMRs presented by A…, the goods supplied to G… were transported from Portugal to Spain and Italy, by the following carriers (Annex V-sheets 3, 7, 11, 15, 19 and 23):
For confirmation of receipt of goods by G…, A… presented:
—> The original fourth copy of the CMRs, stamped, signed and dated by the Spanish company (Annex V - sheets 4, 8, 12, 16, 19 and 24);
—> Declarations relating to receipt of goods by G…, stamped and signed by the partner-manager, HHH…, however, these declarations are not dated (Annex V-sheets 5, 9, 13, 17,21 and 25):
Most of the shipping declarations do not contain the common designation of the transported goods, indicating in field 6 of the CMRs, only the number of pallets, as well as the places of destination of the goods indicated (field 4 of the CMR), are not always consistent with the places of unloading (field 24 of the CMR). According to these CMRs, the "pallets" loaded in … (Portugal) that should have been unloaded in …, … or …, always indicate Seville as the unloading place.
* Intra-Community Administrative Cooperation
Regarding the Spanish company G… two responses were obtained relating to requests for intra-community administrative cooperation, relating to the commercial relations between this Spanish company and A….
The first request for intra-community administrative cooperation covered the period from 2012-01-01 to 2013-06, while the second request covered the year 2013, with special focus on periods 2013-09 to 2013-12.
Regarding the first request for intra-community administrative cooperation, the Tax Agency of Spain informs that (Annex V - sheet 26, pages 51 and 52);
—> G… does not have a basic corporate structure for the development of the activity (neither facilities, nor personnel in its service);
—> Did not present all the documents requested and in those it presented, various incongruities were found relating to transports, namely, in the dates and places of loading and unloading of goods, with no evidence that goods left Portugal;
—> According to what was verified, it was proposed, by said Tax Agency, cancellation of registration in VIES, as of 2013-10-01.
Regarding the second request for intra-community administrative cooperation, the Tax Agency of Spain confirms the cancellation of registration as a community operator of G…, as of 2013-11-21 (Annex V-sheet 27) and sends copies of the documents presented by G…, which consist of:
—> The invoices issued by A… to G… and the shipping declarations of the goods, intended for the receiver of the goods, that is, the 2nd copy of the CMRs (CMR No. … not sent, corresponding to invoice 2921 issued by A…);
—> Some invoices issued by G… to its customers, which justify acquisitions from A…, and;
—> Some transport documents of the goods sold by G…;
• Joint Documentary Analysis
Through the CMRs presented by A…, it was found that the transport services provided by the carriers "DDD…" (CMR No. …) and "EEE..." (CMR No. …), were contracted by the company "FFF...".
At the transport company "FFF..." (hereinafter referred to as FFF…) documents relating to transport services carried out with its involvement were collected. At this company, documents from the Spanish carrier with the same name as the national carrier were also provided.
In the copies of CMRs presented by A… and G… (to the Tax Agency of Spain), there are no divergences in their completion. However, from the joint analysis carried out on these CMRs, with the remaining documents sent by the Tax Agency of Spain and those collected from the FFF… carrier, various irregular situations were found, which are described in the following paragraphs, depending on the invoice issued by A… and the corresponding CMR.
A) Invoice No. 2913 of 2013-09-02 - CMR No. …
This invoice issued by A… to G…, corresponds to the sale of 95,040 units of soap of the brand "…", the transport of which from … to Seville, began on the same day the invoice was issued, with the carrier responsible for the transport of soap/"pallets" being the "CCC… (hereinafter referred to as CCC…), according to the copies of CMR No. … presented by companies A… and G… (Annex V - sheets 3, 4, 28 and 29).
G… sold the soap it purchased from A… to a company located in MALTA, called III…, through invoice No. 2013000032 dated 2013-08-30. This soap sold by G… was also transported by CCC…, on 02 September 2013, from … to the port of Leixões, with the same vehicle and the same trailer being used in this transport that supposedly would be on the way to Seville (Vehicle …, Trailer …) (Annex V - sheets 29 to 31).
The transport guide No. … issued by CCC…, for the transport of soap sold by G…, mentions in the merchandise description field a sealed container (CLDU-…/8) (seal No. …), which was sent by the company JJJ…, located in Malta.
B) Invoice No. 2916 of 2013-09-10 - CMR No. …
According to CMR No. …, the transport of products contained in this invoice, issued by A… to G…, was carried out by the company "DDD…,*, with these transport services having been contracted by the carrier FFF….
Regarding said CMR, the following copies were presented:
—> At A…, the first copy intended for the shipper and the fourth copy delivered to it by G…, to confirm delivery of goods (Annex V - sheets 7 and 8);
—> AT G…, the second copy intended for the receiver of the goods (Annex V - sheet 32), and;
—> At the carrier FFF…, the third copy of the CMR (Annex V- sheet 33).
In none of these copies of the CMR is the type of products transported referred to, indicating only the number of pallets (thirty-one).
In the copies of CMR presented by A… and G…, there are no divergences in completion. According to these copies of CMR No. …, the "31 pallets" loaded in … should have been unloaded in Algeciras, but were received in Seville by G… (fields 3, 4 and 24 of the CMR).
In the copy of CMR collected at the FFF… carrier, it states that "31 pallets" were transported and it adds that "33 pallets of soil" were received (fields 10 to 13 of the CMR), while the copies presented by A… and G… refer only to the "31 pallets".
In field 24 of the CMR collected at the FFF… carrier, relating to the receiver of the "pallets", it is stamped by the Spanish company "KKK…", without reference to its tax identification number or its location.
If the 2nd, 3rd and 4th copies of the CMR accompany the goods from the place of loading to the place where they are unloaded, the reason for the divergences found in their completion is not apparent (fields 10 to 13 and 24 of the CMR).
According to the documents collected, the transport services relating to this transaction were invoiced by the Spanish carrier "FFF..." to the national company "LLL…" (Annex V - sheet 34).
To conclude, it is also noted that the company "LLL…,", based in Portugal, is administered by, MMM… (NIF:…, spouse of HHH.. (NIF:…), manager of the Spanish company G… (Annex V- sheet 35).
C) Invoice No. 2921 of 2013-09-18 - CMR No.…
According to CMR No. …, the transport of products contained in this invoice, issued by A… to G…, was carried out by the company "EEE...", with this transport service having been contracted by the carrier FFF….
Regarding this CMR, the following copies were presented:
—> At A…, the first copy intended for the shipper and the fourth copy delivered to it by G… to confirm delivery of goods (Annex V - sheets 11 and 12), and;
—> At the carrier FFF…, the third copy of the CMR (Annex V - sheet 36).
In none of these copies of the CMR is the type of products transported referred to, indicating only the number of pallets (fifty-six).
According to the copies of CMR No. …, presented by A…, the "56 pallets" loaded in … should have been unloaded in Algeciras, but were received in Seville by G… (fields 3, 4 and 24 of the CMR).
In the copy of CMR collected at the FFF… carrier, they state that "56 pallets" were transported and it adds more "33 pallets of something incomprehensible" (fields 10 and 13 of the CMR), while the copies presented by A… refer only to the "56 pallets".
In field 24 of the CMR collected at the FFF… carrier, relating to the receiver of the "pallets", it is stamped by the Spanish company "KKK…", without reference to its tax identification number or its location.
Once again, it is found that the copies of CMR that accompany the goods (3rd and 4th copies) mention different places for delivery of the "pallets".
According to the documents collected, this transport service was also invoiced by the Spanish carrier "FFF..." to the national company "LLL… ." (Annex V-sheet 37).
D) Invoice No. 2941 of 2013-10-28 -» CMR No. …
According to CMR No. …, the transport of products contained in this invoice, issued by A… to G…, was carried out by the Spanish company "FFF…". This transport service was contracted by G… itself, as mentioned below.
Regarding CMR No. … the following copies were presented:
—> At A…, the first copy intended for the shipper and the fourth copy delivered to it by G…, to confirm delivery of goods (Annex V - sheets 15 and 16);
—> At G…, the second copy intended for the receiver of goods (Annex V - sheet 38), and;
—> At the national carrier FFF…, the third copy of the CMR, issued by the Spanish carrier " FFF…" (Annex V - sheet 39).
In none of these copies of the CMR is the type of products transported referred to, indicating only the number of pallets (thirty-two). According to these copies of CMR No. …, the "32 pallets" loaded in … were received in Seville by G… (fields 3, 4 and 24 of the CMR).
To justify the contracting of this transport service, the FFF… company presented invoice No. 181522 of 31/10/2013, issued by the Spanish carrier to G… (Annex V -sheet 40). According to the description of this invoice, transport services were charged from Portugal (…) to Spain (Algeciras), relating to CMRs Nos. … and …, that is, the service documented by CMR … relating to the transport of goods invoiced by A… to G… was not mentioned in said invoice.
CMRs Nos. … and … referred to in the invoice issued by the Spanish carrier to G… refer to "pallets" shipped by G… itself, to Málaga and Algeciras. These "pallets" were loaded at …, on 2013-10-29 (Annex V - sheets 41 and 42).
Based on the transport documents collected from the FFF… carrier, relating to the transport services provided and invoiced by the Spanish carrier "FFF…", to G…, it is not possible to prove whether the goods sold by A… were loaded at … and unloaded in Seville, taking into account that this transport service apparently was not invoiced and that in the descriptions of CMRs Nos. … and …, the quantities of "pallets" are different from those contained in CMR No. ….
E) Invoice No. 2958 of 2013-11-22 -. CMR No. …
According to CMR No. …, the transport of products contained in this invoice, issued by A… to G…, were transported from … (Portugal) to Seville (Spain), on 2013-11-22, by the carrier "GGG… ."
At A… two copies of CMR No. … (first and fourth) were presented, issued by the company "GGG....", with different graphic forms (Annex V - sheets 19 and 20). In the fourth copy of CMR No. …, presented by said company to justify delivery of goods to G…, fields 22, 23 and 24 are not included, relating to the identification of the shipper, the carrier and the receiver of goods, which appears in the first copy of the same CMR. However, all copies issued of the shipping declaration (CMR) must contain the same graphic form, and CMR No. … cannot be considered credible proof of the carrying out of transport and delivery of goods invoiced by A… to G… (invoice No. 2958 of 2013-11-22).
From the analysis made of the documents presented by G… and sent by the Tax Agency of Spain, it is found that part of the goods acquired by this Spanish company from A…, were sold to the entity NNN…, located in …, through invoice No. 201300039 of 2013-11-22 (Annex V - sheets 43 and 45).
The goods sold by G… to NNN… were dispatched by G… itself, the transport service for which, carried out on 2013-11-22, was provided by the national carrier "OOO…", as verified in the 1st copy of CMR …, presented by G…. According to this CMR, the goods were loaded in …(Portugal) to be unloaded in Algeciras (Spain) (Annex V – sheet 46).
Based on this analysis, it is found that there are two transport services, documented by different carriers, transporting the same goods, including on the same day and with departures from different places (Annex V - sheets 44 and 46).
F) Invoice No. 2968 of 2013-12-10 - CMR No. …
According to CMR No. …, the transport of products contained in this invoice, issued by A… to G…, was carried out by the carrier FFF….
Regarding CMR No. … the following copies were presented:
—> At A…, the first copy intended for the shipper and the fourth copy delivered to it by G…, to confirm delivery of goods (Annex V — sheets 23 and 24);
—> At G…, the second copy intended for the receiver of goods (Annex V - sheet 47), and;
—> At the national carrier FFF…, the third copy of the CMR, in which field 24 is not completed, relating to the receiver of goods (Annex V - sheet 48).
In none of these copies of the CMR is the type of products transported referred to, indicating only the number of pallets (thirty-three).
According to the copies of CMR No. …, presented by A… and G…, the "33 pallets" loaded in Famões should have been unloaded in Italy, were received in Seville (fields 3, 4 and 24 of the CMR).
CMR No. … was replaced by CMR No. …. In this last CMR, G… appears as the shipper of "thirty-three pallets of soap" from Portugal (…) to Italy, in which goods were received by the Italian company "PPP…", without reference to the date of receipt thereof. (Annex V - sheets 49 and 50).
It is also noted that this transport service was contracted from FFF… by the Italian company "OOO…", indicated in CMR No. … as the receiver of the goods.
• Conclusions on the Transactions Declared to Customer G…
Based on the foregoing, no evidence was collected that would allow unequivocally attesting that the goods transacted entered the places contained in the CMRs presented by A…, such circumstances were attested through the documents collected from the FFF… carrier and, in intra-community administrative cooperation, namely for the following reasons:
—> The carrier CCC… issued CMR No. … and Transport Guide No. …, relating to the same goods invoiced by A… to G…, through invoice No. 2913 of 2013-09-02. In these transport documents the goods loaded in … are transported in the same vehicle and on the same day, to different places (Seville and Port of Leixões);
—> Part of the goods mentioned in invoice 2958 issued by A…, on 2013-11-22, were sold by G… to a company located in Ceuta. However, according to CMRs Nos. … and …, these goods were loaded in different places (… and…) and the transport services executed by two carriers ("GGG…" and "OOO…"), which transported on the same day, the same goods to different places (Seville and Algeciras);
—> The CMRs collected from the FFF… carrier do not identify the type of products transported, as well as, the receivers of goods mentioned in these CMRs are not the same as those contained in the same CMRs presented by G… and A…. These are copies that accompany goods that should mention the same receiver, with no justification for the same CMRs presenting different receivers;
—> The only partner and manager of G…, HHH…, has tax domicile in Portugal and is the spouse of MMM…, manager of the national company LLL… ." (Annex V - sheet 37) which contracted transport services from the Spanish carrier "FFF...", relating to the transport of goods invoiced by A… to the Spanish company G…;
To benefit from the tax exemption in intra-community transactions of goods, the conditions provided for in paragraph a) of Article 14 of the RITI must be cumulatively met and these operations must be duly documented, which was not verified in the intra-community operations, carried out by A… and G…. It is also stressed that G… has not been registered as a community operator since 2013-11-21, in its Member State, and made acquisitions from A…, in that capacity, on dates after cancellation of its registration in VIES.
Thus, the goods invoiced by A… to G… are taxed in national territory, in accordance with Article 6" of the VAT Code, with tax assessed and due, on the date of invoice issuance, in accordance with Articles 7 and 8 of the VAT Code.
Pursuant to paragraph a) of No. 1 of Article 1 of the VAT Code, the tax inherent to these transmissions was assessed, applying the tax rates referred to in paragraphs a) and c) of Article 18 of the same decree.
The amount of tax assessed was € 62,507.43, divided by the following periods (Annex V - sheet 51):
III.1.5. H… (ES…)
The Spanish company "H… (hereinafter referred to as H…) has been registered in the VIES system since 2013-08-01. It is located in …, No. …, in Alicante (Annex VI -sheet 1).
According to the cadastral information, the activity carried out by H… consists of the wholesale trade in various products, including hygiene products.
During the month of November 2013, A… invoiced to the Spanish company H…, hygiene products in the total amount of € 247,855.56, through the following invoices (Annex VI -sheets 2, 6 and 10):
• Proof of Transport and Receipt of Goods
According to the originals of the 1st copy of the CMRs presented by A…, the goods supplied to H…, were transported from Portugal (…) to Spain (Alicante), by the following carriers (Annex VI - sheets 3, 7 and 11):
By consulting the registry of the System of Information on Intra-Community Transactions, it was found that the Spanish carrier "SSS…" (ES…), is not registered for VIES purposes (Annex VI - sheet 14).
The amount of tax assessed was € 57,006.78, corresponding to period 2013-11 (Annex VI -sheet 16).
III.1.6. J… (ES…)
For VIES purposes, the Spanish company "J…" (hereinafter referred to as J…) has been registered since 2013-12-18 (Annex VII - sheet 1).
During the months of September and December 2013, A… invoiced to the Spanish company J…, hygiene and cleaning products in the total amount of € 69,609.84, through the following invoices (Annex VII -sheets 2 and 6):
Proof of Transport and Receipt of Goods
According to the originals of the 1st copy of the CMRs presented by A…, the goods invoiced to J…, were transported from Portugal (…) to Spain …), by the following national carriers (Annex VII - sheets 3 and 7):
For confirmation of receipt of goods by J…, A… presented:
—> Copy of the first copy of the CMRs, signed without any mention of the date of receipt of goods. In these copies there is also the identification data of J…, not through a stamp, but through a paper cut-out (Annex VII - sheets 4 and 8);
—> Copies of declarations certifying receipt of goods invoiced by A…, written in English and initialed, without any identification of the issuer of these declarations, which are also not dated. In these declarations the identification of J… also consists of a paper cut-out, with the identification data thereof (Annex VII -sheets 5 and 9).
At the carrier "P…" (hereinafter referred to as P…) the third copy of CMR No. … was collected, relating to the transport of products mentioned in invoice No. 2926 of 2013-09-30. Regarding this copy, the following is noted (Annex VII -sheet 10):
—> The transport vehicle of the goods was not mentioned in the CMR;
—> Field 24 of the CMR intended for identification of the receiver of goods is initialed and handwritten with a number …, without any date corresponding to delivery of goods. In this CMR it is not possible to determine whether goods were actually unloaded in Spain;
—> In field 13 of the CMR relating to shipper instructions, part of the stamp of J… was affixed.
This transport service was contracted by P… to the company "TTT…" (NIF:…) located in … (Annex VII - sheet 11). In both the 1st copy of the CMR presented by A… and the 3rd copy of the same CMR collected from the carrier P…, there is no mention of the carrier that executed this transport service.
• Intra-Community Administrative Cooperation
The Tax Agency of Spain, in response to the request for administrative cooperation, sent copies of the 1st copy of the CMRs that were provided to it by J… and merely mentioned that this Spanish company exports the majority of its acquisitions to countries located in the Balkans (Albania, Macedonia...), based on statements made by the representative of this Spanish company (Annex VII - sheets 12 to 14).
J… as the recipient of goods transmitted by A… should have submitted copies of the 2nd copy of the CMRs, to prove transport and delivery of goods, and never the 1st copy, which is exclusively intended for the shipper of goods.
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