The Administrative Court of Appeal of Thessaloniki with the no. 196/2023 Decision of, in a case successfully handled by our office, rejected the appeal of the Greek State in a case of imposition of a fine for accepting, receiving and registering fictitious invoices.
The Court, among other things, accepted that the tax authority bears the burden of proof and did not prove, even in principle, the non-realization of the legal transactions and the virtuality of the invoices for the provision of services and, therefore, there is no obligation on the part of the defendants to prove the realization of the transactions, by presenting the relevant agreements and documents for the payment of these invoices .
The full text of the decision is given.
Decision number: A196/2023
THE
SINGLE-MEMBER ADMINISTRATIVE APPEAL COURT OF THESSALONIKI
SECTION E'
(TAX-CUSTOMS)
Held in public in his audience, on December 7, 2022, with judge ……………………, Appellant D.D., and secretary ……………………., court clerk,
to hear the appeal, with a filing date of 4-2-2021 (no. filed in the Court of Appeal 227/11-2-2021),
of the Greek State, legally represented, in the present case, by the Head of the Public Financial Service (P.O.Y.) VII of Thessaloniki, who did not appear,
against: 1) …………………… of ……………………., resident of Kalamaria, Thessaloniki, street …………………… no. …….., 2) …………………………….. of …………………………, resident of Kalamaria, Thessaloniki, street ………………………. no. …………………….., and 3) ……………………………… of ……………………, resident of Kalamaria, Thessaloniki, street …………………… ………. no. ………………….., as general partners of the dissolved general partnership under the name “………………………………”, with headquarters in Thessaloniki, street ………………… ………… no. …………., for whom Mr attorney Thomas Kalokyris, with a statement (Article 133 par. 2 of the Civil Code),
and against the 7890/2020 final decision of the Single Member Administrative Court of First Instance of Thessaloniki.
The Court studied the case file and reasoned in accordance with the law.
1. Since, with the considered appeal, for which the payment of a fee is not required by law, the disappearance of the 7890/2020 final decision of the Single Member Administrative Court of First Instance of Thessaloniki is requested, admittedly. With this decision, the appeal filed on 15.10.2013 by the appellants, as general partners of the dissolved general partnership under the name <<……………………………………………………, was accepted. ...>>, with headquarters in Thessaloniki, street ……………………………….no. ………………….., and annulled the 707/13.9.2013 decision imposing a fine of the Head of the D.O.Y. 7th of Thessaloniki. With this latest decision, a fine was imposed on the above company, under article 5 of Law 2523/1997, for accepting, receiving and registering two virtual invoices, worth 3,633.16 and 4,167.28 euros, respectively, plus VAT, issued by... ………………, equal to twice the value of each of them and a total amount of 15,600.88 euros.
2. Because, the case was legally discussed despite the absence of the appellant, since he was summoned legally and within the deadline to appear at the above hearing (see the proof of service of the relevant summons of Dimitrios Tsanidis dated 9.6.2022).
3. Since the Code of Books and Records (K.V.S. - p.d. 186/1992, A' 84), as amended and in force at the relevant time, also defined the following: Article 2 par. 1 " Any local or foreign natural or legal person ... who carries out an activity in Greek territory and aims to obtain income from a commercial or industrial or craft or agricultural business or from a liberal profession or from any other business, ..., hereinafter referred to as "self-employed" , keeps, issues, provides, requests, receives, submits, preserves the books, data, statements and any other means related to bookkeeping and the issuance of data defined by this Code, as the case may be" ...". Article 12 "1. For the sale of goods on their own account or on behalf of a third party or right of importation and the provision of services from one business to another business and the persons referred to in paragraphs 3 and 4 of article 2 of this Code, for the exercise of their profession or the execution of their purpose , as the case may be, as well as for the sale of goods or the provision of services outside the country, an invoice is issued.... 9. The invoice shall include the date of issuance, the full details of the contracting parties, the details of the transaction, as well as the serial number or numbers of the shipping or quantity receipt slips issued for the handling or receipt of the goods referred to in the invoice...". Article 18 "1... 2. Every entry in the books, concerning a transaction or other act of the debtor, must be based on data provided by the provisions of this Code or on public documents or other suitable evidence. Especially for the proof of the transaction by the recipient of a tax element concerning the purchase of goods or the receipt of services worth 15,000 euros or more, it is required that partial or total payment be made through a bank account or with a two-line check. 3... 9. The burden of proof of the transaction is borne by both the issuer and the recipient of the item, who are entitled to confirm the necessary details of the counterparty from the declaration of commencement of operations or from other suitable evidence, subject to the provisions on tax confidentiality , which the contracting parties are obliged to provide on both sides, each bearing the responsibility for the accuracy of the information provided". Furthermore, Law 2523/1997 "Administrative and criminal sanctions in tax legislation and other provisions" (Α΄179), as amended and in force at the relevant time, defined in article 5 (the provisions of which, according to article 24 par. 4 of the same law, they also apply to cases pending when this law comes into force, as long as they provide for more lenient treatment) par. 10 para. b' that "The issuance of fake or fictitious tax data and the receipt of fictitious ones, the falsification thereof, as well as the entry in the books of purchases or expenses that have not been carried out and no tax item has been issued, constitutes a specific tax offense and incurs a fine equal to twice the value of each item or entry, excluding VAT. if it is greater than eight hundred and eighty (880) euros... When it is not possible to determine the partially fictitious value, the fine of this case is imposed reduced by fifty percent (50%). The same reduction applies to the recipient of a virtual element in the event that the virtuality is reduced exclusively to the person of the issuer...".
4. Because, according to the settled judgments (StE 1597/2019, 1405, 3336-40, 3347, 3399/2015, 4570, 4269/2014, 394, 4328/2013), when the violation of receiving a virtual invoice or shipping slip is attributed to intent , in the sense that either the transaction to which it refers has not taken place, or that the transaction has taken place, but not with the alleged issuer of the invoice or delivery note, the tax authority is burdened, in principle, with the proof of said virtuality. To this end, it is sufficient, in principle, to prove either that the issuer of the tax item is non-existent for tax purposes, i.e. he had not declared the start of his business nor had he considered items to the competent tax authority (so the recipient now bears the burden of proving the truth of the transaction and his good faith at the time it was carried out), or that the aforementioned issuer is tax-existant but, in view of his business potential, as derived from the overall assessment of his transactional behavior and the nature and turnover of his business, it is not possible that he was able to fulfill the provision in question (so the recipient of the tax item bears the burden of proving that the transaction, to which the tax item relates, took place).
5. Because, in the present case, from the evidence of the case file, including the 13.9.2013 KBS control report (p.d. 186/1992) of the D.O.Y. G' of Thessaloniki, the following emerges: The general company "……………………………………………", with the object of operations "television productions and image processing" and registered office at …………………… …………… no. ………… in Thessaloniki, which kept B' category books, on 15.11.1995 submitted a declaration of cessation of activity, in accordance with its private dissolution agreement of 8.9.1995, which was legally published, without following a liquidation stage. Besides, with the 11.11.2003 audit report of the D.O.Y. Prefecture of Smyrna, Athens, based on the 19351/12.12.1998 information sheet of the S.D.O.E. P.D. Attica, it was established, following an audit carried out at the sole proprietorship of …………………….. of ……………………, actor-director (street ………………… no. ……… ……………, N. Smyrni), that he issued to the above general partnership three invoices for the provision of services (T.P.Y.) and, specifically, the T.P.Y. 4/23.6.1993 (directing and editing commercial spots and TV programs) and 7/2.10.1993 (editing and post production organization of commercial spots), worth 1,238,000 and 1,420,000 drachmas, respectively, plus VAT, as well as the T.P.Y. 21/28.8.1995 (production of journalistic material), worth 1,450,000 drachmas plus VAT, which were deemed fictitious. And this on the grounds that: a) the aforementioned publisher is unknown at the supposed headquarters of his professional establishment (street ……………………….. in Nea Smyrni), while the efforts of the Service to find him were fruitless, b) he has never submitted periodic and VAT returns, c) he has never submitted income tax returns and d) from the information held (by the Service), it appears that the above was temporarily residing in Greece, from which he moved in the year 1994, without submitting a declaration of cessation of work and, it seems, the real object of his employment was the issuance of fictitious tax information, with the aim of hiding taxable material from the recipients thereof, without himself being affected, since he did not submit the corresponding tax returns. The above invoices, which were entered in the income-expenses book of the above recipient company <<…………………………..>> in the expenses column, and were used for VAT deduction, were received by the control bodies with the 581/11.6.1996 receipt report. Ultimately, the audit determined that the invoices in question were fictitious in terms of the transaction and thus, with the decision 560/12.12.2003 imposing a fine K.B.S. of the Head of D.O.Y. 8th of Thessaloniki, a fine was imposed on the aforementioned dissolved general partnership, for receiving the above 4/23.6.1993 and 7/2.10.1993 invoices, which was set at twice the net value thereof, excluding VAT, i.e. amounts of 1,238. 000 and 1,420,000 drachmas, respectively, and a total of 5,316,000 drachmas and already 15,600 euros, pursuant to the provisions of article 5 of Law 2523/1997. An appeal by the appellants, dated 23.4.2004, against this decision, was accepted, with decision 1419/2012 of the Administrative Court of First Instance of Thessaloniki, on the grounds that, upon receipt of the aforementioned documents from the company's headquarters, no report was drawn up confiscation, which, according to article 36 par. 3, 4 and 5 of the Criminal Code, constitutes an essential type of the procedure for issuing the relevant fine imposition act, while the essential type of the previous hearing was not observed either. In compliance with this decision and following the 80/4.2.2013 control order to repeat the procedure, the tax authority notified each of the respondents on 1/21.8.2013 of the seizure report of photocopies of the above invoices, which were in the service's file, then he also notified them of the 27605/2013 summons for hearing. Finally, with the audit report from 13.9.2013 of the now competent D.O.Y. G' of Thessaloniki, the conclusions of the previous report of the D.O.Y. from 12.12.2003 were adopted. 8th of Thessaloniki and the 707/13.9.2013 decision imposing a fine was issued, by which the dissolved company was re-imposed the same fine that had been charged against it in the original act of imposing a fine, totaling 15,600.88 euros.
6. Because the respondents, with their appeal filed on 15.10.2013 against the latest decision imposing a fine, among other things, questioned the correctness of the judgment of the tax authority regarding the falsity of the above tax data, arguing that the issuer of these... …………………….. was a director, with whom the joint venture company cooperated in the context of its activities for advertising and other television material, and an actual person, who reviewed books and data and, therefore, the only inability to find it in 2003, a full ten years after the above transactions, cannot be interpreted as its non-existence, and it itself acted in good faith when receiving the legal evidence and, finally, the tax authority's conclusion that the above issuer he lived temporarily in Greece and fled abroad. As proof of their claims, they provided, among others, on 12607 and 12608/5.4.2011 affidavits of ……………………………… and ………………………………. before the notary public of Thessaloniki …………………………………………, which were received legally according to article 185 par. 2 of the Civil Code. in the context of their above-mentioned first appeal against the original 561/12.12.2003 decision imposing a fine, with which the above, television producer and cinematographer, respectively, affirm that they met and cooperated with …………………… ………, a Greek by origin who also had Swedish citizenship, and during the period from 1991 to 1997 she lived in Greece, and worked as a director and cinematographer in the context of organizing and executing production for the filming of news items and commercial spots and even cooperated with the aforementioned general partnership for the period 1993 – 1995.
7. Because, with the decision of the Single-Member Administrative Court of First Instance of Thessaloniki issued on the above-mentioned appeal, appeal 7890/2020, the following were decided, among others: From the evidence of the case file, it appears that the issuer of the litigated tax information ………… ………………… was a fiscally established person, since he had received a tax registration number from the competent D.O.Y., had carried out an examination of books and data and had a specific registered office on the street ………………… ……… No. …………… in Nea Smyrni. Furthermore, no data is provided by the tax authority as to his trading activity in general and it is not proven by the overall assessment of this and the nature of his operations – which, after all, does not require the hiring of staff or the purchase of goods or the maintenance of a large business premises - that he was not in a position to fulfill the above benefit, the only thing being that he did not comply with his tax obligations and that he was not found at his aforementioned headquarters, but at a time much later than the critical one, i.e. eight and ten years after the issuance of the lawsuits invoices, it does not imply, without another, that the above editor, at the critical time, did not provide his services to the aforementioned company as a director. Furthermore, the printout of its computerized data shown by the tax authority, according to which the above was temporarily residing in Greece, which he left in 1994 without submitting a declaration of cessation of work, is not included among the elements of the file, while both of the aforementioned affidavits, as well as from the issuance of the above 21/28.8.1995 invoice, of which he is said to be the issuer, the opposite is inferred. Furthermore, it does not appear that the issuer of the legal invoices did not carry out the activity of the director, for which he considered books and data in the competent D.O.Y., or that he refrained, during the critical period, from carrying out this activity, while the legal services are part of its scope of work. In view of these, the Court ruled that the legal transactions with the above-dissolved company, concerning the above 4/23.6.1993 and 7/2.10.1993 invoices for the provision of services, were carried out and, therefore, the legal fine was unlawfully charged against it to receive virtual invoices. Thus, the above appeal was accepted and the above decision imposing the fine was annulled.
8. Because, with the adjudicated appeal, it is argued that the appealed decision did not properly distribute the burden of proof of the facts between the parties and incorrectly evaluated the evidentiary material. In particular, it is submitted that the claim of the appellants-respondents, based on the burden of proof assigned to them, regarding the realization of legal transactions with ………………………………………., was not proven, since they did not present any evidence, in addition to the aforementioned affidavits, capable of overturning the decision of the audit regarding the virtuality of the transactions, such as agreements between the above company and the issuer on the terms of the relevant transactions and the contractual obligations on both sides or documents of advance payment and payment of the above invoices of particularly high value, while the description in these invoices of the service provided is vague.
9. Because, based on these facts, the Court judges the following: The issuer of the litigious tax data ………………………………….. was an existing person for tax purposes, since he had received a tax registration number from the competent authority D.O.Y., had carried out a review of books and data and had a specific registered office on the street ………………….. no. ………………. in Nea Smyrni. Furthermore, it does not appear that he did not exercise the activity of the director, for which he considered books and evidence, or that he refrained, during the crucial use, from exercising it, while legal services are part of his scope of work. Furthermore, no data is provided by the tax authority as to his trading activity in general and it is not proven by the overall assessment of this and the nature of his operations – which, after all, does not require the hiring of staff or the purchase of goods or the maintenance of a large business premises - that he was not in a position to fulfill the above provision, and the only thing was his failure to submit tax returns, as well as his failure to be found at his aforementioned headquarters, in fact at a time much later than the critical one, i.e. eight and ten years after issuance of legal invoices, does not imply, without another, that the above publisher, at the critical time, did not provide his services to the above-mentioned company as a director. Therefore, the tax authority, which also bears the relevant burden, did not prove, even in principle, the non-realization of the legal transactions and the virtuality of the above 4/23.6.1993 and 7/2.10.1993 invoices for the provision of services and, therefore , there is no obligation on the part of the defendants to provide proof of the completion of the transactions, by presenting relevant agreements and payment documents for these invoices. Consequently, the legal fine for the receipt of fictitious invoices was unlawfully charged against the above company, as was correctly judged by the appealed decision and, upon acceptance of the appeal, the above decision imposing a fine was annulled, rejecting the above opposing reasons as unfounded of the pending appeal.
10. Since, in accordance with the above, this appeal must be rejected, but, based on the assessment of the circumstances, the appellant must be exempted from the court costs of the respondents (article 275 par. 1 paragraph five of the C.D.D. ).
BECAUSE OF THIS
He rejects the appeal.
It exempts the appellant from the court costs of the respondents.
Judged, decided and published in his audience at an extraordinary public meeting on 2-3-2023.
Thomas Kalokiris
MDE lawyer
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