In Ispas and another (C-298/16), Advocate General Bobek (AG) has opined that a taxpayer assessed to VAT is entitled, upon request, to access the key documents and information forming the basis of the Romanian tax authority’s assessment.
Mr and Mrs Ispas (the taxpayers) were subject to a tax inspection. On the basis of that inspection, it was found that they had failed to declare their VAT obligations correctly. Two tax assessment notices setting out the VAT amounts due were issued. The taxpayers challenged those notices claiming they were null and void on the ground that their rights of defence had not been respected. In particular, they claimed that during the procedure leading to the issue of the notices, the tax authority should have given them access to the entire content of their file, including all the documents collected before the beginning of the tax inspection.
The national court referred questions to the CJEU concerning the right of access to the file (guaranteed by Article 41(2)(b) of the Charter of Fundamental Rights of the European Union (the Charter)) and the general principle of EU law of respect for the rights of the defence.
In the view of the AG, a taxpayer should, upon request, have access to information forming the basis of the administrative decision.
The AG rejected the Romanian government’s submissions that the request for a preliminary ruling was inadmissible on the basis that the national court had not described the factual situation in enough detail. In the AG’s opinion, although the factual information could be said to be “economical” as to details, it contained the basic factual elements that allowed the parties to present observations to the court and was admissible.
The AG also rejected the proposition put forward by the Romanian government that while the VAT Directive was within the jurisdiction of the CJEU, national compliance measures were not and therefore the CJEU had no jurisdiction in this case. In the AG’s view, although the procedural guarantees contained in the Code of Fiscal Procedure are not specifically provided for in EU law, those rules form part of the overall process of “proper VAT collection” (the obligation contained in Article 273 of Council Directive 2006/112/EC).
The AG then turned to the substantive question concerning whether the general principle of respect for rights of the defence required that a taxpayer should have access to all of the information and documents considered by the public authority when it made its decision. The AG opined that a taxpayer assessed to VAT is entitled, upon request, to access the key documents and information forming the basis of the tax authority’s decision. This does not, however, amount to access to the “complete file”, which the AG interpreted to mean the entire file, including all the elements not directly related to the decision, such as internal notes, drafts, auxiliary calculations, and all the information obtained from third parties.
The AG commented that taxpayers do not have a right to automatic access to their entire file, but should, upon request, be given access to information forming the basis of the administrative decision.
Of course, the AG’s opinion is not binding on the CJEU and it will therefore be interesting to see how this case develops.
A copy of the decision is available to view here.