Tax administrator must not assess evidence put forward with bias
If a taxpayer produces evidence in tax proceedings, a tax administrator must assess such evidence both separately and in combination. If they have doubts about the evidence, they may invite the taxpayer to submit further or different evidence. They may not, however, assess the evidence with a bias, highlighting what incriminates the taxpayer while side-lining any favourable evidence.
The Supreme Administrative Court (SAC) dealt with Case No. 6 Afs 365/2017 – 41 of a Czech company exporting cars to Cambodia through a customs agent in Belgium, where the Belgian customs agent has the same powers as state customs authorities and is also authorised to release goods into an export customs regime.
The Czech company submitted to the tax administrator a single administrative document (SAD), together with other documents concerning the export of the goods (shipment documents, handover protocols, bank statements, etc.). The tax administrator did not accept the VAT exemption for the transaction on the grounds that the SAD did not contain all required essentials (the stamp and signature of the Belgian customs agent). The tax administrator’s main argument was that the goods had not been released into the export customs regime (one of the statutory preconditions for applying the VAT exemption). Obviously, the Czech tax administrator was not aware that Belgian customs agents are authorised to release goods into such regime in lieu of the Belgian state authority.
Although the tax administrator did not challenge the legal status of the Belgian customs agent, they requested that relevant facts be proved. As the taxpayer failed to do so, they, according to the tax administrator, also failed to bear the burden of proof.
Regarding the above, the SAC stated that the tax administrator may express doubts as to the reliability, provability, accuracy or completeness of accounting and other records. They are, however, obliged to identify and support concrete reasonable doubts that render such records unreliable, unprovable, inaccurate or incomplete. This means that tax administrators cannot challenge evidence proving that goods were released to export customs regime without explicitly stating on what facts they are doing so.