Tax Procedure Admissibility and Lapse Implications

Invoices serve as proof of operations recorded in these books, specifically for travel bills.

Admissibility of Re-inspection for 2008 Income Tax

Yes, it is admissible. LGT Article 140.1 states that: "Given a resolution in a limited verification procedure, the tax authorities may not make a new adjustment in relation to the object referred to in paragraph 2 of the preceding article unless a limited verification or inspection procedure is initiated after new facts or circumstances arise from actions other than those made and specified in that resolution."

This article therefore implies that it is possible to initiate a procedure to inspect income tax for 2008, but a new adjustment can only be made if new facts or circumstances emerge.

Procedure Length Issues and Consequences

According to Article 139.1 b), one of the ways a limited verification procedure ends is by revocation: "...the expiry of the period covered by Article 104 of this Act without a specific resolution being notified."

If we refer to LGT Article 104.1: "The latest date by which the decision must be notified is prescribed in the regulations governing the relevant proceedings, but it may not exceed six months, unless established by a regulation having the force of law or regulations under European Community law. If the rules governing the procedures set no deadline, it shall be six months. The period shall commence: a) In proceedings initiated by the administration, from the date of notification of the start..."

The deadline for notifying the resolution therefore concluded on March 5, 2010. Given that the liquidation act was issued on March 10, the procedure has already lapsed.

The effects of the lapse are set out in Article 104.5 LGT, which states: "Upon expiry, it will be declared, either automatically or upon application, and the closure of the proceedings will be ordered. This lapse does not, by itself, cause the limitation of the rights of tax authorities, but actions taken in the expired proceedings do not interrupt the limitation period, nor are administrative requirements considered for the purposes referred to in paragraph 1 of Article 27 of this Law. Actions taken in the course of expired proceedings, and the documents and other evidence obtained therein, shall retain their validity and effect as evidence in other proceedings initiated or that may be opened later in conjunction with the same or other tax obligation."