The principle of retroactive application of the lighter administrative sanction for breach of tax legislation under Greek law
(Legal Council of the state 2319/2021)
The principle of retroactive application of the lighter administrative sanction (and more generally, the most favorable legal provision imposing administrative-sanctions) for violation of the tax legislation, constitutes a general principle of Greek tax law founded in the constitutional provisions of equality (art.4 par.1) and -in terms of pecuniary sanction- of the principle of proportionality in the restrictions of the right to property (art.25 par.1 q. d’). These constitutional principles bind the legislator when it comes to the regulation, by means of provisions of transitional law, of cases pending before the Administration or before administrative courts for the imposition of administrative penalties, where it considers that the effective prevention and repression of the infringements concerned can be achieved by the introduction of administrative penalties which are less severe than those already provided for by law. According to the aforementioned principle, which has the character of a rule of long-standing law, the more favorable or unfavorable character for taxpayers of the most recent law providing for a sanction for a certain tax offence is not to be assessed in general terms but in the light of the specific case, following a comparison of all the relevant provisions of administrative law, concerning the period of time from the commitment of the administrative infringement to the pending of the outcome of the case before the administrative court and examination of the provision which, if applied as a whole, leads, after the evaluation of the circumstances of each case, to the lighter administrative sanction. However, the aforementioned principle does not apply when the newer law imposing administrative sanctions is either not comparable to the previous law with regard to the administrative offence or sanction provided for (e.g.in case of a change in the nature of the sanctions provided for) or it is inseparably connected by introducing a new, substantially different regulatory framework of substantive or procedural obligations of the taxpayer (e.g. in case of abolition of the relevant substantive or procedural obligation for the future, Legal Council of the state 459/2013) so that it does not reflect a different assessment on the part of the legislator concerning the fertile and necessary feature of the administrative sanctions regulated under the previous legislative regime. The aforementioned rule is not absolute, but it can be bent from a clear, different legislative provision, which either excludes the retroactive implementation of the newer, more favorable provision for the taxpayer or provides for it, not without exception, but subject to conditions which substantially affect the legitimate interests of the taxpayer. Nevertheless, such legislative provision, since it establishes a derogation from the aforementioned fundamental principle, must be adequately justified, so it can be in compliance with the constitutional principles of equality and proportionality (see judgements of the Legal Council of the state: 7m 1438/2018, 351, 352, 1389, 2691/2019, 2221/2018, 2734/2020, 1582/2020).
Moreover, among the general principles of European law, is included the principle of retroactive implementation of the lighter administrative sanction. This principle, which relates to administrative sanctions for violations of the tax legislation has a regulatory scope similar to that of the corresponding authority under national tax and, specifically, it is not absolute, but her implementation can be confined by the common legislator, subject to the principle of proportionality. However, the aforementioned principle of European law does not apply to the tax sanctions indiscriminately but only to those which are adequately connected to the law of the Union (see judgments of the Legal Council of the state: 7m. 351, 352, 2691/2019, 2221/2018, 2734/2020).
Finally, art.7 of the European Convention on Human Rights establishes the principle of the retroactive implementation of the more favorable “substantive” criminal law for the offender (see European Court on Human Rights major composition, 17.9.2009, 10249/03, Scoppola against Italy, thoughts 108-109). Considering that the protective field of art.7 of the European Convention on Human Rights also covers the cases of imposition of administrative sanctions of a “criminal nature”, based on criteria similar to these of Engel case law with regard to art.6 of the European Convention on Human Rights (see decision of the European Court on Human Rights, 24.11.1998, 38644/97, Brown against United Kingdom, European Court on Human Rights, 15.5.2008, 7460/03, Nadtochiy against Unkraine, thought 32, European Court on Human Rights, 4.10.2016, 37462/09, Žaja against Croatia, thoughts 86-89 and European Court on Human Rights 4.6.2019, 12096/14 and 39335/16, Rola against Slovenia, thought 54) the aforementioned principle is implemented in case of pecuniary tax/customs of a significant height (see judgments of the Legal Council of the state: 7m. 351, 1389, 2691/2019, 2221/2018, 2734/2020), as is the disputed fine. Besides, this particular principle of the European Convention on Human Rights has a regulatory scope similar to that of the corresponding authority under national tax law, as it was defined in thought 5, specifically, it is not absolute, but her implementation can be confined by the common legislator, subject to the principle of proportionality/fair balance (see judgments of the Legal Council of the state: 7m. 351, 1389, 2691/2019, 2221/2018, 2734/2020).
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