International recovery of tax outstanding

 

 

 

Alena Pauličková

 

 

Anotácia: V rámci integračného procesu je daňová politika jednou z najdôležitejších  oblastí. Vstupom do EU sa harmonizovalo aj slovenské právo s právom EU aj v  oblasti medzinárodného vymáhania finančných pohľadávok. Celý proces bol  uskutočnený zákonom č. 446/2002 Z. z. o vzájomnej pomoci pri vymáhaní  niektorých finančných pohľadávok. Medzinárodné vymáhanie je postavené na zásade vzájomnosti a týka sa poskytovania informácií, doručovania písomností a vymáhania pohľadávok.

Kľúčové slová: finančné pohľadávky, vymáhanie pohľadávok, exekúcia,  vzájomnosť, doručovanie písomností, harmonizácia

 

Summary: Tax policy is one of the most important spheres within the integration   process. Since an entry to the European Union, the Slovak law system has been harmonised with the European Union law also in the sphere of international recovery of financial outstanding. The whole process was realized by the Mutual aid by some financial outstanding recovery Act No 446/2002 Coll. International recovery is based on a principal of mutuality and it is related to information providing, papers delivering and outstanding recovering.

Key words: financial outstanding, outstanding recovery, execution, mutuality, papers delivering, harmonisation

 

 

Since an entry to the European Union the Slovak law system has been harmonised with the European Union law also in the sphere of international recovery of financial outstanding. It was necessary to approximate to our system of law the Council Directive 76/308/EEC about mutual aid by recovery of outstanding concerning certain charges, dues, taxes and other provisions according to later rules. The Directive regulates international recovery within the European Union member states.

The whole process was executed by Mutual Aid by recovery of some financial outstanding Act No 446/2002 Col. according to later rules.

A subject of this Act is an adjustment, a procedure and conditions under which a competent body of the Slovak Republic shall render, require or accept aid by recovery of some financial outstanding (further only “outstanding”):

a) On the basis of the international treaty, of which the Slovak Republic is under contract;

b)   On the basis of the Treaty of Accession of the Slovak Republic to the European Union in relation to EU member states.

The lawmaker also determined basic terms under this Code:

a)      Aid by recovery of the outstanding shall be rendering, requiring or accepting information needed to recover the outstanding or assure of the outstanding;

b)      The competent authority of a signatory state shall be the authority that is according to law of the appropriate state or international treaty entitled to require or render aid by recovery of the outstanding.

c)      A signatory state shall be the state that take part in aid by recovery of the outstanding in compliance with S. 1 of the Act;

d)      The authority recovering the outstanding shall be the authority entitled to recover outstanding in compliance with special laws;

e)      The competent authority of the Slovak Republic is the Ministry of Finance of the Slovak Republic or the tax authority or the customs authority in charge of it.

 

Aid by recovery of the outstanding has to be related to the tax. Aid by recovery of the outstanding relates to the outstanding which originated in connection with:

a)      income tax;

b)      estate tax;

c)      real estate tax;

d)      value added tax;

e)      consumption alcohol tax, consumption vine tax, consumption beer tax, consumption cigarette tax and consumption petroleum tax;

f)        customs and other payments collected by import and export of commodity;

g)      sanctions and costs connected with outstanding recovery;

h)      The outstanding appointed in other signatory states that are the same or similar with the outstanding mentioned above, or that are analogical with the taxes in other signatory state including sanctions.

 

A force of the competent authority of the Slovak Republic and the authority recovering the outstanding

            The competent authority of the Slovak Republic and the recovering authority by rendering, requiring or accepting of mutual aid by recovering the outstanding go in compliance with this Act. The recovering authority goes by recovery of the outstanding in compliance with special law, if the law does not enact differently.

The competent authority of the Slovak Republic may charge the tax authority or the customs authority to render, require and accept mutual aid by recovery of the outstanding.

            The tax authority in charge or the customs authority in charge, shall render, require or accept aid according to this Act or a special enactment (e.g. Tax and duties administration   and about changes in the territorial financial bodies system Act No 511/1992 Col.).

            The competent authority of the Slovak Republic shall be entitled under this Code, to require the tax administrator that is a municipality, the information needed to recover the outstanding concerning the tax which he administer. The municipality is obliged to provide the information needed to recover the outstanding in required extend.

A force of the Tax Head Office of the Slovak Republic

            The Tax Head Office as the authority in charge manages staff in charge of execution departments of the tax authorities.

·        In a field of providing information:

-         It requires information needed to recover the outstanding from the competent authority of the signatory state on a basis of a requisition to provide information.

-         It is liable for data correctness listed in the requisition and it provides information to the competent authority of the signatory state needed to recover the outstanding on the basis of the requisition to provide information.

-         It checks the accepted requisition.

-         It issues a confirmation about acceptation of the requisition by 7 days from a date of the requisition acceptation.

-         It announces the competent authority of the signatory state the provisions that it executed on the basis of its requisition, by 6 months from a date of acceptation of the requisition.

-         It announces the competent authority of the signatory state a matter of fact and reasons of non-acquiring required information.

-         It continues in acquiring information on the basis of a new requisition.

-         It will quit providing information needed to recover the outstanding, if the competent authority of the signatory state serves a written back bringing of the requisition about providing information.

Through the institute of providing information it is possible to gain all the information about a tax debtor including his place of residence, employment, income, property relations, etc.

●In a field of serving papers:

-         It requires the competent authority of the signatory state to serve decisions issued by it and also other documents related to recovery of the outstanding to the debtor or to a person who holds assets of the debtor.

-         It serves papers to the debtor or to the person who holds the assets of the debtor, or it he is a person obliged to perform duties from the assets on the basis of the requisition about serving the document which was submitted by the competent authority of the signatory state.

-         It checks the requisition about serving the document.

-         It issues the confirmation about acceptation of the requisition by 7 days.

-         It announces to the competent authority of the signatory state serving the papers to the debtor or to the person who holds assets of the debtor or he is a person obliged to perform duties from the assets (in a case if papers have not been served it is necessary to give reasons).

      Through the institute of serving documents it is possible to document a proper evidence of the taxable unit´ s illegal act.

      ●In a field of recovery of the outstanding:

- It requires the competent authority of the signatory state on the basis of the requisition about outstanding recovery.

- It is liable for data correctness listed in the requisition about outstanding recovery, documents and other papers.

- It accepts the requisitions about outstanding recovery from the competent authority of the statutory state.

- It safeguards outstanding recovery, if the requisition contents terms provided by the Act No 446/2002 Col. according to later rules, as well as the proclamation of the competent signatory state that the papers have not been attacked by any judicial remedy in the signatory state.

- It issues the confirmation about acceptation of the requisition to recover the outstanding.

- It refuses the requisition to recover the outstanding in a case that the recovery from the debtor or the person who holds assets of the debtor or he is a person obliged to perform duties from the assets could lead to the serious economic or social problems of the debtor or the person, or the outstanding recovery of which is required is lower than 1500 EUR; It also refuses aid by the recovery, if mutuality is not ensured, or if there is an expiration between the day of becoming the outstanding recoverable and the day of submission of the requisition.

- It safeguards substitution or completion of papers in order to recover according to valid legal regulation of the Slovak Republic.

- It postpones recovery if the competent authority of the signatory state, the debtor or the person who holds the debtor ´s assets or he is a person obliged to perform duties from the assets, it serves the announcement that the recovering outstanding or papers are disputable.

- It informs the competent authority of the signatory state about the results of recovery by 6 months from acceptation of the requisition to recover the outstanding.

- It permits postponements of the outstanding payment or settlement in part payments with the agreement of the competent authority of the signatory state to the debtor or the person who holds assets of the debtor or he is a person obliged to perform duties from the assets.

- It informs the competent authority of the signatory state by 1 year from the day of acceptation of the requisition about reasons of unenforceable outstanding or of its part and about up to now acts done to recover it.

- It informs the competent authority of the signatory state about a change of sum of the recovery outstanding.

- It safeguards stopping the outstanding recovery, if the competent authority of the signatory state delivers the information that the reasons to recover passed away.

- It informs without any delay the competent authority of the signatory state about acts due to remitting the recovered sum of the outstanding.

- It safeguards a transfer of the recovered sum of the outstanding to an account of the competent authority of the signatory state by 1 month from a day of the recovery.

            Through the institute of outstanding recovery it is possible to safeguard recovery of the outstanding according to the valid legal regulation of the state in which the tax debtor is situated.

            The subject of the international recovery are all the taxes listed in provision of S.3 of Act No 446/2002 Col. according to later rules, an as it results from the provision of law shown. The Tax Head Office of the Slovak Republic is the competent authority also for international recovery of the real estate tax where the administrator and also the recovering office is a municipality.

            A procedure by the outstanding recovery is analogous. The outstanding of other signatory state according to the provision of S. 6a of Act No 446/2002 Col. according to later rules, is recovered in a same way like the outstanding of the Slovak Republic; it doe not have any priority before other outstanding and it is recovered in the Slovak currency[1].

Procedure by the outstanding recovery

            The outstanding of other signatory state is recovered in a same way as the outstanding of the Slovak Republic. The outstanding of the other signatory state is recovered in the Slovak currency. For purpose of the outstanding recovery papers issued according to the legal regulation of the signatory state consider to be papers issued according to the system of law of the Slovak Republic. If it is necessary, according to the system of law of the Slovak Republic, to complete or substitute papers by other papers according to the system of law of the Slovak Republic, it will be safeguarded by the competent authority of the Slovak Republic by 3 months from a day of accepting the requisition about recovery of the outstanding. This term can be extended by the competent authority of the Slovak Republic. The competent authority is obliged to inform the competent office of the signatory state about the reasons of extending the term latest till 7 days from finish of the term. If the announcement from the competent office, the debtor or the person mentioned in the provision of S. 6 par. 3, letter f) of the Act from the signatory state was served to the competent authority of the Slovak Republic about the fact that the recovering outstanding or papers are disputative, the competent authority of the Slovak Republic postpones recovery of the outstanding (S. 8) and informs the competent authority of the signatory state about it not later than 1 month from a day of acceptation of such the announcement.

S. 6 par. 3 letter f) of Act No 446/2002 Col.

“Name, surname, identification number and a date of birth of a natural person or a commercial name of an artificial person who holds the debtor´ s assets or he is the person obliged to pay from the debtor´ s assets, permanent residence, or domicile.”

       The competent authority of the Slovak Republic may continue in the outstanding recovery, if the requisition about continuing in the outstanding recovery was served to it. Information and papers shall be delivered without any delay by the competent authority of the Slovak Republic to the recovering authority. The recovering authority is entitled in connection with recovery of the outstanding to require additional information and papers through the competent authority of the Slovak Republic. At the request of the competent authority of the Slovak Republic the recovering authority is obliged to inform the competent authority without any delay about acts done for a purpose to recover the outstanding.

            During the time of the outstanding recovery the competent authority of the Slovak Republic shall inform every 6 months from a day of accepting the requisition about the outstanding recovery the competent authority of the signatory state about the results of the outstanding recovery, and without any delay it shall inform about the acts done on a basis of the requisition about the outstanding recovery. The competent authority of the Slovak Republic may permit a postponement of a payment of the recovering outstanding to the debtor or to the person mentioned in the provision of S. 6 par. 3 letter f ) of the Act, or its payment in part payments only with the agreement of the competent authority of the signatory state. During the time of the postponement of a payment of the recovering outstanding or its payment in the part payments the debtor a the person mentioned in the provision of S. 6 par. 3 letter f) of the Act is obliged to pay an interest what belongs to the signatory state that requisite the outstanding recovery. In case of the postponement of the payment of the revering outstanding or its payment in part payments it is necessary to proceed according to the Act No 511/1992 Col.

            The tax and duty recovering authority permits the postponements of execution performance according to the special provision with the agreement of the competent authority of the signatory state. In a case of change the sum of the recovering outstanding, that means its decreasing, the competent authority of the Slovak Republic continues in its recovery on the basis of a written information of the competent authority of the signatory state, and the new papers issued by the competent authority of the signatory state in connection with this change. If the sum of the outstanding has been recovered and the recovered financial sources have not been paid on the competent authority´ s bank account of the signatory state, the competent authority of the Slovak Republic shall return back the difference between the recovering sum   and the decreased sum of the outstanding to the debtor or to the person mentioned in the provision 6 par. 3 letter f) of the Act.

Stopping the recovery

            The competent authority of the Slovak Republic shall safeguard stopping the recovery of the outstanding, if he has been delivered the written information from the competent authority of the signatory state that the reasons of the outstanding recovery passed away. The competent authority of the Slovak Republic shall inform in the written form without any delay, the competent authority of the signatory state about the acts refer to the recovering outstanding done. By one month from the day of the outstanding recovery the competent authority of the Slovak Republic shall make a payment (recovered sum of the outstanding) to the competent authority of the signatory state in the Slovak currency on a bank account indicated in the requisition.

Terms of recovery 

            The terms of recovery are administered according to the legal order of the state which requires the outstanding recovery. The acts with an influence on lapse terms consider performed also in a case when they are done by the recovering office.

Refusing rendering assistance by recovering the outstanding

The competent authority of the Slovak Republic refuses rendering assistance by recovering the outstanding it there has not been safeguard a mutuality or if there has been a longer time period than 5 years between the day when the outstanding became recovering and the day of submitting the requisition. If there has been a legal remedy or extraordinary legal remedy delivered, this term is not extended. The competent authority informs the competent authority of the signatory state about the reasons of refusing the requisite not later than 3 months from the day of acknowledgement. If the competent authority of the Slovak Republic refuses the requisition about the outstanding recovery of the competent office of the signatory state (the EU member state), it shall inform about the refusing also the European Commission.    

Providing information by electronic sources

All the information according to the Act no 446/2002 Col. The competent authority of the Slovak Republic provides via electronic sources signed by a guaranteed electronic signature, except for the requisition:

a)      about serving papers together with papers which shall be served;

b)      About the outstanding recovery together with papers.

The roles in communication field via electronic sources with other signatory state through the CCN/CSI network performs the entitled tax authority except for roles in the fields of consumption taxes and customs, that plays the entitled customs authority.[2]

As it influences from statistical findings, international outstanding recovery in the Slovak Republic is not a very successful issue. Less success is seen in tax outstanding recovery not only in the Slovak Republic, but also in an international extend. The most successful way of recovery is known through order the outstanding from a bank account in a bank. The biggest problem in this field comes from the law enforcement in the Slovak Republic. No one from the ways of tax execution performance according to the Tax and duties administration and about changes in the territorial financial bodies system Act No 511/1992 Col., has not been without problems. And the international outstanding recovery is in a same situation.

Recovery within the EU countries

 Since the entry of the Slovak Republic to the European Union the tax offices of the Slovak Republic have been entitled in compliance with the Council Directive 76/308/EEC about mutual aid by recovery of outstanding concerning certain charges, dues, taxes and other provisions, and the Act No. 679/2004 Col. by which the basic provisions of the Directive about the outstanding recovery to the national legislation of the Slovak Republic have been implemented, to request through the competent authority the competent authorities of the member states of the European Union to recover outstanding internationally, to serve papers and to provide information about the tax debtor. It means that in a case of the outstanding recovery, it is not possible to ask a country that is not the member state of the EU.

            This process of international outstanding recovery is a very difficult one (and needs a lot of time). The employee of the tax administrator proceed according to the 7th part of the Act No 511/1992 Col. The most serious problem is finding out in which EU member state the Slovak taxable person does his business or, as the taxable debtor, if he is the owner or the companion (partner) of some trade company in other EU member state. The problem is that a tax system of individual countries is has not been mutually connected. The procedure of the tax administrator, then, has to result only from the tax payer tax return. It is only up to the taxable subject (unit) to declare according to the Income tax Act No 595/2003 Col. and to introduce his complete real income from abroad. In the opposite case the tax administrator has not any chance to find out whether the tax payer did have or did not have any income abroad.

De lege ferenda

            It would be useful to adjudicate a process of the tax execution according to the Act No 233/1995 Col. (Executory regulations) to put on one level the tax executive action with the action of the outstanding recovery by the legal executor.

            Then, it is necessary to point out a reality from a practice concerning trade companies. Most of the trade companies with some financial problems deplete with an aim to file a proposal about the declaration of insolvency. Subsequently the Court rejects it because of lack of the property and the company is erased from the Companies Register ex offo. This way the tax debtors avoid the tax payments and also the tax outstanding payments.  

International outstanding recovery regularized by the Council Directive 76/308/EEC about mutual aid by recovery of outstanding concerning certain charges, dues, taxes and other provisions was accepted by all the EU member states. It would be necessary to simplify the process of international tax recovery of outstanding payments. We come out from a fact that the outstanding from the other signatory state is recovered in a same way as the outstanding of the Slovak Republic. Because of that it would be necessary to simplify the tax execution proceedings within the Tax and duties administration and about changes in the territorial financial bodies system Act No 511/1992 Col. This fact will also have a positive influence on the international outstanding recovery.    

 

           

 

 

 

 

References

1. Zákon č. 511/1992 Zb. o správe daní a poplatkov a o zmenách v sústave územných finančných orgánov.

2. Zákon č. 446/2002 Z.z. o vzájomnej pomoci pri vymáhaní niektorých finančných pohľadávok.

3. Smernice Rady č. 76/308/EHS o vzájomnej pomoci pri vymáhaní pohľadávok týkajúcich sa určitých poplatkov, odvodov, daní.

4. Kováčiková, E. – Stískalová, A. – Szilágyi, M.: K niektorým problémom medzinárodného vymáhania daňových pohľadávok. Obchodné právo. Odborný časopis pre podnikateľov, právnikov a špecialistov.  Roč. IX, č. 8-9/2008, s.143-152.

5. Pauličková, A.: Malý slovník daňového práva (Výkladový slovník). Eurounion, Bratislava 2006, 158 s. ISBN 80-88984-91-2.

6. Pauličková, A. - Bakeš, M. a kol.: Finančné právo na Slovensku a v Čechách.  Vysoká škola  v Sládkovičove. EUROUNION 2007.  ISBN 978-80-88984-99-3.

 

Address:

Doc. JUDr. Alena Pauličková, PhD.

School in Sladkovicovo

Janko Jesensky Faculty of Law

Richterova Str.

925 21 Sladkovicovo

Tel./fax: +421 33 5446536

e-mail: apaul@palmsoft.sk



[1] Kováčiková, E. – Stískalová, A. – Szilágyi, M.: K niektorým problémom medzinárodného vymáhania daňových pohľadávok. Obchodné právo. Odborný časopis pre podnikateľov, právnikov a špecialistov. Roč. IX, č. 8-9/2008, s. 143

[2] S. 9 par. 4 of the Act No 446/2002 Col.