C.142 - Case of the opportune trader
"On 29 December 1994, Carlos C.T. carried out a real estate transaction, obtaining 82,500,000 pts. from the sale of a plot of land he owned, an amount that was not declared in its entirety in the Personal Income Tax return for 1994, in which he only made accredited specializationfor this item an amount of 40,000,000 pts. Likewise, during the 1994 personal income tax year, the accused subscribed to a total of 106,100 units of the so-called Multivalor Investment Funds that the Bankpyme entity put on the market, for a subscription value of 118,500,000 pesetas, which he paid into account no. ... opened in the aforementioned entity, which he finally exchanged for 1,061 bearer securities on 28-1-1995. These amounts do not appear in the ordinary Personal Income Tax and Extraordinary Wealth Tax returns for 1994 and 1995. The Juzgado de Instrucción issue3 of Barcelona initiated researchand investigation activities, which were notified to Carlos C.T. on 3 January 1998. However, on 29 December 1997, the accused went to the State Agency of Tax Administration and made complementary self-assessments of the previous declarations, in which the aforementioned amounts appeared. On 3 January 1998 he paid the amount due in respect of the IRPF and IEPPF, which totalled 37,559,082 pts. and 41,949,031 pts. respectively".
(STS 29 September 2000; pte. García Ancos; RJ 2000, 9251.)
Can Carlos go unpunished for regularising his tax status?
I. From the facts described, it is worth noting that Carlos C.T. has carried out at least two operations that he has subsequently omitted to declare the full amount of income and wealth tax. The examining magistrate's court initiated investigation proceedings, which were not notified to him until a few days later. During those days, Carlos C.T. had proceeded to declare those amounts (29 December 1997) and even to pay the tax debt due on them (3 January 1998), which was paid on the same day that he was notified of the Court's initiation of the proceedings.
II. Assuming that the proven facts are as described, and that they are not susceptible to alteration, we can point out the following regarding the criminal liability of Carlos C.T.
II.1 . There is nothing in the facts to cast doubt on the concurrence of the basic and fundamental element of the theory of crime, namely human conduct. This is especially so because a person who carries out economic operations cannot do so while asleep, violated by an irresistible force or suffering from reflex movements. There is human conduct on the part of Carlos.
II.2 . It is necessary to analyse whether this conduct fulfils the elements required by the subjectgoal and subjective elements of a crime. We focus on the offence of tax fraud, art. 305.1, which requires: defrauding, by action or omission, the Public Treasury, by evading the payment of taxes due, in excess of 120,000 € (at the time of the facts, 15,000,000 pts.). As regards goal, there can be no doubt as to the causality of Carlos' conduct, as his tax declaration made by omitting the amounts of both transactions would generate a directly proportional reduction in the tax liability: rather than a condicio sine qua non, it is necessary to speak of a condicio cum qua non, insofar as taking his conduct into account mentally, the resultof reduction in tax payments would disappear. However, causality is not enough; it is also necessary to assess this causal conduct as a sufficiently relevant typical risk for the purposes of Art. 305.1. In view of the way the system of managementof taxes is set up, if a taxpayer fails to declare an amount (and the amount defrauded exceeds the amount provided for in Art. 305.1), the tax assessment will be directly proportional to the amount omitted, since the system is based on the declaration of the taxpayers, without the tax authorities having to check in detail what has been declared. This being so, their declaration can be understood as a relevant risk for the purposes of the offence of fraud; a risk that is also realised in the result, since in the facts described it is not perceived that the decrease in the tax debt is due to any other factor. The conduct of the perpetrators is the subjectgoal of the tax evasion.
As for the subjective subject, it is possible to infer the intention from the knowledgethat as a person who carries out commercial transactions he must have of these and of the tax returns: any person of his characteristics knows that failing to include an amount in the respective tax return has an immediate effect of decreasing the debt. And if he knows this, and fails to declare, and does not even rectify it shortly afterwards (if he had made a mistake) by means of a "supplementary declaration", but two years later, he works in the knowledge that he is under-declaring. The amount required by art. 305.1 can be understood as an element of subject, which should be known, at least approximately, by the subject, which can be understood to be the case, given that as he was the one who carried out the economic operations, he knew how much the total amount was, and what he should approximately pay in taxes (if it is understood - according to another doctrinal opinion - that the amount is merely an objective condition of punishability, fraud is not necessary with respect to it, as it is not an element of subject). Therefore, his conduct also fulfils the subjective subjectof the offence of tax fraud. Cf. L.6
II.3 . There are no elements to doubt the unlawfulness of his conduct (cause of justification) or his guilt (since, being imputable, he is aware of the prohibition to defraud and is not in statusof ineligibility to act in accordance with the rule). Therefore, Carlos C.T. is imputable as guilty of tax evasion.
statusArt. 305.1 CP: "Anyone who ... defrauds the Public Treasury ... provided that the amount of the amount defrauded, ... exceeds one hundred and twenty thousand euros shall be punished with the penalty of ..., unless he has regularised his tax liability under the terms of section4 of this article. [The statustax shall be considered to be regularised when the taxpayer has proceeded to the full recognition and payment of the tax debt, before the Tax Administration has been notified by the Tax Administration of the commencement of verification proceedings or research".
II.4 . It remains to be analysed whether such unlawful conduct by a guilty agent is also punishable, or whether there are other elements involved, other than the act, which condition punishability. There is something else of interest in this respect in the facts. Carlos has defrauded the tax authorities: there is no doubt about this; indeed, it even seems that he himself acknowledges it. But such fraudulent conduct will not always - in the eyes of the legislator - require a criminal sanction, as in some cases a way of avoiding criminal liability has been found: the tax regularisation provided for in art. 305.4. The fact that the accused went to make supplementary declarations in the last days of 1997, and paid the amount due on 3 January 1998, casts doubt on the punishability of his offence. In fact, he regularised his statustax by declaring the amounts omitted at the time. What is more, his regularisation leads him to pay the amount concealed. It is a curious coincidence, however, that he made the payment on the same day that he was officially notified by the examining magistrate's court of the commencement of legal proceedings. In any case, days before he had already supplemented his incomplete declaration, so that the Treasury had his real dataand he only had to pay the amount due. This is a reason for lifting the penalty, provided for by the legislator for reasons of criminal policy (it is more effective, within certain limits, to give the fraudster the possibility to pay, even if late, than to prosecute him). This is a factor goal-formal (it affects the criminal relevance of the act and requires conduct).
III. In final, there is a factor foreseen by the legislator himself, by virtue of which, the post-criminal conduct of regularisation of the tax statusallows the offence, which as such (typically unlawful conduct of a guilty agent) existed, to go unpunished. The regularisation affects the punishability and leaves the previous elements of the offence intact.
As can be seen from the analysis of the two previous cases, the criminal sanction is sometimes made subject to the fulfilment of certain conditions, which the legislator has assessed for reasons of weighting (C.141) or utility (C.142). Moreover, it should be noted how in C.141 the parental status occurs prior to the offence, whereas in C.142 the conduct of regularisation takes place afterwards and is not possible until the offence has been committed. In the first case we speak of excusals of acquittal, while in the second case we speak of grounds for lifting the sentence.
Finally, there is a cause that excludes punishment, which occurs after the crime and which does not depend on the guilty agent, but on the holder of the state's ius puniendi. This is the pardon, an expression of the so-called right of pardon, by which the holder of ius puniendi (which should be the legislator, although in Spain it depends on the executive power, for historical reasons that cannot be explained). In this case, the judge is faced with conduct that constitutes a typically unlawful act of a guilty party. And there is nothing that conditions the sanction, so it should be punished, and indeed it must be punished. But the court considers that there are circumstances that make it advisable to refrain from punishing. Given that there is no excuse for acquittal or cause for lifting the penalty of those provided for by the legislator, the only way to avoid the rigour of the criminal law in that specific case is through the applicationpardon. Let us look at C.143. In this case, the possible pardon would entail an interruption or shortening (if it is a partial pardon) of the sentence.