A request for information may be regarded as the commencement of an audit
According to the Madrid High Court, if it is shown that the request was directed at determining the taxable amount, the later audit should be considered to have commenced when the request was made, something that will affect the period allowed for completion of audit work.
The tax authorities had made a request for information after which a VAT audit was commenced, which ended with an assessment.
According to the taxpayer, the audit should have been considered to have started with the request for information, which in this specific case, meant that the period allowed for completion of the audit work had ended when the assessment was issued.
For the tax authorities, however, the sole and exclusive purpose of the request was to obtain specific information from the taxpayer and not to make an assessment, and therefore it was simply a prior act unrelated to the audit itself.
The court concluded, after analyzing the request, that its purpose was to collect data related to the economic activity conducted by the company (record keeping books, outgoing and incoming invoices, etc.), and therefore it had to be seen as a step directed at determining the taxpayer’s taxable amount; especially in view of the assessment ultimately issued, which was based precisely on the data and on the documents collected as a result of the request.
Therefore it concluded that the right to audit had expired and voided the assessment.