According to the facts of the case, in 2007 and 2008 the applicant company imported rye flour into Moldova, taking advantage of the VAT exemption for goods intended for certain categories of producers. For some of the goods sold to companies that did not meet the conditions for VAT exemption, the applicant company paid VAT amounting to 102,199 lei. The Customs Service subsequently required the applicant company to pay the same amount a second time, as well as a fine of 23,238 lei, on the grounds that it had not been notified of the change in the intended use of part of the goods. Although the Chișinău Court of Appeal established that double taxation had taken place, the Supreme Court quashed that decision and dismissed the applicant company’s claim.
The European Court noted that, although the VAT had been paid via an authority that lacked jurisdiction, the entire amount had been credited to the state budget well in advance, without any delay. In these circumstances, the Supreme Court failed to explain how the applicant company’s obligation to pay the tax a second time was proportionate to the aim pursued, given that the State budget had not suffered any reduction or delay in the collection of the amount due.
The Court also noted that it had not been established that the applicant company had evaded tax either intentionally or by mistake. Furthermore, at the time the fine was imposed, even the customs and tax authorities had doubts as to the correctness of the procedure for levying VAT, which meant they could have made an error in good faith regarding the applicable procedure.
Accordingly, the Court found that the applicant company’s repeated payment of VAT, together with the imposition of the fine, constituted a disproportionate interference with its right to the peaceful enjoyment of its property.
As regards just satisfaction, the Court found that the applicant company had not made any claims in this regard and, consequently, did not award any sum in this respect. However, the Court noted that the applicant company could apply for the reopening of domestic proceedings, in the context of which it could claim compensation for the damage suffered.
This summary of the judgment was prepared by the Office of Government Agents within the Ministry of Justice of the Republic of Moldova.
This story was translated with the assistance of artificial intelligence.
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