The strategy of tax litigation based on confusion and document disorder has suffered a severe setback in the National Court. The Second Section of the Administrative Litigation Chamber has issued a clarification ruling, with a report by Judge Francisco Gerardo Martínez Tristán, that completely dismisses the request for a complement to the judgment presented by the company Lanzamil, an enterprise owned by the owner of the fishing company Freiremar at the port of Las Palmas in case 2229/2020. The court not only ratifies the multi-million euro tax adjustment imposed by the Tax Authority, but also orders the appellant company to pay the costs after qualifying its procedural actions as a blend of uncertainty, confusion, and a complete lack of administrative systematics.
The core of the conflict lies in the regularization of the Corporate Tax for the year 2008, where the Tax Agency dismantled the tax incentives applied by Lanzamil under the Economic and Fiscal Regime (REF) of the Canaries. The judges confirm a severe positive adjustment in the taxable base that is divided into two blocks of high financial toxicity: the reimbursement of 130,521.88 euros for the Reserve for Investments in the Canaries (RIC) allocated in 2003, due to the lack of maintenance of the investment, and a much larger hit of 577,078.50 euros corresponding to the RIC allocated in 2004, as the legal period of four years expired without the company demonstrating a real materialization of the funds.
The Maze of Bulk Invoices and Phantom Public Debt
Lanzamil’s legal defense sought to amend its defeat in court by demanding a complement to the ruling under the pretext that the Chamber had failed to evaluate the purchase of public debt. The company argued that it had subscribed to Obligations of the Autonomous Community of the Canaries amounting to 162,000 euros, as well as public debt assets of the Insular Council of Tenerife valued at 123,000 euros, all linked to a current account with Caja de Canarias, now Caixabank. However, the court dismantles this argument revealing that the documentation provided consisted of barely legible copies and a ‘bulk contribution of invoices’ mixed with the operations of a third company, Freiremar, without providing a minimal technical explanation of the causal link between those assets and the tax reserve of the appellant.
The judicial ruling is devastating in describing the procedural mess of the company, which went so far as to submit supplementary writings halfway through the process to add missing pages due to alleged copying errors. The National Court clarifies that Article 267 of the Organic Law of the Judiciary (LOPJ) is designed to rectify manifest omissions of the court, not to salvage the negligence of a company’s tax advisors attempting to use the court to organize an indecipherable balance. By certifying that the accounting provided ‘explains nothing’, the Chamber closes the quick clarification route and pushes Lanzamil towards the costly route of an appeal before the Supreme Court, leaving its financial reputation damaged and confirming that the documentary opacity in the Canary REF incurs severe state penalties.
