anchidim zagrean

The practice of gambling in 2024

The practice of operative and unexpected or thematic control in gambling activity

Article from the series “Gambling Practice“, by Anchidim Zăgrean, FedBet Vice President and President of ROMBET

The control activity, put into practice by the National Gambling Office (ONJN), must be carried out, without any deviation, in full accordance with the special legal regulations in force and, above all, must be carried out, by the staff with competences in this sense within the Office, on a permanent basis, either in the form of operative and unexpected or thematic control, as the case may be, and the result of the findings must be recorded in the administrative control documents, only for the competence objectives: establishing the state of affairs; detection and sanctioning of contraventions; ascertaining the circumstances regarding the commission of certain acts provided for by the criminal law, in this case notifying the competent bodies, according to the legal provisions in force.

It should also be mentioned that the administrative acts of operative and unexpected control must be communicated, depending on the recorded findings and the administrative powers, to: the specialized department within the Office with attributions for ensuring the secretariat of the Supervisory Committee; the competent fiscal bodies in the administration, from a fiscal point of view, of operators subject to control; the general directorates of public finances in whose territorial range the registered office of the controlled economic operator is located, for taking fiscal measures and, if necessary, the criminal investigation bodies. It must be noted here that the implementation of these legal provisions has not been achieved until now and by adopting an order of the President of the Office, as provided for in art. 52 of GEO 20/2013, order in which the control procedure is established, clearly and without the possibility of arbitrary interpretation, in order to correlate it with other incidental legal provisions.

At the same time, it must be emphasized, categorically and without any doubt, that the law established, without any other possible interpretations, the fact that the control objectives must be achieved within the limits of the competence at their disposal, from this resulting, as clearly as possible and without any doubt, that the special legal norm in force has never entrusted ONJN’s control staff with the realization of the fiscal control of budget receivables. This attribute belongs exclusively to the fiscal body which, through the fiscal administrative act, issued in the exercise of the duties of administration of taxes and fees, establishes the individual situations in order to produce legal effects towards the one to whom the respective administrative act is addressed.

The exclusivity of fiscal control, on individual fiscal situations, is provided for in the Fiscal Procedure Code and the form in which these fiscal controls can be carried out are: fiscal inspection and unannounced control.

The competence of fiscal control was entrusted, according to the Fiscal Procedure Code, exclusively to the two fiscal authorities, as follows: 1. fiscal inspection, which is exercised exclusively, directly and unrestricted by the competent fiscal bodies, called fiscal inspection bodies and 2. operative and unexpected control, which is carried out, in accordance with the law, by civil servants from the General Directorate for Tax Fraud, under the name of anti-tax fraud control bodies.

This exclusivity, granted to establish the jurisdiction of the tax control, was objectively necessary for the implementation of the tax rules relating to: the fact that the provisions of the tax legislation are interpreted through each other, giving each the meaning resulting from the whole law; the fact that the provisions of the fiscal legislation susceptible to multiple meanings are interpreted in the sense in which they best correspond to the object and purpose of the law; the fact that, if after the application of the provided rules of interpretation, the provisions of the fiscal legislation remain unclear, they are interpreted in favour of the taxpayer; the fact that the factual situations are relevant from a fiscal point of view, are assessed by the fiscal body in accordance with their economic reality, determined on the basis of the administered evidence under the conditions provided by law and then when there are differences between the fund or the economic nature of an operation or transaction and its legal form, the fiscal body assesses these operations or transactions, respecting the economic fund of them; the fact that the fiscal body establishes the fiscal treatment of an operation considering only the provisions of the fiscal legislation, the fiscal treatment not being influenced by the fact that the respective operation meets or not the requirements of other legal provisions.

Decision 783/2019/M.Of. of 120 of 17-feb-2020 of the Constitutional Court of Romania is significant in this sense, generally binding decision, on the consequences of the operative and unexpected fiscal control, carried out by civil servants within the General Anti-tax Fraud Directorate, with clear and comprehensive explanations on the administrative documents drawn up and the legal regime of them, as follows:

– the minutes, for ascertaining and sanctioning contraventions, is the act of ascertaining a deviation and applying a sanction even by the control body, being subject to the provisions of Government Ordinance no. 2/2001 regarding the legal regime of contraventions, approved with amendments and additions by Law no. 180/2002, with subsequent amendments and additions;

– the control report, for establishing the state of facts, on the occasion of operative and unexpected control, for ascertaining some factual and documentary situations, existing at a given moment, for establishing the fiscal state of facts and for establishing their fiscal implications. The findings of the inspectors, resulting from an operative and unexpected control action, are valued depending on the nature of the findings and the objective of the control, and the minutes are communicated to the taxpayer, according to the provisions of Law no. 207/2015 on the Fiscal Procedure Code, with subsequent amendments and additions.

This category of minutes represents simple acts of ascertainment that do not produce legal effects by themselves, to be capitalized later by issuing a tax act.

The inspectors, vested with the exercise of public authority, are entitled to verify the legality of the activities carried out, the existence and authenticity of the supporting documents in the service provision activities, to legitimize and establish the identity of the administrators of the controlled entities, to apply the measures provided by the legal norms and to notify the competent bodies in order to capitalize on the findings.

Upon completion of the operative and unexpected control carried out by the inspectors, control reports/control documents are concluded, in which findings are made on a factual situation from the period of the company’s operation. However, this report is not issued in the exercise of the duties of administration of taxes, fees and social contributions, but in the exercise of the thematic control attributions, with the aim of ascertaining, analysing and evaluating a specific fiscal risk of one or more determined economic activities.

Therefore, the control report drawn up by the inspectors is not capable of producing legal effects by itself against the audited entity and does not establish fiscal claims against it, so that, regardless of the findings in its content, it is only a preliminary act to some legal documents to be drawn up, whether they are of a fiscal or criminal nature.

Therefore, through the minutes drawn up by the anti-fraud inspectors, tax claims are not individualized, the possible damages being only estimated, and as long as a title of claim has not been issued through which, according to the law, the tax claim can be established and individualized, it cannot be claimed that the control report proves a definite, liquid and enforceable claim on the taxpayer’s patrimony.

The Court finds that the report of the unexpected control concluded by the anti-fraud bodies/inspectors does not establish tax debts for the taxpayer, but only records certain elements of fact and estimates possible damages, being considered a simple means of evidence to be used by the bodies of tax inspection and/or criminal investigation. In situations where, through the minutes, the control bodies do not estimate, but establish fiscal obligations, imposing on the taxpayers and their payment obligation, we can no longer talk about a simple administrative operation, but about a genuine fiscal administrative act. Or, taking into account the above-mentioned, the Court considers that only on the basis of a debt title, which is based on what is recorded and retained in the control report, the obligation to pay certain amounts can be held against the taxpayer to the state budget, thus ensuring, at the same time, the effective possibility of taxpayers to challenge the content of the respective minutes.

The same interpretation can be found in Decision 2/2018 M.Of. 178 of 26-Feb-2018 of the High Court of Cassation and Justice by the Panel for resolving some legal issues, which emphasizes the fact that: “the quasi-unanimous jurisprudential opinion is in the sense that the report drawn up by the anti-fraud inspectors on the occasion of the current, operative and unexpected or thematic control does not meet the characteristic features of a fiscal administrative act, but only ascertains some factual and documentary situations for establishing the fiscal state of facts or ascertains some circumstances regarding the commission of some acts provided by the criminal law and their fiscal implications. Not having the character of a fiscal administrative act, as it does not create, extinguish or modify legal relations of a fiscal nature, it cannot be challenged separately, but only together with the administrative act that precedes it.”

The conclusions, which can be drawn after going through the above records, can be summarized as follows:

  1. The special regulation, of gambling, does not entrust competence to the control staff within ONJN, in the field of fiscal control, not even in the form of evidence for the fiscal inspection, which means that the administrative act drawn up by them cannot include any kind records or observations regarding: the level or basis of taxation; payment terms; measures regarding the correction of taxes and fees established on the basis of a declaration of taxation (self-imposition);
  2. The administrative act, which contains any of the specific elements of fiscal control, is null and void, because it is issued in violation of the legal provisions regarding competence, as provided for in article 49 of the Fiscal Procedure Code.

Nullity can be established by the competent fiscal body or by the body for resolving the appeal, upon request or ex officio. In practical terms, if payment amounts, payment terms or requests to change tax declarations are established, in the charge of gambling organizers, included either in a decision of the Supervisory Committee of ONJN (decisions regarding the granting of licenses, authorizations, etc.) or in the administrative documents of the control personnel, their nullity must be established, as follows:

– ex officio, by the Supervisory Committee of ONJN;

– ex officio by the competent fiscal body, which issues a decision that is communicated to the taxpayer;

– at the request of the gambling organizer, by the Supervisory Committee of ONJN;

– at the request of the gambling organizer, by the competent fiscal body, which issues a decision that is communicated to the taxpayer.

Such administrative acts, which contain provisions for measures to be imposed on the taxpayer, with the obligation to submit declarations, according to some decisions of the Supervisory Committee, to draw up rectification declarations and/or to pay debts established by ONJN or by ONJN inspectors, they become through their content, fiscal administrative acts being susceptible to be challenged in administrative litigation (after going through the appeal procedure, where legally they should be annulled). The court should annul such dispositions of measures, as having been issued in the absence of a legal basis, as well as the fact that they were adopted by an authority that does not have the competence to issue such an act.

Through a final and general conclusion, it can be stated that any decision, administrative act or provision of measures, issued by the ONJN representatives, establishing, in the charge of the gambling organizer, obligations regarding the submission of tax declarations, rectification declarations , or deadlines are set for the payment of implicit fiscal obligations, is illegal, as a result of the fact that these administrative acts transform a simple means of ascertaining a state of fact into a genuine fiscal administrative act, producing legal effects, contrary incidental legal provisions and contrary to the mandatory jurisprudence of the Constitutional Court of Romania and respectively of the High Court of Cassation and Justice.

Therefore, in the framework of an unexpected operational or thematic control, ONJN inspectors can order only those measures provided for, in a limiting way, by GEO 20/2013 and HG 298 from 2013, and if the gambling organizer finds that the drawn up administrative act exceeds, partially or totally , the limit of the powers provided by the law and in the conditions in which the competent fiscal body or the body for resolving the appeal, upon request or ex officio, does not declare these administrative acts null and void, it must attack them in administrative litigation. The legal provision according to which the actions can be formulated personally against the person who contributed to the elaboration, issuance, adoption or conclusion of the act or, as the case may be, who is guilty of refusing to resolve the request regarding a as a subjective right or to a legitimate interest, if compensation is requested for the damage caused or for the delay. If the action is accepted, the person in question may be obliged to pay compensation, jointly and severally with the defendant public authority.

We’ll be back with other opinions in the next issue of the magazine…

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