The sentence of Court of Justice of the European Union (CJEU) against the sanctions imposed for non-compliance with the declaration of goods or rights located abroad Through the so-called model 720, it opens up several unknowns about the consequences it could have for individuals, companies and the public treasury. The CJEU understands that model 720 violates the principle of free movement of capital within the European Union, that the indescribable violations established by the norm are contrary to the law and that it is a disproportionate sanctions regime for abusiveall of which could force the Administration to return a minimum of 230 million euros raised in various processes of withdrawal of assets abroad.
Was the Government of Mariano Rajoy which approved the standard in 2012, directly linked to tax amnesty -which in this case went into the Constitutional Court-, with the aim of establishing a scheduled regulatory mechanism. The Ministry of Finance headed by Christopher Montoro he reserved the function of stick to one measure, and to the other, that of root. Model 720 began to be overturned from 2013, but sanction procedures were hardly processed from 2019 due to the possibility that European magistrates would invalidate it. This gesture of prudence is fully justified in the light of the sentence. Now a waiting period has opened up for the possibility that those who have been sanctioned can claim the refund of what was paid to the treasury.
Beyond the battle for European justice to a poorly reasoned sanction regime, which would affect not only potential fraudsters but also immigrants with properties in their country of origin and requiring a technical adjustment that the government already had in its portfolio, the HvJEU stated that the free movement of capital in the EU. There must certainly be resources to avoid the concealment of assets for the purpose of tax evasion, and the application of the now questioned rule has allowed 88 000 million euros to emerge. But within the Community regulatory framework, the flight of capital to countries with more than lax control and taxation outside the borders of the Union and the circulation and possession of capital and goods within the community’s economic spacewith information exchange procedures they have nothing to do with the opacity of tax havens.
The European Union does have a pending issue in terms of tax harmonization, which more and more member states are willing to address. When the United States proposed the standardization of corporate income tax for large corporations in order to combat precisely avoidance practices and downward tax competition, the most influential voices in the European Union enthusiastically joined such an initiative. The way forward is not through rules that can be understood as questioning the free movement of capital and goods within the EU, but through the reconsideration, within the Twenty-seven, of tax models such as those of Ireland, the Netherlands and Luxembourg, clearly oriented to act as a tax haven in practice. In addition, of course, the constant pursuit of capital flight to third countries.