Proof of underbilling requires proof of the difference in value, says Carf

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Proof of under-invoicing depends on proving that the amount actually paid is different from what was declared. The understanding is of the 1st Ordinary Panel of the 2nd Chamber of the 3rd Judgment Section of the Administrative Council for Tax Appeals (Carf).


Disclosure
Reproduction Proof of underbilling depends on the difference in values, says Carf.
The understanding of the rapporteur, advisor Paulo Roberto Duarte Moreira, prevailed. According to him, “it is not enough for customs inspection to allege the existence of a suspected infraction whose B2B Lead penalty is forfeiture or its conversion into a fine; it must also indicate which signs, documents and facts led to such a conclusion, under penalty of hindering the right constitutionally guaranteed to the taxpayer, that is, the contradictory and broad defense”.

"It is the duty of the tax authority to present 'in writing' the reasons underlying its decision that the relationship between buyer and seller has influenced the price (i.e., that the transaction value is unacceptable)", he explains.

Therefore, according to the rapporteur, there was no legal basis for the penalty of forfeiture of the merchandise, or its conversion into a fine, to be applied, just for the finding of price divergence in the operation.




"If there is no proof that the invoice is false, under-invoicing is not characterized and, for this reason, the application of the penalty of forfeiture and its respective substitute fine is ruled out", he states.

Case
The panel analyzed an infraction notice on customs values ​​declared on imports of crane trucks, acquired from China, which the Revenue understood to be underinvoiced.



To reach this conclusion, the tax authorities claimed that there was evidence that the declared values ​​differed from the average import prices, and also in links between the importer and the exporter.

According to the Carf rapporteur, however, the Revenue was unable to prove the under-invoicing. "Import price under-invoicing requires proof of the practice of forgery or adulteration of a document necessary for customs clearance. The tax authority was unable to demonstrate that materially or ideologically any commercial invoice was issued with any falsehood in declaring the prices of imported goods", he says.