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Footbal and Administrative Decisions

On 10 March 2020, the French Conseil d’Etat (Conseil d’Etat case, Fédération Française de Football, Req. 424347) confirmed the possibility for the executive committee of the FFF (Fédération Française de Football) to accept the propositions of the CNOSF (Comité National Olympique et Sportif Français) given in the course of a conciliation and to additionally ask the DNCG (Direction Nationale du Contrôle de Gestion) to convene and to take other measures. In such a context, to create rights with a decision qualifying as an administrative decision (acte unilateral), the FFF has to take a new decision containing its own legal and fact reasons (motifs), this later cancelling the first one of the DNCG.

In this case, for financial reasons, the first measure ruled by the DNCG prohibited Racing Club de Lens from accessing Ligue 1.

The DNCG is an independent entity by law created by the FFF in the view of ensuring the sustainability of sports associations and companies, to encourage the respect of sport equity and to contribute to economic regulation of competitions. Its main mission is to organize the financial, legal and administrative control of members of sports associations and companies belonging to the FFF or of the professional league (or even those which ask to join them). Albeit considered as independent, the DNCG does not have the legal personality and forms part of the FFF.

After a mandatory conciliation before the CNOSF on 25 July 2014, other measures were instead proposed by such entity: (i) limitation of the number of employees and / or (ii) recruitment control. On 28 July 2014, the executive committee of the FFF thereafter decided to accept these other measures but additionally asked the DNCG to convene in order to determine how Racing Club de Lens would play in Ligue 1.

In such a context, this latest decision was challenged by a relegated team from Ligue 1 to Ligue 2 (Sochaux) (being ranked 18 after the championship and hoping staying in Ligue 1).

Such complaint is dismissed by the Conseil d’Etat for the second time.

The main subject arising from this case and developed in the report of the public draftsman (rapporteur public – see conclusions M. G. Odinet, rapporteur public available on the website of the Conseil d’Etat) deals with the qualification of the second decision dated 28 July 2014 and the correlative cancellation of the first decision dated 26 June 2014.

To rule the case, the Conseil d’Etat runs a limited scrutiny check (contrôle restreint) over the new decision taken after the conciliation on 28 July 2014 (standard in this kind of case). In this respect, the Conseil d’Etat ensured an absence of manifest error (erreur manifeste d’appréciation) only, and followed the conclusions of the public draftsman: the executive committee of the FFF did not take an inconsiderable risk in cancelling the first decision of the DNCG and in deciding instead the limitation of the number of employees and / or the recruitment control. No EMA (erreur manifeste d’apprécaition) can derive from this new decision.

Even if not raised in the case dated 10 March 2020, it might be argued that the question of interest to act (intérêt à agir) of Sochaux could also have solved this case. The interest to act of Sochaux could have successfully been challenged in the first instance as these two teams were playing in different leagues: it is not because Racing Club de Lens would have stayed in Ligue 2 (due to financial reasons) that Sochaux would had won the right to stay in Ligue 1. There is no link between the two: as such, Sochaux could also have lost the case on the ground of lack of grievance (défaut de grief) of the FFF decision. In addition, Sochaux cannot be considered as representing the collective interest of the whole profession.

By this decision, the Conseil d’Etat hopefully confirms the latitude of sport institutions vested with public power prerogatives (prérogatives de puissance publique), but remains, with the ECHR (European Convention of Human Rights) one of the ultimate regulation entities.

Amendments to Tax Code: Azerbaijan

Law of the Republic of Azerbaijan “on Amendments to the Tax Code of the Republic of Azerbaijan” was approved by the President of the Republic of Azerbaijan on 29 November 2019. These amendments become effective from January 1st, 2020.

The amendments concerns the following matters:

  • E-tax invoice cancellation and application of various types of electronic invoices depending on the nature of the transaction;
  • Application of a single approach to VAT calculation and payment (cash method);
  • Abolition of simplified tax on building;
  • False Transactions and Potentially Dangerous Taxpayer;
  • Changes on excise rates;
  • New tax exemptions;
  • Control of installation of POS-terminals and introduction of new generation cash registers;
  • Improvements in the simplified tax payment;
  • Centralized tax registration;
  • Taxation by state-owned subsidies from residential and non-residential areas;
  • Reporting on transnational group of companies;
  • Carrying out of joint inspections with tax authorities of other state as regulated by international treaties;
  • Editing and refining.

General provisions and new concepts

The following new concepts were added to the Tax Code:

Non-Commodity Transaction – is a transaction disclosed in the course of tax control, concluded for the purpose of concealing another transaction and generating profit without the provision of goods, works and services;

Risky Taxpayer – means a taxpayer regarding whom there is a decision of the relevant executive authority (body) and who meets the criteria approved by the decision of the relevant executive authority (body), as well as a taxpayer who carries out non-commodity and/or risky transactions; A taxpayer may be considered as a risky taxpayer upon respective decision of the competent body.

Transnational group of companies – a group of companies, which includes two or more companies that are residents in different countries, or a company that is resident in one country and operates through a permanent representation in another country.

New provisions (Article 16.1.4-2) to the taxpayer’s responsibilities regarding the Transnational Group of Companies will be added in the following content:

If the total income for the fiscal year of the Transnational Group of Companies exceeds the manat equivalent of 750 million euros, the enterprise, which is a member of a transnational group of companies for the purpose of automated information exchange with the competent authorities of other countries under international treaties supported by the Republic of Azerbaijan and is a resident of the Republic of Azerbaijan, submits the report to the tax authority in the form and manner specified by the relevant executive authority (body).

A tax sanction of 500 manat is applied to the taxpayer in case of failure to submit the electronic report in prescribed manner and time to the taxpayer.

Registration of taxpayers

The article 33.7 (Registration of taxpayers) will be amended in the following content:

The following taxpayers can be registered in a centralized manner by the tax authority as determined by the relevant body (body) of the relevant executive authority:

  1. Natural monopoly subjects;
  2. Enterprises with special tax regime;
  3. Taxpayers who meet one of the following requirements:

– Average number of employees 251 and above;

– The average annual residual value of fixed assets on the balance sheet exceeds AZN 5,000,000.

Persons who have been registered at the place of their taxation are then registered in the centralized order with the previous identification numbers when referring to taxpayers or enterprises with a special tax regime.

Tax registration of taxpayers and branches, representative offices or other economic entities (objects) of the special tax regime, registered in the centralized manner, shall be carried out in the aforementioned manner.

Legal entities, registered at the place of their taxation, are required to apply to the relevant tax authority for centralized registration within 15 days of commencement of activities under the special tax regime.

Centralized re-registration or de-centralization of enterprises operating under special tax regimes, commencement or termination of their activities under a special tax regime shall be made within 15 days from the date of their application to the relevant tax authority.

III. Responsibility for violation of tax legislation

Provisions about the expiration of the term for calling to account for violation of tax legislation and application of financial sanctions (Article 56) will be amended to the following content:

Except for the results of on site tax inspection conducted in accordance with the relevant decision on the conduct of tax inspection in accordance with the criminal procedure legislation, the person cannot be called to account for violation of tax legislation and no tax liabilities may arise if the period of 3 years (the period of 5 years after the relevant information from the competent authorities of foreign countries on income received abroad) had passed from the date of the tax violation.

The period specified in this article covers a period of 3 years preceding the date of the decision of the tax authority to conduct on site tax inspection, irrespective of the date of making a decision on liability in accordance with the article 49.1 of the Tax Code.

Electronic delivery notes and purchase act of goods

The provisions regarding electronic delivery notes (Article 71-1) will be amended to the following content:

In the cases established by this Code, a person providing goods, performing work and rendering services to individual entrepreneurs and legal entities shall issue an electronic invoice to them within the following terms:

– providing goods – time of delivery of goods;

– providing not pre-ordered goods – within 5 days from the date of issuance of the document confirming delivery of goods;

– performing works and rendering services – within 5 days from the date of performance of works and rendering of services.

New provisions to the electronic delivery notes (Article 71-1) will be added in the following content:

When goods (works, services) are delivered to buyer not registered as a taxpayer, he / she will be given a receipt or a check.

Tax invoices are subject to the following types of electronic invoices, depending on the nature of the operation:

on the provision of goods, works and services;

on return of goods;

according to the article 163 of the Tax Code, except for return of goods;

on transfer of goods to agent (commissioner);

provided by agent (commissioner) to buyer of goods;

on acceptance to eventual processing of goods;

according to the article 177.5 of the Tax Code.

Purchase act of goods (Article 71-2) will be added to the Tax Code:

Within 5 days from the date of purchase of goods, purchase act and electronic purchase act (the form of which is established by the relevant executive autority) shall be drawn up for goods purchased for the purpose of economic activity (excluding individual consumption) by legal entities and individuals.

In the event that an electronic purchase act issued by a taxpayer has been printed and signed by an individual not registered within the tax authority, this document shall be considered as a document confirming purchase of goods and a purchase act shall not be drawn up on paper.