Investigations by the Guardia Civil into alleged fraud against the Canary Islands public treasury began after a major tobacco company operating in the Canary Islands was identified as having potential tax irregularities. The findings point to a lower tax rate being applied over the past three years than what should have been charged, indicating a possible scheme to defraud the regional tax office.
Research initiation and development
The Guardia Civil became aware of the matter following an anonymous complaint received in May 2022. The report suggested that a tobacco company with its headquarters in the Canary Islands had engaged in irregular tax payments. The complaint originated from Santa Cruz de Tenerife, prompting a formal audit and subsequent inquiries by the authorities.
Fraud procedure
Detailed examinations of tax declarations for the preceding three years were conducted by the Department of Finance and Borders, focusing on discrepancies in the self-assessment of duties on tobacco products. The investigations explored whether the company deliberately matched a tax rate path that misstated the actual tax due, specifically concerning a lower rate applied to dark tobacco products for the period from January 2020 to March 2023.
In the assessment, the so-called special tax rate of 11.10 euros per 1,000 dark cigarettes declared for 2023 was contrasted with the appropriate, higher rate that should have applied, set at 47 euros per 1,000 cigarettes. This review referenced historical tax provisions from Law 1/2011 of 21 January on tobacco products and the related 2011 decision. The analysis aimed to determine whether the rate misapplication extended across later periods and how it affected the declared tax obligations for those years.
When the periods under review were scrutinized in detail, estimates suggested that the discrepancy could have released a substantial amount of revenue into the state coffers for fiscal year 2020, with values ranging around 44.2 euros per 1,000 cigarettes in certain scenarios to 35.9 euros per 1,000 cigarettes for others. The exact figures reflect the complexity of the tobacco tax scheme and the potential impact of any misreporting on revenue.
With the findings announced, the tobacco company reportedly ceased paying 29,890,125.25 euros to the public coffers of the Canary Islands. The case is being handled by the Guardia Civil in conjunction with the Güimar Court of First Instance and Instruction, based in Santa Cruz de Tenerife, as part of the ongoing legal process and inquiry into the alleged tax irregularities.