B Law & Tax
05 September 2023

Tax advisor: Actions against the principal debtor do not affect the limitation period for claims against jointly and severally liable persons

The purpose of this appeal is to determine whether the actions taken against the principal debtor or the person previously liable can have an impact on the interruption of the limitation period for claiming payment from those jointly and severally liable. The State Attorney starts from the fundamental premise that the beginning of the statute of limitations period for the exercise of the Administration’s right to demand payment from a tax liable party is located on the date on which the transaction that gave rise to the tax evasion was conducted. In this specific case, it is a purchase and sale carried out on February 23, 2011, in accordance with Article 67.2 of the General Tax Law (LGT), in its original version.

However, the Chamber of instance issued a ruling in which it declared the statute of limitations of the right of the Tax Administration to derive liability towards jointly and severally liable persons, despite the fact that the debt of the jointly and severally liable person is clearly distinguishable from that of the principal debtor. It is important to note that both types of debts are linked, since joint and several liability operates as a subsidiary or secondary obligation in relation to that of the principal debtor, and only becomes relevant when there is a principal obligor. However, it must be recognized that the jointly and severally liable person is, in his own right, a tax obligorThe principles of legal certainty apply, just as they do to other obligors. From the moment in which the jointly and severally liable party is part of the tax relationship as established by law, with the realization of the event giving rise to the obligation, the Administration is responsible for declaring the jointly and severally liable person’s liability.. This allows that, through the appropriate procedure, the jointly and severally liable party may exercise an effective defense to enforce its rights and, in the case of statute of limitations situations, so that the extinction of its obligation is truly effective.

In this context, it makes no sense to allow time to elapse without declaring liability in accordance with article 42.2.a) of the LGT when there is clear data to make such a declaration. This approach is based on the principle of “actio nata”. Therefore, it is not consistent to try to obtain a benefit from a possible interruption of the limitation period based on actions that are not related to joint and several liability, since these actions do not seek to clarify the legal cause of the declaration of liability, but are aimed at the collection of the principal debt, being actions that are unrelated to this purpose. In summary, the Court establishes the jurisprudence that the computation of the limitation period to demand the payment obligation from jointly and severally liable persons is not stopped by actions against the principal debtor or the previous liable person, unless the liability of the jointly and severally liable person has already been declared. This is based on a correlation between the power to declare the derivation of joint and several liability and the power to demand payment from the liable party that has already been declared as such, considering that they are different and successive actions in the tax process.

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