Limitation on the possibility of claiming self-assessed personal income tax in Form 720

The Supreme Court (SC) has restricted the possibility of recovering the Personal Income Tax (IRPF) self-assessed through the Model 720, by closing the State’s patrimonial responsibility. This implies that if the rectification of the self-assessments was not requested in the following four years, it will not be possible to recover the taxes paid.

This is what the Supreme Court determined in a recent ruling this week. The judgment rejects the claim for the State’s financial liability for damages resulting from regulations declared contrary to European Union Law. The plaintiff based its argument on the famous judgment of the Court of Justice of the European Union (CJEU) of January 27, 2022 (Case C-788/19), which determined the non-conformity of Article 39.2 of the Personal Income Tax Law with European law. This ruling invalidated Model 720, which until then obliged taxpayers to declare their assets abroad.

The regulations rejected by the European Court imposed significant penalties, which could reach up to 150%, for filing the return after the deadline established before the Tax Agency.

Following the taxpayers’ claim, in June 2022, the Court of Justice of the European Union (CJEU) ruled that the Spanish legislation infringed the principle of effectiveness by making it excessively difficult to obtain adequate reparation for damages caused to citizens due to the approval and application of domestic legislative provisions contrary to EU law. This verdict opened up the possibility of recovering the money through the claim for compensation for patrimonial liability of the legislating State.

However, the Supreme Court has closed this possibility of recovering the self-assessed personal income tax paid under Model 720 if the rectification of the self-assessments was not requested within the following four years.

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