B Law & Tax
04 May 2023

Tax advisor: The Supreme Court partially upholds the challenge on the derivations of joint and several liability of article 42.2 of the General Tax Act.

The Supreme Court ruled in appeal 3742/2021 on this matter. The objective was to establish whether, in cases in which a declaration of liability under article 42.2.a) of the General Tax Act is partially annulled by a court judgment, decreasing its scope, the tax administration has the obligation to issue a new declaratory act of liability based on the new amount and demand its payment during the corresponding voluntary period.

The taxpayer’s position is based on the premise that when a judgment of the Nacional High Court makes a partial estimation that reduces the scope of the tax liability, the tax administration must issue a new administrative act to reflect this change when executing the judgment. According to the plaintiff, this new administrative act should annul the previous act and declare the tax liability with the new amount established by the judgment. Furthermore, he argues that the execution of the judgment cannot maintain the previous act in the part that is not affected, but that the Administration must issue a new agreement for the derivation of liability and cancel the enforcement orders prior to the determination of the new amount. It also indicates that the liability is unitary and extends to a global scope, instead of applying to each of the tax assessments included in it.

The Court, finally, stated that in the cases contemplated in article 42.2 of the General Tax Act, the declared liable party assumes liability for the assets and rights damaged as a consequence of its conduct to meet the principal debt, not for the amount thereof, but exclusively up to the value of the assets or rights that the Tax Administration could have seized. The amount fixed is essential in these cases, since it defines the global scope of the liability and, therefore, the defense options of the liable party that has been declared as such. This limit of the challenge is related to article 24 of the Spanish Constitution. According to this reasoning, the Court grants the reasoning of the appellant by considering that it is necessary to issue a new agreement of derivation of liability that reflects the new scope determined by the court judgment, not being able to maintain the collection actions that had been carried out in the past.

B Law & Tax International Tax & Legal Advisors.


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