B Law & Tax
05 September 2023

Tax advisor: Proven facts in a criminal judgment do not bind the Contentious-Administrative Courts unless they relate to the same tax period

The contested judgment rejected the taxpayer’s appeal against Wealth Tax (IP) assessments and penalties for the 2005 tax year. This was done without considering the information contained in the criminal judgment, mainly due to the fact that these were different tax years. The judgment concluded, after evaluating the evidence, that the taxpayer was resident in Spain in 2005. However, a subsequent judgment issued on May 26, 2021, in a different appeal, determined that the taxpayer’s residence was in Switzerland in the same year 2005, based on the facts proven in the criminal judgment. The key issue here is that the criminal judgment established as a proven fact that the taxpayer had his tax residence in Switzerland from June 26, 2000, until March 15, 2007, which includes the 2005 tax year in question.

The contested judgment, while recognizing this statement of proven facts in the criminal judgment, did not provide an adequate or reasoned explanation for the lack of contradiction between the two judgments. This lack of consistency in the courts’ assessment of the same facts prompted the question of whether the criminal judgment should have any effect on the contentious-administrative proceedings, especially given that the judgments addressed the same objective fact related to the taxpayer’s residence in the 2005 tax year. The Court concluded that, although there is no strict linkage between the judgments of different jurisdictions, the facts proven in the criminal judgment must be considered by the contentious-administrative court to avoid a manifest contradiction between the judicial pronouncements. In this case, the challenged judgment did not follow this doctrine by reaching an opposite conclusion on the proven fact in question, without adequately justifying the lack of contradiction. Therefore, it was determined that the challenged judgment should be annulled and that the same factual circumstance should be applied for the purposes of the taxpayer’s IP in the 2005 tax year, following the jurisprudence of the judgment issued in the criminal proceedings.

B Law & Tax International Tax & Legal Advisors.

 https://www.blaw.es/

“En B LAW&TAX somos especialistas en asesoramiento fiscal internacional tanto a empresas como para particulares. Si desea ampliar la presente información, estaremos encantados de poder atenderle en el 917817194 o en [email protected]