B Law & Tax
24 July 2023

Tax Advisor: The Supreme Court prohibits holding a minor with no income responsible for the tax debts of his parents in the form of joint Personal Income Tax taxation

The Supreme Court, in a sentence advanced in a note of the Judiciary, has determined that the Treasury cannot make a minor with no income jointly and severally liable for the tax debts of his parents in the modality of joint taxation of the Personal Income Tax (IRPF) of the family unit. The ruling is based on the fact that the minor, due to his age (10 years old at the time), could not give his consent or dissent regarding the choice of joint taxation made by his parents, which although favoring them, could be detrimental to the minor child.

In this case, the Navarre Personal Income Tax Law establishes that persons who opt for joint taxation are “jointly and severally subject to the tax as taxpayers, without prejudice to the right to apportion the tax debt between them”. However, the State Personal Income Tax Law requires that all members of the family unit have income, otherwise they are not taxpayers.

The Supreme Court has dismissed the appeal of the Comunidad Foral, confirming the ruling of the previous judgment that annulled the seizure made against the minor for the family unit’s 2010 personal income tax liquidation. The Chamber considers that the tax administration treats minor children in a discriminatory manner with respect to the older children dependent on the parents, since the latter are not members of the family unit and are not subject to joint and several liability.

In this case, a child was included in the joint IRPF taxation in 2010, without having any income. Despite this, the Treasury of Navarra issued a seizure proceeding against him for the IRPF debt of the family unit. After a judicial process, the Supreme Court has confirmed the annulment of the seizure, arguing that joint and several liability is only applicable if there is a transfer of income between the members of the family unit, according to the jurisprudence of the Constitutional Court.

The Chamber of the Court considers that the interpretation of the Navarre Personal Income Tax Law made by the appealed judgment protects minor children from joint and several liability when they have no income and their assets did not influence the tax. Furthermore, it points out that the rule generates a discriminatory treatment towards minor children by comparing them with older children dependent on their parents, and that this difference has no justification in personal or economic circumstances.

Due to the age of the plaintiff (10 years old), the judges consider that he could not give his consent to the joint taxation of the family unit. The tax legislation does not contemplate a solution for this conflict of interest, unlike in the civil sphere. Furthermore, they point out that there was no illegal or fraudulent conduct in the case, which reinforces the inapplicability of the joint and several liability of the minor.

The Chamber emphasizes that in the case of a minor child with no income, the joint taxation of the family unit may not be applicable. The State Personal Income Tax Law establishes that all members must have income in order to be considered taxpayers, since they are those who carry out the taxable event, as established in article 36.2 of the General Tax Law.

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