On 15 June last the Institute of Fiscal Studies held its first session on the project promoted by the Fundación Impuestos y Competividad, which ended with the publication of “Tax litigiousness: alternative means of resolution and facilitation measures”.
Following the formal presentation of the act by the director of the Institute for Fiscal Studies, Ms Cristina García-Herrera Blanco, Jesús López Tello, a trustee of the Foundation and coordinator of the project – on behalf of URÍA MENÉNDEZ- offered a general overview of the Foundation’s work after more than 10 years, as well as of this project in particular.
He reviewed some of the data describing the relevance of litigiousness, indicating at the same time the difficulty of its precise measurement; he subsequently recalled the considerable importance afforded to this matter by the Foundation, borne out by an initial study which was conducted some years ago and focused on arbitration as a solution and contributed an important analysis of comparative law. In view of this, neither of these matters has been addressed on this occasion.
Concerning the project development methodology, he underscored the seminars held on each of the matters discussed in the first five chapters of the book, expressly mentioning each of the institutions involved and thanking them for their important contribution to the project by debating and defining the proposals submitted by the authors of the work that has attempted to propose alternative methods through all phases of tax litigation.
By way of a closing remark, he referred to the prologue – drafted by him -, and some of the arguments which it contains which, in his opinion, bear out the urgent need to introduce alternative dispute resolution methods and facilitation measures into the Spanish legal system, bringing years of frustrating inactivity on the part of the tax legislator to an end. In this respect, he invoked the general recommendations of the Council of Europe in 2001 and 2007 to introduce these mechanisms in order to resolve disputes between the Administration and citizens, emphasising their connection to the objectives of promoting human rights, the Rule of Law, and democracy as well as, on the domestic front, the reference within Component 27 of the Planning, Recovery, Transformation and Resilience Plan to these solutions, in connection with the promotion of voluntary tax compliance.
He subsequently called upon the speakers to address the matters discussed in the first two chapters of the work, the first of which provides the general framework, to which all the proposed solutions necessarily refer.
In this respect, professor Garcia Viana of the University of Santiago Compostela, discussed with intentional brevity the issue of the non-availability of the tax credit, an argument which has frequently been invoked as a limiting restriction of different alternative dispute resolutions solutions.
Concerning the different acceptations of non-availability, he identified that included in Article 18 of the General Tax Law and underscored that non-availability is not an ontological element of the tax credit but rather a characteristic thereof which is attributed by Law and is therefore open to review through the channel of legislative amendment.
Underlining the express acceptance of instances of availability, with respect to indefinite legal facts and concepts determining the application of taxes, he rejected the invocation of non-availability against alternative resolution methods.
Lastly, professor and of counsel of Deloitte, Juan Zornoza, and the lawyer of Uría Menéndez Miguel Cremades outlined the main features of their proposal in favour of the introduction of mediation in the administrative phase.
By citing, in favour of these solutions, the line already taken by the Law on the Common Administrative Procedure (LPAC) and more recently, the Emergency Plan for the Judiciary of the CGPJ, Juan Zornoza considered mediation in the administrative phase appropriate and legally possible, advocating in favour of its introduction at a time prior to the assessment act, as a voluntary option for the taxpayer, its resolution being binding in nature and not actionable. Considering that although the essential requirement of impartiality of the mediator may raise doubts in this respect- at least in the first two years in which the new channel is in effect-, the role of mediator should be assigned to functionaries of the Tax Administration, who should be afforded the requisite functional independence.
Miguel Cremades ended his presentation by stressing the peculiarities of mediation within the framework of inspection verification proceedings. He indicated that existing experience in relation to agreed assessments is a cause for hope regarding the feasibility of a solution in this respect, considering the reduced cost of mediation, accepting the mandatory time limitation for its possible specification and committing to the confidentiality of the formality, in order to avoid conditioning the parties, given the subsequent impact that their submissions may have if the mediation is not successful.
The second part of the session consisted of an interesting debate, chaired by Cristina Garcia – Herrera, during which Violeta Ruiz Almendral , from the Universidad Carlos III and a member of the Expert Committee for tax reform, was the first to take the floor, paying special attention to the Committee’s consideration of solutions to promote voluntary tax compliance, with a special reference to alternative methods. Concerning mediation, she underscored the advantage, in her opinion, of an oral proceeding from the perspective of Comparative Law and referenced the US model, showing that at times- as occurs in her opinion in baseball arbitration -the search for mediation formulas requires choosing between effectiveness and guarantees.
Next to take the floor was Stella Raventós Calvo, the chair of AEDAF, who presented the view of tax advisors and considered that the rise in litigiousness was being driven by the undermining of hearing procedures and a profile change in the actions of the Technical Offices. She considered the proposal for the mediator to be a functionary inappropriate and condemned the lack of resources in economic-administrative and jurisdictional proceedings, weakening the system as a whole.
The debate was later joined by the speakers, who disagreed with the Administration being responsible for the excess litigiousness, or the existence of a significant number of “impossible claims”. López Tello insisted that, apart from these differences in perception, there was an evident need for new solutions changing the current inertia. He was sure that if the Law attributes the role of mediator to the Inspectorate and provides the appropriate organisational structure, the functionaries of the Inspectorate would ensure its appropriate and effective application. Cristina García Herrera brought the meeting to an end, after referring to certain attempts at conflict mediation by the Administration, which compare litigations with tax proceedings as a whole, downplaying their importance, and which reflect a moderate decrease in litigiousness in relative terms.