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Proposal for the implementation of alternative dispute resolutions (ADR) in the spanish tax system with special reference to arbitration

The general aim of the Tax and Competitiveness Foundation is already known: to contribute to the improvement of the tax system and its practical application. In this last area one of the issues most clearly identified as negative is doubtlessly the existence of a wide-range of tax-related disputes, which, furthermore leads to lengthy lawsuits very often lasting more than 10 years, and which are excessive and contrary to the requirements of an advanced tax system that is compatible with legal certainty and economic competiveness.

Aside from the above, in its document published in March 2014 “Ten proposals for improving legal certainty within the scope of the reform of the Spanish tax system” the Foundation’s Board considers appropriate, among other measures, that of “establishing alternative mechanisms for resolving disputes with the Administration which permit increasing legal certainty and reducing litigiousness, such as arbitration …”

The study on alternative measures for resolving disputes commissioned by the Tax and Competitiveness Foundation from a team of experienced and renowned professionals, under the supervision of Professor Pablo Chico de la Cámara from the Rey Juan Carlos University is fully consistent with the objectives of the Foundation’s programme. The final document was published in a book bearing the same name, which contains a general analysis of tax disputes in Spain and the causes thereof. The book offers a full review of the different solutions that exist in the Spanish legal system and those offered by Comparative Law for avoiding or reducing litigiousness, “ex ante”, or resolving the same after a dispute has arisen between the Tax Administration and taxpayers, and ends by proposing the introduction into the Spanish legal system of the concept of arbitration, as an optional solution which would be an alternative to the filing of economic-administrative claims and judicial reviews.

The above professionals structure this proposal in accordance with the various aspects offered by the institution of arbitration, resolving firstly the doubts concerning the feasibility of the concept in the Spanish legal system and its compatibility with the principle of unavailability of tax credits, and subsequently presenting a detailed analysis of specific arguments, including a proposed wording of the legislation with respect to the various aspects of the system for such “ alternative measure”, that the authors request be incorporated into Spanish Tax Law as a result of the envisaged reform of the General Tax Law.

The Board fully supports the general commitment to review the system in force and the need to include mechanisms to avoid and reduce litigiousness, and trusts that this work and the proposals presented by its authors contribute to the reflexion and discussion that should precede theimportant changes that the current situation recommends, for which the opportunity to review the current General Tax Law is a fitting occasion not to be missed.