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Tax avoidance in Supreme Court jurisprudence

When presenting this work we should remember that, as defined in its by-laws, the Tax and Competitivity Foundation is committed to research on taxation with the ultimate aim of improving the Spanish tax system and the processes or procedures for the application of taxes. It is clearly assumed that the Spanish tax system is not only identified with the set of rules that make up the tax system, but also includes the practice of applying the different taxes that make up the system, an area in which the Courts play a fundamental role.

In addition, the programme statement made by the Foundation in March 2014 – during the processing of the Tax Reform approved in 2014 and 2015 -, considering that legal certainty is a key element for the improvement of the system, included, among other proposals, the following:

  • to increase legal certainty and reduce litigation,
  • o reduce the existing uncertainty regarding the interpretation of tax regulations,
  • to minimise the insecurity and cost for taxpayers derived from the multiplicity of administrations, rules and interpretations.

From this general perspective it is easy to justify the interest of the Tax and Competitivity Foundation in following, with great interest, the jurisprudence of our courts and, in particular, that of the Supreme Court.

This approach has naturally encouraged the study that is presented here, which addresses an in-depth exegesis of the judgments handed down by the Supreme Court – during the period 2012-2017 – in those cases in which an essential argument in the assessments made by the Tax Administration that are disputed and give rise to the litigation is the existence of intentional conduct by the taxpayer aimed at reducing the tax burden, to achieve tax savings, and when this occurs in the context of direct taxes on income.

This “tax avoidance” sought by the taxpayer – to cite this phrase employed in the title of the work and how it is used in the book – can be conceptualised in different ways and with clearly contrasting legal consequences. This perspective has been lucidly assumed by the author of the book, titled “Tax avoidance and anti-abuse clauses in Supreme Court jurisprudence” , the professor of Financial and Tax Law at Seville University, Mr. Florián García Berro. When describing the purpose of his work, he states that:

Note: “This document has internal and external links to the judicial decisions according to the CENDOJ text, which aim to expand its usefulness as a study and work tool (see page 5)”.