This document, which was published by the Foundation last June 2022, is organised into 13 chapters, the last of which was written by Maximino Linares (EY Abogados, the firm coordinating the project) and aims to reflect the primary considerations of previous chapters and underscore the proposals for improvement. True to the pragmatism of the Foundation’s projects, these proposals for improvement are incorporated into the content of this work and are generally clearly connected with upholding legal certainty and the efficiency of administrative procedures, which should be the principles at the centre of tax proceedings.
The project does not aspire to address all tax procedural matters and so includes no references to review or disciplinary procedures and although it looks at general procedural matters, it primarily focuses on issues concerning inspection procedures.
By way of a necessarily brief overview of its content, we look at the matters addressed below.
Description of the features of tax application procedures in Spain in view of the predominance of management through self-assessment, requiring taxpayers to take responsibility for interpreting the rules, which triggers a high degree of legal uncertainty and unpredictability.
From a subjective viewpoint, tax legislation includes various alternatives for identifying the “taxpayer”, as part of the legal-tax relationship, shying away from the concept of “interested party”. There is an absence of uniform regulation of frequent situations where the taxpayer or interested party acquires such status under agreements or contracts as well as clarification of joint and several liability in those cases where there are multiple taxpayers.
Concerning time in procedures and its significance, the scope of the interruption of the statute of limitations of “connected liabilities”, for example, is still unclear, as well as the limitation of the “rights” to request and obtain refunds. It is considered essential to agree to the possibility of the taxpayer recognising or recovering ex novo tax losses presumably generated in years which are time barred.
A key and controversial matter in the application of taxes concerns the burden and timeliness of proof, with respect to which regulations are excessively brief. There is a suggestion to include didactic information on the Tax Administration’s website, as well as improvements in the administrative case file and lege ferenda, there is a proposal to include the principle of “availability and ease of evidence” and to complete the legal regulation of presumptions.
The principle of full regularisation, shaped by jurisprudence, is addressed in detail, and its express recognition in the LGT (Spanish General Tax Act) is considered appropriate, with its inclusion in its natural position, namely, article 34.1 on taxpayers’ rights and guarantees.
The complexity of applying the tax system underscores the frequent concurrence or succession of tax assessments in respect of the same taxpayers, taxes or years, triggering situations which undermine the principles of procedural economy and celerity. Certain clarifications of legislation seem advisable, such as reinforcing the time-limiting effect of limited reviews, in the interests of legal certainty for taxpayers or ad hoc solutions in cases involving a succession of identical regularisations for successive years, inter alia.
With respect to the concurrence or succession of tax assessments, as well as the repetition of proceedings which may be conducted by the Tax Administration, the lack of regulation and evident legal inefficiencies which are difficult to understand or justify are reported. Specifically, the opinion expressed opposes the possibility of the indiscriminate duplication of liability and a review of legislation is advocated with a view to clarifying and defining the limits of reiterating assessments.
It is underscored that voluntary regularisations are positive and benefit the taxpayer as well as the Administration, and various modifications are proposed to promote them and avoiding via late payment “…the initiation of inspection and penalty proceedings by the Tax Administration” (Constitutional Court Judgement 164/1995, of 13 November 1995, FJ 5)
Concerning collection, the tension between citizens’ guarantees and the collection of tax debts and penalties in collection proceedings is reported, advocating for a change to the current restrictive approach, construed via jurisprudence, to the interpretation of damages which are impossible or difficult to rectify, as well as the general conditioning of precautionary measures to the provision of guarantees in favour of the Treasury. On the other hand, the vagueness of legislation on tax liability is underscored. This is a source of enormous conflict which one might expect would be reduced through an appropriate amendment of the LGT, clearly defining its limits.
Significant importance is attached to the new contentious – administrative cassation proceedings, special attention being paid therein to the most recent jurisprudence and the use of the principles of “good governance” and “good administration” . On the other hand, a detailed analysis is conducted of the procedural aspects of the new cassation, underscoring the need to review certain guidance associated with its current regulation and resolving the problems which its practical application has already revealed.
The work is complemented through a valuable contribution from academia concerning the reasons and proposals for the improvement of procedural litigation, which include a wide list of proposed improvements.