In the tax field in Spain, prior to taking legal actions before Courts, the economic-administrative proceeding must be completed before the Economic-Administrative Court.
Depending on the tax liability quantification, the final agreements (both the final assessment and the tax penalty agreement) should be appealed before the Regional or the Central Economic-Administrative Court.
In this sense, the final agreements could be appealed before the Economic-Administrative Courts within a one-month period since the decision was taken. During this one-month deadline it should be filed the claim’s announcement. Afterwards (within approximately three to six months), the Economic-Administrative Tribunal will open the deadline (one month) in order to submit the written arguments in the claim, and finally the Court will issue the Resolution (within one or two more years).
In addition, jointly with the final assessments the Spanish Tax Authorities will issue the payment documents in order to proceed to pay into the Treasury the tax liability and, if any, the penalty. In this point, it is needed to make a distinction between the settlement and the penalty.
While the penalty would be called off without need to give any guarantees, regarding the tax liability the taxpayer has two alternatives which should be taken into account:
- Pay the total amount of the tax assessments within the voluntary payment period. The voluntary payment period begins following the notification of the settlement agreement.
- If the notification has taken place during the first fortnight of a month, the debt should be paid before the 20th of the following month.
- If the notification has taken place during the first fortnight of a month, the debt should be paid before the 5th of the second following month.
In case the Economic-Administrative Court resolution was in favor of the taxpayer, the amount paid by the taxpayer would be paid back plus an accrued interest from payment date to the date of “the repayment agreement”.
- Request for a payment suspension of the tax assessment filing a bank guarantee or other kind of guarantee (e.g. real estate guarantee), also within the voluntary payment period.
There are three possibilities:
- Automatic suspension by providing a bank guarantee: the debt payment is automatically suspended if a bank guarantee is provided securing the amount of the debt contested, any default interest accrued and the surcharges which may be applicable if the guarantee is enforced (20%).
- Suspension by providing a guarantee other than a bank guarantee: suspension may be requested, and other guarantees provided such as a real property mortgage, a chattel mortgage, etc. Evidence should be provided that it has not been possible to obtain a bank guarantee and a valuation of the assets offered should be delivered.
- Suspension with total o partial exemption from providing guarantees: a suspension may be requested with a total or partial exemption from providing guarantees although its grant is not automatic. The Tribunal, in light of the documentation provided, will decide whether or not it grants the suspension requested.
Evidence should be provided if it has not been possible to obtain a bank guarantee and if there are no other assets to be provided as a guarantee and the suspension which may cover part of the debt, they should be offered as a guarantee and the suspension without a guarantee should be requested for the remaining amount. A valuation of the assets offered should be provided.
Evidence should be provided in the event that the authorities immediately enforce payment of the debt, this would trigger damages which would be irreparable or very difficult to remedy.
If the Economic-Administrative Court resolution was in favor of the taxpayer, the taxpayer would not pay any tax due amount. The definitive favorable resolution of the proceedings allows the taxpayer to file for the restitution of the bank cost of the guarantee assumed by the taxpayer before the Spanish Tax Authorities.
In case the resolution was not in favor of the taxpayer, the taxpayer would have to pay the tax due amount, accrued interest amount, 20% of surcharge, plus an interest on delay from the last day of the voluntary payment period to the last day of the voluntary payment period opened by the notification of the statements resolution (generally, the period in which the Tax Authorities must resolve the proceedings – a year of interest -).
One the administrative procedure before the Economic-Administrative Court has ended and if it is not partially or totally successful, the taxpayer would have the option to undertake legal proceedings before the Courts (Regional Supreme Court) in a term of 2 months, which its procedure would last to 2/3 years or more.
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