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Spanish tax authorities are bound by their own statements

Some believe that tax compliance is easy, until the tax audit starts

The Spanish tax authorities are bound by their own statements, including examples published in tax information booklets


On 13-06-2011, the Spanish National Court (Audiencia Nacional) overturned a settlement transacted by the tax agency which imposed a penalty on a company for the late submission of Corporate Tax. The authorities noted that the assessment was submitted outside the deadline but failed to recognise that the reason for the above was that the company used the example given by the tax authorities themselves in their Corporate Tax Booklet published in 2004.

The judgement concluded, following a detailed analysis on the calculation of deadlines, that there had effectively been a late submission of the tax assessment, but this was not, under any circumstances, an error attributable to the company and, ultimately, the company did not have to pay the penalty. The ground for the ruling was the doctrine of protection of legitimate trust, whereby the authorities are not allowed to change criteria in a random and unjustified manner.

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