Spain's tax authority introduces new self-settlement amendment

As of 25 May 2023, Law 13/2023 has significantly changed the treatment of self-settlement rectifications submitted by taxpayers. Each tax can anticipate the replacement of the current method of requesting rectifications due to the taxpayer's obligation to submit self-assessment rectifications.

Previous system

Before Law 13/2023, if a taxpayer discovered an error in their self-settlement, they had to ask the tax administration to rectify it, and, where applicable, any undue income was subsequently refunded.

In the event of a discrepancy, this system allowed the taxpayer to indicate the most unfavourable criterion in the self-settlement and then request its correction. In addition to the taxpayer's criteria, this request could be accompanied by any necessary documents or evidence.

The main advantage of this system was that the taxpayer avoided the risk of being penalized by the AEAT, the Spanish tax authority, for using a criterion that was not shared. The taxpayer paid a higher amount based on a less favourable criterion and asked the AEAT for the difference based on a more favourable one. The AEAT had to consider the arguments and evidence submitted by the taxpayer and either accept or reject the request. In case of rejection, the taxpayer could appeal and continue the procedure in higher instances.

New process

Under the new system, the rectification request will be replaced by a single "self-settlement rectification" system for taxes that provide for it. This automated process eliminates the need for the AEAT to be involved in the refund decision. It will also ensure that the legal status of the self-settlement and the self-settlement rectification is standardized. The AEAT will no longer decide on the refund, but, instead, this will be done automatically. However, the possibility of initiating a verification procedure still exists, which could lead the AEAT to open a sanction procedure. This would reduce the guarantees for the taxpayer since the possibility of obtaining a refund without the risk of being penalized disappears.

The draft Royal Decree implementing Law 13/2023 outlines the main taxes that this new system will cover: VAT, personal income tax, corporation tax, special taxes and tax on fluorinated gases. Therefore, the standardized self-settlement rectification form must be used to correct these taxes. Currently, taxes delegated to the Regional Communities, such as the transfer and stamp duty, inheritance and gift tax, and wealth tax, are not included.

Similarly, the temporary solidarity tax on Major Fortunes, whose constitutionality is questionable and which is likely to be challenged by most taxpayers, is not included in the new system. 

Osborne Clarke comment

As long as it is not included or the request is made before it is included, if a taxpayer wants to challenge this tax, they must do so through the traditional method of requesting a rectification and the refund of undue income, which will be processed without the risk of being penalized.