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October 3, 2013
These charges are only applicable to payable settlements, substituting the sanction for a charge. On the contrary (i.e. if there is no payment requirement), a late settlement submission would lead to a reduced sanction (article 198 LGT).
It is considered that these charges do not have a sanctioning or repressive function, but rather act as a stimulus for tax obligation fulfilment. Or rather, they consider it a compensation for the harm incurred through late tax declarations or settlement submissions (Spanish constitutional court verdict from 13 November 1995 and National High Court verdict from 30 March 2011).
Therefore, these are charges that taxpayers are required to settle when submitting late declarations or self-assessment payments without previous request from the public administration. This is something strongly discussed by case law as verdicts point out, like the one issued by the National High on 29 March 2007, referring to a “pre-emptive request”, considering the fact that the taxpayer would be immersed in a limited tax audit. However, the verdict issued by the same court on 30 March 2011 considers that carrying out inspections that would force the taxpayer to submit extemporaneous declarations can be seen as a “pre-emptive request”, provided that the public administration is requiring payment for a tax debt.
The amount of charges varies according to the time elapsed between the established final submission date and the actual declaration or self-assessment settlement submission date. If the submission is done within the 3, 6 or 12 months, the charges applied are 5%, 10% and 15%, respectively.
If the submission is done beyond the 12-month period, the applied charge is 20% of the payable amount stated in the declaration. Furthermore, in this last case a delayed interest will also be charged.
With the purpose of facilitating voluntary regularisation, the article 27.5 LGT of the general Tax Act establishes a 25% reduction of the charges, applicable in cases of early payments.
However, the National High Court (in its verdict from 12 December 2011) points out that the public administration must not automatically apply charges on extemporaneous submissions whenever a contributor submits late declarations or settlements. Rather, they should investigate – on a case by case basis – the “voluntarism” of the taxpayer to regularise their situation, or what is considered as being the equivalent, investigate the taxpayer’s situation and determine why they have regularised their situation, in order to avoid violating the principle of proportionality when applying tax procedures. Article 27, point 4 of the LGT aims at controlling what is to be regulated, since it is required that the settled tax period is identified and that only data relating to that period be mentioned.
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