COVID-19: Legislative measures adopted and their effects on tax proceedings in general (and on review proceedings in particular)
Spain Tax Commentary
Royal Decree 463/2020, of March 14, 2020, declaring a state of emergency, through its additional provisions 2, 3 and 4, established a scenario of general suspension of time periods, time limits and administrative proceedings that initially seemed to extend to tax proceedings. Royal Decree 465/2020, of March 17, 2020, redefined this scenario by excluding from said suspension tax time periods in general and time periods for filing tax returns and self-assessments in particular. RD-Law 8/2020 then completed it with its article 33, which regulates how the suspension of time periods in the tax area should be understood. Apparently, review proceedings in the administrative jurisdiction have been accidentally left out of the legislative provisions published.
We find ourselves in an inevitably turbulent time in terms of legislative production and this may lead taxpayers to apply these provisions incorrectly.
This commentary seeks to draw attention to a very specific aspect which, assuming the exclusion of tax proceedings from the general regime governing the suspension of administrative time periods defined by RD 463/2020 and despite the regulation contained in RD-Law 8/2020, seems not to have been covered by the set of legislative provisions associated with COVID-19.
We refer to the time periods for filing appeals or economic-administrative claims against tax decisions or for appealing to a higher administrative body decisions issued in economic-administrative proceedings that had commenced before the state of emergency declaration, as well as the time period for filing submissions in review proceedings that had already commenced at the time of such declaration.
To duly understand the issue that is raised, we must start from the rules introduced in article 33 of RD-Law 8/2020, which stands today as the main guidance on how to operate for taxpayers in the proceedings in which they were involved when the state of emergency arose and, more importantly, in any other tax proceedings that may have commenced since then. On March 18, we published a detailed alert analyzing the main measures adopted by the RD-Law. Consult the alert here.
It should be noted that transitional provision three of RD-Law 8/2020 establishes that the measures contained in its article 33 will apply to proceedings the conduct of which had commenced prior to its entry into force.
The main conclusion that is drawn from the measures introduced in RD-Law 8/2020 is that the time periods for paying tax debts, excluding those resulting from self-assessments regulated under article 62.1 of the General Taxation Law, and for dealing with any formalities that, at the time of the state of emergency declaration, are pending in tax proceedings before the State Tax Agency (other than review proceedings) are extended to April 30, and that the time period for paying debts or for dealing with formalities in the proceedings (of the same nature) that may have commenced since this past March 18, would be extended to May 20.
On March 19, the State Tax Agency addressed the doubts raised by the set of rules published and posted a question & answer form. Consult the form here . This guidance on how to operate in different proceedings before the State Tax Agency is very useful.
However, we fear that, despite the laudable effort made by the State Tax Agency to try to fill the existing gap (by an interpretation that entails extending to review proceedings the philosophy that seems to inspire article 33 of RD-Law 8/2020), the relevance of this gap means that the legislature should expressly regulate which rule applies to the time periods for filing appeals and claims that had commenced before the state of emergency declaration, and whether the extension of time periods established in article 33.1 and 2 can also be extended to review proceedings.
Until this gap is rectified by the legislature, safeguarding the taxpayer’s position in these proceedings makes it advisable to adopt a prudent position, which would entail assuming that, despite the state of emergency declaration and the exceptional nature of the situation, these time periods (both tax and other time periods expressly suspended, interrupted or extended), (i) have not been affected in any way by the general suspension initially decreed, (ii) have continued to run during this period of time, and (iii) one may suppose, will have to conclude before April 30, 2020, which seems to be the date used by the legislature as a valid reference for presuming the cessation of the effects of the state of emergency declaration.
Logically, this approach, perhaps imposed by an abundance of caution, is however difficult to reconcile with the spirit and sense of the changes introduced and, above all, may be difficult or impossible to implement in an exceptional situation such as the one that – for taxpayers and the review bodies themselves – has resulted from the state of emergency declaration.