##  [Spain: Losses could make tax on economic activities bill invalid](/en_GB/new/spain-losses-could-make-tax-economic-activities-bill-invalid) 

# Spain: Losses could make tax on economic activities bill invalid





Spain - 02 / 09 / 2022





Spain Tax Commentary













- <a aria-label="Link" class="fs-5" data-content="Copied link" data-placement="top" data-toggle="popover" data-trigger="focus" data-url="https://www.garrigues.com/en_GB/new/spain-losses-could-make-tax-economic-activities-bill-invalid" id="get-app-artwork" role="button" tabindex="0"></a>
- [](https://www.linkedin.com/sharing/share-offsite/?url=https://www.garrigues.com/en_GB/new/spain-losses-could-make-tax-economic-activities-bill-invalid)
- [](<https://twitter.com/intent/tweet?text=Spain: Losses could make tax on economic activities bill invalid&url=https://www.garrigues.com/en_GB/new/spain-losses-could-make-tax-economic-activities-bill-invalid>)
- [](<https://www.facebook.com/sharer.php?u=https://www.garrigues.com/en_GB/new/spain-losses-could-make-tax-economic-activities-bill-invalid&t=Spain: Losses could make tax on economic activities bill invalid>)

 







   Previous    Next  















**In various decisions published over recent months Spanish courts have called into question tax on economic activities assessments for 2020 for reasons related to the necessary fulfillment of constitutional principles of economic capacity and prohibiting confiscatory taxation, due to the exceptional circumstances that arose this fiscal year as a result of the health crisis.**





The most notable of these judgments are described below:

1. The Extremadura High Court, in a [judgment delivered on December 2, 2021](https://www.poderjudicial.es/search/AN/openDocument/effc280110c66b41/20220111), recognized the taxpayer’s right to obtain a proportional reduction of their tax on economic activities liability in respect of the mandatory shutdown period for business activities in 2020, confirming the conclusion by Alicante Judicial Review Court number 3, summarized in our [November 2021 Tax Newsletter](https://www.garrigues.com/sites/default/files/documents/tax_newsletter_-_november_2021.pdf). The court also expressly rejected in this judgment the reasoning (against this conclusion) supported by the Aragon Regional Economic-Administrative Tribunal in a decision on July 22, 2021, discussed in the same newsletter.
2. Moreover, in a case handled by Garrigues, Santander Judicial Review Court number 2 delivered a judgment on December 16, 2021, setting aside a company's tax on economic activities bill for 2020, because it had been issued without taking the special circumstances in that period into account.  
       
    The court held that the applicant had produced proof that there had been losses throughout the economic sector to which it belongs in 2020, which means that one of the premises in the legislation on the tax on economic activities for being able to charge the tax was not fulfilled.  
       
    This decision went a step further than the Extremadura high court judgment, because it set aside the whole tax on economic activities liability instead of reducing it in proportion to the period in which there was a mandatory shutdown of economic activities.

In short, though not yet prevalently, the courts seem to be accepting of the need to (i) take into account the exceptional circumstances that impacted on 2020 as a result of the pandemic; and to (ii) ensure fulfillment of the principles of economic capacity and prohibiting confiscatory tax, which govern the Spanish tax system.









[Tax](/en_GB/tags/tax), [Spain](/en_GB/tags/spain)







 

 



 

 

### Contact

 

 ![Eduardo Abad Valdenebro - Garrigues](/sites/default/files/styles/medium/public/team/photo/Eduardo_Abad_Valdenebro_en_20260611.jpg?itok=XJmuqiG8)

[Eduardo Abad](/en_GB/team/eduardo-abad-valdenebro)




![](/themes/custom/garriguestheme/img/iconos/email-contacto.svg)[Contact](<mailto:eduardo.abad@garrigues.com >)

- +34 91 514 52 00
    
    [Madrid](https://www.garrigues.com/en_GB/office/madrid)
 










 

[Find more professionals](../team)

 

 



 

 

- 
 


 

 



 

## Find a publication

   

- [Administrative and Constitutional Law](/en_GB/markdownify/node/9931?f%5B0%5D=service%3A1422)
- [Agribusiness and Food](/en_GB/markdownify/node/9931?f%5B0%5D=service%3A1417)
- [Automotive](/en_GB/markdownify/node/9931?f%5B0%5D=service%3A1419)
- [Banking and Finance](/en_GB/markdownify/node/9931?f%5B0%5D=service%3A1443)
- [Corporate and M&amp;A](/en_GB/markdownify/node/9931?f%5B0%5D=service%3A1441)
- [Corporate Governance and Sustainable Development](/en_GB/markdownify/node/9931?f%5B0%5D=service%3A12823)
- [Criminal Law and Internal Investigations](/en_GB/markdownify/node/9931?f%5B0%5D=service%3A1434)
- [Data Economy, Privacy and Cybersecurity](/en_GB/markdownify/node/9931?f%5B0%5D=service%3A10913)
- [Dispute Resolution: Litigation and Arbitration](/en_GB/markdownify/node/9931?f%5B0%5D=service%3A1412)
- [Energy](/en_GB/markdownify/node/9931?f%5B0%5D=service%3A10916)
- [EU and Antitrust Law](/en_GB/markdownify/node/9931?f%5B0%5D=service%3A1416)
- [Family Business](/en_GB/markdownify/node/9931?f%5B0%5D=service%3A1413)
- [Fashion Law](/en_GB/markdownify/node/9931?f%5B0%5D=service%3A1435)
- [Financial Regulation](/en_GB/markdownify/node/9931?f%5B0%5D=service%3A10915)
- [G-advisory](/en_GB/markdownify/node/9931?f%5B0%5D=service%3A12821)
- [Human Capital Services](/en_GB/markdownify/node/9931?f%5B0%5D=service%3A1431)
- [Infrastructure](/en_GB/markdownify/node/9931?f%5B0%5D=service%3A10914)
- [Insurance](/en_GB/markdownify/node/9931?f%5B0%5D=service%3A1438)
- [Intellectual Property](/en_GB/markdownify/node/9931?f%5B0%5D=service%3A1421)
- [Labor and Employment](/en_GB/markdownify/node/9931?f%5B0%5D=service%3A1424)
- [Life Sciences and Healthcare](/en_GB/markdownify/node/9931?f%5B0%5D=service%3A1429)
- [Media and Entertainment](/en_GB/markdownify/node/9931?f%5B0%5D=service%3A1433)
- [Planning, Zoning and Environment](/en_GB/markdownify/node/9931?f%5B0%5D=service%3A1444)
- [Private Equity](/en_GB/markdownify/node/9931?f%5B0%5D=service%3A1439)
- [Real Estate](/en_GB/markdownify/node/9931?f%5B0%5D=service%3A10927)
- [Restructuring and Insolvency](/en_GB/markdownify/node/9931?f%5B0%5D=service%3A1420)
- [Securities Markets](/en_GB/markdownify/node/9931?f%5B0%5D=service%3A1442)
- [Sports](/en_GB/markdownify/node/9931?f%5B0%5D=service%3A1430)
- [Startups &amp; Open innovation](/en_GB/markdownify/node/9931?f%5B0%5D=service%3A1426)
- [Sustainability](/en_GB/markdownify/node/9931?f%5B0%5D=service%3A10921)
- [Tax](/en_GB/markdownify/node/9931?f%5B0%5D=service%3A1425)
- [Technology, Communications and Digital](/en_GB/markdownify/node/9931?f%5B0%5D=service%3A1436)
- [Tourism and Hotels](/en_GB/markdownify/node/9931?f%5B0%5D=service%3A1432)
- [Transport, Logistics and Shipping](/en_GB/markdownify/node/9931?f%5B0%5D=service%3A1428)

 Facet Services detail

 



- [Publications](/en_GB/markdownify/node/9931?f%5B0%5D=publication_type%3A794)
- [Newsletters](/en_GB/markdownify/node/9931?f%5B0%5D=publication_type%3A107)
- [Garrigues collection](/en_GB/markdownify/node/9931?f%5B0%5D=publication_type%3A101)
- [Laws: amendments at a glance](/en_GB/markdownify/node/9931?f%5B0%5D=publication_type%3A104)
- [News](/en_GB/markdownify/node/9931?f%5B0%5D=publication_type%3A105)

 Facet Publication type detail

 



  Min  

 Max  

 







 

## News search engine