## [Tax Newsletter - October 2022](/en_GB/new/tax-newsletter-october-2022)
# Tax Newsletter - October 2022
Spain - 11 / 14 / 2022
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## **A capital gain subject to personal income tax is generated in the termination of a tenancy in common if the asset is revalued**
The Personal Income Tax Law establishes that when a tenancy in common is terminated, there is no capital gain or loss and, therefore, the assets awarded retain their historical value for the purposes of future transfers. However, the Supreme Court and the Directorate-General of Taxes have recently concluded that this will only be the case if the award resulting from the termination respects the joint owners’ shares of ownership without revaluing the assets in question.
## **The premium paid in a call option agreement is savings income**
In several judgments, the Supreme Court concluded that the premium received for the grant of a call option right must be included in the savings component of taxable income for personal income tax purposes, because with that grant, the owner transfers powers specific to its ownership right (temporarily waiving them).
## **The failure to provide documentation in a certain format does not justify entry and search of a domicile**
The Madrid Hight Court concluded that it is not appropriate to authorize an entry and search at a company just because it did not provide documentation to the tax inspectors in the format that they requested.
## **To apply the aggravating factor of repeated commission of tax infringements, penalties that became final, by negative silence, more than four years before the new infringement cannot be taken into account**
According to the General Taxation Law, when a penalty is imposed for an infringement, the aggravating factor of repeated commission of tax infringements may be applied where the infringing party has been penalized for the same kind of infringement according to a final decision in the administrative jurisdiction within the four years prior to the commission of the new infringement. According to the Supreme Court, where the appeal against the previous penalty was dismissed by negative silence, this period is calculated from when the effects of such silence occurred.
## **Economic-administrative decisions annulling assessment decisions for substantive reasons must be enforced within a period of one month**
The Supreme Court confirmed that, if there is an order to roll back proceedings for substantive reasons, the tax inspectors will only have one month to conclude such proceedings, whereas, if it is for formal reasons, the inspectors will have the period regulated under article 150.7 of the General Taxation Law (i.e. the period remaining from the point to which the proceedings are rolled back, to the end of the maximum period for inspection proceedings).
## **The 25% reduction in the surcharge for late filing applies even if its deferral or payment in installments is requested**
In a recent judgment, the Supreme Court agreed that a taxpayer does not forfeit the right to the 25% reduction in the surcharge for late filing, even if the taxpayer requests its deferral or payment in installments. According to the court, a taxpayer that pays the principal of the debt and defers the surcharge cannot be in a worse situation than a taxpayer that does the opposite.
## **To conclude on where the main center of the taxpayer’s economic interests is, it is necessary to compare country by country where the income is generated and the assets are located**
For the purposes of tax residence in Spain, the TEAC analyzed the requirement relating to the main center or base economic activities or interests and ruled that, in order to be able to conclude on whether or not such center is in Spain, it is necessary to ascertain where the highest volume of income has been obtained as well as where the largest portion of investments is concentrated. For that purpose, one must analyze the existing proof and make a comparison of income and investments country by country.
## **A new view by the courts is a sufficient basis for requesting the correction of a self-assessment, even where a request was already made which was denied and became final**
Both the TEAC and the Balearic Islands Regional Economic-Administrative Tribunal accepted the validity of requests for correction of self-assessments (even for a second time, when the rejection of a previous request was already final) where the pre-existing view has changed.
For further information on the judgments, decisions, resolutions and legislation of this month, [**ACCESS THE COMPLETE NEWSLETTER HERE**](https://www.garrigues.com/sites/default/files/documents/tax_newsletter_-_october_2022.pdf).
[Tax](/en_GB/tags/tax), [Spain](/en_GB/tags/spain)
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This publication is provided for information purposes only and does not constitute legal advice or advice of any other kind. It does not seek to offer a comprehensive summary of the legislation and developments to which it refers nor to cover all published material, but rather to provide an overview of selected topics. It is therefore recommended that the official texts be consulted and specific professional advice be sought. Garrigues does not accept any liability for the use made of this information and assumes no obligation to update it after publication.
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