Retroactivity, Analogy, and Abuse in Spanish Tax Law
RETROACTIVITY
Consists on t application of a provision to situations created before t entering into force of t provision.
art
10.2LGTthis followsart.2.3CC.Unless otherwise provided tax provisions will not have retroactive effects and will apply to instantaneous taxes after their entering into force n to periodic taxes.However provisions establishing tax infringements n penalties aswellas surcharges will have retroactv. Effects in respect of decisions which are not final when its applications is more favourable to its destinary.Final=firme.Art.9.3SC:establishes t pp of non retroactv of punitive prov.That are not favourable to or restrictive to individual rights and tax provisions arent restrictive.
TCdoctrine:sts126/87 173/96 n182/97:there is not an absolute prohibition of retroactivity in taxation.However retroactv.In taxation is not always legitimate other const pp set limits to it f.E.Legalcertainty.L.C is not an absolute criterion and it is not a right of the citizens,but it protects the legitimate expectation of citizens that comply with the applicable law against changes in legislation that cannot be reasonably foreseen prohibition of arbitrariety,determining when a retroactive tax provision infringes t LC of citizens is a matter that can only be decided on a case by case basis taking into account the degree of retroactivity..Constnal.Court hasfixedsome criteria to know when retroactv is or not constitutional.According to the doctrine of TCwe have to differentiate:ACCording to t grade of retroact.Wehave:1.Maximumdegree:it pretends that a provision is applied retroactively to past n consolidated situations.It will only be justified n acceptable in very limited circumstncs.2.Medium retroac:it affects to situations that although they were created before t entering into force of the retroactive provision,they are not consolidated they are still alive situations.It will be acceptable when an exam of t balance between legal certaintyof citizens and t circumstances that justify t legal change is adequate taking into account the circumstances:purpose,quantitative relevance,foreseeability.Ingeneral terms const.Court rejects maximum degree retroacvt.Because t impact to legal certainty would be huge but it does admite the medium retroact.ACCording to t circumstances of t case:1.Quantitative relevance2. The forseeability(prevision de capacidad) of those who are obliged to t affected situation.3.The purposes of applying retroact.To a situation. In t case of procedural tax provisions, they apply retroactively as any other procedural provision n they can be applied since t moment they enter into force to procedures in course,to future procedures or even regarding situations created before t entering into force of t provision.Inrelation to explanatory or interpretative provisions, they are applied retroactively starting with t entering into force of t provision explained or interpreted. They havent normative value as they cant innovate t legal ordering.In t case of regulations they have no retroactivity because of t pp of reserve d ley.
Analogy:
art.4cc established t general pp of the admissibility of analogy.
And due to t subsidiary character of cc, in pp,analgy applies also to t other branxes of t legal order.So although art.14LGT established that analogy will not be allowed to extend,beyond t strict meaning of t terms used,t taxable event,exemptions n any other tax benefits or incentices, we have understand that analogy is admitted in general terms on tax law with t exceptions mentioned in art.14.
Abuse:
art.15LGT.Conflict exists when the fulfillment of t taxable event is avoided by means of improper acts whose only purpose is to obtain tax savings.Elements of t legal concept:1.Avoiding the tax ie not fulfilling the taxable event reducing t tax base or reducing t tax due.2.Improper or inadequate acts.3.No economic or legal effects from t deviation other than tax savings.4.T legal effects of t tax event avoided will apply.In these cases we have 2provisions the1 that we should apply (eluded provision) n t 1 that we apply(cover provision).Art.6.4 states that fraus legis abuse of law are:acts undertaken under cover of t language of a provision-cover prov.-that intend a result which is prohibited by t legal system, or against it,will be deemed done in fraus legis n will not impede t proper application of t prov.Whose elusion was intended-eluded provision. T consequence of frauslegis is t application of t prov we wanted to avoid.Rules contained in LGTof1963were difficult to apply so the2003LGT has established some novelties in relation to this matter.Mains ideas of2003 lgt are: penalties cant be imposed due to t constraints of t legality pp n t need that an infringement must be adequately specified to be applicable.In order to note t new legal regime t name has changed from fraus legis to conflict in t interpretation of tax provisions. But this new denomination is inadequate since there is a conflict.Abuse of law abuso d derexo would be more adequate.2003LGT hasestablished new legal regime but there are not much changes mainly procedural aspects n technical configuration.Art.15.3refers to measures provided in case of conflict it says that:t tax due that results from t taxable event avoided has to be paid, interests are charged intereses d demora up to t time of assessment.Penalties are not charged.Legal nature of reaction measures it cant include:the application of analogy, t application of t so called functional interpretation that ignores legal forms.STC120/95 concept of abuse of law has nothing to do with the concepts of fraud in crimin.Law nor with t simulation or deceit.Use of the term fraude d ley is abuse of law can make a confusion but they are very different concepts.In abuse of law there is no hiding of facts but the taking of advantage of t existence of a legal means that is more favourable (coverposition)which is established for other purposes,so as to avoid t application of another, less favourable provision(main prov).Abuse of tax law intends to reduce the taxpayers tax burden taking advantage of t means provided by tax provisions themselves,although used for a purpose that is alien to them.Therefore there is no simulation or fake in t tax vase.