Tax Debt Collection: Challenging Penalties and Suspension Rights
Is the procedure of collecting bodies fair? The deadline to file for voluntary self-assessment by the income tax of 2005 ended on June 30, 2006. According to Article 161.1 b), where the debt is entered in reverse, the executive period starts on July 1, 2006. From that moment, interest begins to accrue for late payment (Article 26).
On September 25, 2007, a spontaneous and extemporaneous declaration (DZ) was made, which incurs the surcharges provided for in Article 27 LGT. Given that, under paragraph 2, more than 12 months have passed from the deadline for submission, a surcharge of 20% must also be applied. Under this section, “In these cases, default interest is required for the period from the day following the expiry of 12 months after the deadline for submission to the time when the reverse charge or declaration was filed,” that is, it is necessary to require default interest for the period running from July 1, 2007, until September 25 of that year.
Since the declaration (DZ) does not follow the reverse with the related revenue and a debt case settled by reverse, we must consider that the executive period starts the next day, i.e., September 26, from which interest accrues. On the other hand, Article 27.2, in the case at hand, i.e., in the case where the presentation of the self-assessment or statement is made after 12 months from the end of the deadline for submission, excludes that sanctions would have been imposed, which would be provided for in section 198 LGT, i.e., violation “for failing to file tax self-assessments or statements on time without causing economic loss, for breaching the obligation to communicate the tax residence or breaching the conditions of certain permits.”
On October 15, 2007, collecting bodies targeted the declaration (DZ) by demanding payment of sums due, the penalty should not and a penalty for untimely declaration below from which would be 20%. Therefore, it does not act properly. The declaration (DZ) has recourse to the courts. According to Article 227.2 b) LGT, which refers to acts capable of economic-administrative claim “in the field of application of charges are claimable: a) the provisional or final settlement ….”
As for the suspension, there is no need for the declaration’s (DZ) request, but this occurs automatically in accordance with Article 233.1, which states: “The execution of the contested act will be suspended automatically on application by ensuring the amount of such act, default interest generated by the suspension and the charges that might come, in the terms established by regulation. If a challenge to a tax penalty would affect the execution of that will be suspended automatically without the need to provide guarantees in accordance with paragraph 3 of Article 212 of this Act.” Bearing in mind that in this case, the dispute concerns a tax penalty, the execution of the same shall be suspended automatically. Furthermore, under Article 233.7 LGT, “The suspension of operation of the act will be maintained during the processing of economic and administrative proceedings in all courts.” Therefore, until the appeal is raised, you can not take any action.
To this must be added that before the providence, it would be necessary to notify the enforcement order, because as stated in Article 161.3 LGT, “Started Executive period, the tax authorities made the collection of liquidated debts or self-assessed to those referred to in paragraph 1 of this Article by the procedure of urgency regarding the assets of forced to pay.” Therefore, only after this procedure is not allowed to satisfy the debt, as set out in Article 167.4 LGT, “… will be seized their property and advised well in the enforcement order.”