Complete guide to appeal for reconsideration
What is an appeal for reconsideration?
Administrative channel
An appeal for reconsideration against the tax authorities is a type of appeal that is lodged and processed administratively (i.e. it is decided by the tax authorities, not by a judge).
Therefore, it does not require the intervention of a lawyer or solicitor and can be lodged against the following tax acts issued by the Inland Revenue:
- Those that declare an obligation or provisionally or definitively deny or recognise a right. This is the case of tax assessments, penalty agreements, acts issued in the collection procedure, acts denying or recognising tax exemptions or incentives, acts verifying the value of income, assets or taxable bases…..
- Procedural acts that decide – directly or indirectly – on the merits of the case or that put an end to the tax procedure.
Since only acts issued by the tax authorities can be appealed, your company cannot lodge appeals for actions or omissions by third parties in tax matters (such as, for example, the failure of a third party to charge VAT or issue an invoice, or the duty to apply or bear a withholding tax).
Third party actions or omissions can only be challenged administratively by means of a claim before the Economic-Administrative Court (Tribunal Económico-Administrativo, TEA).
Appeal against the decision of the Court of First Instance
Optional, most of the time
Option to go directly to the TEA.
In general, the possibility of lodging an appeal for reconsideration is optional, so that a complaint can be lodged directly with the Economic-Administrative Courts (TEA).
For these purposes :
- Your company can dispense with an appeal for reconsideration and complain directly to the TEA.
- Or it can first file an appeal for reconsideration and, once it has been resolved or is considered to have been rejected by administrative silence, file a claim with the TEA.
Local bodies
However, when it comes to acts issued by local bodies (e.g. relating to local taxes such as IBI or plusvalia municipal), there is usually no TEA to appeal to.
In these cases, taxpayers must first appeal to the local council for reconsideration and, if the council does not respond, then go to the ordinary courts (for which they must have a lawyer and solicitor).
In municipalities with a large population (Madrid, Valencia, Seville…), there are municipal economic-administrative courts (TEAM).
Municipalities with a population of more than 250,000 inhabitants or those which, although they do not have this population, are capitals of a province with more than 175,000 inhabitants, among other cases, are considered to be municipalities with a large population.
Time-limits for lodging an appeal
Time limits for lodging an appeal for reconsideration
One month
If you (or your company) receive notification of a tax ruling with which you do not agree, you have one month, counted from date to date, to lodge an appeal for reconsideration with the same body that issued it.
The deadline for lodging an appeal begins on the day following the date of notification.
In the event that you are claiming against a tax with a periodic due date and collective notification (IAE, IBI, Impuesto de Circulación, etc.), the period will start to run from the day following the end of the voluntary payment period, regardless of when you received the payment letter.
Calculation of deadlines
To avoid making a mistake with the deadline, follow this rule: the deadline ends on the day of the following month with the same ordinal number as the day on which you receive the notification; and if this day does not exist, the deadline ends on the last day of the month.
Thus, if you are notified on 22 July, you can appeal until 22 August; and if you are notified on 31 August, you can appeal until 30 September.
In these cases, if the last day is a non-working day (i.e. falls on a Saturday, Sunday or public holiday), the appeal can be lodged on the next working day. Therefore, when the deadline for lodging an appeal ends on a Saturday, it is extended until the next working day (which will be the following Monday, unless it is a public holiday) [LPA, art. 30] .
Suspension of debt
Does not interrupt payment
It is essential to bear in mind that lodging an appeal for reconsideration against a tax assessment does not suspend the enforcement of the appealed act (and the same applies to economic-administrative claims or those made before ordinary courts).
As a result, it is generally necessary either to deposit the debt or to provide guarantees of payment.
No guarantee
There are only two exceptions where the lodging of the appeal on its own (without providing security for payment) suspends enforcement of the debt:
- In cases where a penalty is appealed.
- Or when there are arithmetical, material or factual errors in the tax assessment.
Errors in addition or subtraction, adding an extra zero, changing one number for another or counting a negative item as a positive one would be material errors.
Factual errors, on the other hand, involve an incorrect assessment of the facts (e.g. imputing to a person a gain on a sale that he/she did not make).
These errors must be clear and unquestionable, not arising from interpretations of the law (in which case they would be errors of law).
Resolution of an appeal for reconsideration
Deadlines and requirements of the decision
One month to reply
The tax authorities must notify you of the decision on the appeal within a maximum period of one month after the appeal has been lodged.
This period does not include the periods that the Tax Authorities may grant to rectify defects or for other affected parties to make allegations, or the periods used by other administrative bodies to send data or reports. In any case, the duration of these periods may not exceed two months.
Reason
The Treasury’s decision must be sufficiently reasoned and contain a detailed statement of the facts that give rise to it and the legal grounds on which it is based.
If this is not the case, you should challenge the tax assessment you have received. As a taxpayer, you have the right to know these points, in order to be able to effectively exercise all the means of defence available to you under the law.
Resolution for or against
For
If the tax authorities uphold your appeal, they must reimburse you for the debt you or your company have paid, together with interest for late payment.
And if you have suspended payment of the debt by providing guarantees, you can ask the tax authorities to reimburse you for the cost of providing them (the fees for formalising, maintaining and cancelling the bank guarantee).
Against
If the Tax Authorities rule against you, you can appeal to the TEA, as indicated above (or to the ordinary courts in the case of appeals on local taxes in municipalities without a TEAM).
Administrative silence
If the tax authorities have not resolved your appeal within one month, you have the following two options:
- You can consider your appeal rejected and file an economic-administrative complaint.
- Or you can continue to wait for a decision from the tax authorities – which they are obliged to do – and, if there is a long delay, you can still complain to the TEA at a later date if you wish.
In a nutshell
In general, lodging an appeal for reconsideration against a tax assessment does not suspend the enforcement of the contested act. It obliges you to pay the debt to the tax authorities or to guarantee its payment.
In our experience, it is very rare to win an appeal for reconsideration, but if the error is obvious, do not hesitate to file an appeal for reconsideration.
If you have any doubts about whether to file an appeal for reconsideration, contact Asesoria Orihuela Costa!
