The Constitutional Court has delayed until 2026 its decision on the legality of the current Wealth Tax, a tax that affects some 200,000 taxpayers in Spain and that in recent years has collected more than 6.7 billion euros, according to advanced The Economist.
This delay creates a lot of uncertainty about whether the wealthiest taxpayers They may or may not recover the amounts they have been paying since 2021, when the tax went from temporary to permanent and its maximum rate was raised to 3.5%.
History of a controversial tax. He Wealth Tax was created in 1977 and was renovated in 1991 to redefine your goals. During the first government of José Luis Rodríguez Zapatero, its tax was annulled, although the figure of the tax as such was not eliminated, and in 2011 it was temporarily reinstated due to collection needs. Since that date it has been extended annually under the label of “temporary” until in 2021 it became permanent and the maximum rate was raised from 2.5% to 3.5%.
As and how he collected Five Days In 2021, this change was questioned by the Popular parliamentary group, which filed an appeal before the Constitutional Court arguing that such structural modifications – in short, a new tax was being firmly created – could not be made through a budget law, according to the article 134.7 of the Constitution. If it is found to be unconstitutional, the Treasury should return everything collected from this tax from 2021 with interest to its taxpayers, a payment that part of an estimate of 6,700 billion euros.
The impact on taxpayers. Based on jurisprudence, if the Court declares the tax unconstitutional in its current form, only those taxpayers who have previously requested a rectification of their declarations or initiated a refund procedure will be able to recover payments. The rest would not have the right to recover what was paid because, generally, the sentences do not have retroactive effect, as already happened when the Supreme Court declared the capital gain null and void municipal and the payments had to be returned.
Ángel Sánchez, partner of the Golden Partners firm, specialized in real estate taxation assured to The Independent who “The lack of certainty about whether the tax is constitutional or not has a direct impact on the economic decisions of taxpayers. Nobody knows if in a year what is paid today will be able to be claimed.” Given this uncertainty, the expert warns that “only taxpayers who have submitted a rectification request or, where applicable, an administrative claim will be able to recover what they paid. Anyone who has not acted preventively will lose that right.”
It’s up in the air, but it’s still valid. Something that is tax experts warning is that, although the Wealth Tax is in question, until justice orders actions, they remain in force. That means that if taxpayers don’t pay While the tax remains in force, they could receive sanctions, surcharges and interest for non-compliance, regardless of what the Constitutional Court rules.
Sánchez clarifies that “not declaring constitutes a tax violation. The appropriate strategy is to comply with the obligation and, in parallel, present the claim or rectification to keep alive the right to refund”, in this way, the amounts could be claimed if the Constitutional Court orders its repeal. The claim period covers tax years from 2021 to 2024.
The future consequences. If the Constitutional Court endorses the constitutionality of the tax, it will remain in force and consolidated as a permanent tax. On the other hand, if it declares it unconstitutional, the Government could approve a new law that respects the appropriate legal procedures to maintain it. A debate could also begin about replacing it with another more uniform tax figure or one linked to the Solidarity Tax of large fortunes, which has had such good results.
There could even be a partial declaration of unconstitutionality, reestablishing the previous maximum rate of 2.5% or returning the tax to the temporary nature it had since 2021, which would imply that the Government would have to extend it each year.
In any case, the delay in the Constitutional decision keeps thousands of taxpayers waiting for a ruling that will define the immediate future of the tax and the possibility of recovering millions of euros that have been collected in recent years.
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Image | Wikimedia Commons (K3T0), Unsplah (omid armin)
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