Possibility of contesting and requesting the refund of amounts paid under the Wealth Tax

In April 2021, the Constitutional Court admitted for processing a resource questioning the constitutionality of the Wealth Tax after the modifications introduced by the General State Budget Law of that year.

Summarizing, this resource focuses on two key aspects of the mentioned law:

  1. The increase in the maximum tax rate, which went from 2.5% to 3.5%, which could question the non-confiscation principle established in Article 31 of the Constitution.
  2. The elimination of the temporality of the tax, making it indefinite, which could be considered the creation of a new tax, contravening what is established in Article 134.7 of the Constitution, which prohibits the creation of taxes through a Budget Law.

If the Constitutional Court finally declares the unconstitutionality of these reforms, especially the second one, the self-assessments of the tax corresponding to the years 2021 and 2022 could be annulled, and the amounts paid would be refunded along with the corresponding late payment interests.

In case this happens, the Constitutional Court could limit the effects of the sentence only to those taxpayers who have contested their declarations for 2021 and 2022 since, being in dispute, these settlements are not considered final. Otherwise, no refund would be made, as it would be considered a “consolidated situation.” This limitation is the one that the Constitutional Court applied in its 2021 sentence regarding the Municipal Capital Gains Tax.

Regarding the most convenient time to file the challenges, in our opinion, it was preferable to let a reasonable period pass since the admission of the resource since, when the challenge was rejected administratively, it should be appealed to the contentious-administrative route, which implies adding additional expenses that may be relevant.

Currently, after more than two years since the beginning of the process, the issuance of the sentence by the Court should not be excessively delayed, although this issue remains uncertain since the Constitutional Court is not subject to mandatory deadlines.

When considering the possibility of challenging your declarations, it is essential to take into account that filing a challenge to a self-assessment of the Wealth Tax for the years 2021 or 2022 will interrupt the prescription of the tax.

Therefore, you must consider whether the result of a possible favorable sentence from the Constitutional Court justifies the interruption of the prescription and, consequently, the extension of the period during which the tax Administration can carry out checks.

If you are interested in having addwill proceed to challenge your Wealth Tax declarations for the years 2021 and 2022, you can contact your trusted advisor or send an email to info@addwill.eu. We will be happy to provide detailed information on the procedure to follow and the associated costs.