The tax office claims your company's debt from you

The case, in five lines

What is brought

Challenge to the liability decision, attacking both the ground of liability and the assessments derived to you.

Before which court

The collection office that issued it, if you opt for the reposición appeal, or the TEAR (the regional tax tribunal) and then the contencioso-administrativo courts.

Deadline

One month from the day after notification of the decision for the economic-administrative claim, under article 235.1 LGT. Two months from notification of the decision closing the administrative route for the court claim, under article 46.1 LJCA.

Who can bring it

The person declared liable, whether director in law or in fact. Each liable person appeals separately and the outcome only affects the amount of their own obligation.

Financial risk

If the voluntary payment period ends without payment, the enforcement period opens with surcharges and interest and the debt is collected by enforcement. In later court proceedings, costs may be awarded against you if the claim fails.

Without the company being declared insolvent there is no subsidiary liability

Article 41.5 LGT requires an administrative decision that, after hearing the person concerned, declares the liability and sets its scope and extent. It adds something that decides many cases: derivation to subsidiary liable persons requires the prior declaration of insolvency of the main debtor and of the jointly liable persons. If the company was not properly declared insolvent, the decision lacks one of its own conditions, and that is the first line of defence.

That is why the whole file is requested and the insolvency declaration is read with its date in hand. We check whether the collection office genuinely investigated the company's assets, whether it exhausted the jointly liable persons before reaching you, and whether receivables, balances or assets were left unseized. An insolvency declared as a matter of routine, with no real investigation, is a decision that can be attacked at its root.

Having been a director does not by itself make you liable

Article 43.1.a) LGT does not punish the office held, it punishes conduct: it requires that the company committed tax infringements and that the director failed to take the steps within his remit to meet the tax obligations, consented to non-compliance by those under him, or adopted resolutions that made the infringements possible. That is the only ground that expressly extends liability to penalties as well.

Article 43.1.b) LGT is a different ground and is often confused with the previous one. It reaches directors in law or in fact of companies that ceased trading, for obligations accrued and outstanding at the time of the cessation, provided they failed to do what was necessary to pay them or adopted resolutions or measures causing the non-payment. Here the fight is the real date of cessation and which payments were made.

The practical consequence is that the defence is built on facts, not on statements of intent. We show who actually ran the company, what decisions were taken when the obligations accrued, whether suppliers were paid while the tax authority was left out, and whether the cessation was orderly or abrupt. Where the decision merely copies the wording of the statute without anchoring each element in the file, its reasoning collapses.

The same challenge can attack the company's assessments

Article 174.5 LGT is the rule that changes the case. It states that the appeal or claim against the derivation decision may challenge the ground of liability and the assessments covered by that ground. In other words, even if the debt became final for the company, you dispute it for the first time, because until now nobody had called you to defend yourself against it.

The same article sets the limit: the outcome cannot review assessments that became final for other taxpayers, only the amount owed by the liable person who appealed. In plain terms, the company's debt remains what it was, but yours can be reduced or wiped out. That is why the pleading attacks the liability and the substance of each derived assessment at the same time.

Signing acceptance cuts the debt, but appealing later brings it back

Article 41.4 LGT allows you to accept the proposed liability decision where it covers penalties, with the reduction of article 188.1.b) LGT. The trap is in the following paragraph: that reduction will be demanded back from you without more if you lodge any appeal or claim against the decision based on the merits of the derivation or on the derived assessments.

It is a decision taken once and it conditions everything else, so it is weighed before signing anything, not afterwards. On one side sits the certain reduction, on the other the real strength of the grounds of challenge and the amount at stake. Accepting out of immediate relief and then appealing three weeks later is the fastest way to lose both.

One month for the TEAR and two months for the courts, no excuses

Article 235.1 LGT sets one month from the day after notification of the challenged act to lodge the economic-administrative claim. The pleading may simply ask for the claim to be registered, identifying the claimant, the act challenged, the address for service and the tribunal, although it is worth attaching the arguments straight away when the file already allows them to be built firmly.

When the decision arrives, article 46.1 LJCA gives two months from the day after its notification to bring the contencioso-administrativo claim, and article 46.4 clarifies that, where the reposición appeal was used first, time runs from notification of its express decision or from when it must be deemed rejected. If the tribunal does not decide, there is administrative silence, and that route has its own count.

How we run the case, step by step

1. 1

   Reading the decision and the full file

   Article 174.4 LGT requires notification of the full text of the decision, with the ground of liability and the assessments covered. We check which subparagraph of article 43.1 is applied, which penalties are included, and whether the insolvency declaration appears with its date.

2. 2

   Submissions while the proposal is still open

   If what arrived is the proposal and not the final decision, we answer within the prior hearing of article 41.5 LGT, providing documents. Article 174.3 LGT also recognises the right to make submissions and produce documents even before that hearing takes place.

3. 3

   Deciding on acceptance and on suspension

   We weigh which matters more, the reduction under article 41.4 LGT or the grounds of challenge, and we prepare the security so the debt is not collected while it is being disputed. Without suspension, collection continues even though the challenge is pending.

4. 4

   Reposición appeal or TEAR claim within one month

   It is lodged within the month set by article 235.1 LGT, attacking in the same pleading both the ground of liability and each derived assessment, relying on article 174.5 LGT. Whatever is not argued here is very hard to recover later on.

5. 5

   Contencioso-administrativo claim within two months

   If the outcome is unfavourable, article 46.1 LJCA opens two months to go to the contencioso-administrativo courts. There the nullity of the decision is argued again, an interim suspension is requested, and the evidence the administrative route refused to take is finally produced.

The law that applies

• Art. 41 LGT. Defines tax liability, presumes it to be subsidiary unless a statute says otherwise, excludes penalties save for exceptions, governs the reduction for acceptance and its loss on appeal, and requires an administrative decision after a prior hearing plus the insolvency of the main debtor before reaching subsidiary liable persons. BOE-A-2003-23186
• Art. 43.1.a) y b) LGT. Makes subsidiarily liable the directors in law or in fact of companies that committed infringements, where they failed to do what fell to them, consented to non-compliance or adopted resolutions enabling it, with liability extending to penalties; and the directors of companies that ceased trading, for obligations accrued and outstanding at cessation. BOE-A-2003-23186
• Art. 174 LGT. Governs the liability decision: it may be issued at any time after the assessment, falls to the collection office, must be notified with the full text of the decision, the ground of liability and the assessments covered, and allows the appeal to challenge both that ground and those assessments, limited by finality as against other taxpayers. BOE-A-2003-23186
• Art. 235 LGT. Sets one month from the day after notification to lodge the economic-administrative claim, allows a short pleading with or without arguments, addresses it to the office that issued the act, and requires electronic lodging for those obliged to deal with the authorities electronically. BOE-A-2003-23186
• Art. 46 LJCA. Sets two months for the contencioso-administrativo claim from the day after notification of the express act closing the administrative route, six months where the act is implied, and clarifies that, where a reposición appeal was lodged, time runs from its express decision or from its deemed rejection. BOE-A-1998-16718

Each article checked against the consolidated text published in the BOE (the Spanish official gazette).

Frequently asked questions