The recent Decision of the Supreme Court, in the Case 339/2024, of February 28, opens the way to obtain the refund of the amount paid for the Tax on the Increase in the Value of Urban Land (IIVTNU) in cases of final tax assessments, when there was no real increase in the value of the land.
Despite the declared unconstitutionality of the IIVTNU in those cases in which there was no increase in value, until this Decision, there was no clear procedure in the tax legislation to request a refund in cases of final settlements, even if they were the result of the application of a law declared unconstitutional. Let us recall that The Constitutional Court’s TC Decision 59/2017, of May 11, had declared unconstitutional certain rules related to this tax, but the case law held that this declaration did not affect final and consented settlements due to the lack of an ex officio review mechanism in the General Tax Law.
However, the Supreme Court, through this recent Decision, revises its previous jurisprudence and concludes that, in the absence of limitations in the 2017 declaration of unconstitutionality, the consent and final settlements, in cases where there had not been a capital gain on the occasion of the transfer, are null and void.
The Supreme Court considers that the application of a law declared unconstitutional has imposed an unfair tax burden in situations where there was no increase in value, violating both the principle of economic capacity and the prohibition of confiscation established by the Spanish Constitution.
Thus, the Supreme Court concludes that it is possible to review ex officio these final settlements, in cases of non-existence of increase in value of land, under the provisions of Article 217.1.g) of the General Tax Law. Likewise, this ruling unifies criteria in a matter previously dealt with in a disparate manner in the courts and modifies the previous case law of the Supreme Court itself.
Inmaculada Domecq, UHY FAY&CO Partner: idp@uhy-fay.com
Enrique Santos, Tax Senior Manager: esf@uhy-fay.com
