Tax Liability and Representation in General Tax Law
**Representation**
Representation is addressed in Articles 45 and 46 of the General Tax Law (LGT).
Article 45: Legal Representation
- For persons lacking the capacity to act, their legal representatives will act on their behalf.
- For legal persons, individuals who hold positions relevant to tax proceedings will act according to their representation, either by law or by a validly agreed agreement.
- For entities described in Article 35.4, the person who holds representation will act on their behalf. If representation is not proven reliably, and no representative has been designated, the person who apparently holds management or direction will be considered as such. If it is not possible to determine this, any of the partners or joint owners may be considered a representative.
Article 46: Voluntary Representation
A taxpayer with the capacity to act may act through a representative, which may be a tax consultant. This representation will extend to successive administrative proceedings unless specifically stated otherwise.
For purely procedural acts, representation shall be deemed granted. However, to bring actions or claims, abandon them, waive rights, recognize obligations on behalf of the taxpayer, request refunds of undue payments, or request income in proceedings related to taxes, penalties, or review, the representation must be evidenced by any legally valid means that is reliable (e.g., a deed of grant) or by a hearing with the taxpayer and a personal statement to the relevant administrative body.
The lack or insufficiency of power does not preclude the need for the act in question, provided that the power is provided or the default is remedied within 10 days granted for this purpose by the competent administrative body.
**Tax Liability: Concept, Classes, and Assumption**
The LGT defines tax liability and its classes, and it lists the general assumptions of joint and subsidiary liability. Apart from this, each tax law can, and often does, establish assumptions of liability for specific cases applicable to its effects.
Regarding liability in general, the first question to consider is that, unlike what happens in the cases and figures seen above, liability involves a breach of the obligation before a tax obligation had to be met in the first place. That is to say, the functioning of the concept of liability implies an abnormality in the development of prior obligations.
Liability is always established by law and differs from acting on behalf of a third party and the voluntary assumption of another’s obligations. The responsible taxpayer is determined by law and is required by it to meet the material tax obligations of the principal (which may be a contributor, substitute, or retainer) if the principal fails to comply.
Some cases of liability include:
- Those who cause or actively contribute to the implementation of a tax violation.
- Those who succeed, by any concept, in the ownership or holding or exercising of economic activities, are liable for tax obligations incurred by the previous owner and derived from its use.
- Those who cause or assist in the concealment or transfer of property or rights in order to prevent the action of the Tax Administration.
- Those who willfully or negligently fail to comply with freezing orders.