Tax Regulations: Pre-registration, Offenses, and Business Tax

Posted on Jan 27, 2025 in Law

Pre-registration

This refers to the extinction of the rights of management or the taxpayer over time. The pre-registration deadlines are four years after:

  • The day the deadline for filing of tax liability ends.
  • The day the deadline for voluntary payment to demand payment of tax liabilities ends.
  • The day to impose tax penalties from the time the crimes were committed ends.
  • The day for the right to a refund of income from undue payments ends.

The causes of disruption of pre-registration are:

  • Any administrative action made with formal knowledge of the taxable party.
  • The filing of complaints or appeals.
  • Any action leading to the taxpayer payment or debt settlement.

Compensation

Total or partial tax liability under Articles 71, 72, and 73 of the LGT. The cancellation of debt can be tax or penalties if firm.

Insolvency

When the tax debts were not made effective in the respective executive procedures due to tested insolvency, they were declared extinct provisionally, pending the debtor achieving solvency within pre-registration.

Subjects of Asset Violations

These are the natural or legal persons that perform actions or omissions as simple or serious violations of laws, namely:

  • Taxpayers of taxes.
  • Retainers and those forced into account.
  • Those required to provide information or provide cooperation to the Treasury.
  • The legal representative of the taxpayers who lack the capacity to act.

Classes of Offenses

They can be classified according to general tax law:

  • Mild: Non-compliance with tax obligations or duties.
  • Serious:
    • Failure to enter the tax.
    • Failure to file returns or documents needed for the declaration to practice the settlement of taxes.
    • Undue tax benefits.
    • Inclusion of expenses or non-inclusion of revenues.
    • Declaration of amounts in companies subject to be charged to members.

Types of Sanctions

  • A) Cash: A fixed or provided amount.
  • B) Special: Loss of the possibility of obtaining grants and contracts prohibiting the state.
  • C) Suspension of officials’ professions.

Termination of Sanctions

  • Payment or performance of the sanction.
  • Pre-registration.
  • Death of the offender.

The Fiscal Crime

This occurs after defrauding the public finances of any geographic area by an amount greater than 120,000 euros, defrauding social security by the same amount, or obtaining a grant of more than 50,000 euros by falsifying data.

Business Tax

This is a tax within the Spanish tax system, managed by the municipalities. It directly taxes the performance of any type of economic activity. The amount is constant regardless of the balance of the activity. It is a direct tax (the tax cannot be passed on to third parties), mandatory, proportional, real, and of shared management.

Taxable

IAE (Impuesto sobre Actividades Económicas) is due for the mere exercise of professional, economic, or artistic activity, whether or not it is exercised in a particular locale. Agricultural, livestock, forestry, and fishing activities are not considered. The following activities are not taxable:

  • The alienation of property integrated into the fixed asset.
  • The sale of goods received in payment of personal works or services.
  • The exhibition of articles with the sole purpose of decoration.
  • Retail activities.