Tax Debt and Liability Principles under Article 58 LGT

Tax Debt Components According to Article 58 LGT

Article 58 of the LGT sets the following:

1. The tax debt consists of the fee or amount to be recovered resulting from the primary tax liability or the obligation to make payments on account.

2. Also, eventually, the debt may consist of:

• a) The interest of demora (late payment interest).
• b) The statement surcharges for late filing (extemporánea).
• c) Enforcement period surcharges (ejecutivo).
• d) Legally enforceable penalty charges on contributions or bases for the Treasury or other public bodies.

The concepts that, under this item 2, are added to the quota sometimes come from different situations:

• a) The default interest tends to offset the administration for the delay in meeting the payment obligation. It has a distinctly compensatory nature and, therefore, is caused by mere delay and independent judgments about whether or not an infringement occurred, which will be relevant only for the purposes of the imposition of sanctions (sanciones).
• b) The untimely statement. To encourage compliance with payment obligations, the law states that when declaring or self-liquidating (autoliquida) late but voluntarily—that is, without prior request from the Administration—the subject sufficiently fulfills the obligation by entering the lion's share surcharges established as a function of the time delay. These penalties and surcharges sometimes also exclude interest (intereses).
• c) The Executive period. The law provides that both the executive entry and the eventual period after launching the procedure of urgency give rise to certain surcharges that are added to the previous concepts, to be paid in addition to penalty charges payable on them (ellos).
• d) Law on quotas or bases for the Treasury or other public bodies are tax figures that define a tax by using the settlement of the tax scheme on which they apply.

Taxes are not defined in their entirety but use the tax structure in question to find a new fee (surcharge).

3. Finally, Article 58 sets out that the tax penalties are not part of the tax debt but are a separate debt. The penalties are governed by principles inherent in their determination and the procedure of taxation; once established and firm, the rules of procedure established in the LGT collection apply.

Tax Liability and Article 56 LGT

Article 56 of the LGT sets out that the whole payment is determined by applying the tax rate payable on the basis or as a fixed amount prescribed for the purpose.

The tax shall be reduced automatically if it appears that the application of tax rates, which result in an increase in the base, carries a higher fee increase.

It also introduces in Article 56 that the net quota will be the result of applying deductions, allowances, additions, or ratios under each tax law to the whole payment.

The fee differential is the result of diminishing the net quota by the amount of deductions, installment payments, income accounts, and contributions under the legislation of each specific tax.