Tax Obligations: Active and Passive Subjects Explained

Active Subject

The active subject is the holder of the administrative power to implement the tax and collect it, i.e., it is a subject who carries out the tax procedures. Subjects under tax obligation are defined in Article 35.1 of the General Tax Law (LGT): individuals, legal persons, and entities that are under tax obligation according to tax provisions.

Passive Subject

The passive subject, as defined in Article 36, is the person who, according to the legislation in force, is under the tax obligation that consists in paying the main tax obligation and fulfilling the accompanying formal tax obligations, either as a taxpayer (contribuyente) or as a substitute (sustituto). The position of the passive subject cannot be transferred (Article 36.2).

Taxpayer (Contribuyente)

The taxpayer is the passive subject who fulfills the taxable event. The taxpayer is a passive subject, also known as the de jure taxpayer, not the de facto taxpayer. He is bound to pay the tax and accompanying formal tax obligations.

Substitute (Sustituto)

According to Article 36.2, the substitute is the passive subject who, as provided in tax legislation, is bound to pay the main tax obligation as well as the accompanying formal tax obligations. The substitute is under the same obligation as the taxpayer, taking his place. He remains as the only person under tax obligation as a passive subject by mandate of a legal provision and can recoup the payment from the taxpayer.

Person Under Tax Liability (Responsable)

As stated in Article 41, a person under tax liability (responsable) is a third person who, as a result of a legal provision, is put together with the main debtor. This person is under tax obligation for fulfilling a set of facts which is different from the taxable event. They do not take the place of the main debtor or take him out of the tax relationship; they are put together with the main debtor. They are not a passive subject.

Key Characteristics of a Person Under Tax Liability

• Liable to the tax debt, not to the accompanying formal tax obligations.
• Liable to the accessory payments obligation arising from his own behavior.
• Must pay the amount as determined for the period for voluntary payment, not interest charges, surcharges, or penalties imposed on the main debtor in case he did not fulfill his obligations timely.
• If he doesn't timely fulfill his own obligation, he will be charged accordingly.
• Liability doesn't extend to penalties.