On 8 June 2017, the Constitutional Court (hereinafter, “the Court”) unanimously declared as unconstitutional the Special Tax Declaration (hereinafter, the “Declaration” –also known as “Tax Amnesty”). This Declaration was enacted by the Royal Legislative Decree 12/2012, which was the structure through which several tax and administrative measures were implemented with the aim of reducing the national public deficit.

Prior to this decision handed down by the Court, the Declaration allowed for the voluntary tax adjustment of individuals and companies regarding:

  • Personal Income Tax (hereinafter, “PIT”);
  • Non-Resident Income Tax (hereinafter, “NRIT”); and
  • Corporate Tax (hereinafter, “CT”).

This adjustment was allowed, without penalty, if the applicant could demonstrate a tax burden payment equal to 10% of the purchase price of any non-declared goods. Demonstrating payment of this amount also indemnified the applicant against potential criminal charges.

The Court’s judgment of unconstitutionality is based upon the fact that the Declaration was approved by Royal Legislative Decree. According to article 86.1 of the Spanish Constitution, it shall not be possible to approve any measure which demonstrably adversely affects the rights, duties and freedoms of the nation’s citizens. This is enshrined in the First Title of the Spanish Constitution which, amongst others, contains the duty to contribute to the running and administration of public services.

The Court concluded that, according to the principle of legal certainty as contained in article 9.3 of the Spanish Constitution, this decision will not affect the tax adjustments already completed under the voided Declaration. Thus, the practical effects of this decision on applications both approved and in progress to the tax amnesty are considered to be zero.