There is clearly a recurring pattern of disputes between the tax authorities and taxpayers regarding the application and interpretation of tax legislation.

Key criteria recently established by the Supreme Court
In recent months, the Supreme Court has handed down various rulings establishing key criteria in areas such as:

• The inadmissibility of the so-called ‘third attempt’ in administrative proceedings (consisting of the tax authorities having the possibility of issuing a new assessment following the annulment of two previous acts).
• The application to taxpayers subject to actual liability (non-residents) of the combined tax threshold for personal income tax and wealth tax.
• Limitations on the transfer of tax liability.
• The transfer or succession of a family business, in particular compliance with the requirements of Article 27.2 of the Personal Income Tax Law (LIRPF) for determining the existence of economic activity, with particular
  attention to the workload, the nature of the employment contract and, in the case of business groups, the possibility that the employee may provide services to different entities within the group.
• The suspension of tax debt, reinforcing its quasi-automatic nature in judicial proceedings where sufficient security exists.
• The protection of fundamental rights such as the right to use relevant evidence for the defence and the presumption of innocence (Art. 24.2 of the Spanish Constitution).

Trend towards purposive interpretations and their effects
The aforementioned rulings demonstrate a trend towards restrictive interpretations which, on occasions, go beyond the literal wording of the law to focus on its purpose or spirit. This interpretative development is generating a
significant degree of uncertainty, with a direct impact on the principles of legal certainty and legitimate expectations which must govern administrative action in accordance with the Constitution.

Judgment No. 186/2026: genuine economic activity and family business
Judgment No. 186/2026 of 19 February deserves special mention, in which the Supreme Court emphasises that what is decisive is the existence of a genuine economic activity, and not merely the passive management of assets. In the
case under consideration, effective coordination of human and material resources at the level of the business group was established, which demonstrated joint organisation for productive purposes.
It is equally significant that the Court includes in its reasoning an express reference to the European Parliament Resolution of 8 September 2015, which urges public authorities not to hinder, through formalities or bureaucratic burdens, the application of tax benefits aimed at facilitating generational succession.

Reopening of the debate on late payment interest in personal income tax
Furthermore, the Supreme Court has reopened the debate on the taxation under personal income tax of late payment interest received by taxpayers following the refund of undue payments. This long-standing and controversial
issue has once again taken centre stage in the legal debate. Following various shifts in legal doctrine—ranging from its classification as general income to its designation as exempt income—the High Court has deemed it necessary to
“clarify, refine or even reconsider” its position.
Since 12 January 2023, the tax authorities have been demanding the taxation of this interest, which has created clear legal uncertainty. In the appeal on points of law that has been admitted, it is alleged that essential constitutional principles have been violated, such as legal certainty, legitimate expectations and the non- retroactivity of provisions restricting individual rights. The Chamber itself acknowledges the existence of an objective interest in cassation, both due to the widespread impact and the coexistence of contradictory rulings.

The need to strengthen legal certainty
In this context, it is essential to strengthen legal certainty in the application of tax rules. Only through stable, consistent and predictable interpretative criteria can the confidence of taxpayers and the proper functioning of our institutions be guaranteed.

The Tax Department at Marroquín Abogados possesses the technical expertise and experience necessary to handle proceedings of this nature, guaranteeing a defence grounded in the most recent case law and in the strict upholding of the constitutional principles governing tax administration.