A year and a half ago, the Constitutional Court handed down a sentence with great economic repercussions, annulling various aspects of the municipal capital gains tax, a rate that is an important source of financing for municipalities, with around 2,500 million a year. A week later, the Council of Ministers approved a modification of the tax to cover the legal vacuum left by the sentence. It was specified, as established by the Constitution, that the tax would not be paid if there was no profit.
However, the question remained as to whether the claims introduced after the TC ruling, published on October 26, 2021, would be accepted or limited to previously filed appeals. For the Constitutional Court, there was no room for appeal, but the truth is that the issue has been unevenly resolved by different courts in the cases of taxpayers who had not formalized the appeal before the sentence was handed down.
Well, today the Supreme Court has set doctrine and has clarified that unappealed settlements cannot be claimed before the municipal capital gains are annulled. To this end, it argues that the Constitutional Law has already established that those unappealed settlements on that date were consolidated, and therefore, are not affected by the declaration of continuity of the tax. In this way, the court closes the door to those who have not filed an appeal before October 26, 2021, the date of the sentence.
The Supreme Court magistrates clarify that, however, it is possible to annul tax assessments that are affected by other unconstitutionality rulings in which the TC did not limit the temporary effects of the decision, such as the cases of real estate transfer assessments in which there was no profit, or when the tax is confiscatory because it absorbs all the gain, in addition to any other reason other than the declaration of unconstitutionality.
