High Court: potential debtors must considered innocent until found guilty

High Court: potential debtors must considered innocent until found guilty

Spanish High Courts rules that the Spanish Tax Authorities (Hacienda Pública) cannot take action against people and companies before any ruling has been handed down, in cases where an appeal has been filed.

Previous to this judgement Hacienda used to start the execution process against people deemed debtors by Hacienda, even if court proceedings were still ongoing to establish if the Tax Authorities were right or not.

The only way to avoid your assets being taken before a court ruling in their favour was to apply for a stay of execution at the time of lodging an appeal; in other words, if you didn’t want your assets to be seized by the Spanish Tax Authorities, you had to ask them not to seize them in advance. But this way Hacienda was violating a important constitutional right, as per the Spanish Constitution (article 24).

Silencio Administrativo

For example, if Hacienda believed that someone owed money for the undeclared rental income, the institution recovered the alleged amount directly from the person in question based on the principle of ‘Silencio Administrativo’, or ‘administrative silence’, without waiting for a clear judgment following a possible appeal procedure.

Now, however, potential debtors can breathe a sigh of relief, because it has been decided that Hacienda cannot act against them until a final ruling is on the table. In cases where they have the right to appeal, they are now entitled to a firm ruling on appeal before Hacienda can start  handing out fines, and seizing assets.

So in other words, from now on, potential debtors must be considered innocent until found guilty, as stated in article 24 of the Spanish Constitution. No penalties can be imposed to innocent individuals.

Source: Spanish Propoerty Insight


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