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Spain: First experiences with the new rules on cassation appeals from a tax perspective

02 October 2017

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Up until July 21 2016, the possibility of accessing the Spanish Supreme Court depended solely on the existence of a minimum amount of the lawsuit (which had lately been set at €600,000 ($718,000)) per period and tax in dispute. Therefore, it can be said that there was a right to the cassation appeal for cases of a significant amount.

However, the reform of Spanish law implemented by Organic Law 7/2015 has introduced a new cassation appeal regime, in force since July 22 2016. This regime essentially revolves around the concept of "objective cassational interest for the formation of case law", which is currently the only criterion for determining access to the Supreme Court, replacing the former system based on the existence of a "material" amount of the lawsuit.

Although the current regime is based on the application of an indeterminate legal concept (since the law does not offer a definition of "objective cassational interest for the formation of case law"), these first months with the new law in force have enabled us to identify, through the first rulings from the Supreme Court in its orders admitting and dismissing appeals, a series of requirements that enable us to assess the possibility (or impossibility) of filing a cassation appeal regarding tax disputes under the new regime. Amongst others, the Spanish Supreme Court has established the following criteria for determining possible access to the new cassation appeal:

  • The appeal must be confined to matters of law and exclude matters of fact. If it is evident that matters of fact arise, the appeal can be deemed not prepared (power of the trial court). This is not actually a novelty by itself (as the specific scope of this extraordinary appeal has always been limited to legal issues), but under the former regime there were some room for factual reviewing that has now been ruled out.
  • The objective cassational interest may be lessened if the difference of interpretation relates to a provision that is not in force, given that the discussion may not be of interest for the formation of case law with a long-term projection (even if there is objective cassational interest in the abstract).
  • The lack of objective cassational interest is evident in the case of: (i) legal discussions that have already been analysed or resolved by consolidated case law, without solid arguments being provided in defence of a reconsideration or change to the interpretation adopted by established case law; (ii) legal discussions confined to the specific difficulties of the disputed case, without issues emerging that involve a broader content of general interest or with possible projection onto other cases.
  • The Supreme Court must consider it necessary to form case law on the issue. It is possible that, despite the lack of case law, there is no dispute between the bodies pertaining to the judicial review jurisdiction and the Supreme Court does not find any reasons to disagree.
  • The fact that a judgment interprets a legal provision and its application to a certain indeterminate number of situations forms part of its intrinsic nature, does not mean that it affects a large number of cases. That applicability must be explained through an analysis of the expected impact of the case law on many other cases.

In summary, these requirements can be boiled down to the necessary existence of an exclusively legal debate (i.e. without the possibility of questioning the facts and factual conclusions reached by the lower court) which, given their significance and importance beyond the specific case, make it advisable for the Supreme Court to issue a ruling in order to establish case law that is in the general interest.

Therefore, where before there was a right to the cassation appeal (provided that the amount of the matter reached the materiality threshold determined by the legislature and a legal discussion was at stake), we are now dealing with a system in which the possibility of having access to the Supreme Court will be conditional, unavoidably, on the Supreme Court's finding in the specific case in question that there is a need for a ruling by it to settle case law on significant legal issues (a finding which is in the court's own hands).

The first statistics available since the new model came into force show that the recent change in the cassation appeal largely hinders the possibility of gaining access to the Supreme Court, mainly due to the strict requirements imposed by the Supreme Court in its first rulings. However, it will be necessary to wait somewhat longer before assessing the impact of this model on the right to effective judicial protection when it comes to a tax dispute.

Angel García ( ) and Borja Orta (, Madrid
Garrigues, Taxand Spain

International Correspondents