The Constitutional Court overturns the large increase in corporate tax that Montoro approved in 2016

Angela Martialay Madrid

Madrid

Updated Thursday, January 18, 2024-18:12

T he

Constitutional

Court

has declared this Thursday unconstitutional the corporate tax reform approved by the Popular Party Government in 2016, considering that by means of the decree-law neither the general regime nor those essential elements of the tax regime can be altered. taxes that affect the determination of the tax burden.

The objective of this decree law was to increase revenue from large companies to combat the deficit.

The Plenary Session, in a presentation by conservative magistrate

César Tolosa,

has unanimously upheld the question of unconstitutionality raised by the Contentious-Administrative Chamber of the

National Court

with respect to several modifications to the corporate tax introduced by the Royal Decree-Law 3/ 2016, December 2.

In that royal decree, whose architect was the ministry headed by

Cristóbal Montoro,

measures were adopted in the tax field aimed at the consolidation of public finances and other urgent measures in social matters.

The Constitutional Court considers that the approval of these measures by Royal Decree-Law has violated article 86.1 of the Constitution, since said regulatory instrument cannot "affect the rights, duties and freedoms of citizens regulated in Title I."

In particular, the modifications to the corporate tax on which the TC has ruled are the following: the establishment of more severe limits for the compensation of negative tax bases;

the ex novo introduction of a limit on the application of double taxation deductions;

and the obligation to automatically include in the tax base the impairment of shares that have been deducted in previous years.

The first two measures are only applicable to large companies, while the third can affect any corporate tax payer, according to legal sources.

The ruling states that the corporate tax is a basic pillar of the tax system and adds that the elements affected by the modification approved by the Government of

Mariano Rajoy

are the tax base and the quota, which are an essential part of the tax structure. .

The Executive itself recognized that the changes introduced in the tax rate were "relevant", and this was confirmed by the revenue impact forecasts provided by the Government, which adopted this rule to respond to the deficit problem.

The magistrates establish that, due to the requirements of the principle of legal certainty, those tax obligations accrued by corporate tax that, at the date of issuance, have been definitively decided by a sentence with final force cannot be considered situations susceptible to review. judged or by final administrative resolution.

According to the ruling of the TC, those assessments that have not been challenged on the date of the ruling, nor self-assessments whose rectification has not been requested on that date, cannot be reviewed either.