On November 3, the full text of the Constitutional Court Judgment 182/2021, dated October 26, 2021, was published, through which the unconstitutionality of articles 107.1, second paragraph, 107.2.a) and 107.4 of Royal Legislative Decree 2/2004, of March 5, which approves the consolidated text of the Law regulating local estates (hereinafter, “TRLHL“), which regulated the objective system for calculating the tax base of the Tax on the Increase in the Value of Urban Land (hereinafter, “IIVITNU“), also known as Municipal Capital Gains Tax”for unjustifiably contravening the principle of economic capacity as a criterion for taxation”.
Note, in this regard, that the Constitutional Court had already ruled on the constitutionality of the regulations that regulate this tax on two previous occasions. Indeed, on the one hand, Sentence 59/2017, dated May 11, 2017, declared articles 107.1, 107.2.a) and 110.4, of the TRLHL, unconstitutional and void, but only to the extent that they subject situations of non-existence of increases in value to taxation; On the other hand, Sentence 126/2019, dated October 31, 2019, also declared article 107.4 of the same text unconstitutional, with respect to cases in which the fee to be paid is greater than the increase in assets actually obtained by the taxpayer.
In short, in the previous rulings, the Constitutional Court had ruled first on the cases in which there was no increase in value (a capital gain) and, subsequently, on the cases in which there was such an increase in value, but as a result of the objective system for calculating the tax base, the amount to be paid was higher than said capital increase.
On the other hand, in this Judgment the object of the question covers other types of assumptions, not included in those analyzed in the previous pronouncements, that is, the assumptions in which the increase in value, which exists, is lower than that calculated.ope legisas a tax base, and the tax quota consumes, without exhausting, a significant part of that real increase.
Well, in this regard, the conclusion reached by the Constitutional Court is that “The maintenance of the current objective and mandatory system for determining the tax base, because it is alien to the reality of the real estate market and the economic crisis and, therefore, regardless of the economic capacity taxed by the tax and demonstrated by the taxpayer, violates the principle of economic capacity as a taxation criterion.”.
For these reasons, the Judgment, considering the question of unconstitutionality promoted, declares the unconstitutionality and nullity of the provisions outlined above and, ultimately, of the objective system for calculating the tax base of the capital gains tax.
Note, for this purpose, that the ruling of this Judgment implies the expulsion from the legal system of arts. 107.1, second paragraph, 107.2.a) and 107.4 TRLHL, leaving, as recognized in the Judgment itself, “a regulatory vacuum on the determination of the tax base that prevents the liquidation, verification, collection and review of this local tax and, therefore, its enforceability”.
In this sense, although it has been published in the Official State Gazette (hereinafter, “BOE“), on November 9, Royal Decree-Law 26/2021, of November 8, which adapts the consolidated text of the Law Regulating Local Treasury, approved by Royal Legislative Decree 2/2004, of March 5, to the recent jurisprudence of the Constitutional Court regarding the Tax on the Increase in Value of Urban Land (hereinafter, “RDL 26/2021“), said provision is not retroactive, coming into force on the day following its publication in the BOE (that is, November 10, 2021): therefore, with regard to property transfers carried out between October 26 and November 10, 2021, the tax would in principle be unenforceable for such cases, given that regulations declared unconstitutional cannot be applied to them nor can they be applied to them. retroactively a non-retroactive regulation. However, this conclusion could be qualified by the circumstance that, strictly speaking, the Sentences of the Constitutional Court have res judicata value, bind all public powers and produce general effects from the date of their publication in the BOE, while, as of today, the Sentenceof quaIt has not yet been published in the BOE.
On the other hand, with regard to asset transfers made prior to October 26, 2021, in relation to which liquidations (provisional or final) or self-assessments had already been generated, regardless of their finality, the Constitutional Court itself excludes in principle the possibility that they may be annulled or modified on the basis of the provisions of the Judgment itself: “Those tax obligations accrued by this tax that, at the date of issuance, have been definitively decided by a judgment with the force of res judicata or by a final administrative resolution cannot be considered situations that may be reviewed based on this ruling.For these exclusive purposes, the following will also be considered consolidated situations: (i) provisional or final assessments that have not been contested as of the date of this ruling and (ii) self-assessments whose rectification has not been requested ex art. 120.3 LGT as of said date”.
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