At Lullius Partners, we are proud to share another example of our effective defence and technical expertise in high-stakes Spanish tax litigation. Recently, our Private Wealth and Tax Litigation team successfully secured the annulment of two enforcement orders (Providencias de Apremio) and two subsidiary liability derivation files (Derivación de Responsabilidad Tributaria Subsidiaria) issued by the Spanish Tax Agency (AEAT) in connection with Personal Income Tax (IRPF) assessments and related penalties for the 2018 fiscal year. The total amount at stake was close to one million euros, a figure that highlights both the seriousness of the claim and the importance of a rigorous, strategic defence.
Background: Procedural Defects and the Right to Defence
Our client, a high-net-worth individual with international interests, was notified by the AEAT of substantial tax debts and associated sanctions resulting from a personal income tax audit. What made this case especially challenging—and ultimately winnable—was the discovery of critical procedural errors in the way the tax authority had handled the process. The AEAT had used an outdated address, effectively depriving our client of the right to be heard and to defend himself at the appropriate stage of the proceedings.
Under both Spanish and European law, the right to effective judicial protection is a fundamental guarantee. The use of incorrect contact details and the lack of due notification not only constituted a breach of these basic rights but also rendered the entire enforcement process invalid from a procedural standpoint.
Our Legal Strategy: Immediate Response and Procedural Challenge
Upon urgent review of the enforcement orders and liability notices, our tax litigation team immediately prepared and filed a detailed recurso de reposición (administrative appeal) before the Spanish tax authorities. Our arguments were focused on:
- Demonstrating the AEAT’s failure to comply with proper notification requirements, in clear violation of procedural guarantees and constitutional rights.
- Emphasising the absence of any real opportunity for the taxpayer to respond or contest the original tax assessments and sanctions.
- Highlighting material uncertainties regarding the underlying facts, including the client’s lack of personal involvement in the transactions under review.
Outcome: Full Annulment of Enforcement and Liability Orders
As a direct result of our intervention, the Spanish Tax Agency agreed to annul both enforcement orders and the corresponding liability derivations, as well as the associated penalties. This outcome not only relieves our client from immediate financial risk and reputational harm, but also enables a fresh, fair opportunity to challenge the original tax assessments on the merits—this time with proper notification and full procedural guarantees.
Key Takeaways for International Clients
This case highlights the critical importance of due process in Spanish tax procedures, particularly for international clients or those with cross-border interests who may be more vulnerable to notification errors. It also underscores the value of engaging a highly specialised tax litigation team—capable of acting quickly, identifying procedural flaws, and leveraging every available legal remedy to protect clients’ wealth and rights.
If you or your family office are facing similar issues with tax enforcement actions, subsidiary liability claims, or notification irregularities in Spain, we invite you to contact Lullius Partners. Our Private Wealth and Tax Litigation experts are here to defend your interests with technical excellence, strategic insight and the utmost discretion.
