The Supreme Court will soon clear up the uncertainty as to when the effects of the Constitutional Court ruling, which overturned the system for calculating the municipal capital gains tax, will be limited. The Court has published the order admitting the appeal for cassation, brought by the Deputy of Pontevedra, which, in the context of the unconstitutionality of this tax, will rule on the date of effects, the date of issue or the date of publication of the ruling in the BOE, in order to determine when a situation can be considered to be consolidated. The key is to know whether it is limited to the date of the ruling (26 October 2021) or the date of publication of the ruling (25 November 2021). Many taxpayers who have applied for a capital gains tax refund after learning of its unconstitutionality are in limbo.

What happens to those who claimed the tax refund after 26 October?

This is the scenario for those who received a liquidation.

There are many who appealed the tax assessments that had been notified to them or requested the rectification of the self-assessments submitted at the time. The problem is that, if they did so once the declaration of unconstitutionality was known (as of 26 October 2021), the local councils are considering that the unconstitutionality is no longer applicable, as the situation is consolidated. This, even if all these claims had been filed before the Constitutional ruling was published in the Official State Gazette (BOE), which was published on 25 November 2021.

There are some courts, such as the Contentious-Administrative Court number 3 of Valencia, dated 5-4-2022 (abbreviated 31/2022), which considers that the liquidation of those taxpayers who presented it before the famous ruling of the Constitutional Court was published in the BOE (25 November 2021) is contrary to law, that is, it considers that these taxpayers can appeal the liquidation and recover what was paid for the municipal capital gains.

Well, this same issue is going to be decided by the Supreme Court, says José María Salcedo, a lawyer specialising in tax proceedings. The High Court will have to resolve a cassation appeal against a judgement of the Administrative Court number 1 of Pontevedra, which ruled in favour of a taxpayer who appealed against a municipal capital gains settlement on 5-11-2021. In other words, after the date on which the Constitutional ruling was handed down (26-10-2021), but before it was published in the Official State Gazette (25-11-2021).

Specifically, the Order admitted for processing has agreed to “determine the effects of the unconstitutionality of articles 107.1, 107.2 a) and 110.4 of the revised text of the Law on Local Treasuries, approved by Royal Legislative Decree 2/2004, of 5 March, declared in Constitutional Court ruling 182/2021, handed down on 26 October 2021, in relation to the settlements which, despite not having become final, had not been challenged at that date”.

In addition, the Supreme Court has also agreed to “specify whether it is necessary to refer to the date of delivery or publication of the aforementioned judgment in order to determine whether or not it is a consolidated situation and whether it should be challenged on the basis of the declaration of unconstitutionality that it makes”.


What happens to those who requested the refund of capital gains tax after the publication of the Constitutional Court ruling in the Official State Gazette?

Furthermore, in José María Salcedo’s opinion, the ruling handed down by the Supreme Court could provide the key to knowing how to resolve another case that is also giving rise to a great deal of litigation. This is the case of taxpayers who appealed a municipal capital gains settlement or self-assessment within the deadline, but did so after 25-11-2021. In other words, once the ruling had been published in the BOE (Official State Gazette).

In fact, many taxpayers have requested a refund of the municipal capital gains tax after the publication of the Constitutional ruling in the Official State Gazette on 25 November 2021. And many are still doing so today. These are taxpayers who filed their claim on time, says the expert in tax procedures, but who nevertheless see how their appeal is dismissed due to the limitation of the effects of the Constitutional Court’s ruling 182/2021.

The Supreme Court in a ruling of 17 March 2022 (appeal 34/2021) gave some hope to these taxpayers. It considered that there should be no limitation whatsoever when requesting the rectification of the self-assessment. Nor is there any obstacle to invoking previous declarations of unconstitutionality of the tax (STC 59/2017 and STC 126/2019) in such a request. And it bases its argument on the “miscarriage of justice” in the matter of municipal capital gains tax.

Thus, the Supreme Court was very clear in declaring that “a self-assessment is a declaration by the citizen and not an administrative act, and therefore the rules of the finality of administrative acts cannot be extended to it without further ado, and this has been declared by consolidated case law”. And it considers that, in the specific case, the judicial error complained of exists “as it cannot be said that the self-assessment in question here was not final because it was not contested (as if it were an administrative settlement), nor had the period for requesting its rectification expired, given the respective dates of the self-assessment (2014) and of the request for rectification (2017); the four-year limitation period established for this purpose not having elapsed in the meantime”.

In José María Salcedo’s opinion, the ruling handed down by the Supreme Court could provide clues or clarify how these situations should be resolved. Not in vain, the Order states that it is advisable “a pronouncement by the Supreme Court which, fulfilling its unifying function, serves to answer the core question raised by this appeal in order to specify which consolidated situations are not susceptible to challenge on the basis of the unconstitutionality declared in the ruling of 26 October 2021 which, it should be borne in mind, although it excludes from review not only the tax obligations accrued by the IIVV, but also the tax liabilities accrued by the IIV, which are not subject to review, although it excludes from the possibility of review not only the tax obligations accrued by the IIVTNU which, at the date of the ruling, have been definitively decided by a judgment with the force of res judicata or by a final administrative decision, but also the provisional or definitive settlements which have not been challenged at the date of this ruling and the self-assessments whose rectification has not been requested ex art. 120.3 LGT at that date, it explains that the declaration of unconstitutionality and nullity of articles 107.1, second paragraph, 107.2 a) and 107.4 TRLHL entails their expulsion from the legal system, leaving 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.

La difícil conciliación de los efectos de la declaración de inconstitucionalidad declarada en la sentencia y las limitaciones a su alcance, hacen imprescindible un pronunciamiento de esta Sala para garantizar el cumplimiento de sus disposiciones en sus estrictos términos”.