Spain's Supreme Court requires using the address provided for tax notifications

The Supreme Court issued a ruling (appeal 3905/2023) on 1 July on a case concerning a corporate tax penalty procedure. The Spanish Tax Administration (Agencia Tributaria) had communicated a penalty decision to the taxpayer via their authorised electronic address (DEH), despite the taxpayer's representative clearly providing their solicitor's business address for notifications in the statement of defence. After 10 days without any access to the DEH, the administration concluded that the notification had been delivered. Based on this assumption, they calculated the relevant time limits.

The Regional Economic-Administrative Court ruled that the taxpayer's economic-administrative claim was time-barred, validating the electronic notification sent to the DEH. This decision aligns with the High Court of Justice of Madrid's conclusion, which also confirmed the validity of the notification.

The Supreme Court annulled the administrative action by revoking the enforcement order, finding that there was no valid notification of the penalty agreement. It ruled that the penalty proceedings were time-barred because the statutory period had expired. The appeal explicitly addressed whether, in cases initiated by the authorities in which the taxpayer is represented, a notification attempted at a location other than the designated address can be considered valid without first notifying the taxpayer at the specified address. Additionally, it examined the significance of this designation in relation to the right of defence.

Conclusions of the Supreme Court 

The Supreme Court established the doctrine that, in tax proceedings, whether initiated by the authorities or at the request of a party, the administration must deliver notifications through the appropriate channels to the address expressly designated by the taxpayer or their representative. This is particularly important when the effective exercise of the right to defend oneself depends on these notifications. The administration's authority to designate notification locations in ex officio proceedings – article 110 of the General Tax Law (LGT)  – cannot override an explicit designation made during the proceedings, in line with article 46 LGT regarding representation.

The Supreme Court distinguishes this case from prior rulings, which held that notifications sent to the addresses specified in article 110 of the LGT were valid if there was no explicit designation in the file. The new aspect of this doctrine is that the clear designation of the address for notifications restricts the administration's discretion, even in proceedings initiated by the authorities. Additionally, if the administration needs further information to notify the taxpayer effectively at the designated address, it must request it from the taxpayer. This ensures that the electronic notification system aligns with the taxpayer's chosen notification address.

The consequences are clear: notifications made at a location other than the designated one are invalid. Additionally, time limits do not begin to run from faulty attempts and, regarding penalties, if the maximum time limit expires without a valid notification, the right lapses. This standard helps to unify the practices of the chambers and reinforces the importance of proper notification as a prerequisite for the right to adequate judicial protection.

Osborne Clarke comment

The doctrine plays a vital role in safeguarding taxpayers by guaranteeing their preferred communication channels and reinforcing their right to defend themselves. Rather than being merely a procedural formality, notification acts as an essential protection mechanism. It emphasises the significance of the taxpayer's intent, conveyed through their choice of domicile and representation, and prioritises that intent over the administration's discretion in deciding where notifications should be issued.

The challenge for the administration is to ensure that the electronic notification system is properly aligned with the designated address. This may involve either adjusting the communication channel as needed or submitting a prior request when required.