The case which gave rise to this decision of the TEAC dates back to 15 January 2018. At that time, a taxpayer, resident in Belgium, filed the non-resident income tax return (form 210) for the fourth quarter of 2017 for income derived from the lease of a property. As the taxpayer did not respond to the request to submit supporting documents within the deadline, a limited tax audit was initiated. As a result of this audit, the Spanish Tax Authorities issued a provisional tax assessment – applying the 24% tax rate instead of the reduced rate of 19% applicable to EU residents due to the missing certificate of tax residence – ordering the payment of a tax debt of EUR 2,774.01.
The taxpayer lodged a complaint and submitted proof of their residence (although not the requested certificate of residence) as well as invoices. However, this complaint was rejected on the grounds that the said certificate of residence in another EU member state had not been submitted for 2017. In view of this rejection, the claimant filed an appeal with the TEAC and submitted the required certificates of residence for the years 2017 to 2021.
In light of this, the main object of the TEAC’s analysis was the question of validity of evidence submitted posteriorly in connection with the income tax return for non-residents.
Applying the legal criteria laid down by the Spanish Supreme Court (Tribunal Supremo, TS), the TEAC came to the conclusion that evidence submitted ex novo in revisions during the administrative phase must be considered valid, unless the taxpayer is acting in bad faith. In the case under review, however, there was no evidence of such bad faith on the part of the taxpayer.
Even though this decision by the TEAC does not yet constitute settled case law as defined by art. 239 of the Spanish General Tax Code (Ley General Tributaria, LGT), it may very well be considered a landmark decision, as it reinforces the validity of certificates of residence submitted during the administrative phase.