Administrative Tax Appeals: The Share of Successful Claims Is Rising

The TEA’s 2023 Annual Report shows a marked rise in appeals and decisions, a higher rate of claims upheld and continued emphasis on technological modernisation.

 

1. Overview of the 2023 Annual Report

1.1. Appeals filed and decided

• Appeals filed in 2023:
  The Annual Report records a total of 239,177 appeals across the economic-administrative tribunals (TEAR, TEAL and TEAC).

  • This is a 3.94% increase over 2022, when approximately 230,000 appeals were filed.

• Appeals decided in 2023:
  The economic-administrative tribunals decided 259,596 appeals during 2023, an increase of 2.50% over 2022.

  • This is the highest figure in the past five years; the 2019–2023 average was about 241,000 decisions a year.

Because more appeals were decided (259,596) than filed (239,177), the backlog was reduced more quickly. The official report stresses that the aim is to move closer to resolving cases within statutory time limits and avoid accumulated cases unduly prolonging proceedings.

Five-year trend (2019–2023)

• Average appeals filed (2019–2023): about 210,000 a year, ranging from a low of approximately 180,916 in 2019 to a high of 239,177 in 2023.

• Average appeals decided (2019–2023): about 241,165 a year; the 2023 figure exceeded this average.

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1.2. Distribution among tribunals

The Annual Report breaks down incoming and outgoing cases for each regional tribunal (TEAR), the local tribunals (Ceuta and Melilla) and the TEAC. The largest caseloads include:

1. Madrid TEAR:

   • Filed in 2023: 42,509

   • Decided in 2023: 52,282

2. Andalusia TEAR:

   • Filed in 2023: 37,604

   • Decided in 2023: 35,680

3. Catalonia TEAR:

   • Filed in 2023: 34,033

   • Decided in 2023: 36,161

4. Valencian Community TEAR:

   • Filed in 2023: 32,479

   • Decided in 2023: 33,532

5. Galicia TEAR:

   • Filed in 2023: 19,407

   • Decided in 2023: 21,382

These five tribunals account for nearly 70% of appeals filed and decided, broadly reflecting the demographic and economic weight of their regions. The remaining appeals are distributed among the other TEARs.

• TEAC (Central Economic-Administrative Tribunal):

  • Filed in 2023: 11,836

  • Decided in 2023: 12,011

In addition to deciding certain exceptional cases at first instance (large companies and appeals of particular value or significance) and appeals to a higher administrative body, the TEAC upheld 2,544 claims in full or in part, rejected 6,114 and classified 3,353 as “other” (withdrawals, closures, lack of jurisdiction and so on).

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1.3. Distribution by tax and type of proceeding

The Annual Report groups appeals under several headings (personal income tax, VAT, corporate income tax, transfer and inheritance taxes, collection measures, cadastral matters and others). The main figures include:

• Collection-procedure acts: approximately 87,409 cases filed in 2023, or 36.55% of the total.

  • These usually concern surcharges, enforcement orders, liability referrals, seizures and similar matters.

• Personal income tax: approximately 60,166 appeals filed in 2023, or 25.16% of the total.
• VAT: 24,883 appeals filed in 2023, approximately 10.40%.
• Transfer tax and stamp duty (ITP and AJD): 14,591 appeals filed in 2023, or 6.10% of the total.

These four areas—collection, personal income tax, VAT and transfer tax—account for more than 78% of appeals filed in 2023. The remaining 22% is spread across corporate income tax, inheritance and gift tax, the cadastre and other matters.

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2. Outcomes: claims upheld, rejected and “other”

Across all tribunals, the 2023 Annual Report states that:

• 40.72% of decisions upheld the appeal in full or in part.
• 50.96% rejected the appellant’s claim.
• 8.32% fell into “other” outcomes (withdrawals, closures, lack of jurisdiction and so on).

2.1. Comparison with previous years

These percentages are broadly similar to previous years, with modest fluctuations. Traditionally:

• Claims upheld accounted for 30–40% of decisions.
• Claims rejected accounted for around 50–55%.
• “Other” outcomes (withdrawals, expiry, closure and so on) generally ranged from 6% to 10%.

In 2023, the share of appeals upheld rose slightly above 40% compared with some earlier years. The Annual Report cites faster processing and the harmonisation of criteria as possible factors.

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3. Specific data on penalties in 2023

Although the 2023 Annual Report details the total number of appeals by tax and type of act (assessments, collection measures and so on), it does not always provide a full breakdown of appeals against penalties compared with appeals against assessments or other acts. Nevertheless, when the available data and historical trend are considered together, the article estimates that 25–35% of all appeals relate to tax penalties, and that approximately 25–30% of those are upheld in full or in part.

The reasons for penalties being overturned remain consistent with those observed in previous years:

1. Failure to explain culpability (the principle of culpability).
2. Procedural defects: defective notifications, failure to open a separate proceeding, expiry and similar issues.
3. Reasonable interpretations of the rules that rule out culpability.
4. Errors in the penalty base where the underlying assessment is annulled or amended.

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4. Main qualitative points in the 2023 Annual Report

1. Technological improvements:

   • Implementation continues of systems for electronic transmission and receipt of case files (with the AEAT, the Directorate-General for the Cadastre, the courts through INSIDE, and other bodies).

   • The new electronic office and the Common Documentation Database (BADOCTEA) are being consolidated. They are key to harmonising criteria between the TEARs and TEAC.

2. Strategic priorities:

   • Knowledge management.

   • Electronic administration.

   • Management by objectives.

   • Regional coordination among the TEARs, TEAC and TEAL.

3. Reducing the backlog:

   • Deciding more appeals than are received (259,596 compared with 239,177) helps ease the accumulation of pending cases.

   • This contributes to shorter processing times.

4. Rate of success for citizens:

   • A 40.72% overall rate of appeals upheld means that in two out of five cases taxpayers obtain at least partial relief.

   • Although the Annual Report does not provide a detailed breakdown of why claims are upheld, it reiterates the importance of adequate reasoning, procedural compliance and consistency with TEAC criteria.

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5. Conclusions and trends

• Record highs for the five-year period (2019–2023) in both appeals filed (239,177) and decisions issued (259,596).
• The share of appeals upheld rose slightly to about 41%; about 51% were rejected and about 8% ended for other reasons.
• Litigation remains concentrated in a few autonomous communities (Madrid, Andalusia, Catalonia, the Valencian Community and Galicia) and in collection acts and personal income tax, which are the main sources of appeals.
• For 2024, the report expected the TEA’s full digitalisation to continue, further speeding up processing. Its stated aim is to keep reducing the backlog and consolidate unified criteria, improve legal certainty and prevent a medium-term rise in appeals before the contentious-administrative courts.

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References

• 2023 Annual Report of the Economic-Administrative Tribunals (Ministry of Finance).
• Earlier TEAC and TEAR statistics for 2019–2022 (previous publications).

In short, the 2023 Annual Report confirms a sustained increase in the number of appeals decided, a modest rise in the rate of claims upheld in full or in part, and a commitment to technological modernisation and consistent case law as key priorities for the Economic-Administrative Tribunals.