The Tax Agency may use material found during a search to assess tax years that were not initially under inspection, provided the discovery was genuinely incidental and the required safeguards are observed

A tax inspection may begin by examining 2024 and 2025 and end up affecting 2023 as well.

The Spanish Supreme Court has confirmed that the Tax Agency may use information concerning tax years other than those initially covered by a judicial search warrant when the information emerges as a genuine “incidental finding”.

The ruling was handed down in Supreme Court Judgment 931/2026 of 20 July, appeal 1209/2024, ECLI:ES:TS:2026:3524, and the same approach was reiterated days later in Judgment 992/2026 of 24 July, appeal 1395/2024, ECLI:ES:TS:2026:3463.

The practical consequence for companies and business owners is significant:

A judicial warrant limited to particular taxes and tax years does not necessarily mean that the Tax Agency must disregard relevant tax information from other periods that it lawfully encounters during the search.

However, the Supreme Court sets limits. This is not permission to conduct general, indiscriminate or exploratory searches through all of a company’s records.

The case: the Tax Agency was investigating 2016 and 2017 but found information from 2015

The proceedings concerned Grupo Camín Lavandera, S.L.

The Tax Agency’s Inspection Department began examining:

• Corporate Income Tax for 2016 and 2017.

• VAT from the first quarter of 2016 through the fourth quarter of 2017.

To conduct its investigation, the Tax Agency obtained judicial authorisation to enter and search the company’s premises.

During the search, files and business records were copied.

Later, while reviewing that material at the Tax Agency’s offices, inspectors found that certain files also contained tax information relating to 2015, a year that was not initially included in the proceedings.

The Tax Agency then formally extended the inspection to cover:

• Corporate Income Tax for 2015.

• VAT for the fourth quarter of 2015.

The company argued that the records fell outside the time limits of the judicial warrant and therefore could not be used to assess or penalise it for 2015.

The Supreme Court rejected that argument.

In the circumstances of the case, it considered the information to have been lawfully obtained as an incidental finding.

What exactly is an “incidental finding”?

The expression can be misleading.

It does not mean that the Tax Agency may search any computer, copy every file indiscriminately and then decide what irregularities it might find.

The concept comes from case law under which evidence or information about matters different from those that originally justified an investigation may emerge during a lawfully authorised investigative measure.

If the discovery is genuinely incidental and the original measure was lawful, the new information may be used to open or extend a later investigation.

The Supreme Court had already applied this doctrine in other administrative and tax contexts.

The July 2026 judgments clarify how it applies when the material found relates to tax years other than those initially covered by the inspection.

The five conditions set by the Supreme Court

The Supreme Court has not given the Tax Agency a blank cheque.

The judgment identifies conditions under which records relating to other tax years may be treated as lawfully obtained.

1. The entry must be judicially authorised

This is the essential starting point.

The information must come from an entry and search that was lawfully authorised.

Article 113 of Spain’s General Tax Law provides that, where the Tax Agency needs to enter or search a constitutionally protected home, it must obtain the taxpayer’s consent or the appropriate judicial authorisation.

The application must also be justified and explain the purpose, necessity and proportionality of the entry.

The law further requires the entry decision to identify the taxpayer, the taxes and the periods to be examined.

The judicial authorisation therefore continues to have defined limits.

2. The judicial authorisation must be valid

The Supreme Court proceeded on the basis that the judicial order authorising the entry and search was valid and had not been set aside.

This point is crucial.

If the entry into the premises were declared unlawful, the issue would be different and could affect the validity of the evidence obtained during the search.

In this case, the company did not challenge the validity of the entry itself; it challenged only the later use of records relating to a different tax year.

3. The seized file must appear to have tax relevance

The Tax Agency cannot justify indiscriminately downloading information by saying that it might later find something relevant to tax.

In this case, the copied files appeared from the outset to contain invoices, commercial records and information directly connected with the company’s business activity.

In other words, the Inspection Department had a legitimate reason to access those files as part of the authorised investigation.

Only later, on closer examination, did it discover that they also contained information from 2015.

This distinction is fundamental.

It is one thing to copy a file that appears relevant to the inspection and later discover information from another tax year.

It is quite another to search indiscriminately through information that is plainly unrelated to the investigation in the hope of finding new infringements.

4. The Tax Agency must formally extend the inspection

Finding information from another tax year does not mean that the Tax Agency may immediately assess that year without taking further procedural steps.

The Administration must formally extend the inspection proceedings to the new tax years or taxes concerned and notify the taxpayer.

In this case, after finding information from 2015, the Inspection Department subsequently notified the company that the proceedings had been extended to Corporate Income Tax for that year and to VAT for the fourth quarter.

This ensures that the taxpayer is formally informed of the new scope of the investigation and can exercise its rights of defence.

5. The information must be directly connected with the activity under investigation

The Supreme Court introduces another particularly important condition.

The information found must have a direct connection with the taxpayer’s business activity, even if it relates to a different tax period.

The Court’s reasoning is noteworthy.

A company’s economic activity continues over time. The division into 2015, 2016 or 2017 reflects mainly the temporal structure of taxation.

The same commercial relationship, invoicing system or business practice may continue over several tax years.

Therefore, discovering that a file relating to the company’s ordinary activity also contains information from the immediately preceding year does not necessarily make the evidence unlawful.

The judgment does not allow a “fishing expedition”

This is probably the most important qualification.

The Supreme Court expressly recalls that “not everything goes”.

The incidental-findings doctrine cannot be used to justify what is legally known as a prospective investigation or fishing expedition.

The Tax Agency cannot obtain authorisation to investigate a specific matter and then use the entry to copy all available information indiscriminately just to see whether any other irregularity turns up.

Case law requires the search to be:

• Suitable.

• Necessary.

• Proportionate.

• Within the limits of the judicial authorisation.

It excludes general, indiscriminate seizures of records that are manifestly unrelated to the investigation.

There is therefore an important boundary.

A genuine incidental finding may be used.

A deliberate search for information outside the scope of the authorisation may not be lawful.

A practical example

Suppose the Tax Agency is inspecting a company’s Corporate Income Tax for 2024 and 2025.

It obtains judicial authorisation to enter the company’s constitutionally protected premises.

During the search, it finds a computer folder called:

“Major customer invoicing”.

The file is clearly connected with the company’s business and the subject of the inspection.

The Tax Agency copies it.

Later, while examining the file at its offices, it discovers invoices from 2023 as well and considers that some transactions from that year may have been reported incorrectly.

Under the Supreme Court’s new approach, the Tax Agency could use that information for 2023 if the other conditions are met and it formally extends the inspection proceedings.

A different situation would arise if officials copied:

• Every email account.

• Every hard drive.

• Every personal folder.

• All of the company’s historical records.

without distinguishing whether the material was connected with the taxes and periods under investigation.

In that situation, it would be much harder to characterise the discovery as genuinely incidental.

Why electronic files matter especially

The doctrine is especially relevant in today’s business environment.

Decades ago, a search at business premises mainly involved examining:

• Filing cabinets.

• Paper invoices.

• Accounting books.

• Contracts.

• Bank statements.

Today, much of a company’s information is stored in:

• Servers.

• Computers.

• Email accounts.

• ERP systems.

• Accounting software.

• Shared folders.

• Backups.

• Cloud platforms.

A single electronic file may contain data spanning many tax years.

This makes the separation between tax periods technically much less clear.

A spreadsheet called “Customers”, for example, may include transactions from ten years.

An email inbox will normally contain messages from numerous tax years.

A commercial database may contain a complete historical record.

For precisely this reason, the question of what the Tax Agency may copy and what it may later examine will become increasingly important.

Can an incidental finding be used to impose penalties?

Potentially, yes.

The question before the Supreme Court was not limited to using the information to assess additional tax.

The Court was also asked whether data obtained through an incidental finding could be used to assess tax and subsequently impose a penalty for another tax year.

The Supreme Court accepts that possibility where the evidence was lawfully obtained and the conditions in its case law are met.

An important qualification is needed, however.

The fact that evidence may be used to assess tax does not automatically make a penalty valid.

To impose a penalty, the Tax Agency must separately establish:

• That a tax infringement occurred.

• The taxpayer’s culpability.

• That the taxpayer did not act on a reasonable interpretation of the law.

• That the penalty decision is properly reasoned.

In short:

A valid incidental finding does not mean an automatic penalty.

Can the finding concern different taxes?

The case law on incidental findings is broader still.

The Supreme Court has traditionally accepted that incidental findings may include documents concerning not only different tax years, but also other taxpayers or other taxes, provided the required safeguards are met and the original search was lawful.

However, the further the material is from the original subject of the investigation, the more important proportionality, connection and respect for the scope of the judicial authorisation become.

The July 2026 doctrine is particularly clear because the case concerned:

• The same company.

• The same business activity.

• The same taxes.

• The immediately preceding tax year.

It would therefore be too broad to read this judgment as general permission to use any information found during any entry into business premises.

What should companies check during a Tax Agency search?

The judgment reinforces the need for a specific protocol for tax-related entries and searches.

1. Review the judicial order immediately

Check:

• Which taxpayer is identified.

• Which taxes are under investigation.

• Which tax years are included.

• Which premises may be searched.

• Which records may be examined.

• The stated purpose of the measure.

2. Keep track of the records copied

It is essential to record:

• Files copied.

• Hard drives seized.

• Folders examined.

• Copies made.

• Devices affected.

It may later be decisive to establish exactly where particular evidence came from.

3. Record any objections or reservations

If the company considers that the Inspection Department is accessing records manifestly outside the scope of the authorisation, it is advisable to record its objection or reservation expressly.

4. Keep the search report or official record

The action taken should be documented in as much detail as possible.

The more precise the record of the search, the easier it will be to establish later whether an alleged “incidental finding” was genuinely incidental.

5. Review any later extensions

If the Tax Agency finds information relating to other tax years, check whether the proceedings were properly extended and whether the extension was duly notified.

The key question: where does an incidental finding end and a prospective search begin?

This will probably be a major source of future litigation.

The conceptual difference is simple, but applying it during a search of electronic records can be extremely difficult.

The Tax Agency may argue:

“We lawfully copied this file because it appeared to relate to the tax years under investigation, and later discovered that it also contained information from other years.”

The taxpayer may respond:

“This was no incidental finding: a large volume of information outside the scope of the authorisation was deliberately copied so that officials could later see what they might find.”

Which account is correct will depend on the specific circumstances of the search.

The following may need to be examined:

• The wording of the judicial authorisation.

• How the search was carried out.

• The criteria used to select files.

• The volume of information copied.

• How folders were identified.

• How the documents related to the activity under investigation.

• Exactly when the Tax Agency became aware of information from other tax years.

• Whether and how the proceedings were later extended.

For this reason, maintaining a chain of custody for the evidence is fundamental.

A judgment in the Tax Agency’s favour, but with limits

From the Administration’s perspective, the result is readily understandable.

It would be difficult to justify requiring an inspector to ignore a relevant invoice simply because it relates to the preceding tax year, especially when it forms part of the same file and the same business activity.

But there is an equally clear risk from the taxpayer’s perspective.

An overly broad interpretation of incidental findings could deprive the legal requirement to identify the taxes and periods to be examined of any real effect. Article 113 of the General Tax Law requires those limits to be stated.

The balance struck by the Supreme Court therefore matters:

The Tax Agency may use information from other tax years that lawfully emerges during the search.

But it may not turn a limited authorisation into a general licence to examine every aspect of a taxpayer’s financial life.

Conclusion

The Supreme Court’s July 2026 judgments significantly expand the circumstances in which information obtained during Tax Agency searches of business premises may be used.

An inspection initially limited to specific tax years may affect other periods if tax-relevant information emerges.

The Supreme Court accepts this where, among other circumstances:

• The entry was validly authorised.

• The seized file appeared to contain tax-relevant information.

• The discovery of information from other years was genuinely incidental.

• There was no indiscriminate seizure.

• The information was directly connected with the business activity under investigation.

• The Tax Agency formally extends the proceedings and notifies the taxpayer.

The practical consequence for companies is clear:

A Tax Agency search may have a wider tax impact than the tax years initially identified in the proceedings.

But the limit is just as important:

The concept of an “incidental finding” cannot be used as an excuse for general or prospective searches outside the scope of the judicial authorisation.

In future inspections, one of the most important disputes may concern not only what the Tax Agency found, but how, where and why it found it.