What must a tax deferral application include, and what happens after filing?

Clarify your doubts by consulting your particular case

An application to defer tax or pay by instalments must be addressed to the authority competent to collect the debt. It should explain the taxpayer’s temporary lack of liquidity and propose payment dates and other terms.

Information the application must include

As a general rule, the application must identify the taxpayer and, where relevant, the representative; identify the debt, its amount, tax type and the end date of the voluntary payment period; explain the reasons for the request; state the proposed payment dates and terms; specify the security offered or request a waiver; and include the place, date and signature. Bank details must also be provided if the competent authority has made direct debit compulsory. In insolvency proceedings, the application must state and substantiate that the debt is not a claim against the estate.

Supporting documents

Depending on the case, the application should include the undertaking to provide a bank guarantee or surety insurance certificate, or documents relating to other security or a requested waiver; proof of representation; documents supporting the temporary financial difficulty; and, if the debt arises from a self-assessment not already held by the tax authority, the completed self-assessment form. Other relevant supporting evidence may also be included. Further documents depend on the type of security and the competent authority’s rules.

If required information or documents that can be corrected are missing, the authority must give the taxpayer ten days to cure the defect. If the taxpayer does not comply, the application is treated as not having been filed and is archived. Failure to submit a required self-assessment that is not already held by the authority may lead to the application being declared inadmissible.

Effects of filing

• During the voluntary payment period: a timely application prevents the enforcement period from starting while the application is being processed, but late-payment interest continues to accrue. If an earlier application for the same debt was refused and the new payment period expired without payment, a later application will not prevent enforcement from starting.
• During the enforcement period: the authority may start or continue enforcement while it processes the application. It must, however, suspend the sale of seized assets until it notifies the taxpayer of a decision refusing the application.

Filing an application does not mean it will be granted. The authority processes and decides the request and may require security under the law. (General Collection Regulations, Royal Decree 939/2005, sections 46(2)–(6) and 47; General Tax Law 58/2003, sections 65(5) and 161(2).)