How are the sanctions graduated?

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The amount of a tax penalty is determined by applying the specific rule for the infringement and, where applicable, the grading criteria in the General Tax Law (Ley General Tributaria, LGT). There is no generic increase that applies to every penalty: the calculation depends on the type of infringement, its penalty base and the circumstances established in the case.

GRADING CRITERIA

Article 187 LGT provides four criteria. They apply insofar as relevant and may apply simultaneously:

1. Repeated tax infringements. This applies where, during the four years before the new infringement, the taxpayer was sanctioned for an infringement of the same nature by a decision that became final in the administrative procedure. Infringements under the same article are generally considered to be of the same nature; infringements under Articles 191, 192 and 193 LGT are treated as being of the same nature under a specific rule. The minimum penalty is increased by 5 percentage points if the earlier infringement was minor (leve), 15 points if it was serious (grave), and 25 points if it was very serious (muy grave).

2. Economic loss to the Public Treasury. This is calculated by comparing the penalty base with the total amount that should have been paid or the refund initially obtained, as applicable. If the loss exceeds 10% but does not exceed 25%, the increase is 10 percentage points; if it exceeds 25% but does not exceed 50%, 15 points; if it exceeds 50% but does not exceed 75%, 20 points; and if it exceeds 75%, 25 points. Economic loss is not the same as the total amount of the penalty.

3. Substantial breach of invoicing or documentation duties. This applies where the breach affects more than 20% of the value of the transactions subject to the invoicing duty for the tax and period under review, or where it prevents the Administration from determining that value. A specific rule applies to certain circulation documents. The effect of this criterion depends on the infringement and its applicable statutory provision.

4. Agreement or acceptance. In an inspection, this criterion applies when the taxpayer signs an agreement or acceptance assessment record (acta con acuerdo or acta de conformidad). Data verification and limited verification are subject to the specific conditions in Article 187(1)(d) LGT. The financial effects are implemented through the reductions in Article 188.

Older references to resistance or obstruction, concealment, “simple” infringements and general increases of 10–50 or 20–75 percentage points do not describe the current general criteria in Article 187. Concealment and fraudulent means may affect the classification of certain infringements or the calculation of their penalties under the relevant provisions, but should not be presented as standalone general grading criteria under Article 187.

REDUCTIONS FOR ACCEPTANCE, AGREEMENT AND PAYMENT

For monetary penalties imposed under Articles 191 to 197 LGT, Article 188 provides a 65% reduction for agreement assessment records and a 30% reduction for acceptance. The acceptance reduction may be clawed back if the taxpayer appeals the tax adjustment. The 65% reduction for agreement assessment records is subject to the statutory conditions for that procedure, including the effect of certain court appeals and payment where a guarantee has been provided instead of the required deposit.

After applying the acceptance reduction, where applicable, a further 40% reduction may be available if the remaining penalty is paid on time—or under the terms of an instalment or deferred payment granted against a bank guarantee or surety insurance requested in time—and neither the tax assessment nor the penalty is appealed. If the conditions are not met, the reduction is recovered. This additional reduction does not apply to penalties arising from agreement assessment records. Reductions are applied successively; they are not added as percentages of the original penalty.

The version of the law and applicable percentages may depend on transitional rules for infringements committed before a legal amendment. For an individual case, the date of the conduct, the applicable penalty provision, the tax assessment and the penalty decision should be checked.

Main legislation: Articles 184, 187 and 188 LGT; for the specific classification and penalty, also Articles 191 to 197 or the relevant provision.