The high level of prepayments and delayed repayments

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Tax refunds resulting from the application of a tax law must be distinguished from refunds of undue payments. Where withholdings, payments on account or instalments exceed the tax due, the Personal Income Tax and Corporation Tax laws provide for the refund of the excess. For both taxes, the administration has six months from the end of the statutory filing period, or from the date of a late return, to make any provisional assessment and order the refund.

If a refund due under the tax rules has not been ordered within the applicable period for a reason attributable to the tax administration, default interest is payable on the amount due from the end of that period until the date the refund is ordered. The taxpayer does not need to request this interest. Delays not attributable to the administration are excluded from the calculation. These rules follow Articles 31 and 125 of the General Tax Law and, for Personal Income Tax and Corporation Tax, Articles 103 and 127 of the relevant tax laws.

A refund of an undue payment is a different case. Under Article 32 of the General Tax Law, default interest on an undue payment generally runs from the date the payment was made until the refund is ordered, without a prior request.

A delayed refund should therefore be assessed by identifying the type of refund, the applicable statutory period, the date on which the refund was ordered, and any delay not attributable to the administration. Surcharges for late taxpayer payments are governed by separate rules; the two situations should not be treated as automatically equivalent.

Official sources: General Tax Law (Law 58/2003), Articles 31, 32 and 125: https://www.boe.es/buscar/act.php?id=BOE-A-2003-23186. Personal Income Tax Law (Law 35/2006), Article 103: https://www.boe.es/eli/es/l/2006/11/28/35. Corporation Tax Law (Law 27/2014), Article 127: https://www.boe.es/buscar/act.php?id=BOE-A-2014-12328