Value-added tax declared unconstitutional

Value-added tax declared unconstitutional

The tax on plusvalía is a direct municipal tribute constituting an important source of income for councils. It is charged when there is a transmission of urban property or when there is a handing over of property rights, limited to the title of said land.

The effect of its decision will be more generalised because the same law rejected by the TC appears in the Ley de Hacienda Locales. The government should bring in a far-reaching change in this municipal tax so that it is not activated in transactions where added value is produced.

The content of the sentence confirms assertions from recognised tax specialists in recent years on the configuration of this tax and how it is contrary in nature to constitutional legal order in cases where the contributor has undergone a patrimonial loss in the transmission of a property (in part corresponding to the land value of same), or in cases in which the actual gain is lower than that which is determined objectively on application of the general regulations of the tax.

 Legal sources point out that the contents of the sentence will boost and favour numerous open proceedings in court for this same motive purpose and give rise to new procedural challenges and requests for the return of money paid in recent years under this tax.

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