The IIVTNU: the TS precise the reach of the STC 59/2017, of May 11

The IIVTNU: the TS precise the reach of the STC 59/2017, of May 11

As we discussed in our Circular 01/2018, the Constitutional Court (TC) in its Judgment of No. 59/2017, of May 11, 2017 (STC 59/2017), came to establish the partial nullity of certain articles of the Tax on the Increase in the Value of Urban Land (IIVTNU) because, in application of the same, it could be possible to encumber totally fictitious or non-existent wealth situations based on the configuration of its taxable event.

However, the cited Judgment was not as clear as it would have been, generating interpretative discrepancies between the different Supreme Courts of Justice (TSJ). However, in Circular 01/2018 we commented that this situation would be solved shortly, since the Supreme Court (TS) had admitted for processing, by order of December 21, 2017, a cassation appeal in which it would pronounce on the scope of the STC 59/2017. In addition, we echoed that the popular parliamentary group, on March 9, 2018, had presented a Proposal of Law to modify the current wording of the IIVTNU and thus adjust it to constitutional principles.

Well, the TS has already ruled in relation to the appeal mentioned above, specifically, in its Judgment No. 1163/2018, of July 9, 2017 (STS 1163/2018), in which it interprets the provisions of the TC in its Judgment 59/2017, clarifying the controversy that has led the TSJ to maintain disparate criteria.

In this Circular, we will explain the criterion expressed by the Supreme Court in its Judgment 1163/2018 regarding the aforementioned controversy, as well as make the pertinent recommendations so that the taxpayers by the IIVTNU fulfill their obligations with full guarantees, and are knowledgeable of your rights. Likewise, we will take advantage of this Circular to inform about the status of the Proposed Law modification that we have alluded to previously.