The Central Administrative Economic Court (TEAC) has unified criteria and has opened the door for large families who do not have the enabling title, the family book or other official document that justifies it, can also enjoy the tax benefits of the Spanish tax system. Large families, those with three or more children, can apply a deduction of 1,200 euros per year in the income statement (IRPF) and 2,400 euros for those of special category, five or more children. These families can request the full deduction of these amounts when presenting the return or request a monthly advance on account of it. There is also a favorable treatment for these families in taxes on property transfers, among others.
In a ruling handed down on June 24, the TEAC underlines that “in order to apply the personal income tax deduction for large families, it is necessary to prove the concurrence of the requirements and conditions established by the Law for the Protection of Large Families (LPFN) for any means of proof admissible in Law and not exclusively through the official title of large family to which this last law refers ”. The decision will now allow families with three or more children to apply for tax aid for large families with a mere birth record of the children or if they have an expired or outdated family book.
The TEAC decided to unify criteria after the decision of the Regional Economic Administrative Court of Catalonia (TEAR of Catalonia) that denied a taxpayer’s request to benefit from income tax assistance for large families and confirmed the inadmissibility of applying the deduction during the months of June to December 2017 “since there is only a large family card for 2017 valid until June 12, 2017, without its renewal in that year.” The magistrates of the TEAC, the highest body to settle matters of tax interpretation and in general administrative matters, had registered pronouncements to the contrary of the TEARs of Murcia and Extremadura.
The contradiction was aggravated because the General Directorate of Taxes, the body that the Tax Inspectors, advisers and taxpayers ask when they have doubts about the application of a tax criterion, in their binding consultations when asked from what moment they can be claiming the deduction for large family stated: “The consultant may request the advance payment of the deduction for large family when submitting the application for recognition of the large family title.”
The TEAC judges recall that “when regulating the deduction for large families, the Personal Income Tax Law establishes that it can be practiced by the taxpayer who, meeting the requirements, is part of a large family in accordance with the Law for the Protection of Large Families (LPFN)“. And he adds: “In order to make the deduction, the taxpayer must be part of a large family as defined in the LPFN. The condition of a large family is obtained, for the purposes of the deduction, by the mere fact that the taxpayer is included in any of the cases contemplated in the LPFN, regardless of the means or means of proof used to prove it “.
The TEAC, therefore, emphasizes that it is not necessary to present the family book issued by the autonomous communities to receive tax aid. “For the purposes of making the deduction for large families, the taxpayer must prove by any means of admissible evidence in Law that they meet the conditions required in the LPFN to be part of a large family. Certainly, the official large family title issued by the respective autonomous community constitutes a means of proof of this reality, the most complete if you like, because it accredits the concurrence of all the required circumstances, but not the only one, so that it cannot deny the taxpayer the possibility of justifying said concurrence by any other means; possibility, no doubt, more arduous, “he concludes.
José María Salcedo, partner at Ático Jurídico, considers that the TEAC resolution leaves open the door that, with another wording, the large family title could be required to enjoy the deduction provided for in article 81.bis of the Personal Income Tax Law. Thus, the TEAC states that “If the IRPF legislator had wanted to condition the application of the deduction to the accreditation of the condition of a large family through the official title, he would have used a wording in his article 81.bis.1.c) of the following type: ‘Because it is a ascendant, or an orphan brother of father and mother, who is in possession of the official title of large family in accordance with Law 40/2003, of November 18, on the Protection of Large Families’, or any other similar “.
This statement from TEAC opens the door, in the opinion of Ático Jurídico’s partner, to question the application of tax benefits provided in other regulations, when the large family does not have the title. This, depending on the specific wording of the tax benefit.
However, in Salcedo’s opinion, this could imply the violation of constitutional precepts, such as the one that regulates the right to equality, or the duty to contribute. In this regard, it refers to ruling number 77/2015, of April 27, of the Constitutional Court which, referring to the reduced rate of ITP for large families, provided for in the Community of Madrid, which stated that “Once the legislator has chosen to guarantee the economic protection of large families by applying a reduced rate for the acquisition of their habitual residence, the judicial bodies in their application cannot interpret the legal provisions in a way that is incompatible with the Constitution. , when another alternative interpretation is possible without violating the letter of the law. “