The Supreme Court has recognized the companies that had to paralyze their activities in 2020 due to the restrictions to deal with the COVID-19 pandemic, the origin of the reduction in the Tax on Economic Activities, in proportion to the time who suffered the total stoppage of their activities, as we already informed you in our circular of June 8.

The Court's ruling clears up doubts regarding the possibility of requesting by all those companies that were forced to close their establishments, the return of the fees paid for the Tax on Economic Activities. In this sense, and for the return claim to prosper, the High Court points out that several elements must be taken into account. Perhaps the most important is that the paralysis has been total. Not being able to benefit from the refund, for example, those hospitality businesses that, even though their establishment was closed to the public, delivered food at home.

Regarding the return procedure, there are two essential ways:

1) The appeal against the publication of the registration of the tax or the liquidation of the same.

In this case, the appeal should already be in the process of being resolved, and it would simply be expected that the new doctrine of the Supreme Court be applied in its resolution.

There will therefore be no room for a refund in this way, if it was not claimed at the time, or if the claim was made and it was already rejected and no appeal was made.

2) Request the refund of undue income, basing the claim on the IAE's own regulations and more specifically on article 89 of Royal Legislative Decree 2/2004.

The request must be made within the four-year limitation period determined by the General Tax Law, and those affected who are interested in their refund may now begin to take actions against the self-assessments that are the subject of controversy.

Everything and so, the claim must be adequately substantiated and proven, since the Town Halls presumably will exercise their defense by raising objections and asking for additional requirements to dismiss the refund requests.

If, as is to be expected, the Town Halls reject our refund request, appeals for reinstatement or administrative economic claims may be filed, where appropriate, in which the resolution issued will not be subject to further appeal by the taxpayer.

It is important to bear in mind that the return process may take two or three years until a judicial resolution is obtained.