According to the court, where an assessment is set aside the tax authorities only have a second chance to issue a new administrative measure, regardless of the reasons for ordering it to be set aside.
On September 29, 2025, the Supreme Court issued a decisive judgment on second and subsequent assessments by the tax authorities, after a verification led to a first assessment which was set aside in the review process.
Very briefly, the facts examined in this judgment were as follows.
After receiving inheritance tax assessments, the taxpayer filed a claim with the Galicia Regional Economic-Administrative Court, which partially upheld the claim due to the absence of reasons for the values given to the received assets, and ordered reversion of the procedure. In enforcing that decision, the tax authorities drew up new assessment proposals, which lapsed due to expiration of the procedure (as declared by the competent body), giving rise to the initiation of a new limited verification procedure in which two assessments were issued and later appealed in a judicial review proceeding. The Galicia High Court partially upheld the appeal and ordered new assessments to be issued by reference to different verified values and a different valuation of household items. As can be seen, up to four successive assessment measures can be identified in this case.
The issues raised (among other procedural or substantive elements that have been debated in recent years) essentially revolve around whether the tax authorities can issue successive assessments when the first one arising from a verification is challenged and the administrative or judicial bodies set it aside. The second assessment has come to be known as the “second shot” and any later assessments (if the second is also set aside), as the “third and subsequent shots.”
This issue may arise in different circumstances, which depend fundamentally on (i) whether the defect that gives rise to the decision to set aside the assessment is substantive or procedural (with classification difficulties arising in some cases), (ii) whether or not the review body has ordered reversion of the procedure, or (iii) whether a new assessment is ordered to be issued in the enforcement process for the administrative or judicial decision.
The importance of this judgment is that it apparently tries, with a generality of purpose, to settle most of the debates, by setting out a clear interpretation that can be applied in most cases, regardless of the answer to any of these interpretation issues or the procedural situation.
In fact, regarding the case giving rise to the decision, the Supreme Court acknowledged that the judgment does not address issues such as whether the failure to state reasons amounts to a substantive or formal defect or, in the latter case, whether there is a denial of the right to a defense, or other procedural issues regarding the expiration of the first management procedure or the preclusion arising from it. It found them unnecessary because, by themselves, they would not serve to settle the case and because the solution to the case comes directly from the case law interpretation that is established around the main issue.
More specifically, the court states categorically that the power to issue new assessments reiterating the contents of previous ones that were set aside in the review process (i.e., to make “two and subsequent shots”) is restricted, regardless of the nature of the infringement or defect that gave rise to the overturning decision, to issuing a second assessment, which fulfills the determination in the review process, but not third or subsequent assessments.
The Spanish Supreme Court has therefore ruled that it is not lawful under any circumstances for the tax authorities to order third and subsequent administrative assessments if the second involves infringements of the law or procedural or substantive defects that cause it to be set aside. This, the Supreme Court explains further, is contrary to the principles of good administration and good faith, among others, even more so in a system where the interpretation and application of tax law, which is complex in itself, lies with the taxpayer due to generalized use of the self-assessment system (with the serious consequences that any error in this task or discrepancy with the tax authorities usually entails). It is not acceptable, in short, for the tax authorities to have an indefinite chance to repeat tax assessments after successive infringements until they finally succeed in a procedural trek that can take many years in these cases, to the detriment of citizens.
As we have said, the court itself announced that other interpretative issues, which we dare not describe as collateral (whether the defect in reasoning is a substantive or procedural defect or the preclusion derived from the first procedure) were not addressed, because they became unnecessary once the solution to the general issue was found to be decisive. Other issues may stem from the interpretation established by the judgment, such as the viability of the “second shot”, when the review decision does not expressly authorize a new assessment to any extent.
All in all, the solution given, which starts out from the interpretation upheld in the past (in Supreme Court judgments dated January 26, 2002, March 26, 2012 or November 16, 2015) and recognizes that this reasoning may at times have been inconsistent or imprecise, seems to seek to clarify and conclusively lay down precise limits in the procedural playing field.
It is therefore a question, rightly, of providing greater clarity, legal predictability and certainty to the procedural framework, which, without precluding the tax authorities’ ability to make the necessary adjustments, avoids a questionable use of public authorities’ rights that has prolonged the debate for years, due to repeated defects in administrative measures.
