In various judgments, the Supreme Court insists on the need to prove the guilt of the directors of companies that have committed tax infringements or to inquire into the existence of jointly and severally liable parties before deriving liability to subsidiary liable parties.
The Administration has been reacting to the difficulties in the collection of tax debts, demanding them from the tax liable persons provided for in articles 42 and 43 of the General Tax Law (LGT), among which the directors of entities stand out, who are considered liable if the entity committed a tax infringement when the responsible party was its administrator or director. These derivation agreements are based on the premise that a person can be held liable for an entity’s tax debts and penalties if he or she was its director when the entity committed a tax infringement, unless he or she proves that he or she took all necessary steps to prevent such a violation. In other words, the mere existence of this infringement by the company would imply negligence on the part of the director, since, in this interpretation, any tax liability of the entity would fall within the scope of supervision of the administrative body.
However, this year 2025 the Supreme Court has issued several judgements that have questioned this vision of tax liability.
Undoubtedly, this jurisprudence begins with the decisive judgment 2161/2025, of May 20, 2025, which in turn links with previous judgments of the High Court in which this liability of the directors is attributed a sanctioning nature, insofar as it is based on the existence of an infringement committed by the entity; doctrine supported by the judgment of September 12, 2024 of the European Court of Human Rights in the Josefa Solanellas case. In this judgment, the Supreme Court rejects the reasoning that had been customary until now and considers that a declaration of liability cannot be based on the mere circumstance that the person responsible was a director when the entity committed the infringement. Given that this tax liability is of a punitive nature, it is not the person declared liable who must prove that he acted with the required diligence, but it is the Administration that must prove, not only that there was an infringement and that the administrator was then the director of the entity, but that said infringement was the result of a breach by the person responsible of the duties of vigilance or management that were required of him.
This doctrine undoubtedly affects the declarations of liability issued in recent years that contained a different reasoning, without either the economic-administrative bodies or the courts of justice now being able to remedy this insufficient reasoning, as recalled by two subsequent judgments of the same Supreme Court, of 1 and 17 July 2025 (3255/2025 and 3465/2025).
Looking ahead, however, it is important to know what is the extent of a director’s duty of vigilance whose failure to do so leads to culpable conduct. The Supreme Court seems to resort to commercial legislation, which imposes a duty of diligence that depends on the nature of the position and the functions attributed to each director, presuming guilt in the face of acts or agreements contrary to the law or the bylaws, although without establishing a general duty of knowledge of any aspect of the entity’s fiscal management. In view of these commercial duties, Article 43.1.a) of the LGT must be interpreted, i.e. what breach of the director’s commercial duties has allowed the entity’s tax infringement.
In the aforementioned judgment of 17 July 2025, the court also extends this doctrine to the case of article 43.1.b) of the LGT, whose assumption is not a tax infringement, but the cessation of the entity’s activity, but with certain nuances. In this case, the Administration must prove the culpable conduct of the administrator, for not proceeding to the orderly dissolution of the debtor entity or to request its declaration of bankruptcy, but, this being a clear duty of an administrator, it will be the administrator who must explain the reasons why he did not act as required and the Administration must respond to these allegations.
This importance of correct reasoning also appears in the judgment of 5 November 2025 (5016/2025), in which the Supreme Court qualifies its previous judgment of 22 April 2024 (2438/2024). If a subsidiary liable party alleges the existence of a jointly and severally liable party and provides the Administration with evidence of this circumstance, the Tax Administration must investigate and verify the reality of those and give reasons for its decision if it chooses to declare subsidiary liability. The case analyzed in this judgment is important from the perspective of the liability of the directors, since it was the sole director of an entity who alleged that it was in fact a relative (owner of the entity) who exercised the functions of the position and had therefore been the cause of the infringements committed, which made him jointly and severally liable in accordance with article 42.1.a) of the LGT. The Valencia Chamber had accepted these allegations as proven facts, in view of which the Supreme Court annulled the derivation of liability of the person who had been declared vicariously liable, without the prior declaration of failure of a jointly and severally liable party. And, at the same time, it recognizes that a de facto director can be held jointly and severally liable as the real cause of the tax infringement committed by the entity.
To conclude, let us note that today tax liability is also an issue that is elucidated in the civil courts, as shown by two recent judgments of the 1st Chamber of the High Court.
In a judgment of 4 November 2025 (4867/2025), the Chamber addressed the bankruptcy classification of a tax credit derived from a declaration of liability in accordance with article 42.2.b) of the LGT, i.e. for the failure of the entity to comply with a seizure order. For the insolvency administrator, it was a sanction and, therefore, a subordinated credit. The Supreme Court supports the position of the Tax Agency and considers that the doctrine of the 3rd Chamber on the sanctioning nature of tax liability does not transcend the field of bankruptcy, in which such a credit will have the same classification as would correspond to the credit from which the derivation comes.
Although it is not strictly speaking a case of liability but of succession in tax debts, the judgment of the same Chamber 1 of 11 November 2025 (4958/2025) is no less interesting. The Chamber also supports here the position of the Tax Agency, which through the State Attorney’s Office filed a lawsuit to deprive a natural person of the benefit of inventory in an inheritance, in which the tax debts far exceeded the value of the inventoried asset. And, in effect, that benefit is deprived of those who, after accepting inheritance, carry out acts aimed at diverting assets in their favor from the company that was the main asset of the estate, even if formally such acts have been carried out by the same company that the heir controlled.
