Understanding Tax Prescription Deadlines in Spain

There are many situations in which you might wonder “qué año fiscal prescribe” (which fiscal year becomes time-barred).

In general, “el año fiscal que prescribe” in 2024 (the fiscal year that becomes time-barred in 2024) can be 2019 or 2020, depending on the tax return deadline and provided there is no interruption of “la prescripción” (time-barring), which would reset the four-year period and start it all over again.

Sometimes you may have a bad conscience, you know that something is not entirely correct. Maybe you had no other choice and you are waiting, desperately, for that year to become time-barred so you can forget about that which still worries you.

«A time-barred year is a blessed year». This could be a great saying for you and your taxes.

Following this saying we just invented, you wonder which years you can consider “blessed.” Well, it depends. It depends on which tax it is, and whether there has been any interruption of “la prescripción”.

Which year becomes time-barred depends on which tax it is because the four-year limit is counted differently in VAT (IVA) than in Corporate Tax, for example.

And which year becomes time-barred also depends on whether there has been any interruption of “la prescripción”, because if that happens, the four-year period resets and starts all over again.

All of this is regulated in the Ley General Tributaria (LGT).

Today we’re talking about two different types of time-barring — sections a) and b) of article 66 LGT:

• The time-barring of a tax year—that is, the expiration of the possibility for the Tax Authority to audit or inspect a specific year.
• The other type is the time-barring of a debt you have already acknowledged—or not challenged— but have not yet paid.

Both are subject to the four-year limit. A year can become time-barred and the Tax Authority can no longer audit or inspect it.

And a debt can become time-barred —and you no longer have to pay it, hooray! 👏. We’re talking about debts declared by you, or debts already liquidated by the Tax Authority that you haven’t paid.

Often, you file a tax return stating that you owe an amount and then you do not pay it. It’s more common than you think, in case it hasn’t happened to you yet.

Which fiscal year becomes time-barred in 2024 for IVA (VAT)?

In 2024, the 2020 VAT period can become time-barred, except for the fourth quarter, which becomes time-barred in February 2025.

The fourth quarter VAT return for 2019 becomes time-barred after four years, i.e., on January 31, 2024, because it was filed until January 30, 2020.

The first quarter VAT return for 2020 becomes time-barred after four years, on April 21, 2024, because it was filed until April 20, 2020.

The second quarter VAT return for 2020 becomes time-barred after four years, on July 21, 2024, because it was filed until July 20, 2020 (the dates may not be exact).

The third quarter VAT return for 2020 becomes time-barred after four years, on October 21, 2024, because it was filed until October 20, 2020 (the dates may not be exact).

The dates may not be exact, though generally they match up because VAT returns are filed :
• From the 1st to the 20th of the month following the settlement period (April, July, October).
• The self-assessment for the fourth quarter is submitted from January 1 to January 30.

Article 67 LGT states that the four-year period is counted “from the day following the end of the regulatory deadline for filing the corresponding return or self-assessment” .

And what happens? The four-year period for VAT is different from the one for Corporate Tax.

Normally, VAT is filed quarterly —some companies file monthly— so the four-year period is counted from the end of that VAT quarter for that specific quarter.

For example, the third quarter of 2020 —July, August, and September— becomes time-barred at the end of October 2024.

How many years back can the Tax Authority audit your Corporate Tax? (2024)

These are the years for which you need to keep your company’s documents.

In 2024, the 2019 Corporate Tax year becomes time-barred.

The 2019 Corporate Tax return becomes time-barred after four years, on July 26, 2024, because it was filed until July 25, 2020.

The exact date may vary by Autonomous Community because July 25 (Santiago) is a local holiday, and it can also vary depending on how weekends fall.

Remember that some companies do not end their fiscal year on December 31, and the Corporate Tax return is filed within the 25 calendar days after the six months following the end of the fiscal year.

The Corporate Tax return deadline is July 25.

As we have just seen, by August 2024 the 2019 Corporate Tax period will have become time-barred. That’s why it is always recommended to keep your company’s invoices and bank statements for at least five years.

What are the time limits for the Tax Authority to audit your Personal Income Tax? (2024)

In 2024, the 2019 Personal Income Tax year becomes time-barred.

The 2019 Personal Income Tax return becomes time-barred after four years, on July 1, 2024, because it was filed until June 30, 2020.

The exact date may vary if it coincided with a holiday or depending on how the weekend fell, since the deadline for filing the draft and the Personal Income Tax returns, whatever their result, is June 30.

VAT might have become time-barred while Personal Income Tax has not . Many self-employed individuals are audited for Personal Income Tax and not for VAT because VAT becomes time-barred quarter by quarter, while Personal Income Tax takes longer to become time-barred, as it is filed until June of the following year.

For example, the first quarter VAT return for 2019 became time-barred in February 2023, but the 2019 Personal Income Tax did not become time-barred until July 2024.

Time-barring depends on the specific tax and it varies; it’s normal to see a lack of coordination between VAT and Personal Income Tax or Corporate Tax time-barring. VAT always becomes time-barred sooner.

In this regard, the Resolution of TEAC (Tribunal Económico-Administrativo Central) of September 24, 2024, appeal number 2769/2023 states:

«
When in proceedings whose scope includes the direct tax
(Personal Income Tax or Corporate Tax) and the Value Added Tax, the Tax Administration proves the existence of hidden (undeclared) operations in which the parties have not indicated any mention of VAT, the classification made by the competent body —whether the respective amounts of those operations are considered VAT included or not— must be the same for all the affected operations, provided they are homogeneous or similar. This applies
even if some VAT periods cannot be assessed or adjusted because they have become time-barred.»

Ley General Tributaria: from which point do we count the four-year limit for the Inheritance and Gift Tax? (2024)

In 2024, inheritances from the second half of 2019 and from the first quarter of 2020 become time-barred for the Inheritance and Gift Tax.

Usually you have to wait four years and six months for the Inheritance and Gift Tax on a deceased person’s estate to become time-barred. This is because the deadline to file the declaration is six months from the date of death.

The person from whom you inherit passes away and you have six months to file the declaration, see if there is a will, determine how much you inherited, and value the assets of the estate.

You then add those six months to the four-year limit, and so on.

The time-barring period for auditing the Transfer Tax starts running (2024)

In 2024, most of the Transfer Taxes (Transmisiones Patrimoniales Onerosas) from 2020 become time-barred, except for those from the end of the year which would have to wait until 2025.

The deadline to file the Transfer Tax return depends on each Autonomous Community. Generally, it’s one month or 30 working days—which is about six weeks with no holidays.

Once the filing deadline has passed, you count four years for the Transfer Tax to become time-barred.

When do tax debts with the Tax Authority become time-barred? (2024)

We have just seen the time limits for taxes if you aren’t audited and everything takes its normal course, but these deadlines can change.

Furthermore, maybe your VAT was payable and you didn’t have enough money, years passed, and you still haven’t paid. So here the issue is not whether they audit you or not, but something else.

There are many reasons for interrupting “la prescripción” that delay the end of the four-year period.

The interruption of “la prescripción“. This reset that causes the four-year period to start all over is regulated in article 68 LGT:

—below is a summary, the text of the regulation is just for reference.

Article 68. Interruption of the time-bar periods.

[Interruption of the time-bar for a tax year].

1. The four-year period […] is interrupted:

a) By any action of the Tax Administration, carried out with formal notification to the taxpayer, aimed at recognizing, adjusting, auditing, inspecting, securing, or settling all or part of the elements of the tax obligation in question, even if the action is initially directed toward a different tax obligation as a result of the taxpayer’s incorrect tax return.

b) By the filing of appeals or challenges of any kind, by any actions carried out with the taxpayer’s formal knowledge in the course of such appeals or challenges, by forwarding the case to the criminal jurisdiction or by filing a complaint with the Public Prosecutor, as well as by receiving a communication from a judicial body ordering the suspension of the ongoing administrative procedure.

c) By any official action of the taxpayer aimed at settling or self-assessing the tax debt.

[Interruption of the time-bar for a debt].

2. The four-year period […] is interrupted:

a) By any action of the Tax Administration, carried out with formal notification to the taxpayer, effectively aimed at the collection of the tax debt.

b) By the filing of appeals or challenges of any kind, by any actions carried out with the taxpayer’s formal knowledge in the course of such appeals or challenges, by the declaration of bankruptcy of the debtor, or by civil or criminal actions aimed at collecting the tax debt, as well as by receiving a communication from a judicial body ordering the suspension of the ongoing administrative procedure.

c) By any official action of the taxpayer aimed at paying or settling the tax debt.

In summary, the four-year period resets and starts over if the Tax Authority audits or inspects you. It also resets if you challenge the penalty or assessment arising from that audit or inspection, or if you file a supplementary tax return.

That is, if on June 25, 2024—just days before the 2019 Personal Income Tax becomes time-barred—you file a supplementary 2019 return, you interrupt “la prescripción”, resetting the four-year limit so it starts over until June 25, 2028!

Regarding acknowledged but unpaid debts to the Tax Authority, we can say that the four-year period resets and restarts if your bank account is garnished —even if it’s only for 1 cent—, if you appeal, or if you make a payment.

Yes, even if you pay just 1 cent, the four-year period for the debt restarts. Imagine you owe 100,000 euros from January 2, 2019, and you come into 5,000 euros in lottery winnings at Christmas. On December 29, 2023 —almost four years later— you go and pay 4,000 euros in good faith to comply with the Tax Authority.

In this case, in January 2024, you would still owe 96,000 euros (the 100,000 you owed minus the 4,000 you paid), and the Tax Authority would have four more years to attempt to collect. If you had not paid the 4,000 euros on December 29, your debt would have already become time-barred and you would owe nothing, 0 euros.

In conclusion, it’s useful to know whether a tax has become time-barred for you and what you can do on your end so that the four-year period is not reset and does not start over.

That’s why we want to share a guide with you that includes, in a simple way, the key points about “la prescripción” which we hope will be very helpful to you.

For you: It’s a guide valued at 187 euros that we have decided to give you completely free of charge, 187 euros.

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Why fill out the form to download our “Guide to the Time-Barring of Debts with the Tax Authority”?

• Because we want to help you and free you from debts with the Tax Authority.
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• Because we will treat your name, phone, and email with care and respect.
• Because this is how we can help you achieve the time-barring of your debts.

Video Guide to understand que año fiscal prescribe in 2024.

Here we share a video guide explaining how the time-barring of taxes works.