Public authorities can overturn contested decisions that they issued

Eduardo González Fernández.

15/03/2022 Uría Menéndez (

According to the second paragraph of article 235.3 of the General Tax Law (“LGT” by its Spanish acronym), a public authority that issues a decision that is then challenged before the tax board of appeal may overturn that decision, in whole or in part, when the appeal brief includes pleadings and it has not been given the opportunity to reconsider its own decision on appeal (recurso de reposición).

The reason for this seems to be to allow the acting public authority, based on its decision-making powers and the principle of procedural economy, to overturn its decision without a party formally requesting it to do so if it considers that its decision is defective as alleged. But can the public authority make use of these powers for other purposes?

In some cases, we have found that the public authority, availing of this principle, has overturned its original tax settlement to issue a new one, strengthening or changing the reasons for the settlement in view of the appeal brief filed. So the question is whether the procedure in article 235.3 of the LGT is being used inappropriately, thus placing the taxpayer at a disadvantage and leaving them in a precarious situation. Yet this would arguably not be the case where the new act merely corrects a formal breach and does not modify or extend the outcome resulting from reinstating the proceedings which is what would happen if the appeal were upheld. However, not every case falls under this category in practice.

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