Tax settlement in court

Abstract

This paper examines judicial tax conciliation in Spain as a mechanism to reduce high levels of tax litigation. Unlike other jurisdictions, the Spanish system offers very limited consensual solutions, except for settlement agreements in tax audits. The study focuses on the stage following the issuance of the administrative act, analyzing its potential application in both the economic-administrative and contentious-administrative proceedings.

Judicial conciliation is defined as a procedural tool that allows parties to agree on facts, evidence, or valuations under judicial supervision, without infringing the principle of non-disposability of tax claims. Its legal basis lies in Article 77 of the Administrative Jurisdiction Act (LJCA) and, subsidiarily, Article 415 of the Civil Procedure Act (LEC). In the economic-administrative phase, Article 235.3 of the General Tax Act (LGT) provides a narrow window for agreements before the case is referred to the Economic-Administrative Tribunal, inspired by Italian and German models.

The scope of conciliation includes issues with discretionary margins—such as asset valuation, indirect assessments, legal qualification, and penalties—while excluding purely normative questions. The paper also addresses intra-judicial mediation, promoted by pilot projects of the Spanish Judicial Council, which remains rare in tax matters due to cultural and legal constraints.

The study concludes that judicial tax conciliation is feasible without major legislative reforms, provided there is a clear organizational strategy, transparent criteria, and specialized training. In the medium term, it recommends amending the LJCA to explicitly recognize judicial conciliation and regulate its procedure, thereby reducing litigation and strengthening the legitimacy of the tax system.