The High Court has declared unconstitutional and null and voided a large part of article 107 of the TRLRHL, which was the fundamental pillar for the calculation of the taxable base of the municipal capital gains tax on the increase of urban land (“Plusvalía”).
The unconstitutionality has occurred due to the fact that the calculation of this tax is not in line with reality, understanding that the method of “determination of the tax base of this tax determines that there must be an increase in the value of the land during the period of taxation, regardless of whether there has been this increase and the actual amount of that increase”, so it puts at risk the principle of economic capacity regulated in Article 31 of the Spanish Constitution.
At MDG Advisors we are waiting for the Constitutional Court to publish the judgement in full in the next few days in order to carry out an exhaustive study of all the fiscal and tax repercussions that could arise for taxpayers and advice our clients accordingly.
