The Constitutional Court has upheld the question of unconstitutionality filed by the Contentious-Administrative Chamber of the High Court of Andalusia, Ceuta and Melilla, based in Malaga. Consequently, the CC has declared the unconstitutionality and nullity of Articles 107.1 second paragraph, 107.2 a) and 107.4 of the revised text of the Law regulating local finances, approved by Royal Legislative Decree 2/2004 of 5 May 2004, in the terms provided in the 6th legal ground.
The problem that arises is the adequacy of the tax to the principle of economic capacity as a measure of the tax base, rather than to the principle of economic capacity as a basis for taxation, since the increase in the value of property has always existed.
On this point, the ruling explains that the principle of contributing to the support of public expenses “in accordance” with the economic capacity operates with respect to all taxes and is infringed if those with a lower economic capacity bear a greater tax load than those with a higher capacity.
The methodology of valuing the tax base in accordance with modules or objective criteria is not necessarily unconstitutional, provided that a series of conditions are met. However, Articles 107.1 second paragraph, 107.2 a) and 107.4 of the revised text of the Law regulating local finances do not respect these criteria because the regulation they carry out leads to a result that is notably distant from the real values of the properties on the real estate market. For this reason, the Constitutional Court considers them to be unconstitutional, null and void.
Regarding the scope and effects of the declaration of unconstitutionality and nullity of the cited articles, this implies their expulsion from the legal system, leaving a regulatory vacuum on the determination of the tax base that prevents the assessment, verification, collection and review of this local tax and, therefore, its enforceability.
In addition, tax obligations accrued for this tax prior to the date of the ruling may not be reviewed. Consolidated situations are considered to be (i) provisional or final assessments that have not been appealed at the date of this ruling and (ii) self-assessments whose rectification has not been requested under Article 120.3 of the General Taxation Law (Ley General Tributaria) at that date.
