Tax self-assessment: rectification under article 120.3 of the LGT as the ordinary review channel

The Spanish Supreme Court, in judgment no. 350/2026 of 20/03/2026 (cassation appeal 422/2024), allows the State Attorney’s appeal, quashes the judgment of the Audiencia Nacional (National High Court) and holds that a tax self-assessment is not an administrative act in the proper sense but an action of the taxpayer subject to its own procedural regime. According to this judgment, where the self-assessment is considered contrary to law (typically, because it applied a rule subsequently declared unconstitutional or incompatible with EU law), the available review channel is rectification under article 120.3 of the General Tax Act (LGT), within the ordinary four-year limitation period; the extraordinary procedure for declaring nullity as of right (nulidad de pleno derecho) under article 217 LGT does not apply to self-assessments and therefore offers no second chance once that period has elapsed.

The practical consequence, for defensive purposes, calls for discipline with time limits. Where a judgment of the Constitutional Court or of the Court of Justice of the European Union declares a rule under which tax was self-assessed unconstitutional or incompatible, it is advisable to act within the four-year limitation period. The options available are essentially two: to seek rectification of the self-assessment under article 120.3 LGT and, where appropriate, to consider a State liability claim against the legislator, a route the judgment itself mentions, subject to the requirements of article 32(3) to (6) of Law 40/2015 (among them, having obtained a final judgment dismissing an appeal in which the unconstitutionality or the breach of EU law had been pleaded) and to a one-year time limit from publication of the judgment declaring the unconstitutionality or incompatibility (article 67(1) of Law 39/2015). In its judgment of 28/06/2022 (case C-278/20, Commission v Spain), the CJEU held that some of those requirements, as applied to breaches of EU law, are contrary to the principle of effectiveness. Waiting beyond the limitation period amounts, in most cases, to giving up recovery.

Full analysis in → A self-assessment may not be the subject of the special review procedure for acts that are null and void