Spain’s General Tax Law provides for various situations in which a natural person may be held liable for a third party’s tax debts. One of the most notable cases is set out in Article 43.1. a), which concerns de jure or de facto company directors who have committed tax infringements. This liability is subsidiary in nature, but it can cover the full amount of the debt, including interest and penalties.
The issue is not so much the existence of this type of liability but the sometimes overly automatic way in which the tax administration has applied it. For years, the mere formal status as a director and the existence of unpaid debts were considered enough to trigger the liability process. As a result, directors were frequently held liable without any analysis of their actual conduct or degree of involvement.
This led to a form of quasi-objective liability, incompatible with the procedural safeguards that must underpin any tax procedure. This concern has been addressed both in legal scholarship and case law by administrative and judicial bodies. The turning point comes with the Supreme Court Judgment 594/2025, which brings a qualitative shift in the understanding of this legal figure.
STS 594/2025: A doctrine aiming for consolidation
The Supreme Court’s Judgment 594/2025 of May 20, 2025, offers a clear and precise stance on directors’ tax liability. According to the Court, this is a measure of a fundamentally punitive nature, which cannot be applied automatically or without a proper attribution of fault. The Court holds that the Tax Administration must individually prove that the director engaged in unlawful conduct attributable to gross negligence or wilful misconduct.
The case in question illustrates a common situation: the Administration imposed liability on the director of a dissolved company based on their formal role and the non-payment of several debts. However, it failed to demonstrate which specific actions by the director led to the non-compliance. The Court deemed this reasoning insufficient. Merely citing the company’s insolvency or the director’s inactivity does not prove culpability.
The Court further notes that directors are not under a legal duty to avoid tax debts at all costs, and not every corporate breach amounts to a tax violation attributable to the board.
Due to the punitive nature of the liability procedure, the Court insists on compliance with the constitutional safeguards of Article 24: presumption of innocence, burden of proof on the Administration, and the right to a fair and adversarial process.
This interpretation reinforces a line of reasoning that the Supreme Court had already outlined in earlier rulings and now consolidates it as binding jurisprudence.
Practical implications for directors and companies
This doctrine significantly reshapes the landscape for company directors. While their potential liability is not ruled out, the limits and guarantees that must govern any such declaration are reinforced. Hereafter, it will no longer be legally valid to impose liability without specific justification based on proven facts showing gross negligence or wilful misconduct.
From a business perspective, this ruling calls for preventive and well-documented management of the relationship between companies and their boards. Directors—especially in financially troubled companies—must act transparently and document decisions relating to tax obligations. An orderly liquidation, timely deferrals, negotiations with the Tax Agency, or other reasonable corrective measures may serve as strong protection against future liability claims.
It is also important to note that the doctrine applies equally to de facto and de jure directors. Therefore, companies must be cautious in situations of informal management or influence, particularly in corporate groups or complex structures.
Ultimately, the Supreme Court Judgment 594/2025 represents a significant step forward in protecting directors against poorly substantiated tax liability claims. By explicitly declaring the punitive nature of this measure, the Supreme Court places the debate within the realm of constitutional safeguards and forces the Tax Administration to exercise greater diligence in both its evidentiary efforts and legal reasoning.
Our view: prevention and legal defence
We believe this ruling marks a turning point in the protection of directors against arbitrary decisions. We recommend implementing prevention policies and proper document management practices to reinforce their legal position in potential actions brought by the tax authorities.
Tax liability for directors requires foresight and the right strategy. If you need legal advice on this matter,
