Constitution and principle of ability to pay (on the fractional payment of Corporate Tax)

The Constitution was celebrated and commemorated its 47th anniversary on December 6, the date of its approval by referendum, but it is recreated and updated in each Sentence of its supreme interpreter, the Constitutional Court, especially when it affects the fundamental principles. One of them is that of tax justice and the principle of ability to pay (article 31 of the Spanish Constitution) of natural and legal persons.

In its recent ruling of November 20, 2025, the Plenary Session of the High Court has resolved a question of unconstitutionality that affected, on the one hand, tax justice and the principle of ability to pay, and on the other, tax collection in the corporate tax (LIS), through the method of calculating fractional payments for companies whose turnover exceeds 10 million euros.

The question of unconstitutionality dealt with the fourteenth additional provision of Law 27/2014, of November 27, on corporate tax (hereinafter, LIS), drafted by art. 71 of Law 6/2018, of July 3, on the General State Budgets for the year 2018.

It was caused by another previous one, STC 78/2020, of July 1, which had declared the unconstitutionality of said provision for formal reasons by violating article 86.1 CE (formal and material limits of the Decree Law).

In STC 78/2020, however, STC 78/2020 had not ruled on the constitutionality of the aforementioned fourteenth additional provision, which it now declares to be in accordance with the constitution, by dismissing the issue.

The Sentence and ruling obey the existing majorities in the Constitutional Court. The majority (7) prevailed over the minority (5), which formulates an exceptionally critical dissenting voteappealing to the accumulation of unjustifiable errors and biased arguments” (sic), which the Judgment contains.

In terms of Theory of the State, the majority vote, beyond the goodness or otherwise of its technical arguments, rests on an interventionist vision of the State in the economy whose insatiable needs for financing public spending, clashes with a more liberal vision of the role of the State in said area.

Hence the private vote as a dissenting opinion (jointly formulated by the five magistrates) emphasizes the origin of said provision of the LIS that places it within the framework of the budget stabilization process and the set of state deficits that came together in the Reform of Article 135 EC in 2011 to reverse, among others, the commercial debt of the State and autonomous communities; supports the distortion of the principle of ability to pay and talk about the pyramid financing (business) of the state by individuals.

From a technical point of view, what was raised was whether the system for quantifying the fractional payments of large companies based on the accounting result without taking into account other adjustments and compensations, generated payments disconnected from the main tax obligation, which violated in the case of the HOBALI group the principle of ability to pay. Well, an unreal or fictitious income was being taxed, as demonstrated by the large amounts returned.

The ruling of the Constitutional Court challenges this argument based on the concept of installment payments in the General Tax Law (LGT), contrasting it with the constitutional principle of capacity to pay.

And this is where the criticism of the dissenting vote makes sense by pointing out that in order to quantify the tax obligation, (which reached a minimum percentage of 23%), it distorts the principle of ability to pay which can give way – it states – to other principles that it states such as tax benefits,

fight against tax fraud and other financial policy reasons that do not appear in the text of CE/78; to which he adds that there is no constitutional mandate that requires coincidence in the calculation of tax obligations, between the principal and the installment payments on account, so seems to give a blank check to the ordinary legislator so that it can meet, among others, criteria of tax technique, simplification and administrative practicability.

It is at this point of the interpretative undervaluation of the aforementioned principle of ability to pay, where the ruling presents its weakest point because it responds more to the criteria of a Judgment of an ordinary Court than a Constitutional Court, which becomes a reality by stating that the IS is an eminently tax collection tax, a reason that seems to justify that what is important is collection sufficiency, at any price, and not tax justice.

A more balanced ruling could have justified the exceptional time in which it was decreed that it cannot be used, however, for ordinary situations with well-fed State coffers. The Treasury collects more than ever – according to official data – and it does not seem justifiable to always act as a somewhat homemade court, that is, in favor of the Administration/government, without reasonable justification.