The TEAC confirms that the disability tax credit against the IRPF can be seized.

What has the TEAC decided?

The Central Economic-Administrative Court (TEAC) is analyzing whether tax collection agencies can seize or offset, without limits, the deduction for dependent ascendants, descendants, or spouses with disabilities, regulated in Article 81 bis of the Personal Income Tax Law (LIRPF). The conclusion is clear: since there is no rule declaring this deduction exempt from seizure, and since it does not share the purpose of the aid protected by Royal Decree-Law 9/2015, its full amount can be seized.

The case that led to this ruling involved a taxpayer who requested a refund of €1,200 for her disabled spouse. The Spanish Tax Agency (AEAT) detected an outstanding debt and automatically offset €780 of that amount to collect a traffic fine in the enforcement period.

 

Why this deduction is different

The TEAC starts from the premise that it is a deduction in the differential tax liability, which means that it applies regardless of whether the return results in a payment due, a refund, or a zero balance.Furthermore, it can be requested in advance, with a monthly payment from the AEAT, which in practice amounts to a direct transfer of public funds to the taxpayer.

Precisely because of this way of functioning, the explanatory memorandum of the law that introduced it defined it as a genuine negative tax.

Why is it not considered non-seizable aid?

Royal Decree-Law 9/2015 protects certain public benefits from seizure, such as minimum income support payments and aid for people at risk of social exclusion. The Central Economic-Administrative Court (TEAC) rules out that this deduction falls under that category, among other reasons because:

• It does not depend on the income of the dependent person with a disability, but on a limit of one's own income (8,000 euros per year, excluding exempt income)
• Its real purpose is to alleviate the tax burden of the taxpayer who works or carries out an economic activity, not to directly protect the person with a disability

 

A criterion that could affect more deductions

According to Raquel Jurado, a technician at the Register of Tax Advisors (REAF), the TEAC's reasoning can be extrapolated to the other deductions included in Article 81 bis, since they share the same legal configuration as deductions from the differential tax liability that function as a negative tax. This would also include:

• The deduction for a dependent child or ascendant with a disability
• The deduction for large families, both general and special category
• The additional increase for each child exceeding the minimum required in large families

When these deductions are accumulated in the same family unit, the amount that can be seized can easily exceed 2,400 or 3,600 euros per year.

It is worth noting that this criterion unifies the doctrine for the entire Administration, rendering ineffective previous interpretations more favorable to the taxpayer, such as the one adopted by the Regional Economic-Administrative Court of Andalusia in the opposite sense.

 

What does this mean in practice?

For private individualsIf you have debts with the Tax Office or other public creditors and you apply this deduction, its amount may be seized or offset ex officio, without any limit, regardless of whether it is disability or large family aid.

For self-employed individuals and companiesAlthough the deduction applies to personal income tax, it is advisable to take it into account when planning family taxation when there are outstanding tax debts, as it does not offer any additional protection against collection.

RecommendationIf you have this recognized deduction and an outstanding debt with the AEAT or another body, it is advisable to review your situation before the automatic compensation takes place, especially if you combine several of these deductions.

 

Do you have questions about how this TEAC ruling affects your tax return or outstanding debt? At our consultancy in Cieza, we can review your specific case. Contact us for a free consultation.