The role of corporate directors is once again under scrutiny from the Spanish tax authorities and the courts. On 20 May, the Second Chamber of the Administrative Division of the Supreme Court issued Judgment No. 594/2025 in response to cassation appeal No. 3452/2023. This ruling reaffirms and builds upon the court's previous case law concerning the derivative tax liability of company directors under Article 43.1.a) of the General Tax Law.

In this decision, the Supreme Court addresses the important legal question of whether the burden of proof should be reversed in such proceedings, requiring the designated director to demonstrate any exonerating or extinguishing facts relating to their liability. The Court examines this issue through the lens of the markedly punitive nature of this type of liability, which brings it closer to the logic of sanctions and thus demands stronger taxpayer protections.

This judgment resolves the issue at hand and establishes stable, forward-looking doctrine, building on earlier rulings issued on 5 June and 2 October 2023. In all of these rulings, the Supreme Court consolidates the fundamental idea that a director’s liability cannot automatically stem from their position or the mere existence of non-compliance by the company. Rather, it requires a personal, culpable and decisive act or omission in the commission of the tax infringement. Therefore, any liability must be supported by specific facts indicating a lack of due diligence and cannot be based on generic assumptions or standard formulas.

With this new decision, the Supreme Court establishes a doctrine regarding the punitive nature of this type of liability, unequivocally rejecting any notion of strict (objective) liability. Two key consequences follow from this: (i) The burden lies with the Tax Administration to prove the director’s negligent or passive conduct in detail without resorting to stereotypical assumptions. (ii) In cases of doubt, the principle of in dubio pro reo must prevail as an expression of the fundamental right to the presumption of innocence. The judgment expressly rules out requiring the director to prove a negative fact, such as demonstrating that they acted diligently, thereby correcting criteria previously upheld by lower courts, such as the Audiencia Nacional.

From a practical standpoint, this decision will require the Tax Administration to reconsider its approach to derivative liability claims, which, until now, have often been based on formal presumptions or automatic reasoning. The Supreme Court’s position strengthens the legal defence of company directors and will probably restrict the widespread use of liability derivations based solely on holding office or prior sanctions imposed on the company. This new standard is expected to enhance legal certainty in the inspection and enforcement process by aligning administrative practice with the principles of punitive law and the evidentiary standards required in a rule-of-law system, thus strengthening protection for taxpayers against unjustified liability claims.