Puigverd Assessors analyzes the guarantees of administrators against the derivation of tax liability.

The tax liability of directors is a controversial topic in the business and legal worlds. Until recently, tax authorities could assign subsidiary liability to company directors for their tax debts , including in cases where no negligent or fraudulent conduct on their part could be proven. However, the Supreme Court recently issued a ruling that changed this scenario , establishing new guarantees for the defense of directors and limiting the conditions under which they can be held liable.

At Puigverd Assessors , we analyze in detail how this new ruling affects administrators and what implications it has.

The derivation of tax liability

Tax liability derivation refers to the process by which the Tax Authority can transfer liability for a tax debt to those responsible for the management and administration of the company , such as directors. This can occur when a company fails to comply with its tax obligations, such as the payment of VAT, personal income tax, or other taxes. Traditionally, directors could be held subsidiarily liable for the company's tax debt , regardless of their direct or indirect role in creating that debt.

The above situation generated a sense of legal uncertainty for administrators , since, in many cases, the derivation of liability was not sufficiently justified and could fall automatically simply due to the administrator's status, without the need to prove negligent conduct.

The Supreme Court ruling: reinforced guarantees

The Supreme Court ruling STS 3465/2025, issued on July 17, 2025 , established a significant change in this area. In this ruling, the Supreme Court emphasized that the Tax Administration cannot attribute subsidiary liability to directors solely because of their status as such . In other words, liability cannot be automatic; it must be proven that the director acted negligently or intentionally in order to be held liable for the company's tax debts.

This ruling strengthens the procedural guarantees for administrators and provides them with greater legal certainty against potential tax liability. Thus, the Supreme Court establishes a series of conditions to be met by the Administration in the process of deriving liability, of which we highlight the following:

1. Prohibition of strict liability : The liability of directors will no longer be automatically attributed simply by their status as directors. The Tax Administration must prove that the director acted intentionally or negligently in the management of taxes. This means that a director cannot be charged without providing concrete evidence of wrongdoing.
2. Individualized motivation : In the derivation of tax liability, the Administration must clearly and specifically indicate which action by the administrator allowed or facilitated the tax noncompliance. Thus, if the Administration only refers to the company's noncompliance with its tax obligations without specifying the specific action of the administrator, the agreement will be considered void.
3. Burden of proof : Another important change is that the Supreme Court establishes that the burden of proof falls on the Administration. This means that it will not be the administrator who must prove his or her innocence, but rather the Administration that must prove that the administrator acted negligently or fraudulently. This amendment provides greater protection for administrators, as they will no longer have to defend themselves against a generic accusation; instead, solid evidence from the Administration will be required.

What implications does this ruling have for administrators?

The Supreme Court's ruling has several implications for company directors and, more generally, for those holding executive responsibilities in companies . Some of the most significant implications are as follows:

1. Enhanced legal certainty : Directors can feel more protected, since their liability will not be attributed by default. The requirement for specific justification from the Administration to attribute subsidiary liability prevents the practice of deriving liability without concrete evidence of negligence or wilful misconduct.

1. Possibility of challenging agreements : If a director receives a notice of diversion of liability and the agreement does not adequately specify the negligent or intentional conduct, the director will have the right to challenge the agreement in court. This opens the door to a more robust defense and allows for judicial review of the director's actions.

1. Need for rigorous documentation : With this new jurisprudence, directors must be especially careful with the documentation related to their decisions and actions. It is necessary to keep detailed records of meeting minutes, internal communications, decisions regarding company closure or bankruptcy proceedings, as well as other documents that can demonstrate their diligence and good faith in tax management.

1. Review of Previous Procedures : Company directors who have been subject to tax liability transfers in the past can review their cases in light of this ruling. If the transfer agreements did not meet the conditions established by the Supreme Court, they may be able to challenge them and obtain a review of the situation.

Thus, Supreme Court ruling STS 3465/2025 represents a significant step forward in the protection of directors against the transfer of tax liability. This ruling strengthens procedural safeguards and establishes that the Tax Administration must demonstrate, with concrete and substantiated evidence, the negligent or wilful conduct of directors before being able to transfer liability for tax debts. This regulatory change provides greater legal certainty for directors and opens the door to a more robust defense in cases of transfer of liability.

Directors should be aware of this new case law and adapt their management of business responsibilities , maintaining detailed documentation and acting with the utmost diligence to avoid any personal liability. If you find yourself in a situation where tax liability is derived, it is advisable to consult with a tax attorney to learn about the best defense options.

For more information and personalized advice on how this ruling may affect your situation, contact Puigverd Assessors, experts in tax and fiscal management.