When the COVID-19 crisis broke out in March 2020, public life came to a complete standstill.
At the same time, the tax authority’s “clock” was officially paused. This was a clear legal measure: because everything was shut down, the deadlines for citizens to submit documents or respond to requests were legally suspended. The aim was to ensure that no one would be disadvantaged during the lockdown. However, the key question the courts ultimately had to answer was not so much about the benefit for citizens, but whether the authorities themselves effectively gained extra time for their investigations.
Many taxpayers challenged this in court. Their argument was that, while the pause was understandable and necessary for citizens, the tax authorities should not have benefited from it. In their view, inspectors had already had sufficient time before the pandemic, and it was not reasonable to grant them an additional two and a half months of leeway. This raised a fair question: was the state of emergency meant to protect citizens, or did it also function as a hidden extension to prevent ongoing cases from expiring?
The courts’ answer has been clear and unequivocal: the authorities did gain that extra time. Judges have ruled that this additional period of 78 days is not optional, nor dependent on whether an inspector was behind schedule. It is a fixed and automatic rule that applies across the board. If an audit was still ongoing on 14 March, the tax authorities were legally granted that extra time, regardless of whether it was actually needed.
To understand how the tax authorities used this period, it is important to distinguish between what was visible and what was not. During the lockdown, offices were closed and inspectors could not send letters or impose penalties, this is known as the “formal process.” But the absence of external contact did not mean the work stopped. The courts confirmed that officials were able to continue working behind the scenes, analysing the information already available to them.
This situation gave the authorities a clear strategic advantage. While deadlines for citizens were suspended to safeguard their legal certainty, inspectors were able to continue analysing data internally. It is comparable to a football match in which the referee stops the clock due to an incident, while one team’s analysts continue reviewing match footage in the locker room. This internal work is entirely lawful and meant that, once the lockdown ended, the tax authorities already had their conclusions prepared and ready to act on.
In short, the pandemic did not result in audits being dropped due to time constraints. The courts confirmed that this interruption was a legitimate pause for both sides. In practice, it meant that the period within which the tax authorities can carry out audits was extended to compensate for the standstill. This ensured that no cases expired due to the exceptional circumstances and allowed the tax authorities to resume their work after the lockdown with their analyses complete and the timeline working in their favour.
Pilar Penadés