What does Article 42.2.a) of the LGT really imply?

In recent days, the Spanish Tax Agency has published a relevant analysis on the legal nature of Article 42.2.a) of the General Tax Law (LGT), a topic that often raises doubts and, sometimes, concern among insolvency administrators, business owners, and advisors.

But what does this mean for you if you run a company, are self-employed, or manage a business?
At Adlanter, we translate it into clear language for you.

What is Article 42.2.a) LGT and why does it matter?

This article regulates a type of tax liability that can affect third parties (people who are not the original taxpayer) when they have engaged in unlawful conduct that harms public revenue.

In simple terms:

The tax authorities can hold you responsible for certain tax debts of another person or company if they consider that your actions caused economic harm to the Treasury.

The key issue in the recent discussion was defining whether this liability is:

• Civil/compensatory (not a sanction)
• Or punitive (implies punishment and stricter procedural obligations)

I want more information

 

What has the European Court of Human Rights said?

The case Latorre Atance v. Spain (December 18, 2025) was key. The ECHR had to determine whether this liability should be considered “criminal” by applying the Engel criteria (criteria to define whether a measure is a hidden sanction).

The conclusion?
The Court affirmed three times that this is civil, not punitive, liability.
That is:

• You are not assigned the other person’s tax debts.
• You are not treated as a taxpayer.
• Your payment capacity is not analyzed.
• It is about repairing harm, not punishing you.

This is important because it limits procedural guarantees, providing clarity and consistency in the application of the law.

Where is the problem then?

Despite the technical and legal consensus, some financial press outlets have interpreted the ruling as reinforcing the idea that this liability is “almost punitive.”

This confusion produces two effects:

• Companies and professionals believe they are facing a sanctioning procedure (when they are not).
• Litigation is prolonged due to reliance on incorrect interpretations.

In practice, the tax authorities and courts must continue applying the law as civil liability, even if some parties insist otherwise.

What does this mean for your company?

Here’s what really affects you:

You are not being “sanctioned,” but “held liable”

Avoid unnecessary fear:

If you are assigned liability under 42.2.a), it is not a fine, but a claim linked to damages caused.

Less procedural burden

The requirements are civil, not those of punitive law (which are much stricter).

The Administration must prove unlawful conduct

Suspicion or indirect consequences alone are not enough.

In insolvency situations, this clarification protects you

Especially for insolvency administrators and professionals involved in bankruptcies.

Real examples to help you understand

Typical case: insolvency administrator

The tax authorities can claim damages if your decisions harm revenue but cannot treat you as if you committed a “tax crime.”

Typical case: business owner managing payments under financial stress

Liability could arise if your actions harmed the Treasury, but not under a sanctioning procedure logic.

How can you prevent issues related to 42.2.a)?

At Adlanter, we recommend:

• Establish clear procedures for decision-making when managing insolvencies or cash flow tensions.
• Always document your actions, especially if you are an insolvency administrator.
• Have continuous advisory support, not only when tax letters arrive.
• Act diligently and transparently in all operations affecting tax debts.

Adlanter conclusion

The analysis by the Tax Agency and the ECHR ruling convey a key message:

Liability under Article 42.2.a) LGT is not punitive. It is civil and compensatory.

This provides greater legal certainty, less uncertainty, and more clarity for companies, self-employed individuals, and professionals.
The paradox—as the Tax Agency analysis itself notes—is that, despite the legal consensus, many will continue to argue otherwise. But now you know how it really works.

At Adlanter, we are here to help you navigate these situations with clarity, rigor, and a close advisory approach.

Want to know if your company or role as administrator could be exposed?

Our tax team can provide a clear, fast, and jargon-free assessment. At Adlanter, we help prevent and manage these risks with specialized tax advice and rigorous tax-accounting management, ensuring that your decisions are well-documented, aligned with the law, and protected against potential liability. If you want peace of mind that your company is fiscally secure, we are here to support you.