Following the Supreme Court’s ruling that gold and jewellery purchases are taxed on the basis of the
Transfer Tax
. The Inland Revenue is carrying out I.T.P. checks for the last four years on shops dedicated to the sale and purchase of this type of goods (to see if they have paid this tax).

Specifically, the ruling examined the relationship between the Transfer Tax (ITPO) and the Value Added Tax (VAT) in the current regulations, as well as the relationship with individuals who sell gold or precious metals to traders who acquired assets in their commercial activities.

Therefore, the court determined that the transaction should be analyzed from the perspective of the transferor (natural person) and concluded that the transaction should be governed by the ITPO, although the law stipulates that the taxpayer is the buyer of the property because the law does not provide for any exceptions because the buyer is an entrepreneur.

Therefore, the said ruling dictates that penalties cannot be accepted for purchases of gold or jewellery for which I.T.P. should have been settled before 11 December 2019.

In its opinion, the European Court of Justice ruled that the Spanish provisions were incompatible with the Community Directive on the common system of taxation. On this basis, the Supreme Court dismissed the appeal, so that gold trading companies will have to pay this inheritance tax in 2020.

Until then, the criterion of the Treasury was that this type of operations were not taxed for I.T.P.. Therefore, the traders who did not pay the tax did not act in a culpable or negligent manner (requirements for a sanction).

Note. The tax authorities can only demand the unpaid tax and interest for late payment, but cannot impose penalties.