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On the 20th of November the Spanish parliament approved law 10/2012 on the taxation of judicial proceedings. In short this law will introduce an additional fee every time that someone initiates a legal proceeding in: the Civil court, the Labour court and courts dealing with public disputes. Not affected are the criminal courts and the military court (criminal cases represent approximately 70% of all legal proceedings in Spain).

The objective of this law is to refinance the financial deficit in the Spanish judicial system.

The law generated an incredible uproar of protests from consumer associations and from all legal professional associations, including judges, prosecutors and lawyers associations. The main criticism is that these taxes will create a barrier of entry to the judicial system, violating the constitutional rights of the citizen to receive judicial protection.

Law 10/2012 of On the 20th of November in Practice

Who is going to pay?

For the first time, actual persons will be taxed. There will be several changes on the existing law on free legal aid (“Ley de Asistencia Jurídica Gratuita” in Spanish) so it is not completely clear how this will evolve. Presently people that have a cumulative family income of more than 1282.80 € per month i.e. twice of the minimal Spanish inter-professional income (that is now 641.40€ per months) will have to pay these tax. Companies will also have to pay.

How much will I have to pay?

The amount will be the sum of a flat fee and a variable fee depending on the amounts claimed during the legal proceedings.

  • Flat fees for Civil Proceedings and Courts dealing with public disputes Depending on the case It will range from 100€ to 300€. For High Court  Appeals it will be 800€ and for Supreme Court it will be 1,200€.
  • For Labour courts: 500€ appeal and 750€ for Supreme Court.

The variable fee will be 0.5% of the amount claimed for sums up to 1 million €. The part over 1 million € will be taxed at 0.25%. There will be a discount of 10% on the tax if the legal procedure is filed using the online Internet procedure.

When do I have to pay?

In general the amount will have to be paid upfront at the start of the judicial proceedings. The only exception is for Social or labour courts where the payment will have to be made in case of appeal or when the file is sent to the high court.

Are there any exceptions?

There are cases that are exempt of this tax. These include:

  • Family law proceedings regarding custody of minor children or pensions.
  • Voluntary proceedings in case of insolvency or bankruptcy
  • Administrative disputes in cases of inactivity of public bodies
  • Administrative disputes from civil servants in relation of their statutory rights
  • Claims for Civil disputes less than 2,000€
  • Proceedings regarding fundamental rights

Where is this tax going to have the major impact?

The law will probably stop claims relating to traffic offences as well as disputes between landlord and tenant.  In particular when the judicial tax will be higher than the fine and when the difference won’t be worth the trouble in going through the administrative procedure.

Probably the persons penalized the most will be the individual claiming amounts from insurance companies and from medical malpractice.