In the Tax Agency's strategic plan for 2024-2027, one of its main pillars, along with taxpayer assistance, preventive actions and the communication strategy, fraud control appears, as it could not be otherwise.

Within it, in subsection c.10, reference is made to “complex control actions in matters of collection”, where we can read, as something new, that:

“From another point of view, reference must be made to the exercise of civil actions in defense of public credit. These are cases in which the debt recovery mechanisms provided by the Tax Agency are insufficient to achieve the intended purpose, and it must therefore resort to judicial protection to achieve this, through the exercise of actions in the civil jurisdiction. Thus, it is a fact that the best defense of the rights of the State Treasury in terms of tax collection requires resorting to civil actions.”

This deserves comment and reflection and perhaps we should modulate the response that we are giving to creditor fraud through the collection of public credit.

If we look at the Pan-Hispanic dictionary of legal Spanish, we will see that “creditor fraud” is defined as an act by the debtor, generally simulated and rescindable, which leaves the creditor without any means of collecting what is owed.

These ideas are not complex and should not be complicated. Every creditor hopes to collect what is owed to him and to do so he relies on the assets of his debtor. The problem arises when this asset disappears, not by chance, but by acts of the debtor and his trusted group, which, as was said, leave the creditor without a means of collecting what is owed.

When this happens to a private creditor, civil jurisprudence has told us that the fraud of creditors may serve as grounds for the rescission action, for nullity due to contractual simulation due to non-existence of cause, and also, for the nullity action due to unlawful cause.

This can be complex and we must explain these three remedies that civil law provides to the frustrated creditor:

• In absolute simulation, the contract by which the assets left the debtor's estate, simply and plainly, does not exist - let's think of a sale without a price - since, lacking a cause, it suffers from an incurable defect.

• In the case of nullity due to unlawful cause, the contract being real and existing, the unlawful purpose sought by both parties has been elevated by jurisprudence to the category of unlawful cause determining the nullity of the contract. In this case, the fraud of creditors is not the consequence of the contract, but its cause, which, due to its illegality, determines, from its genesis, its structural ineffectiveness.

• The Paulian remedy is perhaps the most complex, since the contract is born perfect and valid, but becomes fraudulent due to the damage it ultimately causes to the creditor. In this remedy, the important thing is the damage and not the intention, with diligence in knowing that damage can be caused being more important than the exact degree of knowledge, with the remedy becoming objective in the case of provisions or titles that are lucrative or free of charge.

In conclusion and to make it clear, creditor fraud can be sought and desired by the debtor and by members of his trusted group who collaborate with him in hiding assets from the creditor. In this case, the remedy is the nullity of the contracts, either due to the lack of cause or due to an unlawful cause, and the consequence is the return of the assets to the debtor and the reconstruction of the patrimonial guarantee enjoyed by the creditor.

And if the fraud of creditors is not a cause, but a mere consequence, if what was important was not the intention, but the damage caused in the end, the remedy is the Paulian one, which does not reconstruct the debtor's assets, but operates the repressive effect of the embargo, that is, it respects the dispositive act carried out, but allows the harmed creditor to proceed to the embargo of the asset in the assets of the acquirer who, despite not being a debtor, must suffer the embargo.

This is basically the civil scheme of protection against fraud by creditors, and what happens is that when the person who suffers the fraud is the public creditor, being invested as he is with self-protection, he has at his disposal a specific and proper remedy, which is article 42.2 a) LGT.

This provision tells us that those who, with the aim of preventing the action of the tax administration, have been the cause or collaborators in said concealment, will be jointly responsible for the payment of what is owed and up to the amount of the value of the concealed assets and rights.

We clearly see that we are talking about the same thing, creditor fraud, that the conduct suffered by the creditor is the same and that what differs is the remedy applied.

This is why contentious jurisprudence has already told us that the power contained in article 42.2 a) LGT allows the protection of public credit without the need to resort to nullity or rescission actions.

And what for the private creditor are actions for annulment or rescission to be exercised before the civil judge, which allow either to reconstruct the assets or to reinstate the embargo, for the public creditor it is a power that, with self-protection, allows to declare debt on the person responsible for the damage, with the limit of the value of the hidden assets.

But we must understand that the Administration has all these remedies at its disposal, that perhaps the declaration of responsibilities should be, for efficiency, its first option, but that, if this route fails, nothing prevents the use of any other of those that the system puts at its disposal, such as revocation or nullity due to simulation, and so we can read it in the STS 24-04-2013, Civil Chamber, appeal for cassation 2108/2010.

And this is what the referred paragraph of the strategic plan of the Tax Agency 2024-2027 tells us, that for the best collection defense of the rights of the State Treasury it is necessary to resort to civil actions, and to illustrate this idea, we offer two examples:

• It may happen that the right to declare tax liability under article 42.2 a) LGT has expired.

  Well, nothing prevents the tax authorities from resorting to the nullity action due to simulation if the requirements are met, which, as everyone knows, is by definition imprescriptible, as can be read, for example, in the STS 11-19-2015, Civil appeal for cassation 1329/2014.

• It may happen that the conduct that causes harm to the public creditor involves someone of whom the subjective element of article 42.2 a) LGT cannot be predicted, think of a donation made, in fraud of the public creditor, to a minor.

  Well, nothing prevents the Administration from resorting to the Paulian remedy which, in the case of acts of gratuitous title, provides an objective remedy, without the need to resort to the plane of conscience or guilt, as stated by the STS 07-09-2012, Civil appeal for cassation 560/2010.

In summary and conclusion, we must reflect on the fact that for the best collection defense of the rights of the State Treasury, it is necessary to resort to civil actions.