The sharp punishment suffered by Spanish banks on the stock market since October 16 is the best example of the damage that legal uncertainty can cause. The speculation that has targeted the institutions since the publication of the Supreme Court ruling on the tax payable when signing mortgages has nothing to do with banks’ activity—providing financing and managing households’ savings—nor with their solvency position. The High Court’s unexpected decision has generated great uncertainty by overturning a rule that had been established for more than two decades and that this very year was reaffirmed by its own case law.
The proper conduct of any activity requires clear and predictable rules. This is even more so in the case of banks, which play a fundamental role in society by financing economic growth and contributing to prosperity. Banks are an integral part of society, as their members are both shareholders and depositors in these institutions, and recipients of financing. This implies that the stability of banks is a priority for everyone. This situation should prompt our authorities to reflect deeply on all that is occurring and assess its potential future implications if the situation is not clarified and resolved as soon as possible.
Most surprising of all is that the Supreme Court ruling does not refer directly to banks. It is a change to a tax rule that determines who will pay the tax when signing a mortgage in the future. The ruling overturns the previous regulation, clear and unequivocal, which required the bank customer—the taxpayer for tax purposes—to pay the tax. Banks, obviously, did not collect any amount from their customers for the tax. From now on, and provided that the October 16 ruling is confirmed, banks will be the taxpayer liable for the tax. What will banks do? Comply with the law, as they have done in the past with respect to the existing legislation, on this matter and on any other.
It is only fair to acknowledge that banks bear no past responsibility for payment of the tax as a result of the tax change decided by the Supreme Court. This is fair because banks have not charged their customers anything for the tax. How can it be justified to penalise banks for having complied with the law in force? The legislation also reaffirms the non-retroactive effect of a final judgment that overturns a previous general regulation. The Supreme Court itself states this in another ruling that has set precedent. The ruling’s effect—like any change in the law—applies from the moment it is made public. Otherwise, it would create legal uncertainty and undermine confidence in the system.
Banks want to return to normal operations as soon as possible, which requires clear rules now and legal certainty in the future. Their operations cannot be repeatedly called into question—something unprecedented in the past and at European level—especially when banks always comply with the law in force.
