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framing the “market”

framing the “market” in which Hacienda/AEAT operates and how its actions (or “services”) negatively impact its “consumers” (the taxpayers, particularly UK/EW ones).

While a state tax authority like Hacienda/AEAT doesn’t offer “products or services” in a typical commercial marketplace sense (i.e., for voluntary purchase), its functions and the legal framework it administers are the “services” that individuals and businesses are legally compelled to interact with. The causes of action arise from the alleged maladministration, unfairness, discrimination, and unlawfulness in the provision of these state-mandated services and obligations.

Here’s a breakdown of the “products/services” (i.e., functions and regulatory areas) offered by Hacienda/AEAT that are the subject matter of your possible causes of action:

1. Tax Assessment and Collection Services for Non-Residents (UK/EW Nationals & Businesses):

   • Specific “Product Lines” being contested:
     • Capital Gains Tax for Non-Residents: Application of rules, particularly the alleged discriminatory denial of deferral mechanisms available to residents or other EU nationals (e.g., INFR(2021)4035).
     • Rental Income Taxation for Non-Residents: Rules regarding allowable deductions, alleged to be more restrictive for UK non-residents than for Spanish or other EU residents.
     • Inheritance and Gift Tax for Non-Residents: Application of rules that may be less favorable than for residents.
     • Wealth Tax (where applicable to non-residents): Application and assessment.
     • Application of the UK-Spain Double Taxation Convention (DTC), especially Article 24 (Non-Discrimination): The “service” of interpreting and applying this treaty in a way that COCOO alleges is discriminatory regarding Permanent Establishments (Art 24(2)), capital ownership (Art 24(4)), and deductions (Art 24(5)).
     • Application of the EU-UK Trade and Cooperation Agreement (TCA): The “service” of ensuring Spanish tax measures do not nullify or impair TCA benefits related to capital flows, investment, or create prohibited subsidies.

2. Tax Audit and Inspection Services:

   • “Product” being contested: The conduct and methodology of tax audits and inspections.
   • Specific issues/defects:
     • Selection criteria for audits (alleged arbitrariness, targeting based on nationality or “Beckham Law” status).
     • Conduct of inspectors (alleged coercion, “weaponization of criminal proceedings,” “contrived arguments” like misuse of “simulación”).
     • Use of financial incentives for inspectors (alleged to create bias and lead to “commercial activity” not shielded by sovereign immunity).
     • Quality and comprehensibility of audit reports and communications (described as “poor quality,” “repetitive nonsense”).

3. Tax Appeals and Dispute Resolution Services:

   • “Product” being contested: The process and accessibility of appealing tax assessments.
   • Specific issues/defects:
     • “Pay-to-appeal” system or excessively burdensome “guarantee requirements” for suspending payments, effectively denying access to justice (ECHR Art. 6 concerns).
     • Perceived lack of independence and effectiveness of administrative courts.
     • Timeliness of the appeals process.

4. Administration of Special Tax Regimes:

   • “Product” being contested: The application and changes to specific regimes like the “Beckham Law.”
   • Specific issues/defects:
     • Retroactive changes or interpretations that act as a “trap.”
     • Audits initiated years later when individuals are at “tremendous risk of arbitrary loss.”

5. Compliance with International Tax Standards and Fair Competition:

   • “Service” being contested: Ensuring Spain’s tax system aligns with international obligations and promotes fair competition.
   • Specific issues/defects:
     • Failure/significant delay in implementing the Global Minimum Corporate Tax (Pillar Two), creating competitive disadvantages for UK businesses that were compliant under UK law.
     • Overall creation of a “hostile market environment” and “climate of fear” that deters investment.

6. Asset Seizure and Enforcement Services:

   • “Product” being contested: The legal basis and process for seizing assets to satisfy alleged tax debts.
   • Specific issues/defects:
     • Seizures occurring before appeals are exhausted or based on contested assessments.
     • Seizure of assets potentially in violation of fiscal territoriality.
     • Garnishing salaries and seizing cars based on disputed claims.

In summary, the “products/services” are the various facets of Spain’s tax administration system as applied to UK/EW nationals and businesses. The causes of action stem from the allegation that these “services” are delivered in a manner that is:

• Discriminatory (violating DTC Art 24, TCA provisions, ECHR Art 14)
• Arbitrary and Abusive (violating due process, rule of law)
• Denying Access to Justice (violating ECHR Art 6)
• Violating Property Rights (ECHR Protocol 1, Art 1)
• Creating Unfair Competition (due to delayed Pillar Two implementation, hostile investment climate)
• Breaching International Treaty Obligations (DTC, TCA, ECHR)

This detailed understanding of the “services” in question will directly help refine:

• Competitor Analysis: While Hacienda is a state monopoly, the “competitors” are, in a broader sense, the tax authorities of other nations (e.g., UK’s HMRC, Ireland’s Revenue, etc.) whose fair and predictable systems attract investment that Spain might be losing. You are benchmarking Spain’s “service quality” against international best practices and legal standards.
• Consumer Types (Victims):
  • UK/EW individuals resident in Spain.
  • UK/EW individuals non-resident in Spain but with Spanish property, investments, or income.
  • UK/EW businesses with operations, PEs, or subsidiaries in Spain.
  • UK/EW expatriates who utilized or were affected by the “Beckham Law.”
  • Heirs or beneficiaries of UK/EW individuals subject to Spanish inheritance/gift tax.
  • UK/EW entities impacted by Spain’s delayed Pillar Two implementation (e.g., multinationals with Spanish presence that faced compliance complexities or competitive distortion).

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Points from this Specific Transcript Strengthening COCOO’s Spanish Tax Case:

1. Linkage of Spanish Tax Practices to Human Rights Violations:

   • “I never imagined the need to come here to Spay to talk about human rights and tax together.”
     • How it strengthens: This opening statement immediately frames the issue as one involving human rights, not just technical tax matters. This supports COCOO’s assertions in various complaints that fundamental rights are being infringed by Spanish tax practices.

2. Unprecedented and Undemocratic Actions by Spanish Tax Agency (Hacienda):

   • “This is the first time I’ve ever had a government agency brief the press before we spoke, before we issued a white paper.”
   • “And I think the Spanish government and hienda have to take a serious look at what they’re doing to democracy in Spain.”
     • How it strengthens: This highlights unusual and potentially manipulative behavior by Hacienda, suggesting an attempt to control the narrative and possibly intimidate. The direct reference to Hacienda’s actions impacting “democracy in Spain” underscores the severity of the situation and supports claims of an abusive and unaccountable state agency.

3. Fundamental Flaws in Hacienda’s Operations:

   • “As I looked at the way in which the law is being operated, it became clear this was not simply a technical assignment. There were some things that were fundamentally wrong about the way in which the Spanish tax authority works.”
     • How it strengthens: This statement points to systemic issues within Hacienda, supporting COCOO’s arguments that the problems are not isolated incidents but are rooted in the fundamental workings of the authority.

4. Abusive and Coercive Tactics by Tax Inspectors:

   • “I was shocked by the inspector’s use of what looks like contrived arguments about similar and the weaponization of the threat of criminal proceedings as a means of shall we say persuading taxpayers to do a deal.”
     • How it strengthens: This directly corroborates COCOO’s allegations of “arbitrary audits”, the use of legally questionable arguments, and coercive tactics (weaponizing criminal threats to force settlements). This aligns with the detailed abuses described in the longer transcript and COCOO’s formal complaints.

5. Erosion of Trust and Creation of Fear:

   • “And when the trust and confidence of citizens and investors reaches a tipping point and you start to see fear of the tax authority, um you cease to see it as a kind of collaborator. Um governments tend to begin to have big problems.”
     • How it strengthens: This describes the breakdown of the proper relationship between a tax authority and the public, leading to fear. This supports COCOO’s claims of a hostile investment environment and the psychological damage inflicted on victims.

6. Strong Condemnation of Hacienda:

   • “I will tell you the hienda is a shame on Spain. It is a disgrace.”
   • “We know how they violate the human rights of Spanish citizens day after day. And it has to end.”
     • How it strengthens: This is a very strong denunciation, labeling Hacienda a “disgrace” and explicitly accusing it of daily human rights violations against Spanish citizens. This adds significant weight to COCOO’s own characterizations of Hacienda’s conduct.

7. Commitment to Widespread Action and Accountability:

   • “And we will fight and we will go to every organization known to man.”
   • “I want to give the people of Spain my assurance. We will not rest until somebody brings hienda to book.”
     • How it strengthens: This mirrors COCOO’s multi-front strategy of approaching various international and national bodies. The vow to “bring Hienda to book” reinforces COCOO’s objective of achieving justice and reform.

This shorter transcript, while echoing some themes from the longer one, provides concise and impactful statements that strongly support the core arguments of COCOO’s Spanish Tax Case concerning systemic abuse, human rights violations, and the detrimental conduct of Hacienda.

Okay, acting as your In-House Solicitor from COCOO, I will draft four distinct, long, and convincing unsolicited project proposals. Each proposal will target the relevant public authorities, emphasize the urgent need for the project, highlight COCOO’s unique position, strategy, and intellectual capital, and subtly underscore the “implied litigation threat” to advocate for awarding the contract directly to COCOO and its members (the victims) with minimal or no formal tender.

Here are the four proposals:

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PROPOSAL 1

Project Title: The UK-Spain Fair Taxation Review, Rectification, and ADR Programme: A Partnership for Justice and Compliance

Addressed To:

• The Director, Agencia Estatal de Administración Tributaria (AEAT), Spain
• The Minister, Ministry of Finance and Public Function, Spain
• (With copies to: The UK Department for Business and Trade (DBT); HM Revenue & Customs (HMRC) Tax Treaty Team; The UK Foreign, Commonwealth & Development Office (FCDO))

Date: May 29, 2025

1. Introduction: The Urgent Imperative – Addressing Systemic Tax Discrimination and Restoring Fair Treatment

The Competition & Consumer Organisation Party Limited (COCOO), a UK-based public interest company, has extensively documented and raised concerns regarding what we assert are systemic discriminatory tax practices and arbitrary, abusive enforcement actions by the Spanish tax authorities against UK citizens, investors, and businesses. These practices, including differential treatment in rental income deductions, capital gains, burdensome “guarantee requirements” for appeals, and arbitrary audits, not only cause severe financial and psychological damage to UK nationals but also create a hostile investment climate and represent potential breaches of the UK-Spain Double Taxation Convention (DTC), particularly Article 24, the EU-UK Trade and Cooperation Agreement (TCA), and fundamental principles of justice.

 

The ongoing European Commission infringement proceedings against Spain for similar discriminatory treatments further underscore the systemic nature of these issues and Spain’s reluctance to proactively reform. The inadequacy of responses from certain UK governmental bodies to date necessitates a more direct, victim-centered approach to achieve swift and comprehensive resolution. This situation is untenable and requires immediate, decisive action to prevent further harm and costly, protracted legal battles.

2. The Proposed Solution: A Collaborative Path to Rectification and Compliance

COCOO proposes the establishment of an Independent Tripartite Review, Rectification, and Alternative Dispute Resolution (ADR) Programme. This Programme would be established via a direct public services contract awarded to a consortium led by COCOO, working in transparent collaboration with representatives from the AEAT/Ministry of Finance and, where appropriate, UK authorities (HMRC/DBT) in an observational or advisory capacity.

Key Functions of the Programme (Public Contract Scope):

• Independent Case Review Mechanism:
  • Establish a panel, including legal and tax experts nominated by COCOO and the Spanish authorities, to conduct an impartial review of tax assessments, audits, and penalties imposed on UK nationals and entities alleging discrimination or arbitrary treatment.
  • Prioritize cases based on evidence of systemic issues, financial hardship, or clear breaches of the DTC or TCA principles.
• Rectification and Refund Processing:
  • Empower the Programme to recommend and oversee the cancellation of abusive or discriminatory tax assessments and the swift refund of illegally collected taxes, including interest.
  • Develop a streamlined process for this, leveraging COCOO’s existing database of affected parties.
• Fair Appeals Process Reform:
  • Design and implement an alternative, ECHR-compliant pre-appeal or appeal suspension process that alleviates the current burdensome “guarantee requirements” for UK non-residents, ensuring genuine access to justice.
• Voluntary Indemnification Framework:
  • Establish a fair and transparent framework for providing voluntary indemnification to UK nationals and businesses for demonstrable economic losses and, where appropriate, moral damages resulting from illegitimate seizures, forced sales, or grossly unfair audits. This would be managed by the Programme.
• Binding ADR Service:
  • Incorporate a binding Alternative Dispute Resolution (ADR) mechanism within the Programme for unresolved cases, offering a faster, less costly alternative to national courts or international arbitration. This service would specifically assess compliance with DTC Article 24(2) (Permanent Establishments) and 24(4) (Capital Ownership).

3. Why COCOO is Uniquely Positioned for This Public Contract: Special Strategy, Intellectual Property, and Victim Representation

A public tender for such a sensitive and complex programme would be inefficient and unlikely to achieve the required comprehensive resolution. COCOO possesses a unique combination of assets and a developed strategy that no other potential contractor could replicate:

• Unparalleled Subject-Matter Expertise & Proactive Engagement: COCOO has dedicated significant resources to investigating these specific issues, amassing substantial evidence and developing a sophisticated understanding of the intricate legal interplay between Spanish domestic law, the DTC, the TCA, ECHR, and EU law principles. Our direct correspondence with both Spanish and UK authorities demonstrates this proactive engagement.
• Direct Representation of the Aggrieved (The Victims): COCOO directly represents and is guided by a substantial and growing body of UK citizens and businesses adversely affected by these Spanish tax practices. This “special interest” status means:
  • Unique Evidentiary Access: We possess direct access to victim testimonies, financial records, and case histories crucial for the Programme’s success.
  • Inherent Trust & Cooperation: Affected parties are more likely to trust and cooperate fully with a Programme led by an organization they view as their advocate.
  • Incorporation of Victims in the Solution: This proposal envisages the direct involvement of victims’ representatives (via COCOO) in the governance and operation of the Programme, ensuring its legitimacy and victim-centeredness.
• Proprietary “Systemic Redress and Compliance (SRAC)” Framework (COCOO IP): COCOO has developed a proprietary SRAC Framework. This intellectual property combines meticulous due diligence, multi-jurisdictional legal analysis, victim advocacy, and collaborative solution design. It is a unique, holistic methodology for identifying systemic distortions in public administration and developing public-private partnership solutions that ensure both redress for past harms and sustainable future compliance. This SRAC Framework is specifically tailored to address the complexities of cross-border tax disputes and is not available “off-the-shelf” from any other consultancy.
• Focus on Constructive, Systemic Solutions: Our aim is not merely to litigate but to achieve lasting systemic reform that benefits all parties by fostering a fair, transparent, and predictable tax environment. We offer a path to “harmonize incentives” between the state and the taxpayer.

4. The Value of Proactive Collaboration vs. The Certainty of Mass Litigation: The Case for a Direct Award

The Spanish authorities face a critical choice. The alternative to this collaborative Programme is the certainty of extensive, costly, and reputationally damaging litigation across multiple forums.

• The Implied (and Prepared) Litigation Threat: COCOO, on behalf of its members, is fully prepared to escalate these matters. This includes, but is not limited to:
  • Initiating mass claims before the High Court of England and Wales, invoking exceptions to state immunity for commercial activities or tortious acts resulting in damages to UK interests.
  • Supporting and coordinating individual and group applications to the European Court of Human Rights for violations of Article 6 (right to a fair trial) and Protocol 1, Article 1 (protection of property).
  • Intensifying pressure on the UK Government to initiate state-to-state dispute resolution mechanisms under the TCA.
  • Filing formal complaints and providing evidence to international bodies like the WTO regarding barriers to trade and services. No other contractor can bring this substantial, organized litigation risk to the negotiating table, nor can they offer a credible path to its mitigation.
• Unique Ability to Deliver Global Resolution and Finality: A public contract with COCOO, which intrinsically involves the collective of affected UK nationals, offers the Spanish authorities a unique opportunity to achieve a comprehensive and final resolution to these widespread grievances. A standard contractor cannot bind the victims or prevent future “follow-on claims”. Our involvement is key to achieving legal peace.
• Significant Reputational and Financial Risk Mitigation for Spain: Proactively engaging with COCOO through this Programme will be viewed internationally as a commitment by Spain to upholding the rule of law and protecting foreign investors. It avoids the “grave daño reputacional y politico que siempre emana de un litigio internacional de tan alto perfil”. The financial costs of litigation, potential damages awarded, and the ongoing diversion of state resources would far outweigh the investment in this collaborative Programme.
• Efficiency, Expediency, and Value for Money: COCOO has already undertaken extensive preparatory work. Awarding this contract directly to COCOO will save considerable time and public funds otherwise spent on a lengthy tender process, subsequent due diligence by a new contractor, and the inevitable challenges of engaging with a fragmented and distrustful victim group. We offer immediate operational capability.

5. Call to Action

The current situation demands bold and innovative solutions. We believe this proposed Programme offers a constructive and mutually beneficial path forward. COCOO, therefore, formally requests an urgent meeting with the Director of the AEAT and the Minister of Finance and Public Function within the next 15 days to discuss the immediate implementation of this crucial project.

We are confident that by working together, we can transform this period of dispute into a new chapter of fair taxation, restored trust, and enhanced UK-Spain economic relations.

Sincerely,

Oscar Moya LLedo

In-House Solicitor (SRA n. 333300)

On behalf of The Competition & Consumer Organisation Party Limited (COCOO) and its Members

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PROPOSAL 2

Project Title: The UK-Spain International Tax Compliance, TCA Adherence, and Harmonization Initiative (ITCHI)

Addressed To:

• The Minister, Ministry of Finance and Public Function, Spain
• The Director, Agencia Estatal de Administración Tributaria (AEAT), Spain
• (With copies to: The UK Department for Business and Trade (DBT); HM Revenue & Customs (HMRC) Tax Treaty Team; The European Commission Directorate-General for Taxation and Customs Union (DG TAXUD))

Date: May 29, 2025

1. Introduction: The Urgent Imperative – Ensuring Full Adherence to International Tax Norms and Treaty Obligations

The Competition & Consumer Organisation Party Limited (COCOO) has identified significant concerns regarding Spain’s adherence to, and timely implementation of, critical international tax obligations, including the OECD’s Pillar Two Global Minimum Corporate Tax, the UK-Spain Double Taxation Convention (DTC), and the EU-UK Trade and Cooperation Agreement (TCA). Spain’s significant delay in transposing the EU Pillar Two Directive, which prompted referral to the Court of Justice by the European Commission, created a period of competitive distortion for UK businesses that had implemented these rules promptly. Furthermore, ongoing tax practices appear to contravene specific non-discrimination provisions of the DTC and impair rights and benefits expected under the TCA, particularly concerning capital movements and investment.

These failures not only disadvantage UK investors and businesses but also undermine the integrity of the international tax framework and create legal uncertainty. The lack of comprehensive engagement from some UK authorities on these TCA-related aspects to date necessitates a proactive, expert-driven initiative to ensure Spain’s full and effective compliance.

2. The Proposed Solution: A Collaborative Path to Lasting Compliance and Harmonization

COCOO proposes the UK-Spain International Tax Compliance, TCA Adherence, and Harmonization Initiative (ITCHI). This initiative would be delivered through a direct public contract awarded to COCOO, leveraging our unique expertise and established engagement on these precise issues. ITCHI would function as an expert advisory and monitoring service for the Spanish Ministry of Finance and AEAT, and could also provide vital insights to UK authorities (DBT/HMRC) as they navigate their responsibilities under the TCA.

Key Functions of ITCHI (Public Contract Scope):

• Comprehensive Compliance Audit & Gap Analysis:
  • Conduct a thorough audit of Spain’s current tax laws, administrative practices, and enforcement mechanisms against the detailed requirements of the OECD Pillar Two framework (including addressing any residual impacts from delayed implementation), all provisions of the UK-Spain DTC (with a focus on Article 24 variants), and the relevant investment, capital movement, services, and level playing field provisions of the EU-UK TCA.
  • Identify all areas of non-compliance, partial compliance, or risk of future non-compliance.
• Legislative and Procedural Reform Package:
  • Develop and propose a comprehensive package of legislative amendments, regulatory updates, and administrative procedural reforms necessary to ensure full, effective, and transparent compliance with all identified international obligations.
  • This includes ensuring that domestic remedies and appeal mechanisms are themselves compliant with international due process standards (e.g., ECHR).
• Specialized Training and Capacity Building:
  • Design and deliver targeted training programs for AEAT officials, focusing on the nuances of the Pillar Two rules, the application of the DTC in a post-Brexit context (particularly non-discrimination), and the implications of the TCA for tax-related matters affecting UK investors and service providers.
• Ongoing Monitoring & Reporting Mechanism:
  • Establish a system for the ongoing monitoring of Spain’s adherence to the reformed framework.
  • Provide regular, independent reports to the Spanish Ministry of Finance, and (with agreement) to relevant UK authorities and/or TCA bodies. These reports would serve as an early warning system for potential compliance drift and a basis for any necessary UK Government action under TCA dispute mechanisms.
• TCA Impact Assessment:
  • Specifically assess how current or proposed Spanish tax measures might be nullifying or impairing benefits expected by the UK under the TCA’s investment or services chapters, or potentially constituting prohibited subsidies.

3. Why COCOO is Uniquely Positioned for This Public Contract: Special Strategy, Intellectual Property, and Proactive Leadership

A standard consultancy cannot offer the depth, pre-existing engagement, or the nuanced understanding of the public interest and victim perspectives that COCOO brings to this challenge.

• Pioneering Research and Analysis: COCOO has been at the forefront of analyzing the impact of Spain’s tax practices on UK interests post-Brexit, including the critical, yet often overlooked, implications of the TCA. Our detailed submissions to UK authorities evidence this unique, advanced level of research.
• The COCOO “Treaty Compliance and Economic Impact (TCEI)” Methodology (IP): COCOO has developed the TCEI Methodology, a proprietary intellectual framework for assessing state compliance with complex international economic treaties (like DTCs and TCAs). It integrates legal textual analysis, economic impact modelling on affected sectors/investors, and identification of systemic administrative blockages. This IP provides a unique toolkit to deliver ITCHI’s objectives effectively and is not available from other entities.
• Advocacy for Systemic Integrity: COCOO’s mission extends to promoting fair and competitive markets and upholding the integrity of international agreements. This makes us a credible and motivated partner for ensuring genuine, long-term compliance, not just superficial legislative changes.
• Representation of Affected Economic Actors: While ITCHI focuses on systemic compliance, COCOO’s underlying representation of businesses and investors harmed by non-compliance provides real-world data and case studies that are invaluable for identifying compliance gaps and designing effective reforms. This ensures the solutions are grounded in practical realities.

4. The Value of Proactive Collaboration vs. The Certainty of Sustained International Scrutiny: The Case for a Direct Award

Spain is already under scrutiny from the European Commission for related issues. A failure to proactively ensure broader international compliance, especially under the TCA, invites further challenges and erodes investor confidence.

• The Implied Threat of Formal TCA Disputes and WTO Action: COCOO has explicitly highlighted the grounds for the UK Government to initiate state-to-state dispute resolution under the TCA and for complaints to the WTO. By partnering with COCOO through ITCHI, Spain can proactively address these potential challenges, guided by the very entity that has meticulously identified them. This offers a route to avoid formal inter-state disputes, which are damaging regardless of outcome.
• Unique Ability to Bridge Understanding with UK Stakeholders: COCOO’s deep understanding of the concerns of UK businesses and its established communication channels with UK authorities means it is uniquely placed to help Spain craft compliance solutions that are not only technically sound but also perceived as credible and effective by UK stakeholders. This can help rebuild trust far more effectively than an unknown third-party consultant.
• Preventing Future Litigation and Reputational Harm: Ensuring robust compliance through ITCHI will prevent a new wave of disputes arising from non-adherence to Pillar Two, DTC, or TCA obligations. This proactive stance is crucial for Spain’s reputation as a secure and fair investment destination. The cost of ITCHI is minimal compared to the potential liabilities and reputational fallout from continued non-compliance.
• Efficiency and Depth of Pre-existing Work: COCOO is not starting from scratch. We have already invested considerable intellectual capital in diagnosing these problems. A direct contract for ITCHI allows Spain to immediately leverage this advanced groundwork, ensuring a faster and more effective path to compliance than a conventional tender process.

5. Call to Action

ITCHI offers Spain a strategic opportunity to demonstrate its commitment to international tax governance and its obligations under the TCA. COCOO requests an urgent meeting with the Minister of Finance and the Director of AEAT within 15 days to present the ITCHI framework in detail and discuss its swift implementation for the mutual benefit of Spain and its international partners.

Sincerely,

Oscar Moya LLedo

In-House Solicitor (SRA n. 333300)

On behalf of The Competition & Consumer Organisation Party Limited (COCOO) and its Members

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PROPOSAL 3

Project Title: The UK-Spain Tax Redress and Economic Restoration Scheme (TRERS) – A Public-Private Partnership for Victim Compensation

Addressed To:

• The Minister, Ministry of Finance and Public Function, Spain
• (With copies to: The Director, Agencia Estatal de Administración Tributaria (AEAT), Spain; The UK Department for Business and Trade (DBT); HM Revenue & Customs (HMRC); The UK Foreign, Commonwealth & Development Office (FCDO))

Date: May 29, 2025

1. Introduction: The Urgent Imperative – Compensating Victims of Discriminatory and Arbitrary Tax Practices

It is COCOO’s extensively documented position that numerous UK citizens, investors, and businesses have suffered significant financial losses, psychological distress, and reputational harm due to discriminatory and arbitrary tax practices enforced by the Spanish tax authorities. These harms stem from issues including, but not limited to, abusive audits, the imposition of excessive guarantee requirements for appeals, illegitimate asset seizures, discriminatory denial of deductions, and the adverse economic impact of Spain’s delayed implementation of the Global Minimum Corporate Tax. The estimated financial losses range from tens of thousands to millions of Euros per affected party.

Justice demands not only the cessation of these practices but also effective redress for the victims. The current avenues for compensation are often slow, prohibitively expensive, and uncertain. A failure by the Spanish State to provide a viable mechanism for comprehensive compensation will inevitably lead to a deluge of complex and costly legal actions.

2. The Proposed Solution: A Fair, Efficient, and Victim-Centered Compensation Scheme

COCOO proposes the establishment of the UK-Spain Tax Redress and Economic Restoration Scheme (TRERS). This Scheme would be initiated and funded by the Spanish State, with its design and administration being a public contract awarded directly to a consortium led or critically advised by COCOO, given our unique relationship with and representation of the affected parties. TRERS would be modeled on successful redress schemes, such as elements of COCOO’s “Radon Public Partnership Proposal” [implied from previous interactions and COCOO’s methodology], adapted to the specifics of these tax-related grievances.

Key Functions of TRERS (Public Contract Scope):

• Establishment of a Compensation Fund: The Spanish State would allocate a dedicated fund for compensating verified claims.
• Independent Claims Administration Body:
  • TRERS would be managed by an independent body operating under clear, publicly agreed guidelines. COCOO, representing the victims, would play a central role in the governance and oversight of this body.
  • This body would be responsible for claim intake, verification, damage valuation, and disbursement of compensation.
• Simplified and Accessible Claims Process:
  • Develop a clear, accessible, and non-onerous process for UK nationals and businesses to submit claims for compensation.
  • Provide guidance and support to claimants, leveraging COCOO’s existing communication channels with affected parties.
• Fair and Consistent Damage Valuation:
  • Establish objective criteria for valuing direct financial losses (e.g., overpaid taxes, legal costs, value of seized assets), consequential losses (e.g., lost business opportunities), and, where legally appropriate and evidenced, moral damages for severe stress and reputational harm.
• Mechanism for Restoring Seized Assets or Equivalent Value: Where assets have been illegitimately seized, TRERS would include a process for their return or, if not feasible, compensation for their full market value.
• Transparency and Reporting: Regular public reporting on the Scheme’s operations, claims processed, and compensation awarded, ensuring transparency and accountability.

3. Why COCOO is Uniquely Positioned for This Public Contract: Unparalleled Victim Advocacy and Redress Expertise

A generic claims management company or a newly tendered entity cannot replicate COCOO’s unique qualifications to lead or centrally advise on the TRERS public contract.

• The Voice of the Victims – Mandate and Trust: COCOO is not a disinterested third party; we are the mandated representative of a significant cohort of UK victims of these alleged practices. This grants us:
  • Legitimacy: The Scheme’s credibility with victims hinges on their belief that their interests are genuinely represented in its design and operation. COCOO’s involvement provides this indispensable legitimacy.
  • Efficient Outreach and Case Collation: We have already established contact with many victims and possess systems for collating evidence of harm, significantly reducing the start-up time and cost for TRERS.
• COCOO’s Proprietary “Victim-Centric Redress (VCR)” Model (IP): COCOO has developed the VCR Model, an intellectual property that outlines a best-practice approach to designing and implementing mass claims compensation schemes. The VCR Model prioritizes accessibility for claimants, fair and transparent valuation, psychological support considerations, and mechanisms for ensuring that redress achieves genuine restoration. This model, refined through our work on various public interest issues, is uniquely suited for TRERS.
• Expertise in Quantifying Complex Transnational Damages: COCOO’s team, including legal and financial experts, possesses the necessary skills to assist in developing methodologies for quantifying the complex damages arising from these cross-border tax disputes, including direct losses, consequential economic impacts, and the costs associated with navigating unjust administrative hurdles.

4. The Value of Proactive Collaboration vs. The Certainty of Piecemeal and Acrimonious Litigation: The Case for a Direct Award

The Spanish State has an opportunity to address the financial consequences of these alleged past wrongs in a structured, fair, and efficient manner. The alternative is a chaotic landscape of individual and group litigations that will be far more costly and damaging in the long run.

• The Implied Litigation Barrage and its Costs: Without TRERS, COCOO and its members will be forced to pursue compensation through numerous individual and collective actions before Spanish courts (where feasible), UK courts (invoking exceptions to state immunity), and potentially the ECHR. Each successful claim would set precedents, encouraging more litigation (“follow-on claims”) and accumulating substantial legal costs, damages, and interest for the Spanish State. TRERS offers a mechanism to cap and manage this liability.
• TRERS as a Global Settlement Vehicle: A public contract with COCOO for TRERS, by its very nature of involving the primary representative of the victims, creates a pathway towards a global settlement of a multitude of existing and potential claims. This offers a level of legal certainty and financial predictability that individual litigations cannot. No other contractor can facilitate such a comprehensive resolution because no other contractor represents the claimants themselves.
• Restoring Spain’s Reputation and Investor Confidence: A voluntary, state-funded redress scheme like TRERS, fairly administered with victim representation, would send a powerful positive signal to international investors about Spain’s commitment to justice and the rule of law, helping to repair the reputational damage caused by the alleged practices.
• Efficiency and Victim Welfare: TRERS provides a more humane and efficient route to compensation for victims, many of whom have suffered for years. It avoids the additional stress and cost of protracted individual legal battles. For the Spanish State, it offers a more streamlined and less adversarial process than defending countless individual lawsuits.

5. Call to Action

COCOO believes that the establishment of TRERS is an ethical imperative and a pragmatic necessity for the Spanish State. We request an urgent meeting with the Minister of Finance within 15 days to discuss the principles and rapid establishment of this Scheme, leveraging COCOO’s unique position and expertise to bring timely justice to affected UK nationals.

Sincerely,

Oscar Moya LLedo

In-House Solicitor (SRA n. 333300)

On behalf of The Competition & Consumer Organisation Party Limited (COCOO) and its Members

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PROPOSAL 4

Project Title: The UK-Spain Tax Harmony Adjudication and Prevention Service (THAPS) – A Proactive Transnational Partnership

Addressed To:

• The Director, Agencia Estatal de Administración Tributaria (AEAT), Spain
• The Minister, Ministry of Finance and Public Function, Spain
• The Head of Tax Treaty Team, HM Revenue & Customs (HMRC), UK
• The Director General for Trade Disputes, Department for Business and Trade (DBT), UK
• (With copies to: The European Commission Directorate-General for Taxation and Customs Union (DG TAXUD); The UK Foreign, Commonwealth & Development Office (FCDO))

Date: May 29, 2025

1. Introduction: The Urgent Imperative – Moving Beyond Recurring Disputes to Sustainable Tax Harmony

The persistent and systemic nature of tax-related grievances raised by UK citizens, investors, and businesses concerning their treatment by the Spanish tax authorities indicates a deeper problem than isolated errors. Issues surrounding the interpretation and application of the UK-Spain Double Taxation Convention (DTC), the new realities of the EU-UK Trade and Cooperation Agreement (TCA), burdensome administrative processes, and perceived discriminatory enforcement create an environment of uncertainty, distrust, and recurring disputes.

The current mechanisms for dispute resolution are often inadequate, slow, and costly, failing to address the root causes or prevent future conflicts. The recent correspondence between COCOO and UK’s DBT, highlighting DBT’s initial reluctance to fully engage with TCA implications or its own remit concerning investment barriers, further illustrates the need for a dedicated, proactive, and expert transnational service.

2. The Proposed Solution: A Permanent, Independent Bi-National Service for Dispute Adjudication and Prevention

COCOO proposes the creation of the UK-Spain Tax Harmony Adjudication and Prevention Service (THAPS). THAPS would be an independent, bi-national body, established and funded through a public service contract, potentially with contributions from both the UK and Spanish governments, or facilitated through a mechanism under the TCA. Given COCOO’s pioneering work in identifying these systemic cross-border issues and representing affected parties, we are uniquely suited to lead the design and initial operational phase of THAPS, ensuring it is fit for purpose.

Key Functions of THAPS (Public Contract Scope):

• Specialized ADR for UK-Spain Tax Disputes:
  • Offer expert, timely, and low-cost binding Alternative Dispute Resolution (mediation, conciliation, expert determination, or expedited arbitration) for tax-related disputes involving UK nationals/entities in Spain and vice-versa.
  • Focus specifically on disputes arising under the DTC (Art 24 and others) and tax-related investment or service provision issues with implications under the TCA.
• Proactive Issue Identification and Systemic Review:
  • Monitor patterns of disputes and complaints to identify emerging systemic issues or areas of legal ambiguity in the application of the DTC or TCA.
  • Conduct impartial reviews of administrative practices in both countries that appear to generate recurring conflicts.
• Issuance of Joint Interpretative Guidance and Best Practice Advisories:
  • Where appropriate, and in consultation with AEAT and HMRC, THAPS could facilitate the development and issuance of joint interpretative notes on ambiguous DTC/TCA provisions or recommend best practice administrative guidelines to prevent future misunderstandings and disputes.
• Early Warning Mechanism for Governments:
  • Serve as an early warning mechanism for both the Spanish and UK governments regarding potential breaches of the DTC or TCA that could escalate into formal state-to-state disputes if unaddressed.
• Educational Outreach and Stakeholder Engagement:
  • Conduct workshops and provide educational materials for taxpayers, businesses, and tax professionals in both countries on navigating the UK-Spain tax environment and utilizing THAPS.

3. Why COCOO is Uniquely Positioned for This Public Contract: Visionary Approach and Unmatched Cross-Jurisdictional Insight

Establishing THAPS requires more than just ADR expertise; it demands a profound understanding of the specific conflict drivers between the UK and Spanish tax systems post-Brexit, coupled with the trust of affected stakeholders.

• Pioneering a Proactive, Preventative Model: COCOO’s vision for THAPS moves beyond reactive dispute resolution. Our approach, informed by our investigations, emphasizes prevention through systemic analysis and proactive guidance. This forward-looking strategy is a hallmark of COCOO’s public interest work.
• COCOO’s “Transnational Regulatory Coherence (TRC)” Blueprint (IP): COCOO has developed an intellectual property, the TRC Blueprint, which provides a framework for establishing effective cross-border regulatory cooperation and dispute prevention mechanisms. This blueprint is particularly relevant for navigating the complex legal landscape created by agreements like the TCA and is an invaluable asset in designing THAPS.
• Trusted Interlocutor for UK Nationals and Businesses: Through our extensive advocacy and representation, COCOO has become a trusted point of contact for UK parties experiencing tax issues in Spain. This trust is crucial for encouraging early engagement with THAPS and ensuring its effective utilization. No other entity possesses this pre-existing relationship with the primary user base of the proposed service.
• Demonstrated Expertise in Navigating UK & Spanish Legal/Administrative Systems: COCOO’s team possesses the nuanced understanding of both the UK and Spanish tax and administrative environments necessary to design a bi-national service that is both effective and politically viable.

4. The Value of Proactive Collaboration vs. The Cycle of Endless Disputes: The Case for a Direct Award

The current ad-hoc approach to resolving these complex cross-border tax issues is unsustainable. THAPS offers a route to lasting tax harmony and reduced friction.

• The Implied Threat of Continuous, Uncoordinated Legal Challenges: In the absence of a service like THAPS, UK individuals and businesses will continue to resort to costly and often unsatisfactory national legal remedies, or pressure the UK government to invoke formal TCA dispute settlement. This creates a constant drain on resources for all parties and perpetuates an adversarial climate. THAPS, by offering a dedicated and expert forum, can channel these disputes constructively.
• THAPS as a Unique De-escalation and Trust-Building Mechanism: By involving COCOO in the establishment of THAPS, the Spanish and UK authorities gain a partner that is already deeply embedded in the landscape of these disputes and represents the concerns of a key stakeholder group. This ensures that THAPS is designed from the ground up to address real-world problems effectively, thereby building trust and promoting de-escalation in a way a conventional ADR provider could not.
• Cost Savings and Enhanced Economic Relations: Preventing disputes is always more cost-effective than resolving them after they have escalated. THAPS will save both governments and taxpayers significant sums in legal fees and lost productivity. By fostering a more predictable and fair tax environment, THAPS will also contribute to stronger UK-Spain trade and investment relations.
• Strategic Value in the Post-Brexit Environment: THAPS can serve as a model for proactive regulatory cooperation between the UK and EU member states under the TCA framework, demonstrating a commitment to making the new relationship work smoothly. This has strategic value beyond the immediate tax context. A direct award to COCOO to spearhead its design ensures that the accumulated knowledge and victim perspectives are central to its creation, maximizing its chances of success.

5. Call to Action

COCOO urges the relevant authorities in both Spain (AEAT, Ministry of Finance) and the UK (HMRC, DBT) to recognize the strategic importance of THAPS. We request a joint meeting with representatives from these bodies within 30 days to explore the collaborative establishment of this vital service, with COCOO playing a lead role in its design and initial implementation