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last mo.

Spanish Judges Open Door to Forgiving Tax and Social Security Debts for the Self‑Employed

New rulings invoke EU court criteria to question Spain's €10,000 cap on public‑debt relief under the Second Chance law.

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Overview

  • Two pioneering court decisions applying Court of Justice of the EU guidance pave the way to exonerate debts owed to Hacienda and Social Security.
  • An increasing number of judicial resolutions are challenging the statutory limits in Spain’s Second Chance regime.
  • Current law under article 489.1.5º of the consolidated Insolvency Act (RDL 1/2020) caps public‑debt forgiveness at €10,000.
  • The 2022 reform forgives the first €5,000 in full and then cancels only half of the remaining amount until the €10,000 ceiling is reached.
  • Private debts can be wiped out entirely, a contrast that autónomos’ associations say conflicts with the spirit of the relevant European directive.