The tax authorities may require due diligence reports on sales.

Scope and limits of the use of due diligence reports in tax audits

The Central Economic-Administrative Court (TEAC), in its ruling of October 15th, 2025, No. 4521/2022, concludes that the State Tax Administration Agency (AEAT) may require a due diligence report in the context of verifying the sale of company shares.

The General Tax Law establishes the obligation to provide the tax authorities with any information of tax relevance that may be required, including data, reports, background information and supporting documents, in accordance with Article 93 of the General Tax Law. The TEAC itself refers to the case law of the Supreme Court, which defines it as those facts or acts that may be useful to the Administration in determining whether certain people comply with the duty to contribute set out in Article 31 of the Spanish Constitution.¡

The AEAT justifies this decision by stating that the due diligence report contains information of tax relevance and is necessary for the inspection bodies to carry out their duties.

However, tax regulations do not include any obligation to keep due diligence reports, nor any guidelines on the characteristics that such a document must have in order to be technically classified as such.

It should be noted that the ruling is not binding doctrine, as it is not a repeated criterion, and doubts have been raised as to its compatibility with the constitutional guarantees afforded to taxpayers, as it would authorize the tax authorities to request business information of the highest level of relevance and sensitivity automatically and without having to justify such an administrative decision in any way.