If you were unfortunate enough to experience theft or fraud during the previous year, it is important to know that certain losses may be included in your income tax declaration as capital losses, potentially reducing your overall tax liability.
Cash losses
If your wallet was stolen, funds were taken from your bank account, or your card was used fraudulently without authorisation, and these amounts cannot be recovered from your bank or through law enforcement, you may be able to declare them as a capital loss.
If your insurance provider has reimbursed part of the loss, only the unreimbursed portion may be claimed. You will be required to provide supporting documentation, such as bank statements and a police report, to substantiate the claim.
Stolen assets
If personal belongings such as jewellery, watches, mobile phones, or household appliances were stolen, the valuation of the loss is more complex. The loss is generally calculated based on the original purchase invoice or receipt, adjusted for depreciation according to the asset’s estimated useful life, which should be confirmed with the supplier or manufacturer.
For luxury items, such as watches, the valuation must be based on the current market value. This valuation cannot exceed the original purchase price.
Fraudulent purchases
Losses may also be claimed in cases where assets were purchased but never received due to fraud. In such cases, the loss may be recognised one year after a formal legal claim has been made against the supplier or vendor requesting delivery or reimbursement.
Tax treatment of losses
These losses are offset against the taxable base of your general income, subject to a limit of 25 per cent of your total taxable base. If the full amount of the loss cannot be offset in the current tax year, the remaining balance may be carried forward for up to four years and applied against future income tax liabilities.
Understanding how these provisions apply can help ensure that eligible losses are correctly reported and that your tax position is optimised in accordance with Spanish tax regulations.
