Tax Office Fights Against Tax Evasion


The Spanish Government intends to approve a number of changes in legislation to strengthen the tax office’s armoury against the black economy and tax fraud. They propose to modify the Penal Code so that substantial tax fraud may be penalised with up to 6 years (currently four years) in jail.

In the Spanish system ‘substantial tax fraud’ is defined as a single tax offence that results in tax not being paid that exceeds 120,000€. Over this limit the tax fraud offence is subject to the Penal Code but under this limit the consequences are limited to fines and interest which are usually severe.

Furthermore, in the case of substantial tax fraud, they intend to extend the number of years from 5 to 10 years where they can legally review the tax affairs of an individual or business and bring about a prosecution. Past the 10 years, the offence will be prescribed.

Multiple tax offences, i.e. defaults in different tax years and different taxes, non of which exceed 120,000€ of tax not paid, will not be subject to the Penal Code and will continue to be subject to the current 4 year prescription applicable to lesser offences.

Spence Clarke specialises in the provision of Spanish tax, accounts, law and labour services, mainly to foreigners with interests in Spain. Our cross-border knowledge helps clients adapt to the Spanish system with the minimum of doubt and disruption. If you have any questions about this article or any other matter contact us, with no obligation, to see how we can help you.