Bill proposing tougher measures against tax fraud

Automatic summary, not yet reviewed

1. The bill would amend the General Tax Law: broader liability for company administrators and for those subcontracting works or services, five-year limitation periods (ten years in serious cases such as fraud over €600,000 or organized groups), more effective precautionary measures, and the power to seize movable property of companies controlled by the debtor.
2. It would reserve the objective estimation method under personal income taxincome tax The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings. (IRPF) for activities selling to a final consumer. Activities with a certain economic level would have to file under simplified direct estimation and the general VAT regime.
3. It would lower the cash payment limit between businesses or professionals to €1,000, remove the €15,000 limit for non-residents, and raise the fine to 50 percent of the amount paid in cash.
4. It would require periodic official reports on the underground economy and tax and labor fraud, prepared by independent experts and broken down by territory, sector and tax. The reports would be debated in the Congress of Deputies (Congreso de los Diputados) and Senate, and in regional parliaments.
5. It would create the Cuerpo Superior Técnico de Hacienda by merging three existing corps, allowing the 8,500 technicians of the Ministry of Finance to take on higher-level duties. It would also direct the Government to seek international agreements for the automatic exchange of information on activities abroad and in tax havens.
6. It would require publishing in the Official State Gazette the identity and declared amounts of those who used the 2012 tax amnesty under Royal Decree-Lawroyal decree-law A rule with the force of law that the Government passes because it is urgent. It applies from its publication, but the Congreso must validate it within 30 days or it lapses. 12/2012, verifying within one year that the funds came from lawful sources, and it would repeal the provision allowing that regularization process to be repeated.

Who it affects

• Businesses and professionals, who could not pay operations of €1,000 or more in cash and would face fines of 50 percent.: New payment limits and penalties.
• Company administrators and representatives, who would be presumed liable for tax offenses unless they prove otherwise.: Greater tax liability.
• Companies that contract out or subcontract works or services, liable for their contractors' tax debts if they do not provide a certificate of being up to date with tax obligations.: Liability for subcontracting.
• Self-employed people and small businesses, since fewer of them could use the objective estimation method under personal income tax.: Change in tax filing method.
• Those who used the 2012 tax amnesty, whose identity and declared amounts would be published and whose funds would be reviewed.: Publication and review of declared funds.

Words worth knowing

Prescripción

The maximum time the tax authority has to collect a debt or a taxpayer has to claim a refund. Once it passes, the right expires.

Estimación objetiva

A simplified way for certain small businesses to calculate taxes using fixed modules (such as floor space or number of workers) instead of actual income and expenses.

Medidas cautelares

Provisional measures the tax authority can take to make sure it can collect a debt, such as freezing accounts or assets while the case is open.

Paraíso fiscal

A country or territory with very low or no taxes, used to hide money or pay less tax.

Amnistía fiscal

A process allowing undeclared money to be regularized by paying less than would normally be due. The bill also calls it 'regularización fiscal'.

royal decree-law

A rule with the force of law that the Government passes because it is urgent. It applies from its publication, but the Congreso must validate it within 30 days or it lapses.

decree-law

A rule with the force of law that the Government passes because it is urgent. It applies from its publication, but the Congreso must validate it within 30 days or it lapses.

income tax

The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings.

It summarizes the text as it was introduced. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries