Measures to prevent tax fraud in Spain

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1. Transactions between related companies or persons must be valued at their normal market value, that is, the price two independent parties would agree on. Anyone taking part in these transactions must keep documentation available to the Tax Agency, and failing to do so or declaring different values is a serious offense with fines.
2. A new additional provision defines three concepts: tax haven, zero taxation and effective exchange of tax information. Each tax may use one or another of these concepts to fight transactions with opaque countries.
3. Entities based in tax havens or zero-taxation territories are presumed to be resident in Spain if their main assets or activity are located here, unless they prove otherwise. Representative obligations for non-residents are also tightened, with fines of €2,000 or €6,000.
4. Under VAT, anyone buying goods from businesses or professionals at a notoriously abnormal price is subsidiarily liable for the tax that was not paid in, to discourage buying from fraud rings. A special regime for groups of entities is also added, applying from January 1, 2008.
5. To register used vehicles subject to the Special Tax on Certain Means of Transport, the self-assessment must first be endorsed by the Administration, which will check the declared value if it looks low. A partial refund of the Hydrocarbons Tax is also created for trucks, buses and taxis.
6. In the General Tax Law, lifting the corporate veil is now a ground for tax liability: whoever controls a legal entity used abusively or fraudulently to evade debts to the Tax Agency can be held liable for them. Payments under agreed audit reports and sanctions may also be deferred or paid in installments, always with a guarantee or credit insurance policy.
7. In notarial deeds on real estate sales, the tax identification numbers of those appearing and the payment methods used must be stated. Without that data, the Property Registry will not record the deed.
8. The cadastral reference must appear in public documents, lease contracts and electricity supply contracts. Those with supply contracts already signed must provide it within six months of this law taking effect.

Who it affects

• Companies and professionals dealing with related entities: They must value those transactions at market price and keep documentation for the Tax Agency.
• Anyone buying goods from businesses or professionals: If they pay a notoriously abnormal price, they can be liable for unpaid VAT.
• Anyone buying or selling real estate: Their tax ID and payment methods must appear in the deed, or it cannot be registered.
• Owners of trucks, buses and taxis: They can claim a partial refund of the Hydrocarbons Tax on the diesel they use.
• Anyone renting an apartment or signing up for electricity: They must provide the property's cadastral reference in the contract.

Words worth knowing

Operaciones vinculadas (related transactions)

Transactions between parties with a relationship, such as a company and its shareholders, directors or group companies.

Valor normal de mercado (normal market value)

The price two independent parties would have agreed on in a free market.

Paraíso fiscal (tax haven)

A country or territory so designated by regulation, with zero taxation or no exchange of information with the Tax Agency.

Responsabilidad subsidiaria (subsidiary liability)

The duty to pay someone else's tax debt if that person does not pay it.

Levantamiento del velo (lifting the corporate veil)

The idea that, if a company is used fraudulently, authorities look at who really controls it to demand payment of its debts.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries