Tax amnesty in Spain, the deadline to file is 30 November 2012

5 October 2012

Taxpayers of Personal Income Tax, Corporate Tax or Tax on Non-residents Income Tax who have not declared income during any year up to 2010 can now regularize their tax situation. This opportunity expires on 30 November 2012.

There are three basic requirements. First of all, the taxpayer must be the owner of goods or assets, acquired through undeclared income, as of 31 December 2010. The second requirement, the Special Tax Declaration must be filed online by 30 November 2012, along with payment of 10% of the price ok acquisition value of the goods or assets. Thirdly, such Special Tax Declaration must be filed before the communication about the commencement of a tax audit in regard to such taxes.

It has to be kept in mind that fulfillment of the aforementioned requirements would not only regularize the situation with tax authorities regarding undeclared income. It will also regularize the existence of hidden assets, which otherwise may be treated as “income from unjustified sources” with highly unfavorable tax consequences.

Since the time when this measure was approved by the First Additional Provision to the Royal Decree-Law 12/2002 (Official State Gazette of March 31), several clarifications have been made available in order to resolve any possible doubts. Thus, the Royal Decree-Law 19/2012 (Official State Gazette of May 26) adds two paragraphs to the First Additional Provision and HAP Order/11/2/2012 on further development of the Royal Decree-Law 12/2012 (Official State Gazette of 4 June). It approves the form of such tax Declaration (Form 750) and also clarifies various issues, such as regularization of funds held in cash. Likewise, it draws attention to the Report published by the Directorate General on Taxation on June 27, 2012 that clearly shows its strong position in favor of such regularization.

Therefore, we recommend all taxpayers with any pending tax issues related to declaration of income to urgently analyze the option of filing the Special Tax Declaration, especially in the light of the draft of the Law on intensified fight against tax evasion, which is currently debated in the Parliament. If such Law is adopted, it will oblige all taxpayers to inform regarding assets and rights in foreign countries, assigning significant fines in case of non-compliance.

For further information, please contact José Blasi: