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Spanish Decree Firms Up New Tax Anti-Fraud Law

by Ulrika Lomas,, Brussels

26 November 2012

Spain's council of ministers has recently approved a royal decree adapting the country's general tax law to international standards on mutual assistance in tax matters and fixing the reporting obligations for taxpayers with undeclared assets and rights held abroad.

According to the Spanish finance ministry, the government's new anti-fraud law, published in the country's official gazette on October 30, establishes a new obligation for taxpayers to declare all assets and rights located abroad. The royal decree specifies the deadline for compliance with these reporting obligations, namely the first quarter of each exercise.

The finance ministry explains that all accounts located in foreign financial institutions must be reported together with any immovable assets, rights, securities, insurance and annuities deposited, managed or obtained abroad.

The ministry highlights the fact that there is no reporting obligation when the estimated value of each type of asset does not exceed EUR50,000 (USD64,250), noting that the reporting obligation will only become mandatory in successive years once that limit is surpassed by more than EUR20,000.

Failure to comply with the new reporting requirements in question may result in heavy fines for the taxpayer and may be considered a tax crime, the ministry warns.

The royal decree also partially transposes into Spanish law the Community Directive pertaining to administrative cooperation in the area of taxation, designed to strengthen cooperation as regards the exchange of tax information between countries, necessary for the collection of taxes, and to clamp down on tax evasion.

The decree establishes the procedure for transferring tax data supplied by other states or international entities, thereby ensuring legal certainty.

TAGS: compliance | tax | tax compliance | tax avoidance | law | corporation tax | Spain | standards | individual income tax

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