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If you are a Spanish tax resident but declare Non-Resident Income Tax Spain (IRNR), be careful because the Tax Agency of Spain has decided to reinforce the control of fraud by false non-residents.
This year, the agency will increase its scrutiny of residents in Spain who falsely reduce their tax obligations by declaring Non-Resident Income Tax Spain (IRNR). This practice is particularly concerning because IRNR has lower tax rates compared to Personal Income Tax and limits taxation to income generated within Spain, allowing individuals to avoid declaring their worldwide income.
New information and assistance model, and new appointment application
A new information and assistance model will be implemented, allowing citizens to choose how they wish to be served, with most services available through multiple channels.
This flexibility lets individuals select the service method that best suits their needs and the resources at hand. Whether seeking guidance on non-resident income tax Spain or other tax-related issues, this model ensures that support is accessible in the most convenient way for each person.
Work in fraud prevention
In the area of fraud prevention, the agency is committed to intensifying efforts to reduce the number of individuals who fail to file their Personal Income Tax returns.
This will be achieved through targeted warning campaigns during the tax return period, aimed at reminding and encouraging compliance among potential non-filers.
Additionally, the agency will enhance early control measures to monitor the entry of new taxpayers into the tax census.
A particular focus will be placed on entities that are effectively controlled by individuals with a history of questionable tax conduct.
These entities will be closely scrutinised to prevent future tax non-compliance and to detect any potential fraud by false non-residents.
By proactively addressing these issues, the agency aims to create a more robust and fair tax system, ensuring that all taxpayers meet their obligations and contribute their fair share.
Electronic payments and the digital economy
Actions will be reinforced concerning holders of economic activities that make use of ‘virtual payments‘, specifically with the use of electronic payment methods based abroad through entities that do not participate in the national obligations to provide financial information.
International Taxation
Control over the tax risks arising from the mispricing of related-party transactions in multinationals will be reinforced with joint tax inspections between several tax administrations, and complemented by a search for long-term compliance through the signing of pre-assessment agreements.
This will aid in preventing fraud by false non-residents claiming non-resident income tax Spain.
Combating against the Black Economy
Efforts will be intensified to monitor and regulate sectors and business models where there is a high risk of underground economic activity.
Addressing the undue use of tax credits
The Tax Agency will continue to prioritise the verification of negative tax bases and the improper use of tax credits that are pending offset or application.
This includes a thorough review to prevent misuse, particularly in cases involving non-resident income tax Spain.
By ensuring that tax credits are applied correctly, the agency aims to reduce potential tax fraud, such as fraud by false non-residents, and ensure a fair and accurate tax system.
Joint investigations and the European Public Prosecutor’s Office
Efforts to combat VAT fraud by the National Fraud and Investigation Office (ONIF) and to investigate the most serious customs fraud will be strengthened by fully leveraging the capabilities of the European Public Prosecutor’s Office. This supranational body is playing a key role in advancing joint investigations with other EU countries, and its resources will be actively utilised to enhance these investigations.
Suppression of smuggling and drug trafficking
In the prevention and repression of smuggling, drug trafficking, and money laundering, the Tax Agency’s Customs Surveillance Service is currently taking action to neutralise organised criminal activities.
Fraud control in the collection phase
Along with the extension of collection risk analysis to new manifestations of wealth, the 2023 Guidelines underline the importance of strengthening international cooperation for the recovery of tax claims.
Contact us to aid in avoiding committing fraud by false non-residents.
