A tax amnesty in Spain offering people with undeclared taxable assets the opportunity to pay a flat 10% levy, without facing criminal or administrative penalties, is due to close at the end of this month.
Under the amnesty, Spanish and non-Spanish nationals who have assets which should have been subject to corporate income tax, personal income tax and/or non-resident income tax, can make a declaration to the government’s tax authority, the Ministerio de Economia y Hacienda, and pay a flat 10% levy.
The amnesty includes any unreported income or assets held outside of Spain, including, for example, property, offshore bonds and bank deposits. It does not apply to Inheritance Tax, gift tax, wealth tax or VAT.
It is important for people to note that the amnesty, which is due to close on 30 Nov, only covers undeclared assets up until the end of December 2010, and not the 2011/2012 tax year.
Some are worried that once they make a declaration they will continue to be hounded by the authorities, as happened in the Italian amnesty, this is particularly worrying as the amnesty specifically states that once a declaration has been made the authority retains the right to investigate further.
There are also rumours the deadline will be extended which has lead to some thinking they have more time than they actually do. Beware, this deadline is not likely to be extended and the authorities are likely to be aggressive in their approach after the amnesty closes. Indeed, the Spanish government has warned it will adopt new anti-avoidance measures and will increase the penalties for tax fraud after the amnesty has completed.