Currently in Spain there is a significant problem with tax relocations, which can affect individuals or their assets, and who fraudulently seek tax benefits. Fictitious transfers of residence occur within the national territory to take advantage of the large tax differences between the Autonomous Communities, or abroad, so as not to pay anything in Spain. But you can also talk about fraudulent relocation while you are alive, or thinking about the moment you leave this world.
In life, tax relocation outside of Spain is sought above all by people whose professional activity requires many trips. There are very significant examples of famous tennis players or artists who pretended to reside abroad, if possible in a tax haven. As the legislation links taxation to residence in Spain, personal income tax has had to be amended to introduce other criteria, in addition to the one relating to the permanence of more than 183 days a year in Spain. On the other hand, hiding reality is sometimes very difficult and the work of the Tax Administration to discover these situations means spending a lot of time and resources, because evidence of fraud is obtained by exhaustively monitoring the lives and customs of these people, proving, for example, that the children go to schools in Spain, that payments are made daily with the credit card, or controlling the entrances and exits of Spain with the passport.
The EU must do more to end the use of tax havens
Almost no one wants to think about death, but some do for tax reasons because it is worth fictitiously simulating residence in another Autonomous Community as long as they do not pay taxes. This situation is produced above all by the chaotic situation of the two taxes that tax wealth in Spain, the Inheritance tax and the Heritage tax. It is important to clearly differentiate that one thing is the regulatory regulations, which in the case of these state taxes are ceded to the Autonomous Communities, and another very different thing is the application of the tax system by the corresponding Administration and the prosecution of the frauds committed.
Regarding the regulations, it is necessary to reflect on whether the important differences between Autonomous Communities comply with the principle of equality established in article 31 of the Constitution. The following example is enough: a person who has a high net worth and who inherits from a brother a house with a value of 200,000 euros and 600,000 euros in cash, must pay, depending on the Community of residence of the deceased brother, from a fee of 391,672 euros (49 percent of the total value) to another only 375 euros, 0.04 percent. That is, 390,000 euros difference to pay on an inheritance of 800,000 euros.
The receiving autonomies are not interested in knowing if a transfer is fictitious
Regarding the application of the tax system, there cannot be a certain permissiveness of the Administration with respect to fraudulent behaviors of taxpayers, since, if it were so, it would be making an abandonment of functions. In cases of fraudulent relocation, the receiving Community has no interest in verifying whether the transfer is fictitious or not, and the Community of origin does not have sufficient information to prove fraud.
For all these reasons, action should be taken on two different fronts. On the one hand, harmonizing the ceded state taxes, in line with what is reflected in the report of the Commission of experts for the reform of the financing system of the autonomies; and on the other, specific action programs would have to be included in each year’s AEAT Tax Control Plan to avoid fictitious relocations of individuals and legal entities to other Autonomous Communities.
In relation to the transfer and concealment of assets, especially in tax havens, it is necessary to point out that to achieve this, the instruments that some professional firms and large international banks plan so effectively are used. A simple phone call and a cost of less than a thousand euros is enough for an offshore company to be created in a tax haven in just two days, and for it to be the holder of a bank account in which the amounts that are desired are deposited. hide or whiten This simple procedure means that havens are used by great fortunes, soccer players, artists, and by all those who want to launder money from any type of criminal activity, including corruption.
There is another striking aspect that cannot be ignored, and it is the fact that the discovered cases of use of tax havens do not originate from judicial, police, or tax investigations, but are due to information leaks. This has been the case in the many cases discovered in recent years, such as the LGT Bank of Liechtenstein. (2008), Falciani List of HSBC Bank (2010), Offshoreleaks (2013), Luxleaks (2014), Bahamasleaks (2016), Futbolleaks (2016), Panama Papers (2016) and Paradise Papers. (2017).
In Spain everything possible is being done so that tax havens stop being the refuge of money from tax fraud and all crime, but the necessary measures to end its use must be approved by international organizations and by the European Union, and have so far shown little willingness to do so. Thus, tax havens will continue to be the main instrument used to hide wealth.
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