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Letter from the Spanish tax authorities addressed to the beneficiaries of the 2012 tax amnesty

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5 Dec. 2016

Those who have benefited from the tax amnesty by November 2012 filing the special tax Form 750, may have received recently a letter from the Spanish Tax Authorities in accordance with the provisions in the Non-legislative Motion approved by the Government a couple of days ago.

The purpose of the letter is a bit uncertain but it basically informs about the content of the nonbinding law proposal.

THE NOTIFICATION

The statutory limitation period in Spain is 4 years. The deadline to file the tax Form 750 was 30th of November 2012 so the 4-years period expired last 30th of November according to our legislation.

The letter is not a communication of the initiation of a tax audit but just an informative letter, so it does not interrupt the 4-years period and in fact it has not been delivered by registered mail but as a standard letter sent by ordinary mail. However, the tax authorities have made an effort to deliver those letters to the addressees before the 30th of November 2016.

The letter is a notice of intention where the tax authorities explain their control and investigation actions in their fight against tax avoidance, carrying out more than 3.400 tax audits on taxpayers that filed Form 750, with special mention to Form 720 for the disclosure of foreign assets, and massive and systematic analysis on tax risk using the latest technologies and software tools. The letter ends with a reference to future actions in accordance with the current Tax Control Plan and the foreseeable 2017 and subsequent Plans.

The letter includes a copy of the draft law proposed by the party Ciudadanos that was approved by the plenary of the Congress of Deputies.

To highlight the rushing of the standard letter, it is dated 21st of November 2016 but it refers to the nonbinding law proposal approved on 27th of November.

THE PROPOSAL DRAFTED BY CIUDADANOS

Royal Decree-Law 12/2012 gave the opportunity to taxpayers for voluntary regularization disclosing unreported money and assets through the so-called tax amnesty, by paying a special levy of 10% of the value of the disclosed assets.

However, the Government mitigated the consequences of the tax amnesty to motivate taxpayers to disclose by reducing the final levy to an effective 3% letting taxpayers to pay the 10% only on the revenue and gains made from those assets during the 4-years period prior to the deadline, and the promise of those declarations not be checked in the future, and safeguarding the taxpayers from penalties.

Ciudadanos urged the Government to collect the 10% as stated in the Royal Decree-Law, drafting the proposal that has been approved by the Congress, leading to the letter sent by the tax authorities.

THE CONFLICT

The spokesman on economic and financial affairs in Ciudadanos has complained about the type of notification sent by the tax authorities that do not start any tax audit, so the right to review and investigate tax Form 750 expired last 30th of November 2016.

The Government replied to Ciudadanos alleging that tax Form 750 will never expire, and in fact the letter expressly states that the proceedings the tax authorities may carry on will interrupt the statutory limitation period.

The tax experts have serious doubts about the legality of claiming for a 10% of the amount now, and the letters sent to taxpayers are just informative so the 4-years period has already elapsed and their right to investigate and claim anything has expired, and there is no provision in the Royal Decree-Law nor any other law that allows the Government to extend the 4-years period in this case.

Ciudadanos has urged the Government to provide the legal report supporting that “the tax amnesty does not expire when the law says but when the minister says”.

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