The Tax Agency (AEAT) uses various data sources such as mobile phone geolocation, social network surveillance, card transactions, paid invoices, and household supplies to monitor taxpayers suspected of residing in a different location than they declare.
Tax services have increased their checks by automatically analyzing large amounts of information. Tax advisors working with foreigners have noticed a significant rise in inspection cases by the tax authorities in recent months.
The inspections now target not only wealthy individuals or celebrities but also clients who owe as little as 10,000 or 20,000 euros. The use of Artificial Intelligence and Big Data enables the administration to verify tax information easily and sustainably.
It seems that the tax authorities are focusing on retirees who spend part of the year in Spain. They meticulously check calendars to determine the number of days individuals spend in the country.
In such cases, it is important to have established tax residency in another country. Simply paying taxes in another country is not sufficient; official residency activation by the foreign country’s tax authorities is necessary. Those being inspected may have a defence by invoking International Double Taxation Treaties.
The 2021 Annual Tax and Customs Control Plan explicitly mentioned the use of big data by the AEAT. The purpose is to detect false non-resident taxpayers who should be paying taxes in Spain as tax residents for their worldwide income and assets.
The tax authorities track and monitor the digital footprint of taxpayers, including their activities on social networks, e-commerce platforms, and geolocation data. However, it can be challenging to provide evidence against these inspections as the owner of the IP address may not always be the actual user of the devices.
If you require expert tax advice or assistance, our team at Costaluz Lawyers is here to help. We have a dedicated team of tax professionals experienced in navigating the intricacies of Spanish tax law. Whether you are an individual or a business entity, we can provide personalized guidance and support tailored to your specific needs. Contact us today to learn more.