Spain remains a dream destination for Belgian entrepreneurs, expats and investors. Whether it’s buying a second home, moving there permanently or setting up a Spanish company, the country offers a wealth of opportunities. However, a dark cloud has been hanging over the Spanish business climate of late.
The renowned international law firm Amsterdam & Partners LLP, led by lawyer Robert Amsterdam and tax expert Dr Christopher Wales, published a damning report on the practices of the Spanish tax authorities (Agencia Tributaria, commonly known as the Hacienda). The conclusions of the report “”Hacienda vs. The People" are unsettling and expose a structural problem for which, as a foreign investor, you would do well to be prepared.
The Amsterdam Report: Tax intimidation and the ‘Beckham Law’
In the report, the authors strongly criticise the Spanish tax system. Whilst a tax authority should ideally function as a neutral government body, the report paints a picture of an aggressive machine whose primary aim is to collect money, often at the expense of the taxpayer’s legal certainty.
The focus here is on what are known as Ley Beckham, a special scheme designed to attract foreign talent and high-net-worth individuals to Spain by offering a favourable flat rate of 24% on professional income and an exemption on foreign assets. The report reveals how the Spanish tax authorities are now systematically targeting this group through ‘fishing expeditions’ and creative reinterpretations:
- The ‘Pay First, Appeal Later’ principle: If you contest an additional tax assessment, you are often required to pay the disputed amount in full in advance or provide an exorbitantly expensive guarantee, whilst appeal proceedings in Spain can easily drag on for 8 to 20 years.
- Last-minute checks: The tax authorities often deliberately wait until the end of the six-year period covered by the Beckham Law (or just before the expiry of the tax limitation period) to suddenly launch an in-depth investigation. This allows the tax authorities to maximise the accumulation of claims across several years. It also happens that they send out a claim during the holiday period.
- The charge of ‘Simulación’: If inspectors do not find any specific irregularities, they simply label legitimate business structures or Spanish employers as a ‘sham’ (simulation) in order to shift the burden of proof, in a criminal manner, onto the taxpayer.
In our practice, too, we are seeing an aggressive stance on the part of the Spanish tax authorities. And it is not only residents who are being targeted. For example, we often see disputes regarding deductible expenses in the capital gains tax among second-home owners.
The perverse incentive: Personal bonuses for inspectors
The most shocking revelation in the case file – which only came to light following legal proceedings brought by the Spanish Association of Tax Advisers (Aedaf) was enforced – concerns the remuneration structure of the Spanish tax inspectors themselves.
Welcoming Spanish tax officials personal productivity bonuses which can account for up to 25% of their total salary. The tax authorities are pumping hundreds of millions of euros into this bonus fund (including an additional €125 million scheme).
The result? Inspectors’ bonuses are calculated on a subjective basis and increase the faster they close a case and force the taxpayer to accept a settlement (Minutes with Agreement). Even if the taxpayer is later vindicated in court, the tax inspectors do not have to forfeit their bonus not to be submitted. This creates a perverse incentive to artificially inflate claims and threaten criminal prosecution.
What does this mean for you as a Belgian investor or expat?
The Amsterdam report shows that the risk in Spain lies not so much in the statutory rates, but in the the unpredictability and aggressiveness of the enforcement system. As soon as the Hacienda ‘senses’ that foreign capital is involved, you become a potential target. The impact is enormous: the report calculates that a refusal to grant Beckham Law status could subsequently lead to an unexpected additional claim amounting to more than half of a person’s total assets (including fines of up to 125%).
Furthermore, the Spanish tax authorities have no qualms about breaching data privacy rules: there are documented cases in which inspectors have contacted the children’s schools to check on their integration and language proficiency, purely as a tactic of intimidation.
How Confianz protects you
Precisely because the Spanish tax authorities operate so aggressively and are driven by inspectors’ personal targets, watertight, proactive legal assistance is essential from day one.
At Confianz, we are familiar with Spanish legislation and the specific pitfalls of the Hacienda. We do not believe in putting out fires after the event, but in preparing a strong case in advance.
- We ensure that the structuring of your Spanish property purchase or company is crystal clear and compliant with tax regulations.
- We ensure that your tax status (as a resident or non-resident) is fully and indisputably documented.
- We speak the language of the Spanish authorities and provide you with the necessary legal certainty, so that you can enjoy your plans in Spain with complete peace of mind.
Are you planning to invest in Spain, or do you have any questions about your situation? Then take contact Sign up for a professional assessment and bespoke advice.
