SHARE
COPY LINK
For members

TAX

Spain to clamp down on tax fraud by digital nomads and fake non-residents

Spain’s tax agency has announced it will double down on investigating tax evasion by digital nomads and other remote workers who claim not to reside in Spain in order to get better tax rates.

SPAIN-TAX-FRAUD-DIGITAL-NOMADS
Spain's Tax and Budget Minister María Jesús Montero addresses the press. Hacienda's warning comes just weeks after the Spanish government fully approved its highly anticipated Startups Law, which includes favourable tax conditions for foreign workers. (Photo by Pierre-Philippe Marcou / AFP)

Spain’s Agencia Tributaria on Monday February 27th announced that it wants to “intensify its control on residents who artificially reduce their fiscal bill by using the non-resident tax”.

Spain considers its resident population to be tax residents if they spend more than 183 days in Spain, their main economic interests are in Spain and their spouse and/or children live in Spain.

According to Hacienda, as Spain’s tax agency is also known, the focus will be on residents in Spain who meet this criteria and should therefore pay IRPF that applies to all their worldwide income, but instead file their taxes using the more favourable IRNR non-resident tax which applies only to income made in Spain.

Non-resident tax (IRNR) is generally 24 percent whereas IRPF income tax is progressive based on earnings and can go up to 47 percent.

José María Mollinedo, general secretary of the Spanish Tax Technicians Union (Gestha), told 20minutos that these ‘fake non-residents’ usually have a high income and live in Spain with their families.

Of the measures announced by Hacienda, the ones that stand out for catching residents who claim to be non-residents are “strengthening control over online payments through entities or applications located abroad” and “boosting investigations into cryptocurrencies to locate assets subject to seizure and with links to criminal networks”.

READ ALSO: How does Spain know if I’m a tax resident?

The Spanish tax agency also talks about carrying out peinados, ‘combing’ the country’s underground economy, in the sense of tracking undeclared payments.

These plans to crack down on tax evasion have been published in Spain’s BOE state bulletin and form part of the agency’s 2023 official control plan.

The warning comes just weeks after the Spanish government fully approved its highly anticipated Startups Law, which includes favourable tax conditions for foreign entrepreneurs and digital nomads who move to Spain and bring their talent with them.

READ MORE: Everything you need to know about applying for Spain’s digital nomad visa

According to the legislation, foreign workers who get Spain’s new digital nomad visa can pay non-resident tax AND stay longer than 183 days a year, but this is subject to them not earning more than 20 percent of their income from Spanish companies, and earning below €600,000 a year.

Spain’s digital nomad visa is for non-EU foreigners, giving them the right to residency in Spain. Hacienda’s message will serve as a deterrent from breaching the rules of the new visa.

But perhaps the tax fraud crackdown should be primarily aimed at EU digital nomads and remote workers whose EU rights to freedom of movement within the bloc and free movement of capital allow them to sidestep the 183-day rule more easily.

READ ALSO: What are Spain’s penalties and prison sentences for tax evasion?

A 2021 report by Spanish tax advisors concluded that more than half of the tax address changes from Spain to overseas (or even another Spanish region with better fiscal conditions) were fake, in the sense that they’d only moved on paper and remained living at the same place in Spain.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

VISAS

How to pay the fee for Spain’s digital nomad visa

Part of the process of applying for Spain's Digital Nomad Visa involves paying a fee, called ‘tasa’ in Spanish. This is how to pay for the processing of your visa application.

How to pay the fee for Spain's digital nomad visa

Paying for your DNV to be processed is done through modelo or form 790 038.

You can download it on the official website of the Ministry of Inclusion, Social Security and Migration or access it online.

You can pay the fee either online if you have a digital certificate/Cl@ve system or at most Spanish banks, using your card or cash.

READ ALSO:

Filling out Modelo 079 038

The first step is to complete this form with all your details such as name, last name and nationality.

Next you will see checkboxes with various descriptions next to them

For the digital nomad visa you will want to check box number 7 – solicitud de autorización de movilidad internacional or application for international mobility authorisation.

If this is your initial or first application you will check the first box – autorización de residencia inicial.

The second box is for those who are renewing their application.

Next you need to input the correct amount – Initial authorisations are €73.26 and renewals are currently €78.67.

If you are doing this online, the amount will be automatically generated for you.

You then check the box saying how you want to pay – forma de pago or payment method.

You have to choose between En efectivo – cash, adeudo en cuenta – debit from account or tarjeta de crédito o débito – credit or debit card.

CHOOSING HOW TO PAY THE FEE

At the bank in person 

Certain banks will allow you to pay in person before 11am. Be aware not all will have this option and they may argue you need to be a customer with them to offer you the service. You’ll need to take your form with you.

They will give you a receipt and NRC (Numero de referencia completo) reference number which is important for your application. 

At an ATM

Most of Spain’s big banks allow you to pay government fees, but if you prefer to do it at the ATM rather than with the teller, keep in mind that it’s usually only the more modern cajeros that include a full qwerty keyboard and a scanner to scan your document that can offer this service. 

Once you have located one, follow the following steps:

Choose your language and select ‘Access without card’

Select ‘Transactions without card’

Select Payments, followed by Bills, taxes and duties.

Click ‘With payment document’ and ‘By Form’. Choose ESTADO – A.E.A.T. – the Tax Agency

Insert the number of your form, then your NIE.

Next, input the amount €73.26 and choose payee name.

Here’s where you’ll fill in your name.

Then put in your cash or bank card, verify the details and click Accept.

Print your receipt to get your NRC (Numero de referencia completo), which you will need to prove you’ve paid.

Online

The easiest way to pay is online only if you have a digital certificate. You can start the process via the following link.

Identify yourself online then follow the prompts to fill out the form, the same as above for in person.

The form automatically generates the amount, then you can input bank or card details to pay.

Again you will receive an NRC code at the end that you have paid you will need this code in order to put on your application for the Visa

SHOW COMMENTS