Spain’s Tax Agency to ‘urgently’ check on ten former tax havens

hong kong1MADRID | As published on Monday by Negocio, Spanish tax inspectors believe the Tax Agency should take some urgent actions to close leaks of fiscal revenue. Bearing in mind the budgetary restrictions that the State is about to suffer, and that any legal change against fiscal fraud would require too long a process, one of their intended measures would be giving a new twist to the message that vice-president Soraya Sáenz de Santamaría sent earlier this year regarding the fight against tax havens’ opacity: the inspectors’ aim would be to revise if former uncooperative tax havens really offer the necessary information, and in case this is not so, to bring them back to the criminal list.

Currently, Spain maintains in force tax agreements which include details’ exchange with about ten countries that were registered in the national list of tax havens. Among these deals, Andorra’s (in force from 2010), Panama’s and Bahamas’ (from 2011), as well as one with a first-class financial place like Singapour (from January 2012), stand out because of its importance for the Spanish tax authorities.

What tax inspectors propose is that these ten countries –other agreements with key territories such as Hong Kong, Bermudas and the Cayman Islands would be added shortly– are examined under an urgent information application, making even use of cases that may be of little tax importance. This would allow to check relatively quickly whether the former tax havens’ commitment to transparency is real or not, so that they may be considered again as an opaque country if the response quality is poor. This would reactivate the Spanish tax anti-circumvention rule and thus, it would trigger the official mechanism of chasing fiscal fraud.

Furthermore, the Tax Inspectorate has suggested a systematic control of the current corporate taxes allowances, beyond usual checks over any yearly company tax declaration. This procedure would also involve probing the allowances’ economic impact in order to remove as soon as possible those considered useless or that whose effect isn’t the one for which they were created.

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