In Spain, a general distinction is made between late-payment or late-filing surcharges (Recargos) and fines or penalties (Multas). With regard to the former, it is particularly important to point out that, unlike in some other countries, these surcharges are not based on culpable or negligent conduct by the taxpayer, but arise solely as a result of the late fulfilment of a tax obligation.

In practice, this means that there is almost no possibility of avoiding these payments, even where it can be proven that a third party (such as a bank or tax adviser) was responsible for the delay. If a third party is responsible for the surcharge, any claim must subsequently be brought against that party. Only in a small number of exceptional force majeure situations (such as COVID-19, a general failure of a bank's systems or similar circumstances) has the tax authority waived such surcharges on its own initiative.

Surcharges are therefore not penalties, but additional amounts imposed due to the late fulfilment of tax obligations.

Fines or tax penalties (Multas), on the other hand, apply where an infringement has been established following an audit, review or formal request by the authorities. Since July 2021, increased reductions have also been available: 30% in cases of agreement and an additional 40% where payment is made within the prescribed deadline.

The following situations must therefore be distinguished:

1. Surcharge for late filing without prior request

Since 11 July 2021, with the entry into force of Law 11/2021 on measures to prevent and combat tax fraud, a new and more favourable surcharge system has applied. The previous system, which was based on fixed percentages, had become difficult to sustain, among other reasons due to its incompatibility with European case law. Under the new system, the calculation is more proportionate, as a surcharge of 1% is applied for each full month of delay during the first 12 months. No additional late-payment interest accrues as long as the delay does not exceed 12 months. Where the delay exceeds 12 months, a flat surcharge of 15% applies and, from the 13th month onwards, late-payment interest is also charged.

Example:

Tax return filed 3 months late → 3% surcharge.

Tax return filed 14 months late → 15% surcharge + interest from the 13th month.

2. Surcharges in enforcement proceedings (Apremio)

If payment is not made by the relevant deadline and enforcement proceedings commence, the following surcharges apply depending on when payment is made:

- Enforcement surcharge of 5% where payment is made before the enforcement notice (Providencia de Apremio) has been served. This also applies to tax returns submitted with direct debit instructions where collection could not be made due to insufficient funds.

- Reduced enforcement surcharge of 10% where payment is made after service of the enforcement notice but still within the payment period granted by the authorities.

- Ordinary enforcement surcharge of 20% where the payment period following service of the enforcement notice has expired. In this case, late-payment interest also accrues from the end of the voluntary payment period.

3. Fines and tax penalties

Tax penalties are fines imposed by the Spanish Tax Agency (AEAT) where tax obligations are breached intentionally or negligently. They are imposed within the framework of a formal penalty procedure in accordance with the Spanish General Tax Law (Ley General Tributaria – LGT).

For a penalty to be imposed, five legal requirements must be met: an act or omission, culpability, conduct expressly defined by law as an infringement, potential loss or damage, and the absence of a legally recognised justification.

The loss or damage generally consists of tax that has not been paid. Culpability may also arise from an omission based on lack of knowledge where this results in the failure to make payment or file the corresponding tax returns.

As a general rule, the following categories are distinguished:

a) Minor infringements: penalty base ≤ €3,000, without concealment. Penalty: up to 50% of the unpaid tax.

b) Serious infringements: penalty base > €3,000, with indications of concealment or deception. Penalty: between 50% and 100% of the unpaid tax.

c) Very serious infringements: fraudulent conduct, systematic tax evasion or high amounts. Very high penalty base (> €150,000 or > 75% of the amount due). Penalty: up to 150% of the unpaid tax.

 

Reductions for agreement and prompt payment

Surcharges or fines may, as a general rule, be reduced by 30% where they are not challenged and the taxpayer accepts the assessment (“conformidad”). A further reduction may apply where payment is made within the prescribed period or where a deferral or instalment arrangement is agreed with the corresponding security, provided that the statutory requirements are met.

Example:

In the case of a serious infringement carrying a fine equal to 100% of the tax due, the applicable reductions for agreement and prompt payment may significantly reduce the effective financial burden.

Limitation periods

The general limitation period is 4 years for the AEAT to impose or pursue tax penalties. The commencement of penalty proceedings interrupts this period in accordance with the applicable legal provisions.

Criminal offence and tax fraud

A tax offence may arise where a person intentionally evades taxes, levies or tax benefits owed to the Spanish State, an autonomous community, the European Union or other public bodies, and the amount defrauded exceeds €120,000 per tax and tax year.

The following intentional acts (as opposed to mere errors) may constitute a tax offence:

- Evasion of tax payments (for example, through false statements or information)

- Unjustified claims for tax refunds

- Improper use or obtaining of tax benefits

The decisive factors are always intent (“dolo”), the damage caused and whether the amount defrauded exceeds €120,000 per tax and tax year. It should also be noted that the same conduct may give rise to other criminal offences, even where the amount involved does not reach the threshold required for a tax fraud offence. Offences that may occur concurrently or separately include, for example, document forgery, fraud and certain offences relating to dishonest or disloyal management.

Our law firm will be pleased to assist you in analysing your individual situation, carrying out any necessary administrative procedures and assisting you with the preparation and filing of the relevant tax returns. If you are interested or have any specific questions regarding this topic, please feel free to contact us by email or telephone.

Author: 

Rike Füllgraf
Tax Advisor
info@sspartners.es
Tel: (+34) 951 12 13 06
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