With a new approach, tax authorities in Spain implemented stricter regulations on the payment of outstanding VAT returns. This is connected to the tax violation for failing to enter all or part of the tax debt within the period established in the regulations of each tax.
Last Updated on 30 November 2020
Tax authorities getting stricter with tax payers in ES
With the new regulations, taxpayers in Spain can face huge additional payments if the outstanding returns were not paid before receiving a notification from the tax office. The sanction will be applied on the amount not entered in the self-assessment (for the infraction of article 191).
There are two aspects that are decisive
1. The infraction is committed when there was an economic damage caused to the Ministry of Finance due to missing payments of your returns!
2. You have already received a request from the tax authorities to pay your returns as this request leads to those higher penalties.
This being said, you should always pay your returns in time and not rely on the “usual” penalty scheme of 5-15% for late payments anymore.
What penalties can be expected?
Basically, whenever you pay your returns too late, after the due date, you need to pay a penalty to the authorities.
If you pay 3 months after the due date, this penalty is 5% of the amount owed, 3-6 months after the due date means 10% penalty and 6-9 months leads to a penalty of 15%.
This rule still applies but it is also possible that you will have to pay 50%-150% of the original amount owed – depending on whether you have received an official request for payment from the tax administration which is responsible for you.
VAT Registrations & Returns
With the new regulations, you need to pay considerably higher penalties whenever you receive this official request from the tax administration. The sanctions will depend on whether the infractions are minor, serious or very serious.
The sanction will consist of a proportional fine of 50%.
The sanction will consist of a proportional fine of 50 to 100%. The minimum percentage of 50 will be increased depending on whether, for example, there is financial damage to the Ministry of Treasury or violations have been committed continuously.
Very serious offense
The sanction will consist of a proportional fine of 100 to 150%. The 100% percentage may also be increased in accordance with the above.
NOTE: The request for payment which results in these higher penalties can be received at any time after the original due date, depending on the policy of the tax administration which is responsible for you!
How can these penalties be avoided?
As already mentioned before, the only way to stay on the safe side is paying the outstanding returns in time (or actually as soon as possible). That means before getting notified by the authorities but as soon as your duties arise or as soon as you become aware of them.
Book a free consultation
Our VAT experts are happy to help you. Book a free consultation today!
We at hellotax always aim to complete tax tasks as quickly as possible. You will be notified by us as soon as a payment is outstanding and you can take the appropriate steps and avoid penalties.
This way, your payments will be settled, and no penalties have to be expected. As the sanctions can arise at any time after the original due date, don’t e.g. wait 2 months as you will only have to pay fines of 5% as it can easily be way more, depending on the kind of offense.