Embargoes on Spanish bank accountsTaxes Wed, 13 Nov 2013
You know that minute when you first realise that your wallet or purse is missing. The shock that runs through you to be replaced by a vague hope that you didn’t bring it with you in the first place.
In that second of realisation you’ve already flashed up how much cash was in it, which cards and how many telephone calls you have to make. If it was your bag that’s gone and phone along with it, there’s another list of implications for you to work through.
You often hear people saying, it’s not the cash they’ve taken that’s the problem. Many of us don’t carry much cash with us and it’s the implications that we most dread. The nuisance of contacting card companies and getting new cards issued and all to the benefit of no one. You can even catch yourself thinking, ‘I’d rather have just given them the cash.’
Having a Spanish bank account embargoed can have a similarly knock-on nuisance effect. It’s not so much that you can’t get your hands on your money (although that’s pretty annoying too) as the fact that no one else can either. The electricity and water boards in Spain don’t hang around. If your bills aren’t paid, you won’t be receiving your service for long after the event. Don’t expect clemency.
Why would anyone freeze my Spanish bank account?
In case you are blissfully unaware, the Spanish Tax Authority are able to put an ‘embargo’ on your Spanish bank account if you owe them money. In some cases, people are not even aware that they are in arrears at all until they get the news that their bank account is frozen.
There are many reasons why the Spanish Tax Authority might feel that they are justified in taking this action. Perhaps one of the most frequently encountered is the recovery of non-resident taxes in Spain. It can come as quite a blow to a non-resident who has come out for a relaxing two weeks in the sun to discover that their bank account is frozen, their electricity cut off and the tax man on their trail.
Non-resident imputed income tax is payable by all non-residents who are not renting out their Spanish holiday home. This is in addition to the IBI council tax that all property owners, including non-residents, must pay.
If you don’t keep up with your taxes, then ultimately The Spanish Tax Authority has the power to make their presence felt by other means. In Spain, an embargo on your Spanish bank account is an accepted method of settling arrears.
Non-residents who can be difficult to contact and are unaware of the systems here are particularly vulnerable. Faced with the inconvenience and upheaval of getting your bank account functioning again, you’re likely to have wished you’d taken a more direct route and paid your taxes in full in the first place.