Catching the tax evaders

Taxes Wed, 6 Nov 2013
Catching the tax evaders

Is CCTV surveillance a good or a bad thing? Most people agree that having a watchful eye in our streets and thoroughfares is a good idea. But how far should it go and when does neighbourhood watch become Big Brother?   

We have become almost blasé to the fact that we can feature in almost a hundred live performances every day. It’s not just our image that is being recorded and shared, so is our data. In 2011 a new law in the UK stated that the visitor to a website must be made aware of ‘cookies’ and give their consent to their use. Most people had never even heard of a ‘cookie’ before.  

However, you might have noticed how spooky it is that the adverts popping up on your screen appear able to read your mind. Of course, it’s not as sinister as this, it’s just those crafty little cookies placed on our hard drive, storing up our browsing habits and interests for future reference.   

It’s not just businesses that are making the most of the information we generate. It’s public authorities and services too. We have seen this kind of information sharing grow over the years in Spain. Particularly when it comes to chasing taxes.

It’s quite a task for The Spanish Tax Authority checking that residents and non-residents alike are up-to-date with their taxes. With owners of Spanish property being scattered across the world, tracking down those who are seeking to avoid their obligations is no easy matter.

That’s where the Spanish electricity companies and Spanish Land Registry come in handy. One of the problems with identifying who should be paying different property taxes is establishing exactly what their residential status is. However, access to your electricity bill means that the tax man can see whether you are living here permanently or not and therefore what taxes you should be paying.

Non-residents have the two property taxes to pay, IBI (council tax) and either imputed income tax or rental income tax. Residents have only IBI to pay and tax on their personal income. Cross-referencing your electricity bill with the register of your status at the Spanish Land Registry demonstrates whether you really are using your property as declared. For example, if your electricity bill is steady throughout the year it is unlikely that you are a non-resident, and if you are, then rental income tax might be expected.

For some, the sharing of information is an infringement of privacy. For others, it’s one way of making sure that people pay their dues. Either way, the means of watching over you are increasing, whether you like it or not. 

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