The Treasury counterattacks the law firm that calls it a "pickpocket": it only inspects 0.5% of the beneficiaries of the "Beckham Law."

It's been a long time coming, but the narrative of tax harassment that has been circulating in various foreign media outlets against the Spanish Treasury now has a response. Accused of harassing taxpayers from other countries, the Tax Agency has decided to respond. In an unusual move, official sources have harshly criticized the international law firm that accuses the Tax Agency of pickpocketing and have publicly responded to what they consider a smear campaign that makes false and serious accusations against the agency and its officials .

It all began at the end of last year, when a double-page advertisement appeared in the print edition of the British newspaper Financial Times, describing Spanish tax inspectors and technicians as "pickpockets." The advertisement, commissioned and paid for by the law firm Amsterdam & Partners (based in London and Washington), was aimed at taxpayers who benefit from the so-called Beckham Law. and who feel persecuted by agency officials. The advertisement, which encouraged those affected to hire its services to recover their rights, was also published days later in the American newspaper The Wall Street Journal and the Belgian newspaper Le Soir .

The Tax Agency is clear and emphasizes the need to verify the correct application of all special tax regimes, as they represent a loss of revenue for the Treasury that must be monitored. In other words, any of these tax formulas, included in the Personal Income Tax Law, are subject to inspection if irregularities arise. And if noncompliance is detected, these sources emphasize, a regularization and liquidation procedure is required, which is subject to the legally established administrative and judicial review channels.

It's unusual for the Tax Agency to engage in controversies of this magnitude, but since the campaign negatively affects its image and that of Spain, it has decided to go on the offensive. The agency is also defending its inspectors and is disassociating the productivity bonuses they receive from the results of their investigations, as suggested by the law firm.

"The Tax Agency has demonstrated a pattern of discrimination and persecution against high-income foreigners," the firm explains on its website, which it has renamed " Spanish Tax Pickpockets ." On it, it claims to represent those who have been negatively affected by onerous audits, investigations, and "unfounded" claims by Spanish authorities. In fact, the firm will present the details of an action this Tuesday in Madrid involving the filing of several class-action lawsuits against Spain before the European Commission on this matter.

The Tax Agency has revealed for the first time a series of data that contradict the law firm's account. According to sources within the agency, there is no special inspection attention at all regarding the application of the Beckham Law . Nor is there any particular litigation linked to this tax regime . According to their figures, nearly 37,000 taxpayers have opted for this option in the last 10 years, of which around 185 (0.5%) have been subject to inspections for possible non-compliance.

Furthermore, the Treasury Department insists that of the completed inspections, 70% have been resolved with a report of agreement or conformity, while the rest have been the subject of a claim or appeal.

The Beckham Law is a tax regime that can be applied to workers posted to Spanish territory , known as expatriates. These professionals have two options: pay taxes according to the regulations applicable to non-residents or through personal income tax, but with a series of additional advantages over other individuals. The major benefit is that taxpayers (who can be both foreign and Spanish) only pay income generated in Spain, leaving income originating in other countries outside their tax base for up to six years. Furthermore, up to €600,000 per year, the rate applied is only 24%, rising to 47% above this level. The agency points out that applying this option requires notification from the taxpayer. And they remind us that this is a tax option, not a safe-conduct exempting anyone from an inspection.

Several irregularities

The Tax Agency has taken advantage of the controversy to highlight some of the irregularities it has detected in recent years in the application of the Beckham Law , in which some of the firm's clients may be involved.

For example, cases have been detected in which an employment contract is artificially created in Spain. In these cases, the taxpayer creates a company without resources that hires him to work on Spanish soil, but then provides services to the foreign company that actually carries out the activity.

There are also more serious cases, the agency points out, where a fictitious company is directly created in Spain to apply the regime in the year in which a very large capital gain is received from abroad. In these situations, the taxpayer intends not to pay taxes in any jurisdiction, either because they are not a resident or because the income, coming from another country, cannot be taxed in Spain.

In verified cases, these sources add, it is not unusual for the link between taxpayers and employer companies to be disguised by the use of other front companies or close associates, such as an advisor, family member, or friend. In some cases, they add, agency officials have filed complaints for possible tax crimes, given the evidence of fraudulent conduct and the amount of the debt.