Blow from the Tax Agency to these Spaniards: be very careful because you're risking it

The Spanish Tax Agency has issued an important warning for Spaniards residing abroad or teleworking from outside the country. It is essential to understand tax obligations to avoid significant penalties.

If you are Spanish and live outside the country, you must determine if you are considered a tax resident in Spain. This depends on factors such as spending more than 183 days a year in Spanish territory or having the main core of your economic activities here.

Tax obligations for Spaniards abroad: get informed

If you meet any of these criteria, Hacienda will consider you a tax resident. You'll have to declare in Spain for your worldwide income, that is, for all your earnings, regardless of where they are caused.

Additionally, if you own assets or rights abroad exceeding 50,000 euros, you are obliged to inform Hacienda. You must do so through Model 720 before March 31. Failing to do so can result in fines of up to 20,000 euros.

Telework and tax residence

The rise of telework has allowed many professionals to work from anywhere in the world. However, this flexibility doesn't exempt one from fulfilling tax obligations.

If you telework from Spain for a foreign company and spend more than 183 days a year in the country, you will be considered a tax resident in Spain. This means you must pay taxes in Spain on all your income, including that obtained from your work for the foreign company.

It is important to note that Hacienda is intensifying control over those who attempt to reduce their tax burden by declaring as non-residents when, in reality, they should be taxed as residents. This practice can result in severe penalties.

What will happen if you don't comply with your tax obligations

Failing to comply with tax obligations can lead to serious consequences. In addition to financial penalties, which can be substantial, you could face legal proceedings that affect your financial and personal situation.

A prominent example is the case of the singer Shakira. She was accused of tax fraud for not correctly declaring her residence and the income obtained. To avoid problems with Hacienda, it is advisable to:

• Correctly determine your tax residence: Analyze where you spend most of the year and where your main economic interests are located.
• Declare all your income: Ensure you include in your Income Tax Return all income obtained, both in Spain and abroad.
• Inform about assets abroad: If you own assets outside Spain exceeding 50,000 euros, submit Model 720 within the established deadline.
• Seek professional advice: Tax laws can be complex, especially when it comes to international situations. Consulting with a tax advisor can help you comply with your obligations and avoid penalties.