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Tax embargo in Spain for incorrect declaration of taxes

By Chris Burke
This article is published on: 10th July 2023

When moving to Spain you find out pretty quickly that the way things work here, bureaucratically and lawfully, are very different from the rest of the Western world, particularly the UK. One such example is if you are suspected of making an incorrect tax declaration or filing. Even if advised by your accountant/tax adviser to do so, you are liable and not them. In Spain, simply put, you are guilty until proven innocent of any suspected wrong doing.

With that in mind, one major example is of a self-employed person having their taxes filed incorrectly by their accountant and being unaware. At some point in the future the individual is notified that they have not responded to the tax office’s request to query this, and thus immediately have their income ‘embargoed’ and the monies they are suspected to owe are either taken from their Spanish bank account and/or taken at source from their main customers/invoices.

In one particular instance the tax office claimed they had ‘written confirmation’ that the notice of their investigation was delivered 3 times, however this confirmation is a signed document from the post office delivery person saying they were delivered, not the recipient signing to say he or she received them. Then, due to you not responding, the case is now closed and you are guilty by not replying, thus the money they believed you owed, you now owe and must be paid.

I have seen this happen many times over the years and cause considerable pain and suffering to people. Imagine the tax office saying you owed them €40,000 then taking it from your bank account, or deducting it each month as you received invoice payments. How do you then pay your bills? And in all of this, you are the complete innocent due to your accountant wrongly declaring your taxes.

Tax embargo in Spain

What can you do? Well, the process is threefold:

  • Firstly, you have to contest the ruling and see proof of what they are finding you guilty of (e.g., incorrectly filing) and that they actually delivered the documents to you.
  • Secondly, if you feel their ruling is incorrect, appeal against it explaining why.
  • Thirdly, as the appeal will likely be unsuccessful you then go through an ‘arbitration’ process where your likelihood of winning is approximately 75% and above.

The bad news is this process normally takes between 3-5 years. If you win, you will receive your money back plus some interest. If you lose, the European courts are your last option.

My best advice for anyone to avoid this is:

  • Make sure you are confident in the accountant you are using to reduce the chance of this happening.
  • Always make sure your address on file at the tax office is up to date.
  • Only keep in a Spanish bank account money you need to live on. The tax office cannot legally take money from bank accounts outside of Spain unless they go through a court process.

If this has happened to you feel free to get in touch – I can recommend a law firm/accountant that has experience in this field and has been successful. Alternatively, if you would also like a recommendation for an accountant that won’t make these mistakes (hopefully, in Spain it’s never 100%!) then again feel free to reach out.

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Article by Chris Burke

If you are based in the Barcelona/Costa Brava area and would like to have an initial, complimentary face to face video call or arrange a time to visit Chris in his office in central Barcelona, contact Chris on or whatsapp +34 689915730.

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