Tax fraud lawyer in Alicante

When tax fraud is a crime

Not every debt with the tax authorities is a crime. Article 305 of the Criminal Code (Código Penal) punishes anyone who, by act or omission, defrauds the state, regional, foral or local Treasury (Hacienda Pública) by evading payment of taxes, withheld amounts or payments on account, or by wrongfully obtaining refunds or tax benefits, provided the amount evaded exceeds 120,000 euros.

That threshold is calculated as follows (article 305.2):

• For periodic taxes, each tax or filing period is considered. If the period is shorter than twelve months, as with quarterly VAT, the amounts for the calendar year are added together.
• In other cases, each item for which a taxable event can be assessed is considered separately.

Below that figure, the fraud is dealt with administratively, through a tax assessment and penalty, but it is not a crime. And simply owing money is not enough: there must be fraud, in other words concealment or deception. As a general rule, someone who files correctly but cannot pay is not committing fraud. That said, the law warns that filing returns does not rule out fraud if it is proved by other facts.

There is also an accounting offence (article 310), punished with five to seven months in prison, for anyone who is required to keep accounts and completely fails to do so under the direct assessment regime, keeps two sets of books or records false or fictitious entries. In the last two cases, the falsified debits or credits must exceed 240,000 euros per financial year.

Social Security and subsidies

• Social Security fraud (article 307): evading contributions, obtaining refunds or enjoying undue deductions of more than 50,000 euros. The figure is calculated on the total amount evaded over four calendar years.
• Benefit fraud (article 307 ter): obtaining or prolonging Social Security benefits by faking or concealing facts. Six months to three years in prison, or a fine if it is not particularly serious; two to six years if it exceeds 50,000 euros.
• Subsidy fraud (article 308): obtaining public aid of more than 100,000 euros by falsifying or concealing conditions, or using it for other purposes.
• European Union finances (article 305.3): the threshold is 100,000 euros in a calendar year, with a lower penalty between 10,000 and 100,000 euros.

Penalties for tax and Social Security fraud

All of these also carry loss of the right to receive subsidies and tax or Social Security benefits: three to six years for the basic offences and four to eight for the aggravated ones. Companies can also be convicted (article 310 bis); we explain this on our corporate criminal compliance page.

Regularisation and reduced sentences

The Criminal Code offers two ways out that you should know about as early as possible:

• Regularisation (article 305.4). If you acknowledge and pay the debt in full before the Tax Agency notifies you that a tax audit or inspection has started, or before a criminal complaint is filed against you, the offence disappears. Regularisation also covers accounting irregularities and instrumental forgeries linked to that debt. For Social Security, article 307.3 provides an equivalent rule.
• Payment and admission within two months (article 305.6). If proceedings are already under way, the judge may impose the penalty one or two degrees lower if, within two months of your being summoned by the court as a suspect, you pay the debt and admit the facts before the court.

That two-month deadline is short. If you have just been summoned, read our page on being summoned as a suspect and call us.

How we defend you

1. We review the inspection file and the report from the Tax Agency (Agencia Tributaria) or the Labour Inspectorate (Inspección de Trabajo). Many cases start there, and their calculation errors are carried over into court.
2. We challenge the amount. If, once income, expenses or periods are corrected, the figure falls below 120,000 euros, there is no offence. We work with forensic accountants when needed.
3. We analyse whether there was deception or merely a mistake, a debatable interpretation of the rules or non-payment without concealment.
4. We assess with you whether it is best to pay and admit the facts within the deadline to reduce the sentence, or whether there are grounds to seek an acquittal.
5. We review each person’s role: directors, shareholders, advisers. Not everyone is liable in the same way. If the case includes false invoices or shell companies, we coordinate it with the defence for document forgery or corporate crimes.

Criminal proceedings do not halt collection: the Tax Agency can continue to pursue the debt unless the judge suspends enforcement, normally against a guarantee (article 305.5).

Prison, suspension and limitation periods

Suspension of sentence. Sentences of up to two years can be suspended under article 80. For tax and Social Security offences, article 308 bis also requires that you have paid the debt or undertake to do so in line with your financial means, without concealing assets. If you fail to honour that undertaking when you are able to pay, the suspension is revoked.

Limitation periods. Basic tax fraud, with a maximum penalty of five years, becomes time-barred after five years; the aggravated offence under article 305 bis, after ten (article 131). More details in our article on limitation periods for criminal offences.

Civil liability. The conviction includes the tax debt plus interest, which is collected through the administration’s own enforcement procedure (article 305.7).