I doubt if they are not fully legal they are going to admit that on here

I assume this is what you are referring to.

http://europa.eu/rapid/press-release_IP-13-530_en.htm

If they really do integrate the information from each country tax database it will be very difficult to hide income/assets within the EU.


However the serious tax evaders will not be stupid enough to store their dosh in the EU!

That was the announcement I was referring to.

I agree about the serious tax evaders, but In my view, most expats who evade tax, probably just have their dosh in their country of origin, or one of the offshore places. They probably don't have sufficient money to move it around the world. It's probably just cash and other assets they've built up through hard work, inheritances etc.

My view is that they unlikely to evade tax in their own country, probably because it's quite difficult to do, unless you move your assets overseas, and they only do it Spain, because they can, and they do so, because they think it's unfair that they should pay tax on assets and income they built up over a period of years.

I understand why they feel that way, but i find it interesting why someone, who's probably a normal law abiding citizen, and wouldn't dream of say nicking your wallet, finds it morally acceptable in terms of tax declarations.

Turn it around-Is it morally acceptable for the Spanish tax man to nick large chunks of hard earned assets built up in another country where they would be tax free? I hasten to add I DO pay my taxes-I want to sleep at night!

And often it is not deliberate evasion but lack of knowledge of their obligations in Spain, often compounded by gestors/lawyers/assessores etc telling that they don't need to declare it.

It is arguably morally acceptable because that is the law in Spain.

Everyone has an option whether they pay Spanish taxes or not. If you don't want to pay them then just don't become tax resident in Spain.

In my view there is a world of difference, nicking a wallet is taking something that is not yours off someone, whereas trying to pay as little tax as possible is holding on to something that is yours.

I agree with your last sentence, PROVIDING its done legally. I would encourage everyone to do that. I was talking more about illegally. i.e continuing to live in Spain, but not declaring all your income.

Everyone tries to pay as little tax as possible and there are many perfectly legal ways of doing so - it's tax avoidance. See Googe/Amazon/Starbucks for details!

You can legally avoid IHT using trusts. You can invest money in tax deferred bonds - the list is endless. What you can't do is ignore it - that can get expensive.

I have spent my working life avoiding tax but I have never risked evading it.

Most people do not have have the knowledge about safeguarding their finances in Spain. Although the press is awash with adverts from financial advisors, people are understandably sceptical and it's difficult to know who to trust, having read horror stories of those who have been relieved of their savings. They also have the problem of conflicting advice.People who own businesses are aware of tax implications-those who've only had to deal with PAYE are not.
Those who loftily defend the Spanish system, and dismiss criticisms of unjust practices,(quite a few of those) only too ready to spout"don't be tax resident in Spain, then" are missing the point. The golden geese WILL fly from the nest, and Spain will be all the poorer, no doubt having to inflict other unpopular measures onto the population.
I know nothing of trusts but I have heard that Spain does not recognise them in relation to IHT.
It's a shame that there isn't an agreement in Europe that tax free saving plans, isas etc in your own country are respected in another eu country;then people wouldn't fear the taxman.They would still get enough income from the expat pensions, savings interest etc.
Who is surprised that the Hacienda is disappointed at the lack of asset declarations?What did they expect, with the threat of draconian and disproportionately large penalties?

Without those draconian threats they would not have got half the declarations they have.

Unfortunately most expats take them at face value and comply - the Spaniards typically ignore them.

So why isn't the Hacienda coming down hard on them? How they must laugh at the mugs who comply, baring all and leaving themselves open to scrutiny and fines for the tiniest inadvertent error!

Hacienda has started to come down heavily on tax evaders - and even on those who thought they were avoiding it legally. The press is full of high profile cases such as Lionel Messi the other day.

My sister in law, who is a tax lawyer in Spain insisted to my wife that we declare all our overseas assets 100% on the modelo 720, as otherwise she says we face a big risk of losing them

Surely that is only if they exceed €50,000 in any asset class. If they don't then you don't have to declare them.of course that might be €25,000 next year and down again the year after.

Why don´t you have that phrase added to you signature, it would save you a lot of time, us regualrs already know about your sister in law, and the newbies would be able to read it for themselves.