Informing on people and entities that had hidden Swiss Bank Accounts for the purposes of tax evasion hit the headlines in Spain recently and although the Tax Office does not publish statistics on the complaints it receives, it is a fact that they are handled with relative frequency.
People working in Spain's Inland Revenue (Hacienda) also believe that the crisis has caused an increase in the number of complaints.
The suggestion is that many people working in irregular (illegal) situations and who has been dismissed may have felt tempted to make a complaint if they had the necessary documentation even though, since 1986, anyone informing no longer receives any penalty imposed.
However, as occurred with the former employee of Swiss bank H.
S.
B.
C.
who revealed the existence of accounts held outside of Spain for the purposes of evading tax, revenge, envy or spite, tend to be the main reasons why many taxpayers, honest or not, end up providing the tax inspectors with information on suspicious accounts.
So do you have anything to hide and is there anything that you should worry about? A scant five percent of the complaints made to the Inland Revenue (Hacienda) that are successful correspond to tenants, employees, suppliers and family members as they tend to be able to provide proper documentation to support the complaint.
The improvement in technology has made it easy for Hacienda to quickly check the basis of the complaint if it is well documented.
Thus a snubbed tenant can often be a source of problems for the landlord who has not bothered to make a contract and does not declare the rent obtained for tax purposes.
This situation tends to arise most frequently in the case of rentals of apartments in the summertime.
Tax advisers discourage non-declaration of rental income given that the current tax system is very favorable in this regard, especially if it is the tenant's primary residence.
With regard to tourist accommodation, remember that Hacienda has been focusing on this sector for some time, and as a result it would not be recommended to take risks.
It is also possible that they may pursue offenders for failing to declare VAT in addition to concealing rental income.
The same would apply to rental income from parking spaces and commercial premises.
Construction Companies Other potential whistleblowers with plenty of documentary evidence are suppliers and business clients.
Many of the complaints that have been made in recent times against construction companies have come from individual consumers who were asked to pay part of the purchase price in 'black money'.
Neither is there a dearth of suppliers that have reported their clients for requesting false invoices.
If these facts are documented, it is likely that the informant will succeed.
It should be pointed out that you will not know who the informer is.
You may have grounds for suspicion about a person, but it will be impossible to check.
Hacienda does not make public the identities of complainants and even accepts anonymous allegations on the Internet.
Though it is likely that they will know you well enough as for a complaint to succeed it is necessary to collect a lot of information, with only basic circumstantial evidence not enough to justify an inspection.
Family Members Family members are another large group of informants that usually convince officials to open up an investigation for tax fraud.
Such allegations as between divorced spouses are almost common-place, being relatively easy for the informant to collect evidence of undeclared income, if they have not come to an agreement on the division of matrimonial property.
A falling-out between family members when sharing an inheritance is another source of recurring complaint in the halls of Hacienda.
A beneficiary who feels they have been badly provided for by the testator can complicate the lives of those who benefit most if they have not declared all the assets acquired.
The burden of proof In addition to documents that can prove or disprove an alleged tax fraud and initiate an inspection, officials in charge of investigating the complaint will want to know since when the informant knew about the fraud.
They will also want to know how the data that support the complaint was obtained and the motive that the informant has to appear before the inspectors in an effort to avoid false accusations which do also tend to occur.
According to experts, the legality with which the data obtained from an alleged fraudster is increasingly important.
Therefore, it is the case that following a complaint, although well documented, it is possible that the Treasury is unable to use the data submitted in the case of a fired accountant if obtained fraudulently.