A Tax Authority Inspection in Spain: Your Rights and Criminal Defence

Receiving a notice from the Spanish Tax Agency announcing the start of an inspection procedure causes great concern. As economic crime lawyers, we explain what to expect, your rights and, above all, when the inspection can become a criminal problem.

Phases of the Tax Inspection

1. Start notice: the tax agency notifies the start of proceedings, indicating the taxes and years to be checked. Do not ignore this notice: the proceedings period is 18 months (27 where turnover requires the accounts to be audited or the company is taxed as part of a group, Art. 150 LGT), and notice of the start interrupts the limitation period.

2. Conduct of proceedings: the inspector will request accounting documentation, invoices, bank statements and contracts.

3. Inspection record: the proceedings conclude with a record that may be of agreement, of disagreement (you have the right to appeal), or with a settlement.

When Can the Inspection Be a Tax Offence?

The tax inspection crosses the criminal threshold when the amount defrauded exceeds 120,000 euros per tax and year (Art. 305 CP). If it also sees signs of an offence, the tax agency passes the case to the courts or refers the file to the public prosecutor (Art. 250 LGT).

Your Rights Before the Inspection

• Right against self-incrimination: during the inspection you must provide the tax-relevant documentation requested (Arts. 29.2.f and 93 LGT; refusing is a tax infringement under Art. 203 LGT); the right not to incriminate yourself applies fully once you are investigated in criminal proceedings (Art. 118 LECrim).
• Right to legal assistance: you can attend all appearances with a lawyer.
• Right to know the scope: the tax agency must tell you which taxes and years it is inspecting.
• Right to appeal: you can submit pleadings within 15 days.
• Right to limitation: if the tax agency exceeds the maximum period, the procedure does not lapse, but its actions do not interrupt the limitation period (Art. 150.6 LGT), which may leave some years time-barred.

Voluntary Regularisation: Your Best Option

If you suspect the inspection may uncover undeclared amounts above 120,000 euros, voluntary regularisation (Art. 305.4 CP) is your best card. It consists of acknowledging and paying the full debt before the tax agency notifies you that proceedings on those taxes and years have started; once that notice arrives, only concepts and periods outside its scope can still be regularised. Full voluntary regularisation excludes criminal liability: it is as if the tax offence never existed.

Cryptocurrency Inspections

Since 2024, the tax agency has intensified inspections of taxpayers with cryptoassets. Regulated exchanges automatically report the operations of Spanish users. If you did not declare gains from buying and selling cryptocurrency, staking or mining, you may receive a notice. If the amount defrauded exceeds 120,000 euros, the tax offence is configured.

Inspections of Companies: Risk for Directors

When the inspection is of a company, criminal liability may fall on the director who decided on or knowingly allowed the fraud, for example by signing returns they knew to be false (Art. 31 CP); holding the post is not enough. The director can go to prison for the company's tax offences, and the company itself may also be liable as a legal person (Arts. 31 bis and 310 bis CP). This is why it is essential for the company to have a compliance programme with internal tax controls.