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Voluntary Disclosure · Regularisation

Voluntary Tax Disclosure and Regularisation in Spain

Undeclared income, foreign assets, rental earnings — regularising your Spanish tax position voluntarily is always better than waiting for an AEAT inspection. We manage the process confidentially.

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Voluntary vs Detected

Why Act Now: The Penalty Difference

Spanish tax law draws a fundamental distinction between taxpayers who come forward voluntarily to correct an error or omission, and those whose non-compliance is discovered by the AEAT through audit, information exchange, or third-party reporting. The financial consequences of these two scenarios are dramatically different.

Under Articles 27 and 191 of the General Tax Act (Ley General Tributaria, LGT), a voluntary late payment or correction — meaning one made before the AEAT has initiated any formal procedure or notified the taxpayer of any inquiry — attracts a surcharge (recargo) rather than a penalty. The surcharge scales with the delay:

  • Less than 3 months late: 5% surcharge, no interest
  • 3 to 6 months late: 10% surcharge, no interest
  • 6 to 12 months late: 15% surcharge, no interest
  • More than 12 months late: 20% surcharge plus late payment interest from month 12 onward

By contrast, where the AEAT discovers the non-compliance first and initiates a formal inspection or verification procedure, the ordinary penalty regime applies. For tax fraud (infracción tributaria grave or muy grave), penalties range from 50% to 150% of the unpaid tax — before late payment interest is added. The difference between a 20% surcharge and a 150% penalty on a significant underpayment can amount to hundreds of thousands of euros.

Voluntary Disclosure (Before AEAT Contact)

  • Surcharge of 5–20% depending on delay
  • No separate penalty imposed
  • Late interest only after 12 months
  • No criminal risk (below criminal threshold)
  • No adverse AEAT compliance record
  • You control the timing and presentation

AEAT-Initiated Discovery

  • Penalties of 50%–150% of unpaid tax
  • Late payment interest from original due date
  • Formal inspection procedure initiated
  • Criminal risk if >€120k per year
  • Reputational and compliance record impact
  • You respond to their agenda, not yours
AEAT Intelligence

How the AEAT Finds Undeclared Income and Assets

Many taxpayers with historic non-compliance believe that because several years have passed without AEAT contact, the issue has effectively disappeared. This is a dangerous misconception. Spain participates in every major international tax information exchange framework, and the volume of data flowing to the AEAT has increased dramatically since 2017.

CRS: The Common Reporting Standard

Under the OECD's Common Reporting Standard, financial institutions in over 100 participating jurisdictions automatically report account information — balances, income, and transactions — to the tax authority of the account holder's country of residence. Spanish residents with bank accounts, investment portfolios or other financial assets in the UK, Switzerland, Jersey, the Cayman Islands, the UAE, Singapore, and most other financial centres are automatically reported to the AEAT annually. This data is processed and cross-referenced with Spanish tax returns. Where a discrepancy exists, the AEAT's risk-scoring systems flag the taxpayer for review.

FATCA: US-Spain Reporting

The US Foreign Account Tax Compliance Act (FATCA) requires US financial institutions and certain foreign institutions with US clients to report to the IRS, which then shares data with the AEAT under the US-Spain Intergovernmental Agreement. US citizens and Green Card holders resident in Spain who have accounts at US banks or brokers are reported to the AEAT through this channel.

DAC6: Cross-Border Arrangements

EU Directive 2018/822 (DAC6) requires intermediaries — lawyers, accountants, financial advisers — and in some cases taxpayers directly, to report cross-border tax arrangements that meet certain hallmarks to the national tax authority. Arrangements reported under DAC6 are shared among EU Member States. This affects complex cross-border structures, transfers of assets to low-tax jurisdictions, and certain circular transactions.

Modelo 720 and Asset Declarations

Spain's Modelo 720 regime requires Spanish residents to declare foreign assets exceeding certain thresholds. The AEAT cross-references 720 filings with CRS data, and where assets appear in CRS data but not in the 720, this creates an automatic inquiry risk. Where a 720 has not been filed but should have been, late filing with the appropriate surcharge is preferable to waiting for the AEAT to discover the omission.

Common Triggers for AEAT Scrutiny

Beyond the automatic information exchange mechanisms, specific behaviours commonly trigger AEAT review:

  • Rental income visible in land registry or utility company records but absent from IRPF returns
  • Property purchases funded by unexplained sources of cash
  • Capital gains on Spanish property not declared in IRPF or IRNR
  • Cryptocurrency transactions reported by exchanges to the AEAT under Modelo 172/173 but not included in tax returns
  • Income from online platforms (Airbnb, Deliveroo, etc.) reported to the AEAT under DAC7 but absent from tax returns
  • Foreign pension income not declared in IRPF
  • Cash deposits inconsistent with declared income
How We Help

The Regularisation Process: Step by Step

1

Confidential Assessment

We conduct an initial confidential review of your tax position — covering all potential periods of non-compliance, the nature of the undeclared income or assets, and any relevant limitation periods. Attorney-client privilege protects this analysis from AEAT disclosure.

2

Limitation Period Analysis

Spain's general tax limitation period is four years, running from the end of the voluntary filing period for the relevant tax and year. We determine which years remain open — and whether any acts by the AEAT or by the taxpayer have interrupted the period's running. Years that are definitively out of time generally do not need to be regularised.

3

Quantification of Liability

We calculate the tax, surcharges, and interest position for each open year. This gives you a clear picture of the maximum exposure before any disclosure is made, allowing you to make a fully informed decision on how to proceed.

4

Preparation of Corrected Returns

We prepare the necessary corrected or supplementary tax returns for each open year and each relevant tax. For Modelo 720 late filings, we prepare the declaration with the appropriate legal basis. For income tax, we prepare complementary self-assessments (autoliquidaciones complementarias).

5

Filing and Payment

Returns are filed and the surcharge (not a penalty) is calculated and paid. We manage the filing directly with the AEAT's online systems and ensure that the disclosure is properly characterised as voluntary to secure the surcharge treatment rather than the penalty regime.

6

Ongoing Compliance

Following the regularisation, we put the necessary structures in place to ensure future compliance — including annual IRPF filing, Modelo 720 filings where required, and any reporting obligations for cryptocurrency, rental income, or foreign financial accounts.

Criminal Risk: The €120,000 Threshold

  • Tax fraud becomes a criminal offence under Article 305 of the Spanish Penal Code when the amount of unpaid tax exceeds €120,000 per tax and per year
  • The €120,000 threshold applies to each tax (IRPF, IS, IVA) and each fiscal year independently
  • Voluntary disclosure before formal criminal proceedings are initiated is a complete defence to criminal liability in most circumstances
  • Once criminal proceedings have begun, voluntary disclosure no longer prevents prosecution, though it may mitigate the penalty
  • Situations involving amounts near or above €120,000 per year should be handled by a lawyer, not a tax preparer, given the criminal dimension

Is There a Voluntary Disclosure Amnesty in Spain?

Spain operated a formal tax amnesty in 2012, which allowed taxpayers to regularise undeclared assets at a flat rate of 10% with no penalties or surcharges. This amnesty has since closed and is not available. The current regime — voluntary disclosure with reduced surcharges rather than full penalties — is not technically an amnesty, but it is significantly more favourable than the penalty regime that applies to AEAT-discovered non-compliance. There is no current indication that Spain plans a new amnesty. The window for favourable treatment is therefore the voluntary disclosure mechanism under the general LGT rules.

Specific Situations We Handle

  • Undeclared rental income: Spanish rental income not declared in IRPF or IRNR; Airbnb income not reported
  • Offshore bank accounts and investments: Accounts in Switzerland, UK, Channel Islands, US, UAE and other jurisdictions
  • Modelo 720 late filing: Historical non-filing of the foreign asset declaration; correction of errors in previously filed 720s
  • Cryptocurrency gains: Unreported profits from Bitcoin and other digital assets, including those visible in exchange records reported to AEAT
  • Foreign pension income: UK state pension, US Social Security, German pension (Rente), and other foreign pensions not declared in IRPF
  • Capital gains on property: Gains on Spanish or foreign real estate not declared in the relevant year
  • Inheritance and gifts not declared: Foreign inheritances not reported in Spain where the beneficiary was a Spanish resident
Common Questions

Frequently Asked Questions

I have rental income I never declared in Spain — what should I do?
The first step is to establish which tax years remain within the four-year limitation period and are therefore open to correction. Years that are definitively out of time do not need to be regularised. For open years, the appropriate course is to file supplementary self-assessments (autoliquidaciones complementarias) for each year, paying the tax plus the applicable surcharge. For rental income in Spain, this means correcting your IRPF returns (if you are a tax resident) or IRNR returns (if you are a non-resident). The surcharge will be between 5% and 20% of the unpaid tax, plus interest after twelve months, but no separate penalty will apply if the disclosure is genuinely voluntary — meaning the AEAT has not yet contacted you about this income. Take advice before filing; the presentation of the correction matters.
What are the penalties if the AEAT finds undeclared income before I disclose?
If the AEAT discovers the non-compliance before you make voluntary disclosure, the penalty regime under Articles 191–193 of the General Tax Act applies. For a infracción tributaria grave (serious tax offence) — which applies where the concealment is intentional — the penalty is 50% of the unpaid tax, with increases for aggravating circumstances including the use of invoices or false documents (up to 100% additional) and prior non-cooperation. For a muy grave offence — involving fictitious transactions or systematic fraud — penalties reach 150%. Late payment interest is added from the original due date. In serious cases involving amounts over €120,000, criminal referral is possible, with prison sentences of up to five years. The difference between a 20% voluntary surcharge and a 150% penalty plus interest is transformative.
Is there a voluntary disclosure amnesty in Spain?
No. Spain's 2012 amnesty — which allowed regularisation at a flat 10% rate — is closed. The current Spanish legal framework does not provide a formal amnesty programme. However, the voluntary disclosure mechanism under Articles 27 and 191 LGT provides meaningfully favourable treatment compared to the penalty regime: surcharges of 5–20% instead of penalties of 50–150%, no criminal exposure below the €120,000 threshold, and no formal penalty record. The window for this more favourable outcome is open only until the AEAT contacts you — after that, the penalty regime applies. There is no indication that Spain plans to introduce a new amnesty in the near term.
How far back can the AEAT go for undeclared income?
The general limitation period for tax in Spain is four years, running from the end of the voluntary filing period for the relevant tax return and year. For IRPF (personal income tax), the filing deadline is typically 30 June, meaning the limitation period for the 2020 IRPF return began running in July 2021 and would expire in July 2025. However, the limitation period can be interrupted by any act of the AEAT or the taxpayer that demonstrates knowledge of the outstanding obligation — including AEAT audit notices, requests for information, or even taxpayer-initiated correspondence about the period. In practice, taxpayers should seek advice on which specific years are open at the time of seeking to regularise. Note that for assets not declared in Modelo 720, the AEAT has historically taken the position that these are subject to an extended or unlimited limitation period — this position was partially curtailed by the 2022 ECJ ruling, but the specific position for each case requires analysis.
Can voluntary disclosure prevent a criminal prosecution?
Yes — in most circumstances, voluntary disclosure before criminal proceedings are formally initiated (before the case is referred to the Fiscalía or a criminal court) is a complete defence to criminal liability. Article 305.4 of the Penal Code provides that tax fraud is not criminally punishable if the taxpayer regularises their situation before a criminal complaint has been filed against them. This means that even for amounts exceeding the €120,000 criminal threshold, voluntary disclosure prevents prosecution. The key is timing: once formal criminal proceedings have begun, voluntary disclosure no longer provides a complete criminal defence, though it may mitigate the sentence. This makes early action essential where amounts near or above the criminal threshold are involved — waiting carries the risk that an automatic data match from CRS or another information exchange programme triggers an AEAT investigation before you act.
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Legal disclaimer

The content on this website is for general informational and educational purposes only. It does not constitute legal or tax advice and does not create a lawyer-client relationship. Tax laws change frequently and their application depends on individual circumstances. Always obtain specific professional advice before taking any action based on content found on this site. Jacob Salama — Salama Legal SLP — is a registered Spanish lawyer (Colegiado nº 11.294, ICAMálaga) and is not authorised to provide US or UK legal advice.

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