The British newspaper The Telegraph has recently featured a story highlighting the experiences of numerous foreign residents in Spain who have been victimized by Hacienda. Below, an excerpt from the full story:
Like many of the 37,000 professionals from around the world who have taken advantage of the Beckham law since it was introduced, Joe and his wife received certificates on their arrival in Spain in 2018 from the tax agency stating that they had been assigned the special status for six years, meaning their Spanish income was taxed at the lowest rate (24 per cent) and their assets abroad would not be considered for Spanish tax purposes.
“I’d had mental health issues due to stress in my job in London for one of the big four accounting firms and I moved to Madrid to work part-time for an old colleague, while my wife took up directorships at major Spanish companies,” he says. “But the tax authority simply said we had invented these jobs.”
Joe insists they have provided ample proof of how he had been contracted in Spain, where he and his wife, as tax professionals themselves, had hired the services of a tax adviser and ensured they were on the right side of the law. Or so they thought.
“I know what the downside of doing things wrong is having advised people all my life,” adds Joe, a father of four.
As well as claiming Joe and his wife had “simulated” their work contracts in Spain, the tax office went after the money from a London property they had sold even before moving to Madrid, estimating capital gains 60 times higher than the £8,000 on which he had already paid tax in the UK.
‘A cycle of fear and repression’
In the end, he settled by paying around 250,000 euros “because if I had gone through the courts, which could easily take a decade, I could have had to pay double and no way am I giving that much to the Spanish government”.Joe and his wife are making arrangements to avoid spending six months a year in Spain so that they no longer have to deal with the country’s tax agency.
“You think you know this country and then this happens. It’s like Stalin’s Russia; you are bullied until you agree that black is white,” Joe says, adding that he tried to solicit help from three law firms in Spain but “none of them wished to go up against the tax authority”.
Instead the baton has been taken up by international law firm Amsterdam & Partners, which is assessing claims of unjustified persecution from Spain’s tax office by more than 440 expats, many of whom report how their lives have been destroyed by the authority’s inquisitorial methods.
It’s a pattern of behaviour that keeps repeating, says Bob Amsterdam, the law firm’s founder and managing partner.
“We are seeing that this is affecting thousands of British people in Spain,” he says. “It’s a cycle of fear and repression. The tax agency uses terror tactics.”
The law firm has run advertisements in English-language media under the slogan Spanish Tax Pickpockets to publicise its campaign and gather victim testimony, which could lead to a class action against the Spanish state and a challenge in the European courts.
“The experiences people have is that the tax office renegues on the promise of Beckham status and aggressively pursues their wealth,” claims Dr Chris Wales, senior research adviser at International Centre for Tax and Development and a former member of the Council of Economic Advisers at the UK’s Treasury.
The arbitrary nature of the Spanish tax office’s accusations is highly effective in terms of cowing resistance but runs completely contrary to the rule of law, Wales noted.
“I have worked with governments in more than 30 countries all over the world and nowhere else have I seen such fear of the tax authorities.”
Read the full article on The Telegraph here.