British expats must comply with a new Spanish tax reporting requirement or face hefty fines.
Brits who now live in Spain must tell the Hacienda – the country’s tax authority – about any offshore assets valued at more than £43,000.
The move will net most expats, which Spanish authorities say, is aimed at targeting tax evasion and fraud.
Failure to report accurately assets which are held overseas, and they include property, pension pots and bank accounts, could see fines of up to 150% of the asset’s value.
There could also be late payment charges and then an additional fine for each unreported asset of £4,300 being imposed with a minimum fine of £8,600.
Failure to declare an asset worth £103,000 and the owner could be facing criminal charges.
There isn’t long left for expats to comply with the first reporting deadline set for April 30, 2013.
Authorities are also looking for people who not only own the assets but are also the beneficiary or authorised signatory for them.
All asset classes come under the new legislation which also includes stocks and shares, property and life insurance policies.
The law also calls for the average values for bank accounts in the last three months of a year – this includes current and savings accounts and credit cards in all currencies.
A spokesman for financial management firm Blevins Franks said: “This new law is an additional requirement on taxpayers in Spain who are already obliged to declare their income from around the world for income tax purposes.
“However, the new rules are for those who are Spanish tax residents and they must declare their assets held outside of the country, not fully declaring their offshore assets will see authorities being strict with them.”
He added that because of the heavy penalties involved expats are being urged to contact a tax advisor as soon as possible to ensure they declare accurately all of their assets.
The Spanish government is keen to exploit any new revenue possibilities because of the dire straits its economy is in.
The Eurozone’s fourth largest economy has been in recession since early 2011 and the recent economic figures show the Spanish economy contracted by another 0.7% in the last quarter of 2012.
Unemployment is now running at 26% and the government believes its economy will pick up from the second half of 2013 but they are still implementing budget cuts of around £129 billion which have sparked street protests.