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On the proportionality of information requirements in Spain to banks or intermediaries when asking for data of the operations executed by their clients

02.02.2010

Due to their importance, two rulings from the tax administration (Tribunal Económico Administrativo Central) on 10/6/2009 and 25/6/2009 should be highlighted. These decisions checked the validity of a requirement issued by the tax administration, according to which a credit card company (in the first case) and a bank (in the second case) had to provide the tax administration with detailed information of all transactions carried out by their clients.

In the first decision, a Spanish credit card company impugned the validity of a requirement imposed by the tax administration, which requested that the company provide a detailed information of all transactions carried out by the company's clients (client number, type of transaction, value of the transactions and the bank account number where the transactions were charged) if said transactions amounted to over 6,000 euros per year (in 2006 and 2007). In the second decision, a Spanish bank refused to provide the information of bank account holders with over 3 million euros of income per year (2006 and 2007)

Both decisions entailed a thorough study of the legal regulations that allow the tax administration to request these two companies to provide said information. The jurisprudence regarding these matters is also revised. In the end, the Economic Administrative Court ruled to annul the first information requirement on the reasoning that the request involves too much data and that the amounts do not have any tax relevance. Moreover, the measure is deemed to be disproportionate.

On the other hand, in the second case, the court decided it was justified to provide the aforementioned information in order to comply with the constitutional principle to be taxed according to the financial capacity. In addition, the measure was deemed to comply with the proportionality required by the regulation.

We must not forget that, unlike other countries, all tax-paying companies in Spain (including intermediaries such as banks) must regularly and automatically provide detailed information on paid taxes or on those in which they act as intermediaries. The Spanish administration is one of the most efficient in this regard —under no circumstances does it allow to prevent the transfer of information on the base of the taxpayer's privacy. There is no legal rule similar to the German article 30a AO in Spain.

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