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Obligation to provide information to the spanish tax administration: Public Notaries
Preventive activity is key
Duty of property valuation companies to provide information to the Spanish tax authorities on their clients. The obligation is also extensive to Spanish notaries
In a judgement dated 13-01-2011, the Supreme Court established the duty of real estate developers to respond to a request from the Tax Agency to provide details on the valuations in which they had participated, in addition to details on clients. The purpose of this measure is to ensure that the authorities have information on the market value of certain properties which are subsequently sold. Therefore, the prices established in this appraisal can be compared against the price actually stated in the title deed. In the event of a large difference, it would be regarded as a case of fraud involving undeclared income.
Noteworthy is the fact that Spanish tax authorities are authorised to request information from any taxpayer in those cases where the taxpayer is a party to a transaction, and is obliged to supply the information requested. By way of example, we can mention the decision of the Central Economic Administrative Court (TEAC) dated 25-06-2009, where, in relation to a request from the authorities to companies managing credit cards, it is clearly stated that such companies are obliged to provide information on clients who have been operating above certain amounts.
A further highlight is the agreement reached by the tax authorities and the Spanish Chartered Institute of Notaries, executed in June 2007, whereby notaries will regularly provide (in computerised and electronic form) information on transactions which they notarise, stating the names, values and transactions authorised by them. Therefore, the tax administration will have real-time information on the transactions carried out at Notary Offices with the aim of prosecuting tax fraud.