Tax authorities to flush out all undeclared rentals in two weeks' time

Just read this on another forum............

Interesting looks like the Spanish "Big Brothers" are watching closely......

In two weeks´ time Spanish electricity companies will give the tax authorities a list showing the electricity consumption of all their clients so that they can find out which properties are actually empty, and which properties are leased out to tenants even though the rental income is not declared.

The aim of the tax authorities is to detect undeclared rental income, which means that anyone who has not registered their rental property will have to do so this year unless they want to be fined. The information that the electricity companies will hand over to the taxman will be for the year 2010, which means that it will directly affect the tax returns for this year.

After the Fiscal Fraud Prevention Plan was implemented in 2010, the tax authorities collected an extra 10,043 million euros, and they hope to collect even more in 2011 by detecting undeclared rentals.

http://www.polarisworldforum.net/topic.asp?TOPIC_ID=9905

 How can they tell if you dont go over every couple of weeks for a holiday  or every weekend which is very feasable with cheap flights and i know alot of people that do this.there are alot of people that live in spain and return to uk for work.

Could it be that they are looking at long term or major seasonal use where no 'income' is being declared. If push came to shove and proper investigation were instigated they'd also look at travel and flights and patterns of use etc of the non resident owners. Isn't this something the authorities can also do regarding cars and residency because there's a 6 month use rule or something?

I'm sure there was something in one of the fly on the wall documentaries last year about property rental in EU hotspots and how lucrative it can be to have a place 'rented' out but not to be paying any tax on that income- the knock on from that was keyholders, cleaners and unauthorised taxi driving that were linked to the properties being paid cash in hand and not declaring themselves self employed. I suppose its another effort by the govt to claw in cash.

Very innovative approach.  I would expect they are after those whose electricity bills show a constant regular use comparable to full-time occupation.  I would doubt that even regular holiday visits would explain that.

Next thing they'll be getting the administrators to provide info from security about who people have been requesting access for!!

Don't laugh- it could come to that, although it seems extreme. The Govt obviously see that there's alot of revenue they are missing out on- I think they recouped a huge sum last year. I'd imagine they'd be looking at the more major offenders but unfortunately lots of minnows get caught up in those sort of investigations. There's alot of cross pollination going on in EU countries regarding the proceeds of crime and whilst you might think renting an apartment out without being properly registered is just a bit of ducking and diving its really tax avoidance. As a non resident you can stay in Spain for about 180 days so maybe they look at electrical output over and above that.?

Most people do pay their taxes so it's  quite galling to know other's dont and I suspect some people get 'outed'.

Found this quite interested me and I sort of remembered it coming up in articles I read last year so did a bit of research. The original info that Scapa posted comes from:-

http://www.polarisworldforum.net/topic.asp?TOPIC_ID=9905

and the thread on that forum has developed  since that 1st post and might be of interest to people who rent out at Cda as it mentions the tax situation for renting and the changes in the law since 2010- and the fact that this isnt a one day headline that is about to go away. Its clear from that thread that people didnt realise they should be declaring their Spanish income- some declared it on their UK tax info but infact should be declaring and be taxed in Spain then ofsetting in the UK.

Some feel that it will lead to increased rental charges as it will clear the under cutters from the bsiness.