A retiree must pay 104,138.09 euros to the Treasury after trying to pay taxes as a non-resident while, in reality, he did have his core economic and family interests in Spain. The Superior Court of Justice of Catalonia agrees with the Regional Economic-Administrative Court by considering that its “center of vital interests” remained in national territory, failing to comply with the provisions of article 9 of the Personal Income Tax Law and the Double Taxation Agreement with Andorra.
As stated in the ruling to which you have had access NewsWorkit all starts when the Treasury office in Lleida claimed personal income tax for 2018 from this retiree. The inspectors detected that had not filed the income tax returndespite having had income on which he was obliged to pay taxes.
You may be interested
The Inheritance and Donations Law confirms it: if you renounce your inheritance in favor of a specific person, the Treasury will demand inheritance tax and also donation tax.
The Treasury extends the self-employed module system and the 5% reduction in personal income tax
The man tried to defend himself by saying that he had moved to Andorra at the end of 2017, where he rented and then bought a house. But even so, the Treasury demonstrated that it had housing available in both countries and that, in reality, its economic life continued to be mainly in Spain.
For this reason, the Regional Economic-Administrative Court of Catalonia (TEAR) backed down his allegations and confirmed that he had to pay a debt of 60,864.23 euros, to which was added a penalty of 43,273.86 euros.
The organization noted that, although he had a home in Andorra, “he did not prove that he had major economic interests in Andorra, nor closer family or personal relationships with that country.” Faced with this refusal, the taxpayer went to court, arguing that his interpretation of the rule was reasonable and requesting the annulment of the sanction.
I was still living in Spain
Upon reaching the Superior Court of Justice, it ruled in favor of the Treasury. The court explained that when having a permanent home at your disposal in both states, you must resort to the criterion of the “center of vital interests”, which is the place with which a person maintains their closest personal and economic relationships (such as their family, assets and income), and is used as a decisive criterion to determine their tax residence when they have a home in two countries.
Thus, the ruling explains that “his economic interests, his businesses, his assets and the basis of his income are centered in Spain,” in addition to this person also He received a Social Security pension of more than 34,000 eurospension plan rescues for almost 120,000 euros and the ownership of four properties in Barcelona and Lleida.
Furthermore, the court explains that “his most immediate relatives, his wife, his daughters and grandson reside in Spain.” What’s more, even his wife filed the personal income tax return in our country that same year.
He did not prove that he resided in Andorra
The key to this ruling is the lack of evidence about the alleged tax life in the neighboring country (Andorra) and the clarity of the links with Spain. The court reproaches that “Andorran residence is not denied, but rather that it must prevail” without having demonstrated real taxation there, since the actor “limits himself to affirming the assertion, without referring to any body of evidence.”
According to the ruling, the retiree’s conduct was negligent and punishable because “all the elements that determine Spanish tax residence are known to the appellant” (family and assets), so “the absence of taxation of worldwide income, before any jurisdiction, could not escape a very minimally diligent taxpayer.”