What does the Spanish Tax Office know about your bank accounts?

What information does the Tax Office have from my bank accounts?

Spanish banks are liable to provide the Spanish Tax Office with the following information:

1. Any transaction with 500-Euros notes.
2. Any transaction over 10,000 Euros.
3. Cash transaction over 3,000 Euros.
4. Loans for over 6,000 Euros.

On the one hand, the Tax Office might cross-reference the bank transactions with the amounts which have been declared in the Personal Income Tax return or in VAT returns.

However, only companies (artificial persons) have the legal duty of having bank accounts just for the purpose of trading. A sole trader may use a personal account for the business, and at the same time, use that bank account for personal matters as well. The same sole trader may share that bank account with the spouse.

Therefore, the Tax Office may find income in bank accounts which cannot be backed up with the figures stated in Tax Returns, and start either a limited tax check or a proper tax inspection.

In the limited tax check, the taxpayer may be reluctant to show detailed information from bank accounts, and the taxpayer has the right to do so, and say no to the Tax Office requirements.

The Tax Office can only start a proper tax inspection in case of very clear evidence of fraud.