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Spain ex-king ‘submits papers to sort out tax affairs’

Spain's scandal-hit former king Juan Carlos I has submitted a declaration to the Spanish tax office seeking to put his financial situation in order, El Pais newspaper reported on Sunday.

Spain ex-king 'submits papers to sort out tax affairs'
King Juan Carlos I. Photo: AFP

The voluntary declaration was presented by his lawyer with sources telling the paper the move was in connection with an ongoing anti-graft investigation looking into his credit card use.

The legal probe was confirmed last month Spain's attorney general, with judicial sources telling AFP at the time they were looking at whether the former king used cards linked to accounts not registered in his name — which could constitute a possible money-laundering offence.

They said investigators were looking into funds deposited in at several Spanish bank accounts held by a Mexican business and a Spanish Air Force official, and whether they had been accessed by the former monarch.

Prosecutors had sent legal requests abroad to determine whether the monies deposited in the accounts had been hidden from the tax authorities.

If proven, the allegations could constitute a money laundering offence for which he could be prosecuted given that the movement of funds and use of the credit cards occurred after his abdication in June 2014.

A spokesman for the Spanish tax office could not confirm or deny the El Pais report about the voluntary declaration, saying for legal reasons the agency could not comment on specific cases.

There was no response from the attorney's law firm.

El Pais said the treasury was analysing the document and would decide in the coming days whether it needed more information and what action to take.

The move came four months after the former head of state, who is also facing two other investigations into his finances, fled into self-imposed exile in the United Arab Emirates.

The first was opened two years ago with prosecutors examining a Saudi high-speed rail contract that was won by a consortium of Spanish companies in 2011, seeking to establish whether the then-monarch was paid a commission.

According to Swiss daily La Tribune, Saudi's late king Abdullah deposited $100 million into a Swiss private bank in 2008 to which Juan Carlos I had access, prompting suspicions it was a kickback for the contract which was awarded three years later.

The inquiry was triggered following revelations by the octagenarian's former mistress Corinna Larsen, with investigators in Spain and Switzerland now looking into his finances.

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TAX

The taxes in your region of Spain you probably didn’t know existed 

Madrid has just announced it wants to be the first region to scrap regional taxes, but what are these tariffs that apply to specific autonomous communities? And where in Spain do taxpayers pay the most?  

The taxes in your region of Spain you probably didn't know existed 
Which autonomous community in Spain has the most regional taxes? Photo: Javier Carro/Wikipedia

Spain’s 17 autonomous communities, with the exception of the Basque Country and Navarre, all have their own taxes which are applicable to people and companies in their territory. 

Known as impuestos propios (own taxes), these tariffs are applied by regional governments to address matters pertaining to their community which they’re looking to solve. 

On September 1st, Madrid’s regional president Isabel Díaz Ayuso made headlines by announcing she intended to scrap the remaining impuestos propios in the region (tax on slot and arcade machines in bars and restaurants and a tax on the storage of waste), amounting to €3.4 million annually for Madrid taxpayers.

This only accounts for 0.02 percent of taxes paid by the region’s 6.6 million inhabitants, but Ayuso’s announcement had made people across Spain more aware of the existence of these little-known regional taxes in their part of Spain.

Madrid’s leader has argued that some regional taxes are now becoming redundant or obsolete as other tariffs are introduced by Spain’s central government on a national level.

madrid scraps regional taxes impuestos propios

Ayuso has said her government will refuse to adapt its tax system to decisions made by Spain’s central government, especially when it comes to its very low taxes on inheritance and assets. Photo: Javier Soriano/AFP

Spain’s 17 regions are responsible for applying their own autonomous taxes, which depending on what they are, can make life more or less expensive for the average person in Spain depending on their location. 

Regional governments are also responsible for setting tax levels on inheritance and assets, which can vary enormously between territories.

EXPLAINED: How choosing the right region in Spain can save you thousands in inheritance tax

So which region of Spain has the most regional taxes? And what are the impuestos propios that you have to pay in your part of the country?

Catalonia

Catalonia has the most regional taxes of all of Spain’s 17 regions, with 13 impuestos propios adding €137.3 million to public coffers in 2020. 

The latest to be added is the tax on C02 emissions for vehicles, along with other tariffs on large commercial establishments, empty homes, tax on tourism stays, sugary drinks, a tax on luxury goods and several other environmental levies relating to water, waste and emissions. 

Andalucia

Spain’s largest region has the second highest number of regional taxes in the country with eight impuestos, although some of these are currently not applied. 

Taxes on unused land, credit agency customers, single-use plastic bags and a number of other environmental taxes added €145 million in tax revenue to Andalusian authorities in 2020. 

Murcia 

Murcia has six regional taxes in place in 2021: three environmental ones, one on bingo prizes, another on economic activities and a water treatment tax, all of which accounted for €55.9 million in taxes in 2020.

Galicia 

The northwestern region has six autonomous taxes which added €80 million to public coffers last year, including a fee on derelict or abandoned homes and a number of environmental taxes relating to mining, pollution, wind energy and water treatment.

Asturias 

Galicia’s northern neighbour also has six regional tariffs which added €118 million paid to Asturias’s tax office in 2020. They include a tax on bingo prizes, water treatment, unused rural land, large shopping centres, economic activities as well as environmental levies. 

Economists in Asturias are calling for regional authorities to lower levies for inheritance and asset taxes as well as regional taxes, suggesting higher-than-average tariffs are dissuading investors.

Canary Islands 

The Atlantic archipelago has five individual taxes, three of which belong to the Canaries’ unique IGIC tax regime (no VAT): General Indirect Tax, AIEM consumer tax and registration tax. The other regional levies are on tobacco, waste spills and petrol-based products.

Aragón 

Aragón in northeast Spain has five regional taxes, all of them environmental. In 2020 Aragonese authorities collected around €100 million from taxes on water pollution, atmospheric damage, environmental impact of large shopping malls, electricity installation and transport as well as on the use of stored reservoir water.

Extremadura

The western region also has five regional taxes which added €115 million to public coffers last year. Active tariffs in Extremadura are on landfill processes, water treatment and hunting.

Valencia region 

The eastern region has four regional taxes in total: a tax on empty homes for those with more than ten properties, tax on waste processes, activities that have an impact on the environment and water treatment. 

The Valencia region’s tax head Vicent Soler has referred to Ayuso’s words as a “smokescreen” that accounts for an insignificant amount for Madrid taxpayers and that slashing regional taxes “will mean those who need it most get fewer services”. 

The Balearic Islands 

The Balearic Islands also have four regional taxes, of which only two are currently applied: the tax on tourist stays (€36.8 million collected in 2020), which is based on overnight holiday stays on the islands, and the wastewater treatment fee (€78 million collected in 2020).

La Rioja

Spain’s famed wine-producing region has four regional taxes, with which in 2020 it added €12 million to its public coffers. These are a tax on cell towers that have a negative visual impact,  water treatment, waste management and a levy on economic activities.

Cantabria

Cantabrian authorities collected €27 million in 2020 from their regional taxes on water treatment, waste deposit in landfills and a levy on economic activities. 

Castilla-La Mancha

In the central Spanish region there are regional taxes on wind energy and economic activities that have an environmental impact.

Castilla y León

Authorities in Castilla y León have said they don’t plan to follow in Madrid’s footsteps and eliminate its own current environmental taxes, which are mainly paid by electricity companies.

Castilla y León currently receives almost €63 million with its tax on the environmental impact caused by certain uses of stored reservoir water, a tax on wind farms and another on high voltage electric power transmission facilities, as well as a further €7.6 million from landfill waste management taxes.

You can read more about impuestos propios on Spain’s Hacienda website (information in Spanish). 

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