Spain Recovers €131M from 429 Taxpayers Faking Foreign Residency

Spain's Tax Agency has identified 429 taxpayers since 2021 who falsely claimed fiscal residency abroad while actually living in the country, leading to the recovery of €131 million in unpaid taxes.

The agency, known as Hacienda, launched verification efforts that uncovered these cases, according to data released by the Spanish government in response to a transparency request under Law 19/2013. The initiative ramped up from 2021, targeting high-net-worth individuals declaring foreign residency.

Many of those affected are Spaniards living in Andorra, a popular destination for high-income expats due to its tax advantages. However, Hacienda argues they do not qualify for exemptions because their main interests and income sources remain tied to Spain, not Andorra.

The exact number of Andorran cases remains undisclosed, as the government's response omitted a country-by-country breakdown. Hacienda rejected that part of the transparency request, stating the data was not available in the required format.

This crackdown highlights growing scrutiny on cross-border tax arrangements, particularly with Andorra, which hosts a significant number of wealthy Spanish residents. The recovered funds stem from regularization efforts, though full details on individual penalties or ongoing audits were not provided.