Most tax offence cases under the Spanish Criminal Code are not decided on whether tax went unpaid. They turn on three questions: whether the taxpayer concealed or misrepresented the taxable facts, whether the amount evaded exceeds the threshold once correctly calculated, and whether the situation was regularised in time. Article 305 does not punish a debt. It punishes the deceitful conduct that prevents the tax authorities from knowing and assessing what is owed.
This guide explains how the offence works from a practical point of view, based on Articles 305 to 310 bis of the Spanish Criminal Code. For a short overview of thresholds and penalties, see tax fraud in Spain: consequences and defence. When a tax irregularity becomes a crime, and where a defence usually focuses, is covered in tax fraud in Spain: when it is a crime and how to defend it.
The legal basis: Article 31 of the Spanish Constitution
The offence rests on Article 31.1 of the Spanish Constitution, which requires everyone to contribute to public expenditure according to their economic capacity. This principle of tax solidarity is what criminal law protects. The tax offence is an economic offence against the financial interests of the State and of the regional, local and foral treasuries. It is not a forgery offence, nor an offence against public trust.
Its current form is relatively recent. Tax fraud was first criminalised in Spain in 1977, under the previous Criminal Code, and the offence has been reformed several times since: in 1985, in the 1995 Criminal Code and by the reforms of 2003, 2012 and 2019. Each reform has tightened the rules, partly because organised crime has moved beyond drugs and weapons into large-scale tax fraud and corruption.
What Article 305 punishes: concealment, not debt
The tax offence is not a new form of imprisonment for debts. What is punished is the concealment or misrepresentation of the taxable event in order to avoid paying tax. A taxpayer who declares everything correctly and simply cannot pay does not commit this offence.
Article 305.1 covers anyone who, by action or omission, defrauds the tax authorities in any of these ways:
- Evading the payment of taxes, a term that includes taxes in the strict sense, fees and special contributions.
- Evading amounts withheld or that should have been withheld, or payments on account, including those on remuneration in kind.
- Unduly obtaining refunds or enjoying tax benefits in the same way.
Action and omission
Since 1985, the offence can be committed both by action and by omission. Someone who knows they must file a tax return and deliberately does not file it can commit the offence, just as someone who files a false one. Before that reform, a common defence argument was that the taxpayer did not know they had to file. Today that argument only works if it genuinely undermines intent.
Filing a return does not rule out the offence either. If the return conceals income or inflates deductions and the amount evaded exceeds the threshold, the offence exists even though the taxpayer filed on time.
A blank criminal provision
Article 305 must be completed with tax legislation, mainly the General Tax Act and the rules governing each tax. Who must pay, what is taxed and how much is owed are tax law questions that the criminal court must resolve before deciding whether there is an offence.
Tax planning, conflict in the application of the rule and fraud
Choosing the least costly lawful option (economía de opción) is not an offence. Nor, as a rule, is the use of an artificial legal structure to obtain a tax saving that the rule did not intend, which tax law now calls a conflict in the application of the rule (Article 15 of the General Tax Act) and was formerly known as fraude de ley. The Supreme Court requires something more than this for a tax offence: deceitful conduct aimed at concealing the taxable facts. Simulation (Article 16 of the General Tax Act), where the transaction declared hides the real one, is the clearest example of that concealment.
Intent
The offence can only be committed intentionally. There is no negligent form. Dolus eventualis is accepted: a taxpayer who is aware of the high probability that their return is false and files it anyway acts with intent. A defensible interpretation of complex rules, by contrast, is a classic line of defence.
Threshold, calculation and completion
The offence requires the amount defrauded to exceed 120,000 euros. This high threshold means that most taxpayers will never reach it. Article 305.2 sets the rules for calculating it:
- Per tax and per tax period. For periodic taxes, the amount is calculated for each tax period. For taxes with periods of less than twelve months, such as VAT, the amount is calculated by calendar year.
- The exception for organised fraud. Where the fraud is committed within a criminal organisation or group, or by persons or entities that appear to carry on a real economic activity without actually doing so, the offence can be prosecuted as soon as the threshold is reached, without waiting for the end of the year.
- No continuous offence. Each tax and each period is a separate offence. Amounts from different years cannot be added together to reach the threshold.
The offence is completed when the voluntary payment period for the tax expires. Criminal proceedings do not require a prior assessment or demand by the tax authorities: the criminal court can establish the amount evaded itself.
The limitation period is five years for the basic offence and ten years for the aggravated offence under Article 305 bis (Article 131). Since each period is a separate offence, limitation must be checked year by year.
Penalties for the basic offence
- Prison: one to five years.
- Fine: from one to six times the amount defrauded.
- Mandatory additional penalty: loss of the right to obtain public subsidies or aid and to enjoy tax or Social Security benefits or incentives, for three to six years.
Who can commit the offence: a special offence
The tax offence is a special offence: it requires a prior legal relationship between the taxpayer and the tax authorities. Only the person bound by the tax obligation can be the perpetrator: the taxpayer, the substitute taxpayer or, for withholdings, the withholding agent.
- Company directors. When the taxpayer is a company, those who act on its behalf are liable under Article 31 of the Criminal Code, provided their participation is proved. We explain this in criminal liability of company directors in Spain.
- The company itself. Legal entities can be criminally liable for tax offences (Article 310 bis, in connection with Article 31 bis). See the criminal responsibility of companies in Spain.
- Outsiders (extraneus). An adviser, a front man or anyone else who is not the taxpayer can never be the perpetrator, but can be liable as an inducer or necessary cooperator.
The reduced penalty for outsiders (Article 65.3)
Article 65.3 allows the court to impose a penalty one degree lower on inducers and necessary cooperators who lack the status of taxpayer. The reduction is discretionary, not automatic. In practice, courts usually apply it, and refusing it requires specific reasons, such as an intervention by the outsider that is as decisive as that of the taxpayer. For advisers and front men, it is often the most important point in setting the sentence.
Regularisation: without it there is no offence
Since Organic Law 7/2012, regularisation is no longer a ground for exemption from punishment but an element of the offence. Under Article 305.4, the offence only exists if the taxpayer has not regularised their tax situation. Someone who pays in time does not commit the offence at all.
Regularisation must take place before any of the following:
- The tax authorities notify the start of an inspection into the tax debts concerned.
- The Public Prosecutor, the State Attorney or the legal representative of the regional or local authority files a complaint or lawsuit.
- The court notifies the taxpayer of proceedings.
Valid regularisation also prevents prosecution for accounting irregularities or instrumental forgery connected with the same tax debt. Timing is therefore decisive: once an inspection has been notified, voluntary payment no longer removes the offence.
Late payment: reduced penalty (Article 305.6)
If regularisation is no longer possible, the court can reduce the penalty by one or two degrees where the taxpayer pays the tax debt and admits the facts within two months of being summoned as a suspect. The same reduction is available to other participants who actively cooperate in obtaining decisive evidence to identify or capture other offenders, to fully clarify the facts or to trace the assets of the taxpayer or other offenders.
Aggravated tax offence (Article 305 bis)
Article 305 bis raises the penalty to two to six years in prison and a fine of two to six times the amount defrauded where any of these circumstances applies:
- Amount above 600,000 euros.
- Criminal organisation or group in which the fraud is committed.
- Concealment of the real taxpayer through interposed persons or entities, fiduciary arrangements, tax havens or territories with no taxation, where this makes it difficult to identify the person liable or the amount defrauded.
The last circumstance punishes the search for impunity: front men, shell companies and offshore structures whose purpose is to hide who is really behind the operation. The prosecution must prove that the structure actually hid the taxpayer's identity or the amount, not just that it existed. For the defence, structures with real economic substance and transparent ownership fall outside it.
Tax offences against the EU and Social Security
- EU treasury (Art. 305.3). The same penalties apply to fraud against the EU treasury where the amount exceeds 100,000 euros in a calendar year. Above 10,000 euros, a lower penalty applies.
- Fraud against EU budgets (Art. 306). It covers fraud against EU budgets other than taxes, such as the improper use of EU funds.
- Social Security fraud (Art. 307). It punishes anyone who, by action or omission, defrauds the Social Security by evading contributions, obtaining undue refunds or improperly enjoying deductions, where the amount exceeds 50,000 euros.
- Obtaining Social Security benefits unlawfully (Art. 307 ter). Obtaining benefits by simulating, concealing or misrepresenting facts. Its structure is similar to that of fraud.
Concurrent offences: the most disputed questions
Income from criminal activity
Must someone who obtains income from a crime declare it? The Supreme Court has answered yes since the Roldán case, in which a former senior official who had misappropriated reserved funds and received commissions, and moved the money to Switzerland, was also convicted of tax offences. The Court held that the duty to contribute under Article 31 of the Constitution prevails over the right not to incriminate oneself under Article 24.2: declaring income is not the same as confessing to the crime that generated it.
There is a limit. Case law does not convict for a tax offence, as there is a conflict of provisions, where three conditions are met: all the funds come from the criminal activity, the person is convicted of the offence that generated them, and that conviction already deprives them of the proceeds through civil liability. Punishing both would then penalise the same unlawful gain twice.
Tax offence and money laundering
The tax offence can be a predicate offence for money laundering. According to the Supreme Court, what is laundered is the tax evaded, not the undeclared income. If that amount is then concealed or transferred, both offences can be punished. The Court has accepted this with caution, because it is very difficult to identify the tax evaded within the taxpayer's assets as a whole. For the defence, that tracing problem is often the strongest argument against a money laundering charge.
Administrative and criminal proceedings at the same time (Article 305.5)
Since 2012, criminal proceedings no longer automatically suspend the administrative procedure. The tax authorities can assess both the items linked to the possible offence and those that are not. Criminal proceedings do not halt collection of the tax debt unless the court orders the suspension of enforcement. In practice, the defence must work on both fronts from the outset.
Key points
- Concealment, not debt: Article 305 punishes the deceitful concealment of the taxable facts, by action or omission, not the mere failure to pay.
- The threshold is calculated per tax and per period: 120,000 euros, with no continuous offence across years, except for organised fraud.
- It is a special offence: only the taxpayer can be the perpetrator; advisers and front men are participants and may receive a lower penalty under Article 65.3.
- Regularisation in time removes the offence: after that, paying and admitting the facts within two months of the summons can reduce the penalty by one or two degrees.
- Above 600,000 euros or with concealment structures, the aggravated offence applies, with up to six years in prison and a ten-year limitation period.
If you or your company have received a notice from the tax authorities that could lead to criminal proceedings, or are already under investigation, our team handling crimes against public finances, Social Security and taxation can review your case. Request a consultation in English, Spanish or German.
