Tax evasion in Spain: From what point does it become a criminal offence?

Not every incorrect tax return in Spain is automatically a criminal offence – but above a certain threshold, an administrative breach becomes a matter for the public prosecutor. Anyone living on Mallorca as a German resident, Autónomo or property owner should know exactly where this line runs, how far back authorities and courts are allowed to investigate, and what consequences can arise in a worst-case scenario. In this guide you'll learn from what evaded amount tax evasion in Spain becomes criminally relevant, which limitation periods apply, when these extend to ten years, what penalties are realistic – and how timely regularisation before discovery can still avert criminal liability.

Not sure whether an amended return or voluntary disclosure still makes sense in your case?

• Submit a personal enquiry — we put you in touch with experienced tax advisors and specialist lawyers on Mallorca
• Find a tax advisor in Mallorca

What counts as tax evasion in Spain

Tax evasion (defraudación tributaria) is regulated in Spain under Article 305 of the Código Penal (Criminal Code). The offence applies when someone, through action or omission – for example by concealing income, feigning expenses or failing to file a return – withholds taxes, retained amounts or advance payments from the public treasury. What matters here is not every minor inaccuracy, but a clearly defined threshold per tax type and tax year.

Below this threshold, the misconduct remains a tax-related administrative offence (infracción tributaria), which the Agencia Tributaria (AEAT) sanctions administratively with back payment, late-payment interest and a fine. Above the threshold, the tax authority is obliged to refer the matter to the public prosecutor – the tax case becomes a criminal proceeding.

The €120,000 threshold: criminal offence or administrative breach?

The key threshold for criminal relevance is €120,000 in evaded tax – per tax type and per tax year, not cumulated across several years or tax types. If this amount is exceeded for income tax (IRPF) in a single year, the courts examine the case separately from any possible VAT or corporate tax evasion in the same period.

Note: If the evaded amount is just below or just above €120,000, the precise calculation method – such as which deductions, deadlines or assessment years are applied – can already determine whether the case is criminally relevant or remains a purely administrative matter. In precisely this borderline range, an early review by a specialist lawyer is worthwhile.

Aggravated offences (delitos agravados): When it gets really expensive

Since the reform of the General Tax Law, a separate, more severely punished category has been introduced: the so-called delitos agravados. These apply not solely due to the amount evaded, but also because of the circumstances of the offence.

For these more serious cases, the law provides for prison sentences of two to six years as well as fines of two to six times the amount evaded – significantly more than in the standard case.

Statute of limitations: The decisive difference between administrative and criminal law

One of the trickiest peculiarities of the Spanish system: administrative and criminal limitation periods do not run in sync. The general tax limitation period – i.e. the period during which the AEAT can still retroactively assess and demand a tax debt – is four years. For criminally relevant violations of tax law, however, a limitation period of five years applies.

This discrepancy can lead to curious situations: if the tax investigators uncover a case only after four and a half years, the pure tax debt is already time-barred under administrative law and can no longer be reclaimed – however, the judiciary can still prosecute a criminally relevant act until the expiry of five years. In the case of the aforementioned delitos agravados, this criminal time period even extends to ten years.

Note: The five- or ten-year periods apply to criminal prosecutability – not to the amount of the tax debt to be repaid itself. Anyone who believes that after four years "everything is automatically time-barred" underestimates a possible criminal proceeding.

Procedure: How a case for tax evasion arises

1. Review by the Agencia Tributaria: As part of a regular tax audit or through data comparison (bank statements, Modelo 720, international information exchanges), a discrepancy comes to light.
2. Calculation of the evaded amount: The authority determines the difference per type of tax and tax year.
3. Threshold check: If the amount is below 120,000 euros, an administrative procedure follows with back payment, interest and a fine.
4. Referral to the Public Prosecutor's Office: From 120,000 euros onwards, the administration is obliged to have the case reviewed under criminal law.
5. Investigation proceedings: The Public Prosecutor's Office examines whether intent is present and whether – depending on the amount or structure – an aggravated offence applies.
6. Possibility of pre-trial detention: In certain constellations, particularly in cases of flight risk or risk of tampering with evidence, pre-trial detention is also possible for amounts near or significantly above the 120,000-euro threshold.
7. Court proceedings and verdict: In the end, there is either an acquittal, a conviction to a fine and/or imprisonment, or – in the case of timely regularisation before proceedings are initiated – dismissal due to lack of criminal liability.

The way out: regularisation and voluntary disclosure

Since the 2012 reform, Spanish tax law has provided an important way out: anyone who fully puts their tax situation in order – meaning fully acknowledging the facts and paying the resulting tax debt in full before the authorities become aware or proceedings are initiated – can still avert criminal prosecution. This regularisation must be active and complete; a mere partial admission or partial payment is generally not sufficient.

Note: The timing is crucial. Once the tax investigators have already begun investigating or an audit procedure has been opened, the path to a penalty-free voluntary disclosure is regularly blocked. Anyone who suspects irregularities in their own situation should therefore engage a specialised tax advisor or lawyer as early and proactively as possible.

Tax residency as the starting point of many cases

A large proportion of tax evasion cases among expatriates arise not from criminal intent, but from a misjudged tax residency. Anyone who spends more than 183 days in the calendar year in Spain, whose centre of economic interests is there, or whose spouse and minor children live in Spain, is generally considered tax resident – with the consequence that worldwide income must be declared in Spain, not just Spanish income. Anyone who overlooks this residency status or knowingly ignores it, and continues to file only a limited tax return, risks unwittingly slipping into a criminally relevant scale.

You can find more in the guide Tax residency Spain: the 183-day rule.

Tighter controls: what will change in 2026

The Spanish government has recently tightened its measures against tax evasion. The best-known example is the cash limit from the Ley 11/2021 of 9 July. It sets two thresholds, and for German-speaking readers the second is usually the more relevant one:

Anyone who, as a private individual resident in Germany, pays cash for something on Mallorca generally falls under the €10,000 limit — not the €1,000 that is often quoted as a blanket rule. However, as soon as one party is a business owner or self-employed professional (autónomo), the €1,000 limit applies.

Most common mistakes

• "I only live here part-time" – incorrect self-assessment of residency. Anyone who ignores the 183-day rule, the centre of economic interests, or the family presumption often unknowingly declares too little.
• Confusing limitation periods. Four years of administrative limitation does not automatically mean criminal-law safety – the five-year period for criminal prosecution runs separately.
• A voluntary disclosure that comes too late. Regularisation after the start of an administrative or criminal proceeding generally no longer has the same exculpatory effect as a proactive, complete after-the-fact declaration made beforehand.
• Cash transactions used for concealment. Given the lowered cash limit in business transactions (1,000 euros), larger cash receipts or payments are increasingly subject to closer scrutiny.
• Underestimating international data exchanges. Accounts, properties and capital income abroad are becoming increasingly transparent through automated information exchange between tax authorities.

What happens next? After discovery or the start of proceedings

Once proceedings have been initiated, the options for action are limited but do exist. Full cooperation, transparent disclosure of all relevant documents, and prompt payment of the legitimate tax debt can have a mitigating effect on any penalty – even though the exculpatory effect of a pure voluntary disclosure usually no longer applies at that stage. If there is a risk of pre-trial detention, particularly for amounts close to or well above the 120,000-euro threshold, immediately engaging a specialist lawyer in tax criminal law is essential.

Checklist: Recognising tax risks early

• Have I correctly checked my tax residency in Spain (183-day rule, centre of economic interests, family status)?
• If I am subject to unlimited tax liability, do I fully declare my worldwide income in the Renta?
• Have I disclosed foreign accounts, properties and assets via the relevant reporting obligations (Modelo 720)?
• Is the amount I have potentially evaded close to or above 120,000 euros per tax type and year?
• Have I checked in good time – that is, before any contact from the authorities – whether a regularisation makes sense?
• Am I working with a tax adviser or specialist lawyer experienced in German-Spanish tax law?

Conclusion

In Spain, tax evasion only becomes a criminal offence once the evaded amount reaches 120,000 euros per tax type and year – below that, it remains an administrative matter involving back payment and a fine. Anyone who exceeds this threshold faces criminal proceedings that, depending on the amount and circumstances, can be significantly more severe – up to prison sentences of two to six years in so-called delitos agravados (aggravated offences). Also crucial is the interplay between two different limitation periods: four years under administrative law, and five or ten years under criminal law. Anyone unsure whether their tax situation in Spain is fully correct should act proactively – timely, complete regularisation before any contact from the authorities is the only safe way to avoid criminal consequences.

Official sources

• Agencia Tributaria (AEAT) – central Spanish tax authority: https://www.agenciatributaria.es
• Boletín Oficial del Estado (BOE) – Criminal Code, Art. 305 (Offences against the Public Treasury): https://www.boe.es
• Ministerio de Hacienda – overview of tax regulations: https://www.hacienda.gob.es