by Staff Reporter

THE tax officers union Gestha warned yesterday that more than 5'000 million euros in taxes from what they described as “opaque and fraudulent operations” carried out in 2002 will expire on July 25. Under Spanish legislation tax investigation can only go back five years.

Most of the operations were carried out by real estate firms using 500 euro bills, it was alleged.
The union claimed that based on Bank of Spain statistics, “black money” accumulated up to December 2002 came to 14'295 million euros, which could represent non-payment of Company tax -- the general rate of which is 35 per cent -of at least 5'000 million euros, without including the interest for late payment nor any fines which may be imposed.

A Gestha spokesman said that the possibility of investigating Company Tax for 2002 (for which the period of filing tax returns ended on July 25, 2003), runs out on July 25, so that these allegedly fraudulent operations carried out by firms will be laundered.

The law establishes that the Administration's right to determine a tax debt runs out after four years, if an inspection has not already started.
The union claims that the tax office has dedicated barely 100 tax officers and inspectors to investigating these cases, and expressed a fear that the declaration of company taxes for 2002 will expire on July 25 without the tax due for these allegedly opaque operations having been paid.

The union officials said that they have repeatedly asked the ministry of economy and taxation to authorise an immediate inspection of companies suspected of laundering money in 2002, contributing in this way to efficiently reduce fiscal fraud.

The union claims that the movements of black money by some companies in the years prior to and immediately after the introduction of the euro, mainly in the real estate sector, were carried out with “large denomination bills”, as reflected in Bank of Spain figures.

In the month of January 2002 alone, more than 6'348 million euros in 500 euro bills had been hoarded.
According to Gestha, the real estate sector is responsible for nearly 20 per cent of the underground economy in Spain and has become one of the chief refuges of black money in Spain.

Dozens of tax officers regularly demonstrate outside the tax office in Palma, calling for greater powers to fight against fiscal fraud and greater control on public expenses and subsidies.


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