Spain’s low-tax dream has become a nightmare for trusting Brits
Spain’s Beckham Law lured Brits with the promise of tax incentives. Now it is punishing them, writes international lawyer Robert Amsterdam
I have seen a lot in my time as an international lawyer but Spain’s latest tax raid on foreign residents is up there as one of the most predatory government schemes I have ever seen. This is why I am campaigning on behalf of those targeted by the Spanish authorities.
After placing ads across various major papers in the UK, the US and Europe, we have been inundated by those seeking support. My firm has received many cries for help from those affected by Spain’s greedy efforts to take foreigners for all they are worth.
After all, they have been deceived by a completely unprincipled cash grab that is founded on misleading wealthy foreigners into relocating to Spain with the promise of a mutually beneficial tax arrangement.
It supposedly gives people a chance to experience all that Spain has to offer. Wealthy foreigners would contribute substantially to the Spanish economy, while enjoying significant tax incentives to move. It is little wonder that so many believed this was a dream come true.
However, for too many, this dream has become the stuff of nightmares. A coercive monstrosity that traps foreign residents into a terrifying inquisition.
The lure of Spain’s Beckham Law
Lured to Spain under the auspices of the so-called “Beckham Law” (so called because the famous ex-footballer was among the first to benefit from Spain’s promise to exempt foreign earnings from tax), victims start to put down roots and integrate into their local communities. It is then that they are hit with spurious allegations covering their residence in Spain. The longer you have contributed to the Spanish economy – the greater the potential pain that you face.
One victim that has been in contact with us put it well: “The joke has it, no one expects the Spanish Inquisition. My advice is – expect it pretty soon.”
Further weaponised by the rise of an envious anti-wealth government, the Beckham Law has become a club designed to beat targets to within an inch of their financial life.
Those on the Beckham law list are seen as targets by the authorities. Many of the cases we have heard about all follow a similar pattern. Their tax exempt status under the Beckham Law is withdrawn, and then retroactively eye-watering penalties for the previously covered periods are levied.
They are then buried under paperwork requests with the tax rules being distorted at will and inconsistently by the auditors falsely accusing victims of wrongdoing.
The new Spanish Inquisition
The whole system is a perverse mockery of the rule of law. Tax auditors are given bonuses that scale with the size of the fine they throw at victims, no matter the long-term outcome of a potential appeal.
Meanwhile, victims are banned from appealing against these vexatious “audits” until they have paid the ruinous fines from these fishing expeditions in full.
Those targeted must destroy their finances to simply appeal against even the most blatantly bonkers “assessments”. Deciding not to pay is not possible as the claims allow Spanish authorities to pursue efforts to recover assets from all over the world, as well as Spain’s exorbitant exit taxes on any money or efforts to leave the country.
There is little regard for due process, fairness or legality. Incentivising tax investigators to pressure victims aggressively into disproportionate settlements is a disgrace that contravenes the rights of those trapped by Spain’s tax regime.
It is time for Spain’s obvious violations of rights enshrined in both the EU Charter of Fundamental Rights and the European Convention on Human Rights to end. Spain’s profit-driven enforcement mechanism must be dismantled, and its pay-to-appeal policy cancelled.
Robert Amsterdam is the founding partner of Amsterdam & Partners LLP, a boutique international law firm with offices in London and Washington DC