Spanish tax authorities crush citizens with ‘inquisitorial behaviour’

by Lorraine Williamson
tax authorities documentary - screen grab from official trailer

MADRID – ‘Hechos probados‘ (Facts Proven) is a documentary about the ‘inquisitorial’ behaviour of the Spanish tax authorities based on a case involving Spain’s largest debtor, the businessman Agapito García Sánchez. 

For a documentary about the ‘bad manners’ of the tax authorities, the independent producer Alejo Moreno collected countless relevant testimonials from mainly legal and tax experts in a very accurate and thorough way. The two pillars in the documentary are the commissions that tax inspectors receive on amounts collected and the abuse of criminal proceedings by the tax authorities. 

Largest debtor – not a fraud – in Spain 

The protagonist and guideline for the documentary is number one on the Spanish tax authorities’ list of debtors. This was made public by the Ministry of Finance in 2015. A year in which Spain experienced a skyrocketing government deficit, in which tax collection plunged to unprecedentedly low levels, and the PP government was besieged by corruption cases. 

Businessman Agapito García Sánchez emerges in the documentary as a modern take on the protagonist of Kafka’s ‘The Trial’; a citizen faced with the tyranny of mechanisms of the state and its administration. As a result, his fight against the tax authorities forms the common thread of the detailed analysis that reveals the alarming humiliation of citizens’ guarantees and rights. 

Profit of 12.6 million 

In 1989, García Sánchez sold his gravel business to a multinational. The amount was received in two tax years (1989 and 1990) and years later the IRS started digging. The businessman himself says that he has sold his company for 25.2 million, with a profit of 12.6 million. 

Already paid 20 million and more than 16 million to go 

García Sánchez has now paid more than €20 million to the tax authorities and there are still €16.9 million outstanding. “In the end, he paid way more than the amount of his original debt. And he still owes a lot,” Moreno told ElDebate.com. 

The businessman has been in a legal tangle that seems to have no end for a quarter of a century. He won a few cases in the National Court and once lost in the Supreme Court. However, these did not take into account the facts proven by the Court. According to Agapìto and other experts, this is against the law. 

“Because Agapito has fought with the tax authorities for years, he has experienced and endured just about everything that can happen to you in a similar case. This makes him simply a perfect example because what comes to light during the documentary is not an issue in itself, a series of experts also emphasise in the documentary: “it is rather the usual course of action of the Spanish public administration”. 

Battle of David against Goliath 

According to a review in Vozpopuli.com, the documentary shows how the tax authorities’ exorbitant array of powers, explained and detailed by a large and varied number of professional prosecutors, transforms the legal-fiscal relationship into a modern portrayal of David’s fight against Goliath. But what’s worse, the documentary shows that Goliath is also cheating. In addition, that the match referee validates that cheating behaviour. 

nederlandse orthopeed

Enough distressing cases for second documentary 

The documentary maker got to know many more similar and very poignant cases through ‘Hechos probados’ and emphasises that this does not concern millionaires but also civil servants, for example. Normal people who have experienced some pretty serious cases, about which he wants to make a second documentary. 

Destroyed lives 

The filmmaker discovered that people who experience these kinds of situations always react in the same way. He tells ElDebate.com: “There is always a feeling of great unease and injustice. People eventually end up with psychiatrists and psychologists because their lives have been destroyed. You now have a debt, you can challenge it, but you must pay immediately. And if you don’t have the amount, it will determine your life. Some people see all their life plans disappear overnight like snow in the sun. And often only because of a completely incorrect and insulting interpretation of the rule. So the bottom line is that you can either pay immediately and remain silent or it will take you 15 years to solve it through legal proceedings if that works at all.” 

Citizen must prove wrong tax inspector 

According to Moreno, the tax authorities always play with marked cards in such situations. “The inspector, who receives the commission assumes the veracity of the facts presented by him and you as a taxpayer see but how you prove them wrong”. 

Commissions collecting tax inspectors 

It is therefore very lucrative for a Spanish tax inspector to blame unjust debts on taxpayers. According to Moreno, this is relatively unknown to the public. It is also admitted in the documentary by two top officials: Manuel Tejerizo, General Director of Taxation of the Ministry of Finance and Ignacio Ruiz-Jarabo, Director of the Tax Administration between 1998 and 2001. Ruiz-Jarabo says: “The more debt you collect, rightly so. or wrongly, the more you will receive in variable remuneration”. 

Inquisitorial System 

Moreno shows in ‘Hechos probados’ that the most “aggressive period” at the tax authorities started after the outbreak of the economic crisis in 2008. The state had a gaping deficit and had to be collected. Normally a commission is related to efficiency, but in the IRS, the good work of an inspector is not rewarded, but is good the more money he collects, whether rightly so or not. However, if later proven the debt was unjustified, the inspector in question does not have to repay his commission. Moreno calls it an “inquisitorial system.” 

Tax authorities lose half of lawsuits 

Those who can financially and psychologically afford to revolt against the abuse of power, as the documentary shows, need a very long breath and about a 50% chance of winning the case in court. However, that can take years and many do not have the financial capacity for it. 

Nobody wants to broadcast documentary 

Despite the great importance of the Spanish tax authorities’ approach highlighted by Moreno, he says that no one wants to broadcast his documentary. “From the beginning the reactions were terrifying. I was told no one would buy it from me because of the thorny subject. They told me everyone is afraid of it and they have all been inspected.” 

Where can Hechos probados be seen? 

The documentary is therefore shown via the website founded by Moreno: Documentalhechosprobados.com. From Friday 19 November you can pay to see the one and a half-hour documentary. Also, Moreno made a series of all the recorded material into three 40-minute chapters with more testimonials to support the abuse of the tax authorities. The film costs €3.99 and the complete package can be seen for €4.99. 

Editor’s note: Anyone thinking they can avoid problems with Hacienda by having a gestor do the bookkeeping may be disappointed. As a taxpayer, in the eyes of the Spanish tax authorities, you are always responsible for your returns. Therefore, always look for a good, reliable office with a proven reputation. 

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