Apparently there are a lot of holiday homes for rent in the Alicante province where the owners fail to pay tax on the income. The State Tax Administration Agency (AEAT) are on the case and are investigating the extent of this fraud. They estimate that in 2010, this amounted to 209 million euros and that 80% of owners failed to pay tax on rentals.
By consulting Iberdola, AEAT can determine when the apartments and houses were occupied and use this information to track down offenders who claim that their properties were vacant.
Top of the list for evading paying taxes and corruption are the Greeks with Spain following close behind. Is is any wonder the country is in such a financial mess.
Actually, I blame the authorities as much as the individuals for this. Bureaucracy in Spain is both slow and cumbersome. Even the most trivial transaction requires a pile of paperwork all of which has to be stamped appropriately and signed. One piece missing or failing to have the correct stamp on it and the process is voided. It therefore comes as no surprise that the country has no clear idea of how much tax they should have collected from holiday rentals.