A German, British, French, or American citizen agrees to become a director of a Spanish company for corporate convenience, for real estate investment, or because they are part of an international group. They return to their country, leave the day-to-day management in the hands of others, and months or years later, receive a notification from the Spanish Tax Agency: they are being personally charged with a debt that belonged to the company.
The situation is particularly delicate when the administrator does not reside in Spain but holds assets within Spanish territory, such as a property in Mallorca, a bank account, shares in a Spanish company, or receivables from third parties. In such cases, the transfer of tax liability to non-residents can result in asset seizures if no action is taken within the established timeframe.
At Resitax, a boutique firm based in Palma de Mallorca specializing in international taxation and tax defense, we defend non-resident administrators, partners and investors against referral procedures, claims from the Spanish Tax Agency (AEAT) and seizures of assets located in Spain.
In summary: being a non-resident does not prevent the Tax Agency from claiming a tax debt if the legal requirements are met. However, this cannot be automatic: the Tax Agency must initiate a procedure, provide reasons for its decision, respect the hearing process, and demonstrate the legal basis for demanding payment from someone other than the company.
What is the transfer of tax liability?
The transfer of tax liability is the procedure by which the tax authorities demand payment of a tax debt from a person other than the primary debtor. In the case of corporations, the primary debtor is usually the company itself, and the liable party may be an administrator, partner, successor, collaborator, or third party who falls under one of the categories established by the General Tax Law.
Have you received a notification from the Tax Office regarding a transfer of tax liability? Don't act alone: every day counts, and a wrong response could cost you dearly. Our lawyers specializing in non-resident taxation will analyze your case free of charge.
It is important to clarify the legal framework. Tax succession is regulated in Articles 39 and 40 of the General Tax Law. Tax liability is regulated in Articles 41 to 43. And the procedure for declaring that liability is mainly set out in Articles 174 to 176.
Subsidiary liability
Subsidiary liability is the liability claimed after attempting to collect from the primary debtor. In practical terms, the tax authorities must declare the debtor company insolvent before proceeding against the subsidiary liable party, except in the specific cases provided for by law.
In proceedings against administrators, one of the most frequent cases is that of article 43.1.a of the LGT: administrators of legal entities who, by action or omission, have not carried out the acts necessary for the fulfillment of tax obligations, have consented to the non-compliance or have adopted agreements that enabled the infringement.
The key is that simply having been an administrator is not enough. The Spanish Tax Agency (AEAT) must explain what specific conduct is being attributed to the administrator, why it was required of them, and how that action or omission contributed to the tax evasion.
Joint and several liability
Joint and several liability allows the Tax Authorities to pursue the responsible party more aggressively, without needing to declare the company insolvent beforehand. The most common scenarios are outlined in Article 42 of the General Tax Law (LGT), for example, when a person causes or actively collaborates in the commission of a tax offense or when they participate in concealing assets to prevent tax collection.
For a non-resident, joint and several liability can be especially dangerous because it reduces the administrative procedures and can expedite tax collection. Therefore, it is essential to review from the outset what type of liability is being sought and what legal basis is being invoked.
Why residing outside of Spain doesn't automatically protect you
One of the most common mistakes is thinking that living in Germany, the United Kingdom, the United States, France, or any other country prevents the Spanish Tax Agency from claiming a Spanish tax debt. This is not the case.
Non-resident status does not preclude the possibility of being held liable if there is a legal relationship with the debtor company and the legal requirements are met. The difference lies in the procedures for notifying, defending against, and, if necessary, enforcing the debt.
If the non-resident owns assets in Spain, the Spanish Tax Agency (AEAT) can take action against those assets once the act is enforceable and there is no suspension. The most common risk is concentrated in:
- Properties located in Spain, especially homes in Mallorca, Ibiza, Menorca or the Mediterranean coast.
- Bank accounts opened in Spanish entities.
- Shares in Spanish companies.
- Vehicles, boats or other assets that can be registered in Spain.
- Outstanding tax refunds, for example from IRNR.
- Collection rights against third parties domiciled in Spain.
The referral cannot be automatic: the jurisprudential shift in favor of the administrator
For years, many debt settlement agreements relied on overly generic reasoning: the person was an administrator when the debt was incurred, the company failed to pay, and therefore the person was liable. That approach is no longer sufficient.
Recent Supreme Court jurisprudence has strengthened the position of the administrator, especially regarding the subsidiary liability under Article 43.1.a of the General Tax Law. In this case, the Administration must prove the administrator's fault and cannot simply invoke their formal position.
What the Treasury must prove
The Spanish Tax Agency (AEAT) must identify a specific conduct. For example, what tax obligation was breached, what actual capacity did the administrator have to prevent it, what decision did they make or what action did they omit, and why that conduct allows for imputing liability.
Generic inaction is not enough. The Administration cannot simply say that the administrator “did not do what was necessary.” It must specify what should have been done, when, what information was available, and how the omission contributed to the non-payment or the infraction.
Insufficient motivation as a line of defense
Many transfer orders are subject to challenge because the decision is not sufficiently justified. The justification cannot be a template. It must explain the facts, the applicable law, the alleged conduct, the causal link, and the resulting economic impact.
When the resolution merely reproduces the relevant article of the General Tax Law without specifying the administrator's actions, a solid legal avenue exists. At Resitax, we review every agreement from this perspective: if there is no specific conduct, the transfer may be voidable.
What can the tax authorities seize if you don't act in time?
The seizure doesn't occur immediately simply by receiving a notification. First, the procedure must be completed, the transfer order issued, and the corresponding payment period opened. However, if the debt isn't paid, isn't appealed, or is appealed without obtaining a stay, the Spanish Tax Agency (AEAT) can initiate enforcement proceedings.
In enforcement proceedings, the Tax Authority can seize assets and rights of the taxpayer without the need for judicial authorization, respecting the collection procedure and the legal order of seizure.
| Good or right | Risk to the non-resident |
|---|---|
| Real estate in Spain | The Spanish Tax Agency (AEAT) can register a lien in the Property Registry. In Mallorca, this is one of the most common risks for international property owners. |
| Spanish bank accounts | You can order the seizure of balances in entities with a presence in Spain. |
| Shares in Spanish companies | It may affect shares or stakes of the non-resident in companies based in Spain. |
| Tax refunds | The AEAT may offset or withhold amounts pending refund. |
| Credits from third parties | You can pursue collection rights that the responsible party may have in Spain. |
What the Treasury cannot do
The Spanish Tax Agency has broad, but not unlimited, powers. When assigning tax liability to a non-resident, there are red lines that should be understood.
It cannot be referred without procedure or hearing
The transfer of liability requires an administrative act. As a general rule, there must be a hearing, an express declaration of responsibility, justification for the decision, and a determination of the scope and extent of the debt. If the interested party has not been able to review the file or submit arguments, there may be a significant lack of due process.
You cannot execute if the debt is validly suspended
Appealing doesn't always stop the collection process. To avoid seizures, you usually have to request a stay and provide sufficient guarantee, except in specific cases where the law allows a stay without a guarantee. Therefore, one of the first steps in the defense is to determine whether a stay request is appropriate, what guarantee is required, and which court to file it with.
It cannot directly seize assets located outside of Spain by its internal powers alone
If the affected party has assets in Germany, France, the United Kingdom, the United States, or another country, the Spanish Tax Agency (AEAT) cannot simply order a direct seizure as if those assets were located in Spain. To act abroad, it needs mutual assistance or international cooperation mechanisms, with their own requirements, limitations, and timeframes.
Within the European Union, there is a specific framework for mutual assistance in the recovery of tax debts. Outside the EU, the situation depends on the applicable international instrument and effective cooperation with the country in question.
It cannot seize assets belonging to third parties unrelated to the debt
If the lien is placed on an asset that does not belong to the liable party, a third-party claim of ownership may be filed. If there is a third party with a superior right to payment, a third-party claim of superior right may be considered. These procedures are technical and require documentary proof of the alleged ownership or preference.
You cannot ignore the statute of limitations or continue an expired procedure
The Administration's right to determine, demand, and transfer tax liabilities is subject to time limits. The statute of limitations must be analyzed in detail, because certain actions may interrupt its running.
The expiration of the procedure must also be reviewed. Expiration requires the closure of the expired file, and these actions do not interrupt the statute of limitations. However, expiration does not automatically equate to prescription: the Administration could initiate a new procedure if the right to transfer the case has not yet expired.
How to defend a transfer of tax liability to non-residents
The defense must begin before the case becomes final. In these types of proceedings, time is of the essence: letting the deadline pass can turn a disputed transfer into an enforceable debt with a real risk of seizure.
Step 1: Review the notification and deadlines
The first step is to check when the notification was sent, to which address, by what means, and whether the notification was valid. Notification problems are common with non-resident clients: outdated addresses, failed delivery attempts, public notices, or communications received late.
The deadline for appealing is usually one month from the date of notification. Therefore, it's not advisable to wait or informally request "more information" without a clear strategy.
Step 2: Access the complete file
A transfer of liability cannot be defended without reviewing the case file. It is necessary to analyze the principal debt, the actions taken against the company, the declaration of bankruptcy if it involves subsidiary liability, prior notifications, the grounds for the agreement, the required financial amount, and the specific conduct alleged.
Step 3: Request a suspension to prevent seizures
The suspension is a key element. It can be requested when filing an appeal for reconsideration or an administrative claim. In many cases, it will require a guarantee, such as a bank guarantee, surety bond, mortgage, or other admissible security. In others, a suspension without a guarantee may be considered when enforcement could cause irreparable harm or when serious defects exist.
The objective is clear: to prevent the Treasury from seizing properties, accounts or shares while the legality of the agreement is being discussed.
Step 4: Challenge the substance of the agreement
The appeal must attack all the weak points of the case file:
- Lack of individualized motivation.
- Absence of culpable conduct by the administrator.
- Real and documented delegation of functions.
- Defects in the declaration of bankruptcy of the company.
- Statute of limitations for the debt or the right to derive it.
- Errors in calculating the scope of responsibility.
- Improper inclusion of penalties, interest or surcharges.
- Defects in notification or violation of the right to defense.
Step 5: resort to the contentious-administrative route if necessary
If the administrative appeal process is unsuccessful, the matter may be taken to the contentious-administrative jurisdiction. In certain cases, when there is objective grounds for cassation, an appeal may also be filed with the Supreme Court.
The defense should not be limited to "filing appeals." It must be built from the outset with a comprehensive vision, anticipating what arguments may be presented in court and what evidence will be needed to support them.
The profile of the most exposed non-resident
The transfer of liability does not only affect large corporate groups. In practice, it can affect very different profiles.
Formal administrator of a Spanish company
This is the most common scenario: a foreign national accepts the position of director of a Spanish company, but the day-to-day management is handled by another person, a management firm, or a local partner. If the company incurs tax debts and fails to pay them, the Spanish Tax Agency can pursue the person formally listed as the director.
The defense involves proving the true functioning of the company, who made decisions, what information the administrator received, and whether there was a real delegation of functions.
Real estate investor with holding company
Many non-residents purchased properties in Spain through companies. If that company accumulated debts for VAT, withholding taxes, corporate income tax, non-resident income tax, or other obligations, the Spanish Tax Agency (AEAT) can investigate the liability of directors or partners.
In Mallorca this scenario is especially sensitive because the property may be the main local asset and be exposed to a lien.
Former administrator who is no longer involved in the company
The tax authorities can also take action against former directors if the debts or alleged offenses occurred during their tenure. The date the debt was incurred, the date they left office, and subsequent actions are crucial for determining the extent of the risk.
Tax representative of the non-resident: obligations and risks
Some non-residents must appoint a tax representative in Spain, especially in certain cases stipulated by the Non-Resident Income Tax (IRNR) regulations. This role often causes confusion: being a tax representative is not the same as being a director, partner, or tax officer.
If you have assets or investments in Spain and fear a seizure or transfer of liability, now is the time to protect yourself. At Resitax, we help you understand your rights and take action before the situation becomes more complicated.
The tax representative is not automatically liable for any debt of the non-resident simply by acting as an intermediary. However, the regulations provide for specific cases of liability, and, furthermore, active involvement in concealing assets or obstructing collection could give rise to liability under the General Tax Law.
Therefore, before accepting or appointing a tax representative, it is advisable to define the scope of the mandate, the communication obligations, and the documentation that must be kept.
Referral, international mutual assistance and assets outside of Spain
When a non-resident has no assets in Spain, enforcement becomes more complicated, but it doesn't necessarily disappear. The Spanish Tax Agency (AEAT) can attempt to use international mutual assistance mechanisms to recover the debt in other countries.
Within the European Union, a framework exists between tax administrations that allows for requests for assistance with tax collection. In third countries, the outcome depends on the applicable international treaty or instrument, reciprocity, and the administrative practices of the country of residence.
Even so, the main strategy must focus on Spain. If the transfer agreement can be annulled or suspended in time, the risk of enforcement against Spanish assets and subsequent actions abroad will be significantly reduced.
Common mistakes when receiving a liability transfer
These are the mistakes that most harm non-resident administrators:
- Ignoring the notification , thinking that living outside of Spain avoids the problem.
- Responding without reviewing the complete file and without knowing the alleged conduct.
- Appealing without requesting a stay, leaving the door open to seizures.
- Failure to verify the statute of limitations for the debt or the right to derive it.
- Do not review the declaration of insolvency when liability is subsidiary.
- Do not coordinate defense with advisors from the country of residence.
- Thinking that everything can be solved by paying, without analyzing whether the transfer is legally contestable.
How Resitax works in these procedures
At Resitax, we handle the transfer of tax liability to non-residents using a comprehensive legal and tax methodology. Our goal is not just to file an appeal, but to protect our clients' assets and build a coherent defense from day one.
The job typically includes:
- Complete review of the notification and the administrative file.
- Analysis of deadlines, prescription, expiry and validity of notifications.
- Study of the type of liability: joint and several or subsidiary.
- Challenging the reasoning behind the agreement when it is insufficient.
- Request for suspension to avoid seizures during the procedure.
- Coordination with advisors from the client's country of residence.
- Defense before TEAR, TEAC, contentious-administrative courts and, if applicable, the Supreme Court.
We work in Spanish, English, German, and French, which allows us to serve international clients without language barriers and coordinate strategy with professionals from other countries when there are assets outside of Spain.
Conclusion: the defense begins before the seizure
Transferring tax liability to non-residents is a serious procedure, but not indefensible. The Spanish Tax Agency (AEAT) must comply with formal and substantive requirements: proper procedure, due process, justification, attributable conduct, accurately calculated scope, and adherence to deadlines.
The problem is that these arguments are only effective if used in a timely manner. An ignored notification, a poorly formulated appeal, or an unsolicited suspension can turn a viable defense into an asset seizure in Spain.
If you are a director, partner, representative, or non-resident investor and have received a communication from the Spanish Tax Agency (Hacienda) related to a Spanish company, act as soon as possible. At Resitax, we can help you review the file, assess the actual risk, and design a tax defense strategy tailored to your international financial situation.
Contact Resitax in Mallorca
Resitax is a boutique law firm based in Palma de Mallorca specializing in international taxation, tax defense, and advising non-residents with assets or interests in Spain. We work with international clients in Spanish, English, German, and French, and coordinate legal representation with advisors in the client's country of residence when necessary.
If you have received a tax liability assessment, a seizure order, or a notification from the Spanish Tax Agency (AEAT) related to a Spanish company, contact Resitax. An early review can make the difference between protecting your assets and losing ground for defense.