Question
Just some quick points about our tax inspection in Spain.
- Spanish audits go back 4 years. Any expense that is not documented (3rd party doc) won’t count.
- They can request translation.
- If you pay utilities, many only maintain 2 years of online records. Tbd if proof via bank or CC payment will be accepted.
- If they audit one year, they are likely to advance thru rest.
- They can demand access to full bank accounting docs.
We have been here six years and file taxes annually. We received a notice of Spanish audit for our 2021 filing, which our expensive law/accounting firm says is happening more often. Our income is generated by rental properties in the US amd they have requested basically every single thing related – leases, receipts of all repairs, rents paid, insurance, taxes, etc.
It’s insane amount of work to reconstruct to meet this open ended level of inquiry. And the firm is of course charging us to deal with it, too. Has anyone dealt with this? Any general tips or guidance (E.g. focus on the big stuff, they can’t legally require your US bank statements, etc?)
FWIW it looks like we OVER reported rental income.
Eye rolls and profanity follow….”
Answers
These are the answers from Spainguru’s Facebook group members:
“I think that is not it. An accountant told me a story about a woman who was also audited on foreign rental income. Actually, it wasn’t much an audit. It’s more like they did the calculation and said she owed another €2000. And took the money right out of her bank account. The reason, they said all the invoices, receipts, maintenance bills were not in Spanish so they won’t recognize it.
She went ahead and got a quote for sworn translation for those items, it came up to be €2000. So basically, a damned if you do, damned if you don’t situation. She ended up just paying the €2000. It’s not worth the fight.”
“Hi. My neighbours had this. If you are tax resident I believe it’s up to you to show you are tax compliant. Declining to show certain documents may delay the process/increase your tax bill/ subject you to fines
In my neighbours’ case they deemed them as tax resident as their son was at boarding school here and then it turned out the wife has actually been her long enough to be tax resident – making the husband tax resident too
The tax man literally went through everything and wanted receipts for everything. This included information not just from Spain but from the U.K. where they had realised some assets and Portugal where they had bought a house. As they had realised assets, they got a bill for CGT (Capital Gains Tax) plus some surcharges
And yes, they want to know everything and yes it took a huge amount of paperwork and 6 months to resolve
One of the queries was what I had paid them 95 euros for. In the end we worked out by the date that we were in quarantine for being a close contact of a Covid case: my neighbour had very kindly taken the dog for her haircut and got us a couple of take outs! Just to give you an example of the level of info they want!
So advice, get on the case and get a good tax lawyer. But be prepared for questions after questions”
“People chill … If you get audited you give them what you got .. if you get fined or disagree with the amount you owe or they Tell you ..you owe … You take them to court … Hacienda loses all the time in court … Because they use Predatory practices. If you pay you taxes and you declare what you make and you deduct what you can legally then you won’t have a problem”
“Not sure why you would reconstruct. Under US law you are supposed to keep backup for 7 years in case of an audit. If you deducted repairs why would you not scan receipts and keep in a file for each tax year?”
“We were audited for 2021 around a US rental property deduction being questioned and the more documentation we provided them the more confused they became. After months of back and forth with our accountant, we were ordered to pay over nearly 8,000€. Our accountant said that we were dealing with their tax lawyer and they refused to respect him so ended up paying 2,000€ for a lawyer who was able to get them to acknowledge their error. The whole process was very stressful and jarring every time they sent another certified letter.”
“Is it your American or Spanish tax return being audited?” – “Spanish”
“It is very easy to draft up receipts for repairs. You can even buy receipts books of different styles in the Home Depot. Stay calm and gather everything. Maybe your tenants can help you remember certain repairs, etcetera. Relax. See what you claimed and have it on hand.”
“Pretty sure that’s the same detail as required in a US audit and you can’t deny them access to reasonable requests such as banking statements – it’s a tax audit, right? (Sounds like you want to enjoy Spain, but not follow the laws in Spain)”
“Exact same audit on our rental property two years in a row. We had to get EVERYTHING translated the second year. Over 300 pages. Thankfully, there are good online translation tools.”
“Hmmmmmm. I keep getting messages and texts from AEAT La Agencia Tributaria stating that I have a notification, but I don’t know where to find it.😬. It includes my name and part of my NIE so it looks legit. I’ve been in the US so I haven’t been able to address it. Hate to make the Tax Man angry.”
“Speak to your gestor to find out what it’s about.”
“Good to know. I have rentals in US many years, never been audited, but never kept the detailed records, for all the repairs. I will for Spain”
“I thought audits only go back 3 years🤪” – “I think in general it’s 4”
“There is a reason we recommend keeping copies of your receipts for 7 years.”
“As a US CPA, I can assure you it’s 7 years. That’s how far back the IRS is allowed to go back to audit.”
“I’ve helped my clients through several audits over the last 30 years. Most were owed money back. You?”
Conclusion
The discussion shows that a tax inspection in Spain can be exhaustive, especially for residents with U.S. rental income. Members report requests for leases, invoices, bank evidence, and even sworn translations, with audits sometimes expanding from one year to several. Several experiences also mention long back-and-forths and the value of hiring a specialized tax lawyer or gestor.
Key clarifications from the thread: Spanish audits typically look back four years; undocumented expenses are disallowed; authorities can request translations and access to bank documentation. Notifications may arrive via AEAT and DeHú, so monitoring official channels is essential. Keeping organized, year-by-year files and scanned receipts significantly reduces stress.
If you face a tax inspection in Spain, assemble third-party documentation, prepare sworn translations where required, and consider legal support to contest errors. Building a seven-year archive and staying on top of AEAT notifications can make a tax inspection far more manageable. This article is based on personal opinions from the Spainguru community and is not legal advice.
FAQs about Spanish Tax Inspections for Expats with U.S. Rental Income
1. How far back can the Spanish tax office (AEAT) go in an audit?
Normally, AEAT can review and assess tax filings going back four years from the end of the last legal filing date. This is called the periodo de prescripción and is established in Article 66 of the General Tax Law (Ley General Tributaria 58/2003).
If AEAT suspects fraud or undeclared income, it can initiate additional investigations, but ordinary audits cover four years.
2. Are non-Spanish documents or receipts valid for audit purposes?
All documents must be legible and in Spanish (or an official co‑language such as Catalan or Basque) to be accepted. AEAT can legally demand sworn translations (traducción jurada) for invoices, leases, or receipts in other languages.
If translations aren’t provided, the deduction or claim can be disallowed. Using a sworn translator accredited by the Spanish Ministry of Foreign Affairs (MAEC) ensures validity.
3. Can AEAT demand access to my foreign bank statements?
Yes, if you are tax resident in Spain, AEAT may request evidence of foreign income and accounts, especially related to declared income such as U.S. rental earnings. They cannot force foreign banks to release data directly, but they can require you to present bank extracts and records proving the declared figures.
This is supported by Spain’s Common Reporting Standard (CRS) compliance agreements, under which participating countries share financial data automatically.
4. Is proof of utility payments or other expenses valid if I only have bank or credit card records?
Utility or repair expenses must be supported by invoices issued by third parties (not your own spreadsheet or personal record). A bank or credit card statement alone is not sufficient to validate a tax deduction.
However, if the supplier no longer provides digital copies (after two years, for instance), AEAT usually accepts written confirmation from the provider or scanned invoice copies if available.
5. What should I do if I receive a tax inspection notice from AEAT?
You should:
- Log into your DEHú or Carpeta Ciudadana to verify official notifications.
- Review the years and tax types under inspection.
- Gather all third-party documentation (leases, repair invoices, insurance, taxes).
- Hire a gestor or tax lawyer familiar with international income and the Modelo 720/D‑6 obligations.
- If AEAT errors occur, you may appeal via recurso de reposición or reclamación económico-administrativa within one month.
Audits often expand from one year to several, so maintaining complete, translated, and organized records for at least seven years is the most effective preventive measure.
