Tax Fraud Crime (Art. 305 CP): Elements, Defences and Regularisation in Spain (2026)

# Tax Fraud Against the Public Treasury (Art. 305 PC): Elements of the Offence and Defence Strategy (2026)

The offence of tax fraud against the Public Treasury (Hacienda Pública) set out in Article 305 of the Código Penal (Spanish Penal Code, hereinafter "PC") protects public funds against particularly serious tax fraud. Together with the accounting offence (Art. 310 PC) and the offence of fraudulently obtaining tax refunds (Art. 305 in fine), it forms the core of Spanish Criminal Tax Law.

1. Basic Offence (Art. 305.1 PC)

Conduct constituting the offence: any person who, by act or omission, defrauds the Public Treasury: whether national, regional (autonomous community), foral (applying to territories with special fiscal regimes, such as the Basque Country and Navarre) or local; by evading the payment of taxes, withheld amounts or amounts that should have been withheld, or payments on account of benefits in kind, by unlawfully obtaining refunds, or by improperly enjoying tax benefits.

Threshold amount: the fraud must exceed €120,000 per tax and tax period. This is an element of the offence itself, not merely an objective condition of punishability.

Penalty: imprisonment of 1 to 5 years and a fine of between one and six times the amount defrauded, with possible loss of the right to obtain subsidies or tax benefits and to contract with the public sector (Art. 305.4 PC).

2. Subjective Element: Fraudulent Intent

The offence requires direct intent (dolo directo): knowledge of the tax obligation and the deliberate will to evade it. Negligence is not punishable under the ordinary tax offence. The distinction between an excusable mistake of fact (not punishable) and knowledge coupled with intent to defraud (punishable) is the key issue in many criminal defence strategies.

Modes of commission:

• Concealment of income (non-declaration or incomplete declaration)
• Simulation of non-existent expenses or deductions
• Use of false invoices (Art. 390 PC, in concurrence)
• Offshore structures without declaration of income
• Abuse of artificial legal forms (Art. 15 LGT; Ley General Tributaria, General Tax Act) where the criminal threshold is exceeded

3. Calculation of the Amount Defrauded

Quantification is decisive for establishing whether the offence has been committed:

Per tax and per period: the €120,000 must be calculated separately for each tax (personal income tax (IRPF), corporate income tax (IS), value added tax (IVA), etc.) and for each autonomous tax period.

No aggregation: amounts from different taxes or periods are not added together to reach the threshold, except in cases of continuous offence (delito continuado) under Art. 74 PC, the applicability of which has been debated by the Tribunal Supremo (Spanish Supreme Court, hereinafter "TS").

STS 30 January 2019 (appeal no. 2384/2017): this judgment consolidates the rule that the amount defrauded in VAT is calculated as the difference between the effectively deductible input VAT and the fictitiously deducted amount, rather than by reference to the total output VAT charged.

In VAT cases: the defrauded amount is the difference between the VAT that should have been declared and the amount actually paid, for each quarterly or annual settlement period depending on the applicable regime.

4. Aggravated Offences (Art. 305 bis PC)

The penalty increases to 2–6 years of imprisonment and a fine of between two and six times the amount defrauded where any of the following circumstances are present:

1. Amount exceeding €600,000
2. Fraud committed within a criminal organisation or through intermediaries that obstruct identification of the liable party
3. Use of tax havens or zero-taxation territories that hinder the investigation
4. Fraud committed by the director or officer of a legal entity who abuses a position of special trust

Extended limitation period (Art. 305.2 PC): for aggravated offences, the criminal limitation period is 10 years (compared to 5 years for the basic offence).

5. Tax Regularisation: Exemption from Criminal Liability (Art. 305.4 PC)

This is the most significant mechanism available to the defence:

Effect: a person who regularises their tax position by making a full declaration and payment of the tax debt shall be exempt from criminal liability, provided the regularisation takes place:

• Before the Tax Authority (Administración Tributaria) has notified the commencement of audit proceedings
• Before the Public Prosecutor (Ministerio Fiscal) or the Examining Magistrate (Juez Instructor) announces the opening of an investigation
• Before the filing of a complaint (denuncia) or formal criminal charge (querella)

Scope: regularisation must be complete; covering the principal amount, surcharges and default interest. Partial regularisation does not produce an exculpatory effect.

Case law: STS 20 January 2015: regularisation occurring after the commencement of a tax inspection does not produce an exempting effect, although it may qualify as a highly significant mitigating circumstance (Art. 21.5ª PC).

6. Criminal Liability of Legal Entities (Art. 310 bis PC)

Legal entities may be held criminally liable for offences against the Public Treasury:

Penalties: a fine of between two and four times the debt (basic offence) or between three and five times the debt (aggravated offence). Additional sanctions include: disqualification from contracting with the public sector, loss of tax benefits, and dissolution.

Tax compliance: tax compliance programmes (Tax Compliance Programs) may mitigate or exclude the liability of a legal entity if they demonstrate that the entity had an adequate control model in place and that the individual offender circumvented it.

7. Interaction with Administrative Infringements

The non bis in idem principle prohibits double punishment for the same conduct. The relationship between criminal proceedings and administrative tax penalty proceedings is governed by Art. 180 LGT (General Tax Act):

• Where there are indications of a criminal offence, the Tax Authority suspends the penalty proceedings and refers the matter to the criminal courts
• Following a criminal acquittal, the administrative proceedings may be resumed

2015 Reform: Art. 305.5 PC introduced a debt collection procedure during the investigation phase (instrucción), allowing the AEAT (Agencia Estatal de Administración Tributaria: Spanish Tax Agency) to continue collecting the tax assessment even while criminal proceedings are pending.

8. The Investigation Phase: Key Procedural Steps

AEAT expert report: this is fundamental to quantifying the debt. Defence counsel must carefully examine the valuation methodology, the documents relied upon, and the periods taken into account.

Searches of homes and business premises: Art. 18.2 of the Spanish Constitution (CE) protects the inviolability of the home. For companies, the protection is more limited but still requires a reasoned judicial order.

Lifting of bank secrecy: judicial authorisation is required to access bank accounts. This may be extended to accounts held by connected third parties.

Asset freezing: precautionary freezing orders may be issued to secure civil liability (amount defrauded plus interest).

9. Defence Strategy

During the investigation phase:

1. Challenge the quantification of the amount defrauded (independent expert report)
2. Contest intent: was there a reasonable interpretation of the applicable rule? Was external tax advice sought and relied upon?
3. Examine whether regularisation was complete and occurred before the applicable time threshold
4. Verify whether the Tax Authority's right to issue an assessment has become time-barred

Applicable mitigating circumstances:

• Confession before learning of the investigation (Art. 21.4ª PC)
• Reparation of harm through subsequent regularisation (Art. 21.5ª PC, as a highly significant mitigating factor)
• Undue delay in proceedings (Art. 21.6ª PC), frequently applicable in criminal tax cases

Lexiel identifies the applicable criminal tax case law, analyses the elements of the offence as they apply to the specific case, calculates the amount defrauded using the same criteria the prosecution will apply, and drafts the defence brief or voluntary regularisation filing.