Tax Inspections in 2025: What Foreign Business Owners in Spain Need to Know

Spain is increasing tax inspections of foreign residents with overseas income. Here is how to stay compliant in 2025 if you own a business abroad. 

 

Spain Targets Improper Use of Foreign Entities 

Spain’s tax authority, Agencia Tributaria (AEAT), is intensifying audits in 2025, particularly focusing on foreign nationals who: 

• Live in Spain using non-lucrative, golden visa, or digital nomad visas. 

• Own and operate foreign businesses, particularly U.S. LLCs or offshore entities. 

• Fail to declare foreign income or misrepresent tax residency. 

Authorities are using international data-sharing agreements and banking transparency rules to identify non-compliance. 

 

Common Violations Leading to Inspections 

• Using a non-lucrative visa while actively running a business, even if based abroad 

• Declaring non-resident tax status while spending most of the year in Spain 

• Not reporting salary, dividends, or business profits from foreign entities 

• Failing to submit required declarations like Modelo 720 or Modelo 100
   

Even if your company is registered in the U.S., the income may still be taxable in Spain if you live and operate from here. 

 

Visa Status and Tax Compliance Go Hand in Hand 

A growing number of visa renewals and immigration procedures are now being cross-checked with tax data. Residency permits could be denied or revoked if tax irregularities are discovered. Authorities are increasingly enforcing the requirement that visa holders must not engage in unauthorized work. 

For example, using a non-lucrative visa while actively managing a business may be grounds for both visa denial and backdated tax assessments. 

 

What You Can Do to Protect Yourself 

• Confirm that your visa allows you to carry out your current activity 

• Declare all income from foreign entities in the Spanish personal income tax return (Modelo 100) 

• Submit Modelo 720 for foreign bank accounts, shares, and properties 

• Regularly review where your company’s management is considered to be located 

 

Arkos Management’s Approach 

We help international clients: 

• Navigate the intersection between immigration and tax law 

• Resolve residency status inconsistencies 

• Prepare for inspections or respond to AEAT notices 

• Restructure foreign business holdings in a legally compliant way 

 

References: 

• Agencia Tributaria – Fiscalidad internacional 

• Agencia Tributaria – Modelo 720: Declaración de bienes en el extranjero 

Proactive compliance today protects your visa, income, and reputation tomorrow.
Contact Arkos Management to prepare for 2025 with confidence.