Spain to publish list of tax-debtors – have the data protection implications been considered?

July 27, 2015

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Earlier this year, the Spanish government submitted an overhaul of the General Tax Act to Parliament (the “Draft Bill”). The principal aims of the Draft Bill are to step up the fight against fraud, reduce conflicts and increase legal certainty.

The reform will introduce the publication of a list of those taxpayers with outstanding debts and sanctions, which will include the personal details of those found guilty of offences against the Treasury (including insolvency offences and smuggling to the detriment of the Treasury). This name-and-shame list will serve as a deterrent, similar to that already running in other EU countries such as the UK and Ireland.

The publication of such lists unsurprisingly raises data protection issues and concerns. It is important to consider how the amendments introduced by the Draft Bill align with current data protection legislation. We have highlighted the following issues when information is published relating to individuals:

Prevalence of the fundamental right to data protection

Information relating to individuals may be communicated without the consent of the data subject under Article 95.4 of the Draft Bill, but this communication must be pursuant to a specific, explicit and legitimate purpose, as envisaged in Article 4.1 of the Spanish Data Protection Act.

This purpose should be to prevent that individual, whose information is published, from social criticism, which could ultimately hinder them from publishing further information in the future. To this extent, the publication of an initial draft of a list of individuals found guilty or penalised is specifically prohibited. The presumed tax-debtor must be given the opportunity to have the personal information about him or her rectified, amended, or deleted where it is inaccurate before publication.

In summary, data subjects will be granted ‘breathing space’ prior to publication and any final decision can be challenged through the administrative courts.

Guarantee the fundamental rights to privacy and protection of personal data

Only debts that are executive and quantitatively relevant that must be published. This is ultimately likely to be a list of taxpayers who have debts of more than one million euros. In any event, deferred or suspended tax debts and infringements must be expressly excluded from the application of the Draft Bill.

Prior to publication, data held about individuals must only refer to the full name, taxpayer identification number and the amount of all the outstanding tax debts and penalties according to the criteria described above.

The disclosed information must be true and accurate and be published for no longer than is necessary to fulfil the purpose for which it was published.

Publication by electronic means

The publication of a list containing ‘tax cheats’ and ‘persistent debtors’ must only refer to those tax-debtors at the end of each tax year. The publication must make it clear that it is not looking ahead to the current tax debt situation of an individual but only his or her tax situation in the preceding tax year.

The listings will no longer be accessible after three months of its publication, and there will be an option offered to prevent the possibility of being able to index its contents. This aims to avoid the multiplier effect produced by publication through internet search engines.

It is clear that the data protection implications of the Draft Bill have been considered to a certain extent – how it plays out in practice remains to be seen. The Spanish government plans to publish the first list of tax debtors in the fourth quarter of this year which will include individuals in this situation as at 31 July 2015.

Rubén Cabezas Vázquez  |  Abogado Asociado Senior |  Landwell - PricewaterhouseCoopers Tax & Legal Services, S.L.
[email protected] | +93 253 27 13 | +34 638 343 340

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