What could we know about Juan Carlos I if he establishes his tax residence in Spain?

MadridIf former King Juan Carlos I wants to return to Spain, he should renounce his tax residency in the United Arab Emirates. This is the advice of sources at the Royal Household consulted by ARA, who believe that to "safeguard his image and reputation from speculation and potential criticism, and consequently, the image of the Crown, he should regain his tax residency in Spain." This would automatically mean paying taxes to the Spanish state and, therefore, returning to the scrutiny of the Spanish tax authorities. But in the case of the former king, there are other implications beyond contributing to the public coffers.

To begin with, when filing his income tax return, he would have to detail not only his income earned in Spain, but also his worldwide income. Furthermore, he would also have to file a wealth declaration—here, the possibility arises that he might have to pay the extraordinary tax on large fortunes approved by the Spanish government.

But what may be even more relevant is that he should declare his assets abroad. In this case, it's important to note that the Spanish Tax Agency stated in 2018, when Juan Carlos I was being investigated by the Public Prosecutor's Office, that it had no record of the former king having bank accounts in other countries. Furthermore, it should be remembered that in 2020, the former monarch carried out a voluntary tax regularization: he paid €678,393 to the Spanish Tax Agency to avoid legal proceedings and admitted to having used undeclared funds. If he were to now transfer his tax residency to Spain and it is discovered that he had undeclared assets abroad at that time, that regularization could even be declared null and void. And if the statute of limitations has not yet expired (more than ten years must pass when the amounts exceed €600,000), he could be suspected of having committed a crime. "The message regarding tax residency in Spain, if one lives here, goes beyond the obvious in this case," reflects José María Mollinedo, spokesperson for the Gestha union of tax technicians. Finally, the emeritus king repaid loans worth 4 million euros last summer, which his friends lent him precisely to regularize his situation with the tax authorities, and which, if he were to transfer his tax residency to Spain, would require him to detail how he repaid them. The People's Party (PP) opens the debate

However, the nuance of this Friday's statement from the Royal Household comes after the leader of the PP, Alberto Núñez Feijóo, reopened the debate on the return of the emeritus king on Thursday, taking advantage of the declassification of documents related to the 23-F coup attempt, although the decision to go to living in Abu Dhabi in August 2020 It has nothing to do with the attempted coup, but rather, precisely, with his finances. In response to Feijóo's proposal, sources at the Royal Household simply stated that the former monarch's possible return is a "personal decision." "He can return whenever he wants," the same sources indicated. However, the Zarzuela Palace did not specify whether they had directly conveyed the message to the emeritus king, nor did they comment on whether or not he could live at the Zarzuela Palace should he decide to return.

Juan Carlos I began the administrative procedures to transfer his tax residence to the United Arab Emirates in 2023, as reported at the time by the newspaper The WorldWhen this took effect, the former monarch ceased to be a Spanish taxpayer. He was therefore no longer under the control of the Tax Agency. In Abu Dhabi's tax regime, taxes are remarkably low, attracting great fortunes, and there are no taxes like personal income tax. "It functions as a tax haven," Mollinedo told ARA. To regain Spanish tax residency, he would have to acknowledge that the base of his activities and economic interests is once again in Spain. The other factor that determines whether someone is recognized as a tax resident in Spain is the number of days spent in Spanish territory: if a person is in Spain for more than 183 days, they automatically become a resident. As of Wednesday, after the PP's proposal, sources at Moncloa Palace consulted by ARA were simply passing the buck to the Royal Household, while the PP is clear that he should be encouraged to return. According to the PP leader,the known information about February 23rd It must represent a "reconciliation" of the Spanish people "with the one who stopped the coup." One of the voices that has most fueled this return is that of Isabel Díaz Ayuso, who on Thursday insisted that she "wants the best" for Juan Carlos I. "To go against the monarchy or simply question it is to question our own history," stated the president of the Community of Madrid. The PP spokesperson in the Senate, Alicia García, also commented, saying that "it would be very sad to see King Juan Carlos die outside of Spain."