The Supreme Court of Spain has established stricter limits on the Tax Agency when imposing sanctions on self-employed professionals who use “shell companies” to reduce their tax burden. The new ruling is intended to protect professionals from automatic accusations.
Previously, the Tax Agency frequently penalized specialists (such as doctors, lawyers, or artists) who created companies to issue invoices and pay corporate tax (~25%) instead of personal income tax (up to 45%). If the company had no employees or assets, it was deemed fictitious.
In its ruling of October 22, 2025, the Supreme Court determined that the Tax Agency cannot impose sanctions based solely on suspicions. The agency must “sufficiently” and specifically prove that the company lacks the necessary material and human resources to carry out its activity.
A key change concerns the calculation of fines. The Court prohibited the Tax Agency from calculating sanctions based on the company’s total revenue, as was previously done. From now on, the fine may apply only to the portion of income that was actually simulated—that is, the professional’s personal income routed through the company.
This decision strengthens the presumption of innocence for the self-employed. The Tax Agency must prove the existence of “fault or intent,” not merely an accounting error. At the same time, self-employed professionals must be prepared to provide evidence of the real nature of their business structure (such as having an office, employees, or bearing business risks).
Previously, the Tax Agency frequently penalized specialists (such as doctors, lawyers, or artists) who created companies to issue invoices and pay corporate tax (~25%) instead of personal income tax (up to 45%). If the company had no employees or assets, it was deemed fictitious.
In its ruling of October 22, 2025, the Supreme Court determined that the Tax Agency cannot impose sanctions based solely on suspicions. The agency must “sufficiently” and specifically prove that the company lacks the necessary material and human resources to carry out its activity.
A key change concerns the calculation of fines. The Court prohibited the Tax Agency from calculating sanctions based on the company’s total revenue, as was previously done. From now on, the fine may apply only to the portion of income that was actually simulated—that is, the professional’s personal income routed through the company.
This decision strengthens the presumption of innocence for the self-employed. The Tax Agency must prove the existence of “fault or intent,” not merely an accounting error. At the same time, self-employed professionals must be prepared to provide evidence of the real nature of their business structure (such as having an office, employees, or bearing business risks).
