New income tax law and anti-fraud legislation in Spain

This article examines two important tax laws passed by the Spanish parliament at the end of 2006: a new Income Tax Law (ITL) and the Law for the Prevention of Tax Fraud (LPTF). The ITL is a newly drafted law which modifies the previous law in many points of various significance and affects the basic structure of the personal income tax in two ways in particular: it approximates the tax to the dual model and adopts the classical system of dividend taxation. The ITL also modifies other laws, especially the Corporation Tax Law and the Non-Resident Income Tax Law. The LPTF includes some measures specifically directed against tax fraud, but it also contains many others that are only indirectly related to tax evasion or not at all. This article discusses the most relevant measures of these two laws.