Dear Mr. Amsterdam
My name is Nicasio Sande, I was born and raised in Spain and I also hold American citizenship. I moved to New Jersey in 2011 and I currently reside in the Raleigh area. I was a business exec for a corporation for 23 years. Although finances and taxes were not my main responsibilities, they grew in the weight of what I did daily as my work´s scope increased, so I eventually got to be knowledgeable about them. I own, write and edit the ExpatriadoUSA.com blog to help the Hispanic community in the US and I am well connected to that community, especially in the Research Triangle area.
This letter has two purposes. The first one is to thank you and the second one is to share with you a potential area of work and vector of attack to the unfair practices of Hacienda, for your consideration. I jump straight to the first point. I have been following and applauding your work on the Beckham law cases for some time, but it is only recently that I realized that your initiative had a much wider reach. This was displayed in your paper, but it became especially evident to me in the recent media coverage. Your interview in Negocios in May was especially telling. I agree 100% with almost every single statement, nuance and detail you shared. I could elaborate at length about all that, but this letter would be way too long. As a Spaniard and as an American, I want to sincerely thank you. Thank you for your clarity. Thank you for your bravery. Thank you for your work. And especially thank you for your outrage. You just became one of my current time heroes.
However, there is one aspect of what you said in the interview, where I would like to provide some insights, at least from my personal experience. I consider myself a well-educated person. I also have a cousin who is a Hacienda inspector. And still… I didn’t know. I didn’t know Hacienda was operating as a mafia-like organization. I always thought that Hacienda was very tough, but fair in most cases. A key reason was that I thought they treated everybody in the same way: artists, athletes, whoever. The Rodrigo Rato´s case was especially important to build that perception. He was the Spanish VP, the president of IMF and he was very close to be chosen to take over in PP from Aznar, so he was close to be the President of Spain. And still, he was put in jail. One of their own.
I am 50 now, and have felt strongly against the IRNR tax since I had to suffer it in 2012. However, I was not blaming Hacienda for that, but the legislator. It was an unfair rule, but AEAT just applied it. It was only in the last few years that I learned the truth. The details of the Xabi Alonso´s case, and especially the language used by the judge in the 2019 sentence, leaving the AEAT inspectors in a bad place, was the first clear sign. And what revealed the whole plot and left me totally shocked was the Alejo Moreno´s documentary Hechos Probados, that I watched a couple of years ago for the first time. Since then, I have encouraged every single Spaniard I met to watch it, and I insisted that it is the most important documentary made in Spain in the last 30 years.
I am sharing this with you, because I agree we need the Spanish people´s outrage to get somewhere. But that is not going to happen if they don’t really understand what is going on. And right now, they just don’t. Even if they heard about you, most people likely think that you are a foreign lawyer trying to get better deals with Hacienda for your foreign customers living in Spain, by making noise in the media. And many will just make a mockery and think that those foreigners need to pay their fair share like Spaniards do, so… Go Hacienda, go. Obviously, the Spanish media has a significant responsibility on this for the way they have been covering Hacienda´s cases for decades. So, all your actions on the media side are essential to this crusade, as, in most cases, the Spaniards are not numb to the Hacienda abuses but just ignorant to them.
The opportunity
Many Spanish expats who reside in the United States have been unfairly treated by Hacienda for many years and many of them have American citizenship. The reasons why I believe this would be a very sizable case, if we look at it holistically, are provided below. This could open an opportunity for the application of provision 899, on the basis of this specific group and the rules of one specific tax: IRNR (non-residents tax).
Allow me to explain why the tax is discriminatory and unfair. I can explain it with my own case. In 2009 we bought a larger home close to Madrid and moved in, because we were expecting a second child and we wanted more space. The first home was an apartment and since the real estate market was terrible (and it continued being terrible for many many years), we didn’t even try to sell it. We rented it. The IRPF (the regular tax for residents) allows you to deduct all expenses, and even to apply an amortization of the value of the home, as a way to incentivize home owners to rent their homes in a market that lacks rental properties. The terms for those deductions and credits are quite similar to the equivalent rules by the IRS. Since the home had a recent mortgage, and all the related expenses, I ended up not having to pay any taxes for that rental income. This made sense too, because after paying the mortgage, I was barely making a profit. There was still a benefit to us, since the principal got paid month by month, but we were not making extra cash to pay for additional taxes, so the system worked well for all involved.
Then, we moved to the US in 2011. Same apartment, same tenant, same rents, same “service” provided to the Spanish rental market. However, since we didn’t live in Spain anymore, there was almost no utilization of the Spanish public services paid by our taxes (except for the ones provided by the Foreign Office). But, no use of the generous Spanish healthcare, and (eventually) no use of the publicly funded Spanish universities, to mention two items that are super expensive in the USA, but free (or very cheap) for the Spanish taxpayers. However, since we didn’t reside in Spain, IRPF was no longer applicable, but the IRNR. And under that tax, I couldn’t apply any deductions or credits. I had to pay every quarter, within a ridiculous 20 days window, a 24% flat tax for all the rental income. Obviously, that meant we were in the red every month. But, still, since the market was so bad, we couldn’t sell the property, and we had to fund with our savings the “privilege” to continue renting that home for more than a decade. By the time we finally sold it in 2022 we had paid a very signficant amount for this tax, where the payable tax for those same rents would have been 0€, if we would have resided in Spain during that period. A significant share of the Spanish expats has the same problem.
At the end of 2021, the UE filed a requirement against Hacienda, since IRNR was discriminating against Europeans (including Spaniards) within the UE, what violates the foundational principles of the Union. Hacienda was forced to allow all the residents in the Union to choose if they wanted to apply the default IRNR calculation or the IRPF rules. In practice this meant the end of this problem for anyone residing in the UE. My understanding is that the lawyer Alejandro del Campo filed a case in 2018 in the UE that would cover the situation for taxpayers outside the Union, and there is hope to see a verdict by Audiencia Nacional in the next year or so. But in the meantime, the Spanish expats in the USA, many holding American citizenship, continue being discriminated every day.
Why I believe this could be a large case
The target group is sizable. The official Padrón states that there are 220.000 Spaniards in the USA, which recently became the 3rd largest country of the Spanish diaspora, and, likely, the fastest growing one. The Spaniard community of immigrants in the USA is also one of the fastest growing as a percentage. In the decade of 2010, it grew about 40%. But the Padrón tells only half of the story because it only accounts for Spaniards who officially registered in the Spanish Consulates. Most of them don’t do it or they delay it for many years. A study of 2016 estimated that close to 70% do not register in the PERE. Just in the year 2022 it was estimated that 500.000 Spaniards left Spain and USA was the top 4 destination. For all this, some estimate that the Spaniard community in the USA is actually exceeding the 500.000 threshold. Additionally, there are close to 1 million people born in the USA who are descendants of Spanish immigrants and might have inherited properties in Spain from their parents.
Many of them acquired real estate in Spain. Real Estate is the only type of investment that Spanish in Spain trust. The ridiculous techniques and practices that the mutual fund managers use in Spain and the very difficult challenge to find reasonable investment vehicles has led to that. Over 80% of Spanish families’ wealth is real estate in Spain. Spaniard immigrants are no exception to this rule. In fact, since many are expatriates with international careers and good education, I would bet they had better chances to buy real estate in Spain before they emigrated than the average Spanish family.
Others inherit. Even if they didn’t own a home when they left Spain, most still have their parents in the home country. So, when they eventually pass, it is not rare that the expat inherits real estate in Spain.
And most still hold those properties. Additionally, most of them don’t sell, even after they leave the country. The real estate market in Spain was terrible from 2007 to (at least) 2022. It took almost 20 years for the country to recover from the subprime bubble and many towns and areas have not yet recovered the 2006 price level, even today. Additionally, the transactional costs are super high, including a one-off tax of 10% on the entire sale value, which is applicable in many areas. The process to sell has been very long too, in many cases it can take up to a year. And, many of these expats have the hope to eventually return to Spain, perhaps to retire there, so they keep their home there for that reason.
Most of them rent these homes. Considering that there is scarcity of rental homes in Spain it is relatively easy to rent them. And considering that expat families have a significant portion of their historic savings tied to those homes, it would be crazy to keep them empty instead of trying to generate a rent from them. Also, many have significant mortgages to pay for those homes after they leave Spain, so often they don’t have an alternative and they have to rent even if they would prefer not to. It was common in Spain to get mortgages with a 40 years term period, so this situation continues for a long long time.
A billion reasons. The IRNR collected 2,7 b€ in 2024 for Hacienda. For the reasons explained before, we can bet that most of that money comes from home rentals. We could also think that about 10% of it would be related to the USA residents, since they are about 10% of the Spanish diaspora according to the PERE. But since there has been a lot of recent immigration to USA and the Padron is delayed for years in reflecting those migratory moves, the share is probably much higher. Even more important, due to the recent changes forced by the European Union, the Spanish migrants to EU countries now have the same fiscal treatment as local Spanish residents, so, in practice, many of them don’t have to pay IRNR. (The top emigration countries for Spaniards are France, Germany, UK and USA). So, I wouldn’t be surprised if 30%-ish of this amount or about 1 b$ a year would be accounted for the Spaniards expatriates in the USA. Moreover, since the IRNR is so dark and unfair, I strongly suspect that many expatriates don’t pay it. So, they have a Damocles’ sword over their necks and the actual IRNR money problem could be many multiples of that amount.
I would like to thank you again for everything you are doing and I also want to wish you great success. Spain needs this desperately.
Respectfully
Nicasio Sande
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This letter was sent to the Robert Amsterdam Law Firm in June 2025. For the spanish version click here.