Criminal investigation for tax fraud — the offence defined in Article 305 of the Spanish Penal Code — is one of the situations in which foreign suspects most frequently underestimate the risk of pre-trial detention. The perception that financial crimes do not lead to imprisonment before trial is not accurate within the Spanish legal system, and that misperception can prove extremely costly.

This article examines when a judge can order pre-trial detention in the context of a tax fraud investigation, which factors elevate that risk for foreign nationals, and which defence strategy is most effective from the earliest stages of the proceedings.

Tax Fraud as an Offence That Enables Pre-Trial Detention

Article 305 of the Spanish Penal Code establishes tax fraud as a criminal offence when the amount evaded exceeds one hundred and twenty thousand euros. The penalty ranges from one to five years imprisonment under the basic type, and may reach up to six years when the aggravating circumstances set out in Article 305 bis are present — including the use of intermediaries, the employment of tax havens, or membership of a criminal organisation.

With those penalties, tax fraud clearly exceeds the two-year minimum threshold that Article 503 of the Code of Criminal Procedure establishes for pre-trial detention to be possible. The question is not whether it can be ordered, but under which specific circumstances the judge considers it necessary.

Factors That Elevate the Risk of Pre-Trial Detention in Tax Offence Cases

In the experience of Spanish courts, the factors most frequently leading judges to order pre-trial detention in tax fraud investigations are the following.

The first is the existence of connections to foreign jurisdictions — offshore bank accounts, companies in tax havens, assets abroad — that facilitate leaving Spain and concealing assets. When the suspect has the practical capacity to transfer assets abroad quickly, the judge perceives a high flight risk and a significant risk of evidence destruction.

The second is the scale of the alleged evasion. The higher the amount, the higher the potential sentence, and the stronger the perceived incentive to abandon the proceedings. Cases exceeding one million euros or involving the aggravated type under Article 305 bis are the most likely to result in prosecution requests for pre-trial detention.

The third — particularly relevant for Barbancho Legal’s international clients — is the absence of ties to Spain. A foreign suspect who operates from their home country, has no stable address or connections in Spain, and has resources abroad presents the profile that prosecutors most effectively exploit to support a detention request.

In substantial tax fraud cases, the defence must anticipate the prosecution’s detention request before it is made. The moment the prosecutor asks for detention is not the moment to start building the ties argument.

Evidence Destruction as an Additional Ground

In tax fraud investigations, the risk of destruction or concealment of evidence — provided for in Article 503.1.3ªb of the LECrim — is an argument the prosecution uses frequently to support pre-trial detention. The documentary nature of these offences — invoices, accounts, transfers, contracts — means there is always the possibility that the suspect has access to evidentiary sources they could eliminate.

The defence can counter this argument in several ways: by demonstrating that the relevant documentation has already been seized or secured during the investigation, by establishing that the suspect has no access to the relevant evidence, or by proposing supervisory measures that reduce the risk without recourse to deprivation of liberty.

Defence Strategy: The Advantage of Anticipation

In tax offence cases, effective defence does not begin at the Article 505 hearing — it begins the moment the suspect becomes aware of the investigation. Building the ties argument, organising the documentation and anticipating the prosecutor’s case before the detention request is made is the difference between arriving at that hearing with a strong position or arriving at a disadvantage.

Barbancho Legal has experience defending foreign nationals in tax fraud proceedings in Spain, including cases with particularly complex international dimensions. Coordination between the Spanish defence and the client’s advisers in their home country is one of the elements that adds most value in these matters.

Frequently Asked Questions

Can pre-trial detention be ordered in a tax fraud investigation involving a moderate amount?

The law sets the threshold at one hundred and twenty thousand euros. For amounts close to that threshold without aggravating factors, pre-trial detention is less common because the potential sentence is lower. However, when the circumstances of Article 305 bis are present or the amount is very high, the risk increases significantly.

Does associated money laundering increase the risk of pre-trial detention?

Yes. Investigations that include money laundering charges — common in large-scale tax fraud proceedings — carry a higher potential sentence and reinforce the judge’s perception that the suspect has the capacity to conceal assets and evade justice.

What happens to the suspect’s assets during pre-trial detention?

Pre-trial detention does not directly affect assets, but in tax offence cases the judge may simultaneously order precautionary measures affecting property — asset freezes, disposal prohibitions. The defence must address both dimensions of the proceedings in a coordinated way.