Spain is making tax news again but not for the right reasons: the Spanish tax authorities now say they made a huge mistake in a high profile tax case. Authorities now claim they have found errors in reports that initially indicated that Princess Cristina, the youngest daughter of King Juan Carlos and Queen Sofia of Spain, failed to report gains on the sales of property she owned. The biggest error? The Princess never owned the properties.
Princess Cristina has been under investigation after tax officials believed she might be involved in financial dealings related to her husband, Iñaki Urdangarin, the Duke of Palma. Urdangarin and his former business partner, Diego Torres, have been accused of fraud, tax evasion, and embezzlement of nearly 6 million euros ($8 million US) in public money related to the operation of the Noos Institute. That criminal matter is ongoing.
Princess Cristina had been named as a suspect in her husband’s case but the charges were eventually dropped. Urdangarin has maintained that his wife was not involved in his business dealings. However, an examination of tax returns submitted as evidence in that case resulted in new allegations against the Princess, including reports that she failed to report the sales of nearly 1.4 million euros ($1.87 million) worth of properties in 2005 and 2006. Those properties supposedly included 13 apartments, homes, and land in Alicante, Ciudad Real, and Barcelona.
The problem is that the Princess apparently never owned those properties. Local authorities confirmed this, saying about the properties: “They are not registered [in Cristina’s name] and have never belonged to her.” Attorneys for the Princess have always maintained that she had never owned the properties.
It is not clear how the error happened. Multiple transactions were involved in a number of different places. And while the taxing authorities initially indicated that there had been a mix-up in national identity numbers, that explanation doesn’t quite make sense: each member of Spain’s royal family has a two-digit national identity number (Princess Cristina’s is 14); everyone else has an eight-digit number. A full investigation has been ordered.
The Princess appeared to take it all in stride. Her lawyers shrugged the matter off, saying:
If there are mistakes there are mistakes. Mistakes get corrected, and that’s all there is to it.
It was a fairly relaxed response to a tense situation. The popularity of the royal family in Spain has significantly declined in recent years and this latest set of scandals can’t help. Prior to these latest allegations, no royal-born member of Spain’s ruling family has ever been criminally charged in Spain. So far, that remains the case.
