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Tax evasion in Spanish Personal Income Tax by income sources, 2005–2008: from the synthetic to the dual tax

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This paper estimates Spanish Personal Income Tax (IRPF) evasion by income sources, between 2005 and 2008, applying the methodology of Feldman and Slemrod (Econ J 117:327–352, 2007) to the IRPF Taxpayers Panel database published by the Instituto de Estudios Fiscales (Spanish Institute for Fiscal Studies). From the estimates carried out, four conclusions can be drawn. First, that the greatest tax compliance throughout the period is found in labour income and the lowest in income from movable capital. Second, that the level of compliance is, in general, lower in 2008 than in 2005. Third, that, with the exception of income from movable capital, compliance is greater for the top 50% of taxpayers. Fourth, that the lowest level of compliance is found in the group of regions with better structural economic characteristics: Aragon, Catalonia and Madrid.

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  1. For a recent survey on this topic, see Wiepking and Bekkers (2011, 2012) and Andreoni and Payne (2013). For the Spanish case, see García and Marcuello (2001).

  2. See Wiepking and Bekkers (2011, 2012). García and Marcuello (2001) use city size and Torregrosa (2015) city size and regional dummies to estimate the decision of donate by means of a Probit model and then calculate the inverse Mill ratio which is included in the model explaining the amount of charitable contributions according to Heckman model. We are not convinced of the explanatory capacity of these geographical variables, for the reasons given in the text.

  3. Negative income is included, as in Feldman and Slemrod (2007), “to investigate whether the underreporting behaviour of positive and negative reported values of income conveys systematically different information about noncompliances” (p. 332): see Eq. (4) above. In Spain, negative income is generally admitted by the tax code, but is subject to certain rules of compensation with positive income. For the sake of simplicity, we include results for negative income in the Appendix, but not discuss them in the text. We also exclude capital gains because its results are distorted by the fact that capital gains are taxed upon realization instead of upon accrual and thus the income reported by the taxpayer in a fiscal year might be different from the income actually obtained in that year.


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We are indebted to José María Peláez, Eduardo Sanz Gadea, and two anonymous referees of the Journal for their helpful suggestions and comments. We also gratefully acknowledge the funding received from the Spanish Ministry of Economy and Competitiveness (project ECO2012-37572), the Regional Government of Aragon and the European Regional Development Fund (Public Economics Research Group). The usual disclaimer applies.

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Correspondence to Fernando Rodrigo-Sauco.



See Table 2.

Table 2 Results of the estimates in the different scenarios considered (2005–2008)

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Domínguez-Barrero, F., López-Laborda, J. & Rodrigo-Sauco, F. Tax evasion in Spanish Personal Income Tax by income sources, 2005–2008: from the synthetic to the dual tax. Eur J Law Econ 44, 47–65 (2017).

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  • Personal Income Tax
  • Tax evasion
  • Income sources
  • Spain
  • Microdata

JEL classification

  • H26