How Spain's tax agency uses AI to profile taxpayers — and applies a double standard

How does Spain's tax agency investigate you without lifting a finger? AI decides your risk profile

Spain's Tax Agency has moved beyond manual review of tax returns. It now cross-checks massive datasets, analyses patterns and assigns a risk level to every taxpayer without any prior human intervention. Income that doesn't fit your profile, disproportionate spending, cash movements, cryptocurrencies, international transfers… any deviation triggers the alarms. And you don't need to have committed a crime: it's enough for the numbers not to match what's expected for the system to flag you.

The Israeli software that tracks your finances

As has come to light, the tax authority uses software of Israeli origin, initially designed for security purposes. A tool that makes it possible to cross-reference thousands of variables and detect anomalous behaviour. While the average taxpayer is subjected to this algorithmic scrutiny, questions arise about its selective application. The same system that demands you justify 1,000 euros seems unable to see the hundreds of thousands moved by certain public figures.

The Pujol case: 885,000 euros that expired under the statute of limitations

One figure illustrates the asymmetry: the tax authority concluded that Jordi Pujol defrauded 885,000 euros in the year 2000, but the offence had already expired under the statute of limitations. Examples like this fuel the perception that the tax machinery squeezes the little guy while letting the big players slip away. The technology, the argument goes, is used to control ordinary citizens, not to pursue well-resourced fraudsters.

Strategies to dodge the radar (according to rumour)

In financial circles, tactics are discussed for avoiding profiling: cash purchases, using other people's cards, swapping balance statements, ATM withdrawals under fake pretexts. The key, they say, is not to raise suspicion with predictable patterns. But these tricks, legal or not, contrast with the ease with which the truly big wallets move money through front men, shell companies and tax havens without the algorithm batting an eye.

With this technology, the tax authority can inspect you without setting foot in your home. But the uncomfortable question still hangs in the air: who does the all-seeing eye really work for? While those moving millions to tax havens sleep soundly, AI, after all, also has orders to look the other way when the time comes.