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Some are more equal than others - A Blog from Freemont Group

Freemont Group
30 May, 2012

What would happen if you were to ignore your tax liabilities for 17 years and got caught? Would you be able to shake it off simply by paying the taxes that were owed, without so much as a court-case, fines or other nasty consequences? Probably not.

But if you are Emilio Botín, the former president of the world 6th largest business Banco Santander, different rules apply.
In 2010 the French tax authorities forwarded their Spanish counterparts a list of HSBC bank data they had obtained in 2008 from crooked HSBC employee Hervé Falciani. It is the same list that prompted tax probes in Germany and the US.

On this list one account in particular proved especially lucrative for the Spanish tax authorities: that of the Botín family. In 1937, during the Spanish Civil war, Emilio Botín senior escaped to Switzerland and opened an account with HSBC. When he died in '93, he left his fortune to his children and grandchildren. By 2006, this sum had grown to 6 billion Euros.

Naturally authorities started an investigation into the matter. Botín declined to comment on the case, but his lawyers stated that he and his family had only found out about the bank account in 2008. In spite of this very believable story, the investigation against the Botín family was dropped in June 2011 when all 12 family members made adjustments in their  tax returns for the years 2005 to 2009, paying over 200 million Euros in back-taxes. Treasury officials even stated that there was no way to check whether the adjusted tax returns were indeed truthful, but the case was closed nonetheless.

Last week the Spanish national court reconfirmed the tax authorities' decision to drop the investigation. The tax problems had been “regularized” and there was no ground for any further inquiry.

About the Author

Freemont Group

Freemont Group is a comprehensive provider of fiduciary services, including corporate formation and administration, trust, fund formation, legal-and tax services. Contact: info@freemontgroup.com


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