Tax Office Tightens Monitoring on Virtual Cards from Revolut and N26

Spanish tax authorities have activated a comprehensive tracking system monitoring virtual cards, electronic money, and digital bank accounts held with foreign digital banks. The surveillance framework targets accounts increasingly used by sole traders (autónomos) and small to medium-sized enterprises (SMEs).

The new control system specifically zeroes in on digital banking entities operating outside Spain. Discrepancies flagged by risk analysis systems will serve as warning signals for the tax administration. While many users of these accounts are private individuals, a growing proportion consists of commercial accounts belonging to small businesses seeking to avoid the high commission fees charged by traditional banking institutions.

While digital banks like N26, Revolut, and Trade Republic currently offer accounts with Spanish IBAN codes, rendering them equivalent to national banks for regulatory tracking, the primary focus of the updated regulations is on users maintaining foreign IBAN codes. This specific category previously offered lower traceability for tax inspectors.

The tightening of regulations traces back to the introduction of Form 720 (Modelo 720) regarding assets and accounts held abroad. This was followed by the European Union DAC7 directive, which requires digital platforms to report the income of individuals and businesses selling through their services. The current expansion builds towards Form 174 (Modelo 174) to streamline and cross-reference data.

The tracking mechanism is designed to accumulate information continuously, although the first formal declarations under this framework will not be submitted until January 2027, covering the data collected throughout 2026. Financial experts remind businesses that tax liability depends strictly on the taxpayer’s fiscal residency and the origin of their commercial activity, rather than where the banking institution is headquartered. Failing to adhere to the transparency requirements or ignoring discrepancies could lead to severe penalties of up to 150 per cent of the unpaid tax liability.