Can my bank ask me for my tax return?
09/01/2019
Yes it can, and although the request may seem out of place, it is permitted to do so. Credit institutions are subject to regulations on the prevention of capital laundering and terrorist financing. Under these regulations:
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The following are considered to be obliged entities: credit institutions, insurance companies, investment firms, pension fund management entities, payment institutions, real estate developers, statutory auditors, notaries and property registrars.
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Credit institutions must ask for certain documentation from the legal entities or individuals with which they intend to do business and carry out transactions.
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They will ask us for documents evidencing personal identification and our professional or business activity.
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However, these regulations do not specify which documents financial institutions can ask us for. Hence they can ask us for any documents that enable them to ascertain the source of our funds or the nature of our professional or business activity. Including, obviously, tax returns.
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This documentation is used by banks to make the appropriate checks, and they may keep a copy. All this, we insist, is in compliance with the regulations on the prevention of money laundering and terrorist financing.
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These measures must be applied not only to new customers, but also to existing customers, since financial institutions’ data on their customers must be up to date.
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If we do not provide the required documentation, the bank may freeze our account. However, the Banco de España considers that before freezing our account, the bank should notify us and give a reasoned explanation of why it intends to do so.
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The documentation provided is expressly protected by the regulations on the protection of personal data, the level of protection being categorised as “high”.
Thus, your bank may ask you for your tax return and any other certificate of your income that it sees fit to request from you under the regulations on the prevention of money laundering and terrorist financing. For more information, see Law 10/2010 of 28 April 2010 on the prevention of money laundering and terrorist financing and Royal Decree 304/2014 of 5 May 2014 enacting the implementing regulations of Law 10/2010.
