The lack of state-citizen trust in Spain

The Spanish government-machine is much more paperwork heavy and much less trusting of Spanish citizens than you will find in the UK, US or most northern European countries. This means that there is a continually layer of unnecessary official paperwork involved in almost every transaction.

For example, in the UK you rarely need to prove your address you would simply fill a form declaring an address to be valid. If you do need to prove your address then two utility bills are deemed sufficient. In Spain, you are more likely to need to prove your address and the only way to do this is through the empadronimiento or padron for short. Buying a car? Then you need a padron to prove where the new registered address will be.

However a padron runs out after 4 months. So if you are buying car you find yourself running off to the district office to get an up-to-date padron. Another example of the three-times to get it right rule in Spain.

The lack of trust between the state and citizen runs through everything. Using a casal (the children's summer camps through the long 3 month holiday) then you will typically need to provide copies of ID and copies of health cards and may be even vaccination certificates.

Buying in a shop? Even though chip and pin has now been introduced (about 2010), some shops still require you to show your ID to prove a credit card is yours (though this doesn't actually remove fraud) - eg Media Markt and Al Campo. The result is that cash is still king in Spain.

Internet purchasing is similarly hampered by the lack of trust and so the major stores have been very slow in getting established in Spain. This could be cultural, but the bureaucratic barrier still exists.

Unfortunately, the high levels of paperwork seem to have the opposite effect to the one intended. Instead of keeping everything above board, a lot of things happen 'on the black' away from official eyes. The need for paperwork with everything encourages this, as it may well be that avoiding paperwork (and the risk of fines - the fine for mis-filing paperwork can be bigger than the fine you'd get for pickpocketing someone on the street...) is the main reason for not declaring something, rather than the small amounts saved avoiding tax.

Unfortunately all of this bureaucracy doesn't seem to work that well. Marbella and Valencia where politicians took backhanders still happened and arguably the overzealous paperwork encourages rather than discourages graft.

Obviously there is a cultural element to this. Crime in the form of petty theft is much greater in Spain than in Northern Europe and you see security guards at all major shops, so perhaps if theft is accepted then paperwork becomes essential to keep out of trouble. But probably a stronger response to 'petty delinquencies' like a three strikes rule could be better than not trusting any citizen.

As an example. In the UK, if you ask a friend to paint your house for £500 there is no problem so long as the friend declares the income at the end of the year and the end of year tax declaration is the only paperwork he needs - no need to register for anything else. He can even claim for the cost of paint and brushes against the job.

In Spain it is different. To work for a friend like this you would have to declare yourself autonomo for the job (alta) at the tax office. This means you have to be registered for and charge VAT (even if it is just a one-off £500 job). You then have to fill in the IVA/VAT and IRPV forms at the end of the quarter, pay social security at the €235 per month, then baja to sign off from being self employed. At the end of the year you will need to complete a final VAT declaration and include the money on the renta which might mean you need a gestor or accountant - and that's to do it legally.

This could be someone giving language lessons part time, selling a few crafts to helping out with advice.Not surprisingly then in Spain small jobs/projects work outside the system.

The problem comes in that many small businesses start up from this informality - you build a reputation and all of a sudden the painter is painting a house a week. Now what do you do? Go legal and lose the tax free money you made, or stay illegal? The bureaucracy has the opposite effect of its intention.

In the UK, the VAT threshold and the ease of starting and declaring small projects means that small projects and side-income are more likely to be declared and more small speculative businesses start.

Addendum: Mind you if you look at how the politicians at the top of the tree behave (eg tarjetas b of Caja Madrid...)