Sarah Panitzke, originally from York, was arrested in an operation led by the Spanish Guardia Civil, working alongside HM Revenue and Customs (HMRC).
Plain clothes officers approached the 47-year-old as she walked her two dogs in the small town of Santa Barbara near the Catalan coast on Sunday morning (27 February).
Panitzke disappeared in May 2013 while standing trial for money laundering offences and has since featured in the National Crime Agency (NCA) most wanted appeals.
She was convicted and sentenced in her absence to eight years in prison. She and her 16 co-conspirators were given sentences totalling 135 years for a multi-million pound VAT fraud.
Simon York, Director, Fraud Investigation Service, HMRC, said:
“Sarah Panitzke was one of Britain’s most wanted tax fugitives.
“She played a pivotal role in a multi-million pound VAT fraud and moved millions through offshore bank accounts.
“Panitzke thought she had put herself outside of the reach of HMRC, but through our work with UK law enforcement and international partners we have tracked down another tax fugitive. No tax criminal is beyond our reach.
“We have helped secure the return more than 60 fugitives since 2016, including some of the UK’s most harmful tax cheats.”
NCA International Deputy Director, Tom Dowdall, said:
“Sarah Panitzke has been on the run for almost nine years. Given the length of time, she might have thought we had stopped searching, but she remained on our radar.
“Joint working between UK law enforcement and our partners in Spain led to her being apprehended, and we will now seek her extradition back to the UK to serve her prison sentence.
“This should serve as a warning to others on our most wanted list – we will not rest until you are captured, no matter how long it takes.”
Panitzke was detained and has been remanded into custody. When returned to the UK she will face eight years in prison.