Non resident bank accounts. Certificate of non residency

Spanish banks can open  bank accounts in the name of  resident or non resident person.  In case of a non residents, the banks require  that the clients prove that they are not resident  in Spain by the obtention of a certificate of non residency from the local police station.

A Spanish non resident bank account is  in most cases tax exempt in Spain, any interest received  by a  non residents  shall be taxed  in the country of residence.

If you have a non-resident bank account in Spain, your bank will contact you every two years to confirm that your status as a non-resident remains the same. If it does, they normally apply on your behalf for a non-resident certificate, if you have given them the necessary authorisation and charge you a fee  for this service. It is essential that you check with your bank whether this is an authomatic process or if you need to apply for this personally.

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If you have to apply for the certificate yourself, the application procedure for a Non Resident Certificate  is very similar to the one for the NIE ( Number of Identification of Foreigners). You have to go to your nearest Police station with your passport and a full copy of same , fill in a form  and  pay  the corresponding rates . The certificate has  to be  collected a few days after the application has been presented

For more information or an appointment please contact us on (0034) 952 822 321 or admin@nonresidenttaxesinspain.com. 
Web: www.nonresidenttaxesinspain.com

Sale of permanent residence. Discrimination between residents and non residents

In order to insist on the subject of  the existence of possible tax discimination between  Spanish Residents and Non Residents,  we would like to comment that Spains was also  referred to the EU's Court of Justice for discriminatory rules that prevent non-residents from enjoying the same tax benefits as residents in case of the sale of a Real Estate property.

For Spanish residents, capital gains from the sale of a permanent residence are tax  exempt if the money is used to buy another permanent residence in Spain. However, if a person living in Spain  sells his permanent  residence and buys   a new house in another Member State where he has moved to,  thus changing his status to Spanish non resident, he is taxed on the capital gains made on the sale. If he would have stayed in Spain and bought a new house there,  no tax would have become due. Spanish  non-residents  in this situation end up paying much higher taxes.

This is a violation of the free movement of persons and therefore a breach of the EU Treaties.

For more information or an appointment please contact us on (0034) 952 822 321 or admin@nonresidenttaxesinspain.com. 
Web: www.nonresidenttaxesinspain.com

Possible tax discrimination between residents and non residents in Spain

The European Commission is pressing Spain again to avoid any possible discrimination regarding taxes between Spanish residents and Spanish non residents, members of the EU. At the time this was the reason for the change in the capital gains tax rate for non residents to match that of the residents. Finally the Spanish legislation was adapted and the same rate is applicable to both.

In the case of Inheritance and Gift tax, there is a similar situation, Spanish non residents of certain regions pay much higher rates than residents and thus the European Commission has denounced this before the European Court of Justice. This tax discrimination is contrary to European Law because it goes against one of the fundamental freedoms of the EU Treaty: the free movement of persons and capital.

The situation is complex as this tax is not only regulated by the Spanish State but also by regional bodies (Autonomous Government) and the tax to be paid even by Spanish residents varies considerably depending in which community they live. Most of the Spanish regions have implemented amendments to the general State regulations and their resident tax payers, i.e. persons who receive an estate within their boundaries have to pay a lower inheritance tax.  At present the Spanish non residents are taxed according to the main State regulations, thus the amendments introduced by the regional bodies are not applicable to them. Therefore in order to avoid discrimination, any non resident should also benefit from any tax allowance based on the regulations established by the Autonomous Government where his property is located.

Until the necessary amendments are made by the Spanish government to adapt the legislation and avoid the tax discrimination any UE non resident who pays inheritance tax liabilities at a higher rate than a Spanish resident can claim the refund of the surplus tax paid based on the existence of discrimination in the tax treatment. This is also applicable to any inheritance tax paid in the last four years, but every case has to be analyzed carefully and individually, as the regulations applicable differ from one Autonomous Government to another. Summarizing both residents and non residents should receive the same tax treatment and thus  the regulations applicable have to be compared when arranging for the payment of the tax to establish the existence of a possible discrimination.

For more information or an appointment please contact us on (0034) 952 822 321 or admin@nonresidenttaxesinspain.com. 
Web: www.nonresidenttaxesinspain.com