ANNUAL LOCAL RATES AND REFUSE COLLECTION CHARGE RECEIPTS.

ANNUAL LOCAL RATES AND REFUSE COLLECTION CHARGE RECEIPTS.

If you are the owner of a property in Spain you have to pay annually local rates and refuse collection charge receipts. In those locations   of the Malaga area where the receipts are paid through the “ Patronato de  Recaudación Provincial “,  payment should be effected  in general between 1^st of July and 12^th of September 2014, although    this may not be applicable to all locations.

For those of you who have arranged for a direct debit for the payment of the receipts just make sure that there is enough money in the account to arrange for payment of the receipts in this period as otherwise not only the receipts are returned but also the direct debit cancelled for future payments.     

If you do not have any direct debit you will have to obtain the receipts from the “Patronato de Recaudación Provincial” and arrange for payment at your bank. Please note that you may have received  notification of the receipts at your house which can be used to arrange for payment but this is not mandatory.                                                                                                                                                                   

You can always contact the Local Council of your location or Patronato de Recaudación Provincial  Tel 902152000                                                                                                                                                                        

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

Web: www.nonresidenttaxesinspain.com

WEALTH TAX FOR NON RESIDENTS.

This is the time of the year when you have to check if you  have to present before 30.6.2014 a wealth tax declaration in Spain.

The assessment has to be presented by any owner whose assets exceed the net value of 700.000 Euros. If the property is owned by more than one person, i.e. married couple or co-owners, each owner will have to present an individual tax assessment and will have this tax exemption of 700.000 Euros.

Also the assessment has to be presented by any person whose assets exceed a gross value of 2.000.000 Euros, although no tax may be due taken into account the charges on the property.

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

Web: www.nonresidenttaxesinspain.com

NEW DOUBLE TAXATION TREATY BETWEEN SPAIN AND UK.

There is a new double taxation between both countries which will be applicable from 12.6.2014.

For those of you resident in the UK , this may have consequences if you own shares in Spanish companies where the value is based more than 50 % on Real Estate . If you decide to sell the shares you will have to pay in Spain non resident income tax for the capital gains incurred in this transfer. Formerly this would have only been taxable in the UK .

Also the ownership of these shares should be declared in the Annual Wealth Tax Declaration . This was not applicable previously, when only direct ownership , i.e. property owned by UK non resident physical persons was taxable in Spain. However, a wealth tax declaration has to be presented only if you own assets which exceed the net value of 700.000 Euros or with a gross value exceeding 2.000.000 Euros , both per person.

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

Spanish resident income tax assessment 2012 with only 5 % surcharge.

Until 31^st of March 2014 you can still pay  your  non resident 2012 income tax assessment for the use of the own property with only a 5% surcharge on the tax due. From 1^st of April 2014 the surcharge goes up to 10 %. This tax should have been paid by any non resident owner of non rented property in Spain  before the 31^st of December 2013.

Not facing the matter is  not  an advisable option as if  payments  are demanded afterwards by the tax office you will have to face an unexpected  and  more  expensive  debt  as surcharges can go up to 20 % and there could be additional fines and legal interest to be paid.

Our welcome package is still available.

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

Web: www.nonresidenttaxesinspain.com

ANNUAL ROAD TAX in Spain. Payment due shortly.

If you are the owner of a vehicle , i.e. car , motorbike, motorcycle, caravans, vans etc.   registered in Spain you must pay annually  your road tax known in Spain as Impuesto Sobre Vehículos de Tracción Mecánica or IVTM.

The tax to be paid depends on the vehicle, fuel type and municipality in which it is registered. This tax should be paid normally between the beginning of March and May of each year but  this varies from one region to another.

You can contact the town hall office for more information . We always advise that  when arranging the first payment you set up a direct debit for  the payment of the receipts for future years so you don’t have to worry about this item annually.  Normally no notifications are issued  and sent to the   tax payer unless applied for by the vehicle owner, thus if you do not pay this  you can find yourself at  some stage with an outstanding debt for road tax for various years  and  the debt resulting much higher than if paid  on time due to surcharges , legal costs and interest.

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

Web: www.nonresidenttaxesinspain.com

Spanish Inheritance Tax.

Irrespective of the present existence of a discrimination between  resident and non residents as to the payment of the inheritance tax, mention to  this was made previously on this bloq, we would like to give you certain clues to minimise the tax taken the  present regulations.

At this stage in the case of real estate in Spain owned by a non-Spanish resident, the State rules will always apply on the death of the non-resident owner.  The tax will be calculated on the  market value of the property at the time of the death and the rate ranges between 7,65 % and 34 %. Depending on the relationship with the deceased there is a certain  amount on which no tax is due, which is approximately 16.000 Euros in case of spouses and descendants.

Therefore it may convenient to leave your property to more than one heir, because apart from the amount tax exempt,   the  tax scale is applied to each heir individually  starting alsways at 7,65 % for the first  part of the   value of their estate to be received.

Also  taken into account that the value of the property can be divided between the value of the life interest ( which will depend on the age of the user )  and the mere ownership, you could also  consider leaving the life interest of the property to  a person ( for example spouse ) and the mere ownership to  the  descendants. This normally will reduce the inheritance  tax  to be paid for the surviving spouse  and  the  descendants (final heirs ) will be paying the tax in two phases.

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

Web: www.nonresidenttaxesinspain.com

No luck when renting out your property in Spain

The always increasing expenses of the property abroad (community, local rates, income tax ) has made a lot of non residents decide to  rent out the property and receive an income to reduce their costs. If a property is let the non resident  will be  liable to the payment of income tax on the rent received ( 24,75 %) . For property owners from the UE certain expenses can be deducted when working out the tax to be paid.

However, before renting out it is very important to  make  certain enquiries and about, the agency handling the agreement,  the terms of the letting contract and the circumstances of the tenants as otherwise this may turn into a great problem and unexpected costs,  if finally the tenant does not pay the rent.

If  you are in this particular case and you are not receiving the  agreed rent , you should react quickly and not wait until circumstances may improve, as this normally does not occur. If after having claimed by recorded delivery  the payment of  the unpaid rent to the tenant, there is no reaction  , you should instruct the presentation of a lawsuit to claim the payment of the rent due  and eviction of the tenant. The court will give the tenant 10 days for payment and simultaneously set a date for eviction. The tenant  will be only able to avoid the eviction if he pays  the outstanding rent or   opposes to the  claim presenting valid arguments.

In principle this should be a straight forward process and the  landlord can even claim the legal fees  paid in connection with the lawsuit from the tenant. However,  we should admit  that if  no rent was received,   the possibility to be reimbursed the legal costs will not be very  high.

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

Web: www.nonresidenttaxesinspain.com

Spanish Tax Update 2014 for Non Residents

For this year 2014   in general terms the  same tax rates are applicable  as in 2013 for non residents which means that the tax rate for income tax remains at 24,75 %  which will be applicable in case of rental of property or  use of your own property and if you decide to sell  your  property  in Spain the capital gains tax  to be paid  is still  21%.

Also  for those you who have to present a non resident Wealth tax declaration (owners with a net asset value exceeding 700.000 Euros ) , which was temporarily set only  for the years 2012 and 2013,   this obligation has been extended to this year 2014  and , if required the corresponding Tax assessment declaration has to be presented in 2015

There is another  item  which affects non  resident which is that  the rateable value (valor catastral)  this year will vary  in some cases depending on the  year when the last  revision of the rateable value   took place  in  the  municipality. The increase starts at 13 %  and goes down to   6 % for  those locations where the tax revision took place between 1984 and 2003. What is new is that there are certain places where the  ratable value could even  go down (85 % to  73 % of the 2013 value) . This is applicable to  places where the revision took place  between 2006-2008 and there is a big difference between the market value used at the time to establish the rateable value  and the  present value of the properties.  The  change of the rateable value will  affect you  as this is used to work out some of the taxes to be paid annually by the non residents i.e. , income tax  for own use of property , local rates, etc.

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

Web: www.nonresidenttaxesinspain.com

Late for your non resident income tax assessment 2012? Immediate reaction required.

This message is for those of you non resident owners of property in Spain that have omitted to present your non resident 2012 income tax assessment for the use of the own property. This assessment should have been presented before the 31^st of December 2013.

You need to react and proceed immediately with the presentation of same. At this stage you can still pay the tax with only a 5 % surcharge.  If you wait   the surcharges can go up to 20 % and there could be additional fines and legal interest to be paid.

Therefore if you react forthwith you can still minimise the costs. The statutory period for payment has elapsed and this cannot be changed but you can try and reduce extra unnecessary costs to a minimum if you rectify the situation immediately.

We are prepared to charge you the fees as per our welcome package which in this case will also include the receipt and reply of notifications from the tax office which will come up due to late presentation of the assessment.

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

Web: www.nonresidenttaxesinspain.com

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.

.

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

Why do we strongly advise that you present your non resident income tax assessment for the use of your own property on time? Deadline Income Tax 2012: 30th December, 2013.

If you are non resident and own a property in Spain you must present annually the income tax assessment for the use of your own property.  This is sometimes difficult to understand by the non resident who is normally aware that income tax has to be paid if the property is let but cannot understand that tax has to be paid if no rent is received.

However, for your peace of mind the same rule is applicable to the Spanish residents. They have to pay income tax for the use of their own properties with the exception of their permanent residence. In case of a non resident the property in Spain would be always a second residence.

Nowadays, a lot of official bodies have the data computerised and the tax office is updating the information relating to non resident owners of properties. Also when you come to sell the property the tax office will be given details of your purchase. The purchaser in case of a sale by a non resident has to retain 3 % of the purchase price to be paid directly to the tax office on account of the capital gains tax of the vendor  and when presenting the assessment and effecting payment has to  provide information about the transaction.  At this stage the tax office will revise your tax situation as vendor and will claim payment of any tax due with surcharges, interests and penalties.

In the present economical circumstances most transactions generate no capital gains but a loss and when you present your capital gains tax declaration  you will apply for the refund of the 3% of the sales price paid on account of the Capital Gains by the purchaser. However, if you have not presented the income tax assessment for past years, the refund will be stopped until you regularise your tax situation.

For your information in 2013 the tax office can still enforce payment of the income tax declarations for the years 2008-2011 and if these have not been paid they can render assessments with fines, interests and surcharges.

Therefore in order to avoid payment of extra money in surcharges, interests and penalties and effect payment of the tax for various years in one lump sum of money, we strongly advise that you arrange for the payment of the tax annually in the due date.

At present you are still in time to present the income tax declaration for 2012. Deadline for this is the 30^th of December 2013.

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

Implications of being Spanish tax resident.

If you are tax resident in Spain you will have to pay tax on your worldwide income in Spain (Income tax) and your worldwide assets (wealth tax), i.e.  not only for the income and assets located in Spain as applicable to non – residents. Also the   periods for the presentation of the tax assessments vary; residents must present declarations in June and May each year for the past fiscal exercise.

Also since 2012 any resident has to present an informative tax declaration (Modelo 720)  with detailed information about assets located abroad.  This information will be compared by the tax office with that declared in the annual wealth and income tax declarations to check that no information    has been omitted   and the tax paid has been worked out correctly.

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

Applications For The Payment Of Local Taxes 2014 In Instalments Must Be Made Before 31.12.2013

For those who live in the Malaga area and the local taxes (Local rates, refuse collection charge, car tax) are being paid through the “Patronato de Recaudación Provincial”  you have the alternative to  pay the future receipts in instalments  without interest. You can either decide to do this with  only one of the receipts, maybe local rates which is the one that has increased considerably in the last years,  or decide  that all of them should be  added together and  payment effected  gradually.  This is  a service that is being offered  and which may be of interest for  you to avoid to face a  big one-time payment of any of the  receipts.

A direct debit will have to be arranged for the payment of the receipts and the alternatives you have are as follows :

Payment in two instalments:  April and October.

Payment in three instalments: April, July and October.

Payment in eleven instalments : January to November.

This can be applied for by Internet at www.prpmalaga.es, by phone 902 152 000 or at any office of the “Patronato de Recaudación Provincial“. If you wish to pay as usual,  i.e.  each receipt in its statutory period, no action has to be taken.

Just keep in mind that for the 2014  receipts this has to be applied for before 31.12.2013 and will be valid for the following years unless you apply for a different alternative or the receipts are not  paid.


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

Important issue before payment of any tax in Spain.

¿When are you by law considered to be a tax resident in Spain?

You are a Spanish tax resident if you spend more than 183 days in Spain during one year (1st of January to 31st of December).  When establishing this term short periods of absence from Spain are not taken into account, unless you can prove that you live for more than 183 days in another country.

Having a residence permit in principle is evidence that you intend to stay in Spain and pay taxes here but not having this document does not prove your non-residency for tax purposes.

Also the tax office presumes that you are a Spanish resident if your centre of vital interest is located in Spain or if your spouse and children of minor age live in this country, unless you are legally separated or you can prove that you are tax resident in another country. Normally the way to prove in these cases that you are non resident for tax purposes in Spain is by way of a Certificate issued by the Tax office of your country of residence confirming that you are resident for tax purposes in such country.

On the contrary if you do not comply with any of the above you will be considered as a Spanish non resident from a tax point of view.

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