Taxation of transfering my Spanish real estate goods into a society of my own nacionality.
07 November 2011
We have received lately several queries from clients asking about the possibility of transferring their properties in Spain into societies from their own country, thinking about selling or inherit shares instead of the property instead.
The whole procedure to do so would have the following steps:
1.) The foreign society will have to apply at the Spanish Tax Office for a Tax Identification Number so that the deed where the transferring is accomplished can be registered at the Register Land Property. This Tax Identification Number starts with letter N, and why is this important? Because according with the Spanish tax legislation, Tax Identification Numbers that starts with N (among others) will need to obtain a electronic certificates that identifies those entities with the Tax Office, as the Tax Office won´t sent letters in paper to these entities to notify them anything, but the Tax Office will leave them at the electronic box office previously created either by the entity or the Tax office. You can only enter at this mailbox if you have the electronic signature granted by the Tax Office. This is the reason why the letter of the Tax Identification Number is important.
2.) At the moment you transfer the property into the society, the member of the society that transfer the good, according the tax legislation, will have a capital gain or loss that will have to be declared with form 210 and the main important thing: the society that receives the property will have to practice the 3% retention on the value of the good and pay it to the Tax Office through form 211. I understand this has to be done, as the tax law foresees the exception of the 3% retention when you transfer a property into a society that is consider RESIDENT IN SPAIN. As these societies we are talking about are NOT resident in Spain, the exception doesn´t cover them.
3.) Once the property has been transfer into the society, then the former owner stops fulfilling the form 210 every year in order to pay the non-resident tax that comes from the ownership of a property, but the society should make form 213, that usually is tax free, but only, and only if you fulfil it and submit to the Tax office. If not, the tax has to be paid in case you get caught by the Tax office.
4.) The way to transfer the property should be an ampliation of the capital of the society. Making a free donation is pretty much the same, as the Spanish General Plan of Accountancy foresees that a donation of the members of a society to the same society is not an income for it, but an ampliation of its own funds, including the capital of the society.
5.) The point is that in Spain these kinds of operations where a real estate good is involve could be subjected to two possible taxes: Stamp Duty Tax or the Tax over societies Capital, both of 1% over the price of the property. The operations of ampliation of capital of societies are exempted of this 1% tax, but if the local authorities considered that the operation is not subjected to Capital Tax in Spain, because of the international rules of conexions of the tax, might consider that th operation is then subjected to Stamp Duty Tax, which is a tax that has no exemption, so the society that received the real estate property would have to pay the 1% over the value of the property.
6.) And finally once the property has been transferred into the society, the transferring or the inheriting of the shares of the society that has the property, are both operations that would have to pay taxes in Spain, but it is completly true that as those operations don´t have to be registered at the Spanish Land Register or any other kind of registered, and eventually will take place at public deeds granted outside Spain in presence of foreign Notaries, if so, then, the Spanish Tax Office won´t have any notice about it and it will be impossible for it to control it. So, there you have the tax saving or tax fraud, as you might prefer to call it.
Best regards,
Antonio Robles Jara
Solicitor of Serveco Asesores
antoniojara@serveco.es
Posted at 10:59 Comments (0)
Process to obtain a NIE for Non-Communitarian Foreign Citizens
04 April 2011
For certain economic activities in Spain such as opening a bank account or buy assets through a public deed of purchase, it is mandatory by Law to obtain a N.I.E. (Foreigner Identification Number).
The process to obtain the N.I.E. is relatively easy for citizens of the European Union, providing that they can come to Spain to apply in person. In that case it is just necessary to go to the Police Station or Foreigners Office (depending of the city) with the original passport and the specific application form. The NIE will be issued in a few days, after paying the corresponding tax.
However, the rules have changed a few months ago and it is not possible anymore to obtain the N.I.E. with a power of attorney, so those communitarian citizens that want to apply for the N.I.E. without coming to Spain would need to apply at the nearest Spanish Consulate in their country. The process to obtain the N.I.E. through the Consulate is considerably longer (minimum one month, according to our experience). It is possible that the Law will change in the future to make possible again to apply with a power of attorney. That would make easier the work of the solicitors.
Let’s focus now in the process to obtain a N.I.E number for a Non-Communitarian foreign citizen (according to the Foreigners Office of Murcia):
1) The Non-Communitarian needs to come in person to Spain. We have managed to obtain the N.I.E. for Non-Communitarians through the Spanish Consulate in their country (for example in Moscow and in Guayaquil) but it has been a real nightmare and has taken a very long time.
2) It is necessary to fulfil the corresponding application form.
3) It is necessary to show the original passport at the Foreigners Office together with a photocopy of all the pages of the passport, including those in blank.
4) It is required a picture (passport size) of the non-communitarian. It must be a picture, not a photocopy of a picture.
5) It is necessary to show the original plane tickets (together with a photocopy), to prove that the person has entered legally in Spain and also that the person has a date to leave the country.
6) Before going to the Foreigners Office, it is necessary to go to the Notary to sign what it is call an Act of Manifestations. In this Act it is necessary to explain the reasons why the non-communitarian needs a N.I.E., for example to buy a house.
7) With all this documentation we can go now to the Foreigners office and apply for the N.I.E. In a few days we can go again to pay the corresponding tax and collect the N.I.E.
As you can see the process is a bit complicated. Bureaucracy...
Salvador Manzano
Solicitor
Posted at 13:54 Comments (0)
New forms for non-resident taxation for year 2011
03 January 2011
The Spanish Tax Office has approved new forms for this year 2011 so non-residents can pay their taxes in a simpler way.
New forms
The form 212 disappears. As you know, this form was the one to pay the taxes (or to obtain the devolution) for the capital gain obtained when you sell a property in Spain. This capital gain (or loss) and the payment due (if superior to the 3% retention made by the purchaser) or the devolution to obtain (if the final tax is under the 3% retention made) will be made by form 210
So the form 210 form will be used to declare the following revenues:
- Capital gains/losses from the sale of a property.
- Revenues from the ownership of a property and revenues from the rental of the property, revenues from savings, shares….Any kind of revenues foreseen at the Non-resident Spanish Tax Legislation.
The form 215 also disappears and its contents are included in the new form 210.
The forms 211 and 213 remain
Payments and devolutions.
One of the novelties foreseen at the new regulation is the chance, in case there is a devolution in favour of the citizen, to get it either by bank transfer to a Spanish bank account or by bank transfer to a foreign bank account by submitting at the form the BIC/SWIFT CODE and IBAN number. This procedure will be available from March the 1st of 2012
Also is foreseen the possibility of payment from abroad through a bank transfer made into the bank account of the Income Tax Office opened at the Bank of Spain. This procedure will be available from March the 1st of 2011
Terms to submit and pay the taxes
The terms to submit the new forms will depend of the kind of revenue declared on it.
Form 210:
· If we declare capital gains from the sale of real estate properties, will be four months from the sale of the property.
· If we declare the fictitious revenue from the ownership of the property, the whole year
· Rest of revenues: if the tax declaration is to pay the first 20days of April, July, October and January regarding the revenues arisen in the previous three months. If the tax declaration is to obtain a devolution, from February the of the next year.
Form 211: one month from the date of the purchase of the property.
Form 213: during the month of January of the next year that the tax is due.
SERVECO
Antonio Robles
Tax Advisor
Posted at 10:12 Comments (0)
COMPULSORY TAX ELECTRONIC NOTIFICATIONS AT SPAIN
26 November 2010
According the Royal Decree 1363/2010 published last November the 16th, the notifications sent to certain type of entities by the Spanish Tax Office will be have to be received compulsory by electronic ways.
This will be enforced next January the 1st 2011 and then the normal letters in paper will disappear.
Who are obliged to receive the notifications from the Tax Office by electronic ways?
Those entities whose VAT number starts with the following letters:
Letter A: anonymous societies
Letter B: limited societies
Letter U: temporary union of companies
Letter N: entities non resident in Spain
Letter W: permanent establishments of foreign companies
Letter V: fund pensions and some other investments institutions.
And besides these kind of entities, even physical people that doesn´t hold those appearance will have to receive notifications by electronic ways from the Tax Office if:
- If they are inscribed at the Register of Big Companies
- If they are inscribed a the Register of the Monthly Devolution of VAT
- If they configure a Tax Group
How does it work?
Once we have activated the electronic PO Box we will receive at the e-mail communicated to the Tax Office a warning message that we have due to collect and electronic notification. If after 10 natural days we haven´t entered into our electronic PO Box, the notification will have full effect as if we had rejected from the mail man. If we enter in our electronic PO Box within those 10 days, that date of enter will be the one to be considered notified to all legal effects.
Antonio Robles Jara
Serveco Asesores.
Posted at 19:47 Comments (0)
Legislation against debtors in Spain
29 July 2010
Since 7th July 2010 is applicable the Law 15/2010. This law modifies the Law 3/2004, which established some measures to try to avoid the increasing number of debtors in arrears in trading.
The Law 3/2004 has not had any success at all due to several circumstances and because of that has been modified to try to obtain better results. The most important innovation introduced by Law 15/2010 is referred to the PERIODS OF PAYMENT between companies and between companies and the Administration (National Administration, Regional Administration and Local Administration).
Regarding payments between companies, the Law 15/2010 establishesa maximum period of 60 days to pay the invoices of the purveyors. This period starts from the day of receipt of the goods or from the day the services are rendered. In order to avoid that a big company takes advantage of a small one, this maximum period of payment cannot be extended by agreement of the parties. All the clauses in a contract establishing a longer period of payment are null and void.
This maximum period of payment will come into effect from 1st January 2013. Since then we have this transitional period:
- From 07/07/2010 until 31/12/2011 the maximum period of payment is 85 days.
- From 01/01/2012 until 31/12/2012 the maximum period of payment is 75 days.
Important: for perishable goods (for example food), from 7th July 2010 it is established a maximum period of payment of 30 days, since the goods are delivered.
Purveyors must send the invoice or equivalent document to the clients in 30 days following the receipt of the goods or the provision of the services.
Serveco Asesores
Salvador Manzano Valverde
Posted at 17:04 Comments (0)
Comments about the increase of Spanish VAT
08 July 2010
As it is already known, on July 1 took effect the increase of two of the three rates that have the VAT tax in Spain. Specifically, the standard rate of 16% is 18% and the reduce of 7% goes up to 8%. The super-reduced rate of 4% remains as it is.
But given the complexity of the levying of VAT rules and the existence of operations that can be rectified by negative invoices to be made after July 1 we will give some guidelines in order to know how to react to this legislative change, as already indicated, is more complex than simply raise the tax 2 points. For the purposes of easier understanding we will use specific examples.
Advance payments to suppliers and subsequent delivery of the goods
Let us illustrate with the purchase of a car and two assumptions
Assumption a): I have clear the specific car that I want to buy:
In this case if we have made an advance payment of 90% of the car, the car dealer applies the 16% for being a down payment made in advance and when I get the car deliver on July 15, the car dealer only will tax 18% on 10% of the price that I have to pay, without having to correct upwards 16% of VAT paid in advance
Assumption b): I have not clear which model is the one I want:
In this case when I make a prepayment on account of a generic list of products from which I can freely choose what I want, then I'm not in the same situation as if a) and the tax rate paid to 16% when I made the advance payment, will need to be correct to 18% when I finally get delivered the car that I finally decided, since it is understood that in such situations is not really an advance payment. It is also a way to avoid fraud and cunning.
VAT rate to apply in the event of subsequent rectification of the tax base for whatever reason
We have agreed that the VAT is levied at a specific time and that the tax rate applicable is the rate at this point in time, when from 1 July to make a rectification of an invoiced which display 16% or 7%, the amendment invoice has to display to the same tax rates that had the bill corrected, although the operation of rectification was made after July 1.
VAT rate to apply on the supply and continued operations in time
:For example: mobile phone services: As well known mobile bill in July take part of June and part of July. If we followed the general rule for levying the VAT mobile companies should separate calls that were made until June 30 and charge them to 16% and those made from 1 July onwards 18%, but in this type of general supply contracts levyingl rule is set when the obligation to pay arise, so if the invoice is made in July and is due to in July everything will be 18%, even though might be calls made during the month of June.
Telephone services using prepaid card, in this case lies chargeability when purchasing the card regardless of when I consume the minutes I bought with the acquisition of the card, that is, if I buy the card on June 25 the VAT to 16% even though I made the calls for the month of July.
Serveco Asesores
www.serveco.es
Antonio Robles Jara
Posted at 19:41 Comments (0)
MURCIA AUTONOMOUS COMMUNITY AIDS FOR THE ACQUISITION OF COMPUTERS AND INTERNET CONNECTION FOR WORKERS THROUGH THEIR COMPANIES
06 July 2010
Last June 25th was published the Order regarding the granting of subsidies to workers in the Region of Murcia for the purchase of computer equipment through their companies
These subsidies have also a quite generous tax treatment for the worker and the company:
• For the worker the equipment delivered by the company is not considered income from work.
• For companies, the amounts invested in 2010 have a deduction for corporation tax of 5% of amounts invested.
Beneficiaries.
Employed persons, excluding public employees, scholars and freelancers.
Workers should
WWorkes:
• Be resident in the Murcia Region
• Support all or part of the eligible costs.
• To enter into a novation agreement in his employment contract that includes a change in the pay system to replace a portion of the gross fixed monetary compensation for the delivery of a computer.
Eligible costs.
Is eligible:
• The acquisition cost of a personal computer with Internet access capability and
• The cost of operating system or other software that must been acquired for use or installation
Are not eligible expenses or costs the in periodic dues for Internet connection, or initial installation of th Internet connection
Amount of the aid and deadline to apply for it
The maximum amount per employee requesting the aid is of 150 €
The deadline for submitting applications is September 30, 2010
Antonio Robles Jara
Serveco Asesores
Posted at 20:34 Comments (0)
ECONOMIC ADIS FOR SMALL RETAILERS IN THE MURCIA REGION
31 March 2010
On February 17, 2010 was published in the Official Gazette of the Region of Murcia subsidies for the retail trade whose characteristics are those that we describe briefly:
Beneficiaries:
Retail businesses in the Region of Murcia with local smaller than 150 m2 and less than 10 workers.
Eligible costs:
Acquisition of new assets within the concepts of works, installations, furniture and equipment (excluding vehicles) and technical assistance costs in the preparation of reports or projects.
In case of opening of establishment 65% of the cost of those expenses with a maximum of 7,000 €
In other cases 55% of the cost of those expenses with a maximum of 4,000 €
Term:Open until the day October 29, 2010
Antonio Robles Jara
Posted at 17:48 Comments (0)
Economic aids for purchase of funiture at Murcia Region
31 March 2010
On March 17, 2010 was issued the call for aid for the purchase of furniture retailing in the Region of Murcia: Furnish Plan. Funding for this Furnish Plan has already been exhausted, but with the success of the initiative local authorities of the Region of Murcia have reached an agreement with representatives of manufacturers and traders in the sector to develop a new plan called "Plan Furnish 2”. The characteristics of this plan are:
Purpose and beneficiary
These are a series of aids to finance the purchase at retailers and manufacturers of the following items: sofas, chairs and seats, tables and occasional furniture, kitchen and dining room and bedroom furniture.
These items must be NEW.
The discount on the purchase of any products as specified above will be 15% of total sales. In the case of retail 10% discount is funded by the authorities and 5% the retailer itself while in the case of manufacturers 5% discount is funded by the authorities and 10% the manufacturer.
The aid can be requested only once and it has to be processed through retailer or manufacturer which made the purchase from.
Term
The deadline is June 30, 2010.
Procedure
Businesses that want to benefit from this plan must register at the website www.argem.es and click on AID box.
The management of the aids for the clients from retailers and manufacturers will be made online through a computer program that will provide the authorities and once made the request retailers or manufacturers must provide documentation justifying the aid granted to the client, which will be deducted directly by the retailer or manufacturer to the customer's purchase price.
Antonio Robles Jara
Tax advisor of www.serveco.es
antoniojara@serveco.es
Posted at 17:42 Comments (0)
Self unemployed and pension fund bailouts
19 February 2010
As is known, the employees are entitled to receive unemployment benefits in the event that their companies fire them by closing it because of bankrupcy. And when such workers are in a situation of long-term unemployment and end up exhausting their unemployment benefits, have the possibility of rescuing the contributions which once made to pension plans that have been signed
But what happens with the self-employed? By definition, when they close their businesses through bankruptcy, they don´t have unemployment benefits. Can they rescue their contributions to pension plans when they close their business while unable to collect unemployment aids?
The General Direction of Insurance and Pension Funds said yes, with the conditions thereof the following:
· Having ceased the activity, whether or not to have caused low in the Special Regime for Self-Employed
· Not be eligible for unemployment benefits.
· Be registered as unemployed in the respective employment office.
Serveco Asesores.
Antonio Robles Jara
Posted at 18:28 Comments (0)
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