new taxation - what are the penalties if your overseas assets are under 50K?

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17 Feb 2013 3:40 PM by philbradshaw Star rating in Mogadishu/Lagos/Alic.... 10 posts Send private message

 I have recently moved to spain and become resident here and been reading about the new law to decare assetts overseas including company bank accounts etc.

I provide virtual, online marketing services to clients all over the world, a few in spain too, through my USA based company and have a bank account in Texas USA which maintains a balance well under the 50k limit mentioned in this new tax law.

Do I therefore need to declare this company bank account if the "assett" is under 50K?

Thanks 
Phillip





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17 Feb 2013 4:57 PM by johnzx Star rating in Spain. 5242 posts Send private message

As I understand it, the assets are split into 3 groups (or 5 depending on what you read). If the assets in any group, collectively amount to 50,000 €  then everything in that group must be declared.
 
 Example, 6 bank accounts each with 10,000, all accounts must be declared
 





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17 Feb 2013 5:16 PM by camposol Star rating in Camposol. 1406 posts Send private message

Why isn't there a definitive official list of the categories, which asset goes into which?





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17 Feb 2013 5:28 PM by guslopez Star rating in Lorca, Murcia.. 744 posts Send private message

So they can catch people out & fine them ?



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17 Feb 2013 5:57 PM by johnzx Star rating in Spain. 5242 posts Send private message

Campo
                       Why isn't there a definitive official list of the categories, which asset goes into which?
 
 
I believe there is, however, the last time I searched I found that form which is to be used to make the declaration, a 720,  had yet to be finalised.
 
There is a lot of info at:- http://jullastres.es/wordpress/?p=718





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17 Feb 2013 6:09 PM by Kathyslad Star rating. 329 posts Send private message

If your company is a a separate legal entity, then I don't see need to declare the assets ( including bank accounts) of the company, because its not the company which is a fiscal resident of Spain, it's you. However, if the value of your share of the company exceeds €50,000, as determined by the last audited accounts, then you will need to report that as an overseas assets.

Although, if you only arrived in 2012, and were not here more than 183 days, then you will not be fiscally resident for 2012' and will not need to declare in 2014, by he end of March, if you become fiscally resident during 2013.



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17 Feb 2013 6:18 PM by Kathyslad Star rating. 329 posts Send private message

"Campo
Why isn't there a definitive official list of the categories, which asset goes into which?
I believe there is, however, the last time I searched I found that form which is to be used to make the declaration, a 720, had yet to be finalised. "

There isn't a form as such. As I think I mentioned weeks ago, you can only complete the declaration online, and you need an electronic I'd to be to be able to access and complete the form. It's been available on the Hacienda website since the end of January.

"There is a lot of info at:- http://jullastres.es/wordpress/?p=718"

This is more or less a lift from the actual law, and the Hacienda website (translated). Unfortunately it doesn't answer Campasol questions. He needs an answer soon though, as the clock is ticking. Tick took, tick tock.




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17 Feb 2013 9:05 PM by johnzx Star rating in Spain. 5242 posts Send private message

Although, if you only arrived in 2012, and were not here more than 183 days, then you will not be fiscally resident for 2012' and will not need to declare in 2014, by the end of March, if you become fiscally resident during 2013.
 
Unless of course you qualify as Tax Resident for another reason !
 
 
 
 This might be useful:-
 
http://www.blevinsfranks.com/Spanish_tax_resident?gclid=CNPVwcGbvrUCFW_KtAod0ywAuw
 
You will become a Spanish resident for tax purposes in Spain if:
  • You spend more than 183 days in Spain in one calendar year. You become liable whether or not you take out a formal residence permit/certificate, or
  • If you live on a boat within 12 nautical miles of Spanish land. or
  • If your “centre of vital interests” is in Spain, eg, the base for your economic or professional activities is in Spain, or
  • You are presumed Spanish resident if your spouse lives in Spain even though you may spend less than 183 days in Spain
If you are considered a Spanish resident for tax purposes, you will be liable for
  • Income Tax on worldwide income
  • Savings Income Tax and Capital Gains Tax on worldwide savings income and gains
  • Succession Tax, which is a tax on inheritance and gifts if the recipient is resident in Spain or the asset is in Spain
  • Wealth Tax on worldwide assets
 





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20 Feb 2013 10:50 AM by philbradshaw Star rating in Mogadishu/Lagos/Alic.... 10 posts Send private message

 thanks @johnzx

I am tax resident for other reasons.

My only main question in this case would be: what is the defintion of "worldwide income"?

Is it from the profit from a foreign company? 

How is worldwide income determined?

Thank you for any help with this.





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20 Feb 2013 12:10 PM by johnzx Star rating in Spain. 5242 posts Send private message

Hi Phil, 
                It is all income from anywhere, except that which is excluded by any double taxation agreement between that country and Spain.   (Look on Google for details of any agreement you may be interested in)
 
For example, UK Government employee pensions (police officer, military etc) are only taxable in UK and are ignored by Spain. Also, income from rental property in UK is taxable in UK (Although a couple of posters insist it is also taxable in Spain. I am not that concerned whether they are right or wrong as it does not affect me).





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20 Feb 2013 12:24 PM by philbradshaw Star rating in Mogadishu/Lagos/Alic.... 10 posts Send private message

 Hi John,

Thanks for your time making answers for me, I am really grateful as I am farily new to this international tax stuff.

In my uneducated view, I would imagine that i would have to go to the spanish tax office and declare that I received some "income" from the US company or perhaps I dont need to do anything at all as I would not be obligated due to the 50k rule?

The US company cant charge tax to clients outside the US and as I dont have any clients in the US, I am not required to maintain any tax returns to the US tax authorities (the US is happy as long as I pay my annual franchise tax which is $250), so not sure how spain would be able to find out how much revenue the company is making.

I would imagine that "income" would mean "profits" so if I declare low profits, then I would declare my "income" to Spain and only get whacked with a low tax bill from Spain.

 





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20 Feb 2013 12:38 PM by johnzx Star rating in Spain. 5242 posts Send private message

Phil,
                sorry I am not a taxation expert, although I am acquainted with the law as it affects the average person, but your position sounds very different, thus, I would suggest you get some professional advice.
 
However, I would  never suggest one evades their tax liabilities, and doing so, could work out very costly.  
 
 I think the new law on the disclosure of assets (which, at present, has nothing directly to do with new taxation) has been put in place to curtail existing tax evasion.





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20 Feb 2013 12:44 PM by philbradshaw Star rating in Mogadishu/Lagos/Alic.... 10 posts Send private message

 Hi John,

Totally understand! Its a complicated issue.

I would of course never illegally evade taxes but of course one has to investigate all avenues in order that they are not paying double tax and to minimise the amount of tax that should be paid.

Just need to find some professional advisor now! I have tried emailing a couple of them in spain but as usual never heard back from them. 

Thanks very much for your help with it, again I ma very grateful for thew time.





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20 Feb 2013 1:02 PM by johnzx Star rating in Spain. 5242 posts Send private message

Hi Phil, I have sent you a private message.





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20 Feb 2013 4:51 PM by baz1946 Star rating. 2327 posts Send private message

Hi Phil.

Phil are you an American Citizen, as in born and bred in the US?...i ask because a couple of my American friends have told me that being American they have to pay Uncle Sam taxes no matter what they do and where they do it in the world, could have a bearing on your tax status if this is true.





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20 Feb 2013 4:53 PM by philbradshaw Star rating in Mogadishu/Lagos/Alic.... 10 posts Send private message


I am British Citizen, live in spain but have LLC in USA but have clients across europe as well as Spain.





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20 Feb 2013 4:56 PM by johnzx Star rating in Spain. 5242 posts Send private message

Phil
            LLC ?
 
             Is that a   Limited Liability Company?





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20 Feb 2013 4:57 PM by philbradshaw Star rating in Mogadishu/Lagos/Alic.... 10 posts Send private message

20 Feb 2013 10:33 PM by Team GB Star rating. 1245 posts Send private message

Team GB´s avatar

 

Phil

Regarding your enquiry, you have not commented on the most informative post on this subject by Kathyslad

If your company is a a separate legal entity, then I don't see need to declare the assets ( including bank accounts) of the company, because its not the company which is a fiscal resident of Spain, it's you. However, if the value of your share of the company exceeds €50,000, as determined by the last audited accounts, then you will need to report that as an overseas assets. 

So, if your shareholding in the company is worth more than 50k€ (as per your audited accounts) ie retained shareholer funds and assets etc you need to declare this on the form (modelo 720)



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23 Feb 2013 7:38 AM by nigel188 Star rating in Estepona. 655 posts Send private message

 Hi there

Please can someone tell me if I am already declaring my Annual Income on my Yearly Tax Return in Spain ,do I also have to declare the Capital of this  Pension Annuity from South Africa if it is over E50.000,00  on this Model 720 Form before 30th April 2013 as well.

 

Many Thanks

 

Regards

 

 


This message was last edited by nigel188 on 23/02/2013.

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