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We blog legal and tax information targeted to resident and non resident UE citizens in Spain to help them with these issues and to solve doubt and generate controversy about these matters.

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


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TAX TIPS TO PASS THE CRISIS
17 February 2010

 

As companies in the construction sector know, but not only them, when they were subcontracted by the developer or by the principal contractor in order to get their invoices dully paid, it is necessary to hold the certificate of the Tax Office stating whether or not they are current on their tax obligations
 
The problem is that with the current crisis, many of these subcontractors are in a situation of meeting of creditors or insolvency proceeding, and also owe money to the Tax Office, so that they can not get paid from their clients because they do not have the certificate of the Tax Office certifying the absence of debt.
 
In this situation they enter a vicious circle, I am in a situation of insolvency, but I can not get paid from my clients because I do not have a positive certificate.
 
The Spanish Tax Office, through its Department of Revenue has reached a compromise to avoid these situations clearly unfair:

Client companies of subcontractors in insolvency proceedings are allowed to pay to their suppliers in insolvency proceedings when those two conditions are met:
 
1. Holding the certificate of the Tax Office, albeit negative, that is, even if it states that the supplier has outstanding debts with the Tax Office.
2. The order to pay these suppliers in the insolvency situation, comes from the Commercial Court that is supervising the proceedings.
 
A relief for these companies placed in insolvency proceedings that will be able to improve their cash-flow situation and face their own debts.

 

 

Serveco Asesores.

Antonio Robles Jara



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Reporting obligations of banks and financial entities in general dedicated to traffic banking or credit. Royal Decree 1/2010
05 February 2010

With the approval of this Royal Decree the obligation of declaring the loan balances  smooths out a little bit because such financial entities will need only report the personal loan balances at December 31 if they are higher than € 6,000. However, these entities are required to inform the deposits, fund provisions or recoveries that are made in cash currency or bank notes in excess of € 3,000 (until now this only happened with the checks).


In addition, these entities when providing the management service of charges through credit card or debit card to entrepreneurs and professionals established in Spain will have the obligations to report transactions undertaken by these entrepreneurs and professionals attached to the system when the annual net of recovery exceeds 3,000 €
This might be a way to control those systems like PayPal, etc.. but I have to acknowledge  that I am not sure because the world of Internet is a very complex world and I am not sure whether systems like PayPal has the status of bank financial entity.If not, don´t worry Tax Big Brother will take in account in case they see a gap there, no doubt about it.

Serveco Asesores

www.serveco.es

antoniojara@serveco.es



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NEW SPANISH TAX LEGISLATION 2010 (III) INHERITANCE AND DONATION TAX AT MURCIA PROVINCE
03 February 2010

 

1. Inheritance tax
 
In terms of inheritance tax and for financial years starting from 2010 is relaxed the rules for reduction in the tax base 99% of the value of a company or family business.
 
This reduction was not applicable when the trade, business or shares that were ceded to the heirs were correlated with a patrimonial society or a society of mere possession of goods. However, this constraint disappears and when the shares transferred are correlated to a patrimonial society or to a society of mere possession of goods, the tax base reduction of 99% of its value also applies.
 
Also was a requirement to apply this reduction that the deceased effectively exercised management functions within the institution and the remuneration he/she would received for would represent the greatest source of income. However, from 2010, this requirement is no longer required to implement the reduction in the tax base of 99%
 
2. Donation tax.
 
2.1 Reduction in the tax base 99% of the value of a company or family business.
 
In terms of donation tax and for financial years starting from 2010 is relaxed the rules for reduction in the tax base 99% of the value of a company or family business.
 
This reduction was not applicable when the trade, business or shares that were ceded to the heirs were correlated with a patrimonial society or a society of mere possession of goods. However, this constraint disappears and when the shares transferred are correlated to a patrimonial society or to a society of mere possession of goods, the tax base reduction of 99% of its value also applies.
 
2.2 Reduction in the tax base for the donation of a plot in the Murcia region for construction of habitual residence.

This is a new reduction of 99% of the value of land with a maximum reduction of up to € 50,000 in the tax base of donations when the object of the donation is a plot for the construction of the habitual residence of the beneficiary of the donation. The remainder in excess of € 50,000 will be taxed at a fixed rate of 7% instead of a progressive rate much more expensive, as it will be increasing according with the value of the plot, the higher this one, the higher the tax you have to pay.
 
The requirements of this new reduction are:

• The donation must be made between family members in groups I and II of relatives (father and sons, grandparents, grandchildren ...)
• Donation and its destiny is to be done in a public document.
• The construction of the dwelling must be completed within four years from the granting of the deed of donation.
• At the time of the deed of gift, the beneficiary of the donation must not be owner of any other house.
 
Serveco Asesores.
Antonio Robles Jara
www.serveco.es


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NEW SPANISH TAX LEGISLATION 2009-2010 (II) INCOME TAX ON PERSONAL AND COMPANIES.
02 February 2010

 

1 Deduction of 400 € from 1 January 2010.

Specifically, the famous deduction on work incomes and incomes from economic and professional activities of € 400 is reset to benefit only the lowest incomes, introducing a progressive approach that should have accompanied this deduction since its birth.
 
It has been amended so that its application will be entitled just to those taxpayers whose tax base is less than € 12,000 and earn income from employment or economic or professionals activities. The deduction shall be full for taxpayers whose tax base is equal to or less than € 8,000. From € 12,000 € 8000.01 progressive criteria  have been introduced.
 
The application of this deduction for the self-employed varies substantially at the calculation of their payments on account of their income tax (form 130) and if the sum of net income of the quarter reaches     €12,000, the deduction will stop in the quarter the self-employed reaches that figure.

I.e, if the sum of net income from January 1 to June 30 exceeded € 12,000, and in the second quarter I won´t apply the deduction
 
2 Retentions and payments in advance


For this year 2010 we have new rates of retentions and payments in advance in the Income Tax.
Those streams of revenues that had a retention or payment in advance rate of 18% now will have a 19%

• The investment incomes
• Capital gains on transfer or redemption of shares and units in collective investment institutions.
• Cash prizes
• Use forest
• Leases and subleases of urban buildings.
• The income from intellectual property, industrial, technical assistance, the lease of movable property, business or mine, the sublease on the property before and from the sale of the right of exploitation of image rights

3 Rates of taxation of savings and capital gains incomes from 1 January 2010.

The first 6.000 tax base will have a rate of 19% and the amounts beyond € 6.000 21%
 
4.Taxation displaced workers to Spanish territory.

Recall that this tax regime allows foreign workers who go to Spain because of an employment contract, to be taxed as non residents, despite being residents. This implies that employment income will be taxed a maximum of 24% compared to the overall scale, which in the case of renowned football players such as Cristiano Ronaldo, should be taxed at 43%.
 
This tax regime is maintain in its same terms with the exception that is that not to be appiedy to workers whose employment income exceeds € 600,000 year.

Cristiano you can remain calm. This new regulation is only for displaced workers that come over to Spain from 1 January 2010 on.
 
5. Reduction in income tax net return of economic activities by maintaining or creating employment, dated effect from 1 January 2009.


A reduction of 20% of positive net economic results to taxpayers with a turnover of less than 5 million euros and an average payroll of less than 25 employees if during the years 2009, 2010 and 2011 maintain or create jobs . The term for comparison of these economic exercises is the average of workers in 2008, except that during that year had not done any activity.
 
The amount of the reduction has an absolute limit and it can not exceed 50% of the amount of wages paid in the year to all the employees.

The average number that serves as a basis for comparison can not be less than unity, except for a very specific case of beginning of activity during the years 2009, 2010 or 2011 provided that in the following year to the one the activity is initiated that unit is reached.
 
6. Tax rate reduced corporation tax for maintenance or job creation for companies.

With effect back on January 1st of 2009 there is a new reduced rate of taxation for companies whose net turnover is less than 5 million and have an average payroll of less than 25 workers.
 
The first € 120,202.41 will be taxed at 20% and the rest of the base to 25%
 
The reduced taxation is conditional upon during the 12 months following the start of the year in question the average of workers is not less than unity and not less than the average of the 12 months preceding the start of the first financial year beginning from January 1, 2009. Just as with personal income tax deduction, the term of comparison remains the financial year 2008.

 

Antonio Robles Jara
Tax Solicitor of www.serveco.es


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NEW SPANISH TAX LEGISLATION 2010 (I) VAT
01 February 2010

For the financial year 2010 the most important developments on VAT are the following ones we highlight below:

VAT tax rates from 1 July 2010
 
Effect On July 1, 2010 VAT rates change as follows:

General rate: goes from 16% to 18%.
Reduced: goes from 7% to 8%
Super-reduced rate: it is at 4%.
Compensation of agriculture and forestry: going from 9% to 10%
Compensation for livestock and fisheries: going from 7.5% to 8.5%
 
Changes in the form 349

This form will also experience a series of profound changes which we shall discuss
 
New cases of submission for the new form 349


There is a broadening of cases in which Form 349 must be filled out, as former VAT Regulations only required to fill this form when companies made deliveries and for acquisition of goods and now we have to include deliveries and for acquisition of SERVICES
 
Ways and terms for submission of the form 349

The general rule of presentation of the form 349 makes it a monthly form that has to be submitted within the first 20 calendar days of the following month, except July which may occur throughout August and until September 20.
 
However, if during the reference quarter or each of the four quarters preceding, the total amount of supplies of goods and services does not exceed € 50,000 the form will be submitted every three months.
 
If at the end of any of the months that make up each quarter the amount of 50.000 is exceeded, there will be a 349 for each of the months past in the current quarter. That is, during January does not exceed € 50,000, but in February it is superior. From 1 to March 20 have to submit monthly 349 for January and for  February and from March I will have to submit form 349 each month until you make four calendar quarters not exceeding € 50,000.
 
VERY IMPORTANT: This threshold, only for the years 2010 and 2011 shall be € 100,000, and thus for 2012 the threshold is € 50,000.
It remains the case that the previous legislation regulated for the annual filing of form 349 for companies that had a total amount of deliveries and services that would not exceed, exclusive of VAT, more than € 35,000 and exempt intra-Community supplies do not exceed € 15,000
 
Regulation for VAT refund supported by businessmen abroad not established in the peninsula and established in the European Union,, in the Canary Islands, Ceuta and Melilla
 
The new Law provides a new system for the recovery of VAT supported outside the Peninsula, and vice versa, that is, the VAT paid by a non established entrepreneur in a purchase made at the Peninsula.
 
With former VAT regulation, for example, a Spanish truck driver, at the moment he had to refuel petrol at a German service station, supported German VAT, and if he wanted to recover the German VAT he was supposed to begin before the German tax office, a refund of VAT. Obviously, this discouraged a lot of request for repayment of those foreign VAT quotes because they had to be done before a foreign administration and had to be done in each foreign administration which VAT was supported (say that on his way he pumped gas in France, Germany and Poland)
 
Well, with the new regulation, the request for return of the foreign VAT will be submitted through the website of the Spanish Tax Office (www.aeat.es). Much better: first you know the language, second, everything you do on the Internet from your country and third, you apply to just one Tax Office to handle the return of those quotes of VATs supported by the EU.

And the same when it is a German truck driver who refueled in the Peninsula. It will do so, from now, through the web site of German tax office

SERVECO ASESORES www.serveco.es info@serveco.es



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