wealth and income tax

Hi Neil,

Yeah, I had the % rate anyway, but thanks for responding!

There is only one bit of the form that I want clarifying, have worked through the intructions, but puzzled on one small part.

I will be sending you a pm, hope that's ok?

Can I just thank you publicly on EOS though.......................

As I said previously, we do have a clash of interests here....................

And it is so refreshing that you have replied in such a nice manner.

You didn't even need to bother replying to me, being a "rival", LOL, but you did!

You have been helpful, not only to me, but to others.

This is what EOS is all about, helping one another, so thanks!

Kind regards,

In answer to the question about deadline for submission of modelo 210 for 2009, I have pasted a couple of lines from the Spanish tax office which confirms that the date is being changed to December to keep in line with the abolished modelo 214:

En el artículo 1.2 de la Orden EHA/3398/2006, de 26 de octubre, de entre los plazos para realizar la domiciliación bancaria, se elimina el relativo al modelo 214, y se incluye el correspondiente al modelo 210, para la clave de tipo de renta 02, con el siguiente texto:«Modelo 210, tipo de renta 02 (rentas imputadas de inmuebles urbanos): Desde el día 1 de enero hasta el 23 de diciembre».

(I have highlighted the important words)  It is difficulty with the language which acts as a barrier for most people completing their own tax forms, as the actual calculation is not too dificult to make - it is the correct completion of the form which is the hard part.  I set up a new business last year completing forms for just 35 euros.   Unfortunately as I am new to this forum I am not able to publicise my website, but if you would like further details I think you can contact my via this forum? 

Further to yesterday's posting, I have cut and pasted this from the Agencia Tributaria, frequently asked questions:

Pregunta: ¿Cuál es el plazo para presentar el modelo 210 cuando el resultado de la declaración sea a ingresar o cuota cero?

Respuesta:   En general, será de un mes a partir de la fecha de devengo de la renta declarada . Las rentas imputadas de inmuebles urbanos deberán declararse durante el año natural siguiente la fecha de devengo.

To translate:

Question: what is the period of time to present modelo 210 when the result of calculation is an amount payable or zero?

Reply: In general, it will be a month after the payment of the declared income.  The 'imputed income' of urban buildings should be declared during the year following the income.

To clarify: if it is renta or imputed income non residents are paying on their modelo 210,  it is payable a year in arrears.

Hi Les

The instructions that come with the 210 form are very clear, and are as detailed in my previous post. It's possible that the information you've taken from the AT website is out of date.

Re the costs that I've seen being quoted for preparation of non resident's tax returns As a tax payer I believe it's crucial that you ask the following questions before you agree to have a return filed: -

1. Is the person or business preparing the return for you legally registered as such (ideally in Spain)?

2. Does the person preparing the return have formal Spanish qualifications to prepare tax returns? If not, and the tax office investigates your submission, is the person qualified to handle the investigation and what would the costs to you be?

Thanks

Neil

Hello, I think you will find that the time period has recently been changed on the tax office website - it used to state that June was the deadline for submission and the instructions which come downloaded with the form itself still state this.  The section I got the previous quote from was the 'frequently asked questions'.  The system is still being updated and does give conflicting advice.  If you follow the link through to the non residents section the modelo 214 is still the  form which is showing for use, even though other articles have clearly stated that this is not to be used this year.

There is no requirement for non residents to nominate a 'legally registered' representative.  A non resident is entitled to complete their own form or nominate a representative, but nowhere is it stated that a representative needs to be legally registered in Spain - it could even be a friend or neighbour that is chosen.  In the same way there is no requirement to have a formal Spanish qualification to complete the non resident tax return.  The instructions are freely available for everybody to follow and the calculation a very simple one which I believe most people would be able to make themselves.  As stated in a previous post, I believe it isdifficulties in understanding the language which acts as a barrier to many people completing the form. 

.....but if you make a mistake what recourse does the client have if you're not a registered business? and if you make a mistake - which is possible if you aren't qualified, how would you be able to represent your client? 

My personal experience has been that Fiscal and Legal Reps - people who are 'qualified' make plenty of mistakes and also are quite happy not to follow the 'rules' when it suits them.  Black money in house purchases to name one example. 

However, at the start of this post, I was merely trying to answer a question which had been raised about when the modelo 210 needs to be submitted!  As I am able to read Spanish and am a regular user of the Spanish tax office website I am hoping my reply will prove useful to some people.

Hi Les

Thanks for your response, but you haven't answered my questions re your €35 service i.e. what recourse does the client have if you make a mistake and how would you represent a client if they're investigated as a consequence of a mistake made by you or your firm?

My company neither recommends nor encourages the practice of under declaration of the purchase price of a property as, on the whole, this ultimately forces the buyer to pay the capital gains tax of the vendor when they (the new owner) goes on to re-sell the property in the future.

I'm not sure what you mean by your accusation that we only 'follow the rules when they suit us'.

Hello, well what a can of worms!! My comments about following rules when it suits were a generalisation and not aimed at you personally - I have never met you and had no dealngs with your company.  However I have now just followed the link through to your website and understand that you offer financial advice in Spain and may see my business as competition.   You appear to have made a lot of assumptions about my business.  I run a fully legal business providing a service to complete non resident tax forms for just 35 euros.  I am very competent and am no more likely to make mistakes than any other company doing the same thing.  Naturally I am happy to make any necessary representations.

Hello,   I have been following this thread and would like to add my bit. I suppose like a lot of people I continued with the Fiscal rep that completed my first non resident tax form. But now with thanks to this forum I am looking at costs etc. 

Having purchased in 02 but only getting LFO in 09  my renta tax was calculated by halving the price ,then 2% and then the tax rate.

But now with the LFO granted CV's were backdated for 4 years and asa result IBI was due for these years. But my question is  can I revisit my renta tax calculations and work them out with the backdated CV's.? If i could it would represent a rebate of 700 euro .

Now that I am more aware of some of the tax laws  I am suprised that there isn't much discussion about the discrimination against non resident property owners .  I feel that tax professionals representing non residents should be making more of case of their behalf. Spain is being forced gradually to apply equal rights. In this current economic climate I imagine spain will be reluctant to reduce taxes unless they are forced or encouraged by the EU. 

I think there's been quite a lot of discussion about discrimination against non-resident property owners, which probably contributed to, if not directly resulted in, Spain ammending it's tax laws so that non-resident owners no longer pay wealth tax. As for "renta" i.e. imputed income, as far as I know, this applies to anyone who owns a second home in Spain - whether they're resident or not? And Capital Gains Tax on property sales was also adjusted so that residents & non-residents pay the same now. (Of course, since reducing the non-res tax would result in a loss of revenue for the govt., residents now pay more than before to account for this). A landmark case has been reported in the press in the last few days regarding backdated claims on overpaid CGT. But as for your renta question, I don't know whether you would have a case. Perhaps the duelling experts here can answer that for you?

Thanks Roberto,    Yes my comments were directed at the experts. But the point about discrimination is that tax experts are fully aware of the law but seem to be happy to go along with the system and not highlight its inadequacies..

 IE:  Rental income :residents can offset expenses against rental income, non residents cannot.

       Padron:               Empadronientos receive reduction in IBI

There is blatant discrimination  against EU citizens in Spain and it should not be defended. Spain is a full member of the EU and is entitled to and receives  benefits. I am not aware of any other country that treats   its property owners differently depending on whether they are habitually resident in the country  or not.  Non resident property owners have brought wealth  & prosperity to the country and pay taxes, but we should not be treated differently.

 I am suprised and dissappointed that the Spanish Government take this position  and I believe that Spain will be forced to change their laws by the EU. As in the past the Spanish Government will only change laws when they are forced to by the EU.Their is not much point in Spain removing wealth tax and modifying  CGT  while continuing to have discriminatory laws for Rental income, Renta tax and IBI.  The Spanish Government should not treat foreigners as an easy target because people will move to countries that treat people fairly.

I have a feeling that I am one of those referred to as a 'dualling expert'!  However you will notice that my comments have been entirely related to the modelo 214 and its replacement the modelo 210  - I am not a fiscal rep and do not aspire to be one.  My intention when starting my business to complete modelo 214 forms at a very reasonable price was to offer an alternative to the large yearly fees that some non residents pay to fiscal reps, whilst enabling them to submit their tax return accurately.  A typical fee for Fiscal Reps is anywhere between 90 - 200 euros yearly, and in reality for most people all they get for their money is a modelo 214 (now modelo 210).  All other bills, including SUMA tax can be set up to pay by direct debit from the bank.  The modelo 210 needs to be presented yearly to the tax office, but the payment can still be made from non resident's own bank account and the bank will forward the completed form to the relevant tax office.  I reiterate my point that it is language difficulties which prevents non residents from filling their own form. 

I am afraid I can be of no help in your question about abolishment of 'renta' but I do agree with the comments and when I have some spare time I will scan the Spanish web articles to see if I can come up with anything useful.

Although I am new to this forum, thanks to the 'lively discussion' over the last couple of days, I have made my 10 posts so can now publicise details of my business here!!.  If you have been following this thread, you will have gathered that I provide a service to complete non resident tax forms, which this year is the modelo 210 for just 35 euros or 50 euros for two forms on a jointly owned property.  Anybody who would like further details please visit www.spain214.com (maybe the name  should change now to spain210.com!).  I have many happy customers and have previously been recommended elswhere on this forum on the subject of wealth tax.

Hi Doc

I haven't come across anybody trying to reclaim non resident's income tax, but I guess in principal this should be possible providing you can support your claim. Your main consideration before beginning a claim has to be costs versus benefits. If you calculate that your likely benefit is going to be €700 you have to make sure that it's not going to cost you more than €700 to make the claim. Also bear in mind that Spain's statute of limitations restricts your reclaim to the last five years only.

Based on my recent experiences with the tax office I suspect that they'll immediately throw your claim back, and it will then be up to you (or your representative) to press your claim further. Obviously, if this is the case you need to be careful that your representative's time charges don't get out of control.

On balance, given the amount that you feel you've overpaid by, and the time I know it will take you to progress your reclaim to its conclusion, I would only recommend that you go ahead with the claim if you plan to deal with it yourself - don't appoint somebody to deal with it for you as you may end up with a bill and no refunded tax.

Does any one know.....

If we complete the new tax form ourselves as non residents with one property, can we pay the payment through the Banco Halifax or does it have to be a traditional Spanish bank?

If we have to pay through a traditional bank - do you have to have an account with them?

Many thanks

Hi Peter and Anne,

You have to pay your taxes through an Spanish account, in any Spanish Bank. Halifax has branch in Spain, so you could ask in your bank if they could pay directly to the Inland Revenue through your account or open an Spanish one.

Regards,

Mar Durio
Calle Ancha 30, 2º
E-11201 Algeciras
(t) +34.956.092.687
(f) +34.956.092.697
m.durio@costaluzlawyers.es
www.costaluzlawyers.es

Hi Mar

The last time a client of ours tried to pay through Banco Halifax (last year) they couldn't as the Banco Halifax didn't at that time have an agreement with the Agencia Tributaria. In cases like Peter and Anne's the client normally withdraws the cash from their Banco Halifax account and goes to another Spanish bank to pay their tax.

Thanks

Neil

Hi Neil

Thanks for the reply.

Do you know if it is any Spanish bank or just certain ones?

Do you need to open an account or can you just pay over the counter?

Many thanks in advance

Hi Peteranne

Any bank is ok as long as it's a Spanish bank i.e. CAM, BBVA, Santander etc. Note though, that most banks don't like it if you go without a bar code sticker on your tax return form.

Thanks

Neil