What should we do ....?

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Campo Living
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What should we do ....?

Postby Campo Living » Wed Aug 19, 2009 10:34 pm

Hi,

I have been browsing the andalcuia.com website forum for past few years since moving out here and always found the comments and advice extremely useful. On seeing the new topic, this has come at a time when we need to find a solution to the situation we currently find ourselves in and hence this is my first post!

We are in trouble with the Hacienda because my husband was set up on a modulo scheme (which we were not aware of) when he first registered as autonomo. We have now found out this meant he had agreed to pay a certain amount of IVA per year. Since then my husband has only been paying small amounts of IVA on a quarterly basis (this didn't make us unduly concerned as he didn't have very much work initially). Also his previous (English) aesoria (who set him up originally but has since gone back to England!) made a mistake on his end of year declaration - this stated there were 0 employees but there were vehicles connected with my husband's business and the IVA was worked out that he would owe 7,000 euros per year!

The long and short of it is we have now been told he owes 12,000 euros in back payment of IVA plus we are waiting for a fine to come through for late payment of this amount.

Our current Spanish Gestoria has been doing his best on our behalf but has basically said he has already managed to negotiate a 20% discount on the IVA owed and because in the Hacienda's eyes, my husband agreed to be on this modulo, he is liable to pay.

On checking the paperwork, we have discovered the original modulo form which was submitted to the Hacienda in Jan 2007, was NOT signed by my husband but his signature had been forged by our aesoria - hence we never knew my husband had been set up in this way. This form also had handwritten alterations made to our address and this is in the same handwriting as the signature! However, on checking our other paperwork, we did sign a document consenting to our aesoria working on our behalf, but this was dated July 2007 (after modulo document was submitted).

So the situation is that my husband did not consent to being set up on the modulo scheme, he had no idea what this was and because we were paying IVA payments on a regular basis, we did not have a clue that this could end up in such a mess. Additionally, we paid the original asesoria in good faith for his professional services and advice - is there any way he can be held responsible for his actions in this regard?

Your advice would be appreciated.

Jool
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Re: What should we do ....?

Postby Jool » Thu Aug 20, 2009 7:27 am

Asesorias and Gestorias are normally not held liable but in this case it may seem like fraud if your signature was forged, even Hacienda has something that says they (Hacienda) are not held liable if they send incorrect information.

I will be very interested to see the answer as our gestor consistently refused to submit a tax return for OH as he pays tax in the UK but OH has now received an embargo from Hacienda and we don´t kow what its about, I can only think it is that.

Fines are very hefty over here for minor infractions, such as late submission of forms

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Re: What should we do ....?

Postby julian » Thu Aug 20, 2009 7:32 am

I think this is one for a lawyer, preferably a spanish one !!

Jool, does your husband´s name appear on your escritura as part owner of your property?if so,then presumably he should have been subitting tax returns as a non-resident ref that property..Cid???

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Re: What should we do ....?

Postby Jool » Thu Aug 20, 2009 10:53 am

Yes and yes, that was my point exactly to the gestor, OH has a residencia here and lives here year round but because of special status of his pensions he has to pay tax in the UK, consequently gestor said no need for any kind of tax return from him and even when I said we wanted to do one he said it was just not possible....... so non residents tax would not seem to apply but I am sure he should still do a nil return at Hacienda.......

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Re: What should we do ....?

Postby masterob » Thu Aug 20, 2009 11:51 am

Jool, I´m in receipt of a Civil Service pension that is and has to be taxed in the UK under UK regulations. This is covered by the Double Taxation Treaty so I am not required to pay any additional tax on it in Spain. However I do declare it each year to the Authorities here as a nil return. I do it myself through the local office with no problems. It´s pretty straight forward, I don´t need to use a gestor and such like!

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Re: What should we do ....?

Postby Jool » Thu Aug 20, 2009 12:24 pm

Thank you, that´s what I said should happen, but was shouted down. I was less confident then but wish I´d done one for him this year now........can you just download the form and then use your NIE number? If so could you send me a link please?

OH does not speak spanish and leaves all this to me. I use a gestor as I have a business here and he helps with all that and resolves Hacienda problems for me quite well, also not expensive.........but on this one issue I am not happy or satisfied.......

masterob
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Re: What should we do ....?

Postby masterob » Thu Aug 20, 2009 2:15 pm

I´m sure there is a form to download but I just make an on-line appointment to see someone at the local Tax Office and they do it all for me. In and out in about 10mins. Just to be on the safe side I have always taken a friend who speaks Spanish pretty fluently but I think I could have managed on my own. The young guy in the office who dealt with me this year was pretty keen to show how good his English was which was a bonus! :)

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DavidSearl
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Re: What should we do ....?

Postby DavidSearl » Fri Aug 21, 2009 2:34 pm

Reply to Campo Living

There are two systems for taxing small businesses in Spain. One of these is the "modulos" system and the other requires the business to submit every factura and keep complete records. When the business is first started, it has to begin on the "modulos" system. This scheme taxes the business on a modular basis, not on its real earnings. If the business is a restaurant, the tax will be based on the number of tables, for example, and if the business is market trading, it will be based on the size of the van used. More tables, more tax. Bigger van, higher tax.

You cannot opt out of this system for the first two years. After that, if you wish, you can apply to go on the regular system, keeping every bill and declaring it. So your English asesor did what he had to in that case. The plan works in favour of some operators and against others, but it is obligatory for all.

If your business uses vehicles and they are registered to the business, your modulos tax will be based on this. If a mistake was made and your business does not own any vehicles, you can surely point this out to Hacienda.

It certainly sounds as if you received poor treatment from your asesor, if you were not informed of all the implications. The signature forging is merely an incident, as you empowered the asesor to handle your affairs.

If it was me, I would take all the papers and walk into my Agencia Tributaria office and ask to speak with someone who speaks English. If they told me I needed an appointment, I would make the appointment and come back. Please note that this is not intended to disparage your Gestoria. They probably are doing all they can. It is only that sometimes a personal contact can produce progress.

Good luck with it, David Searl
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DavidSearl
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Re: What should we do ....?

Postby DavidSearl » Fri Aug 21, 2009 2:47 pm

Reply to Jool

You can find Forms and a lot information at www.aeat.es, which is the web site of the "Agencia Española de Administración de Tributos". However, I would do just what obmaster does, and go in person the first time, with documentation of the civil service pension and reference to the double taxation treaty. This is the "Convenio" and my memory says Article 17. There are some Tax Agency staffers who seem totally ignorant of the treaty and others who are very aware of it. Then ask for a nil return to be made out.

If your husband is a resident, he may need at some point to show his tax returns to prove this. With the new Certificate of Residence, many Notaries are requiring tax returns to prove residence when Spanish property is sold, for example. Otherwise, there is no requirement to file, just as the gestoria said.

Good luck with it, David Searl
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Bongtrees
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Re: What should we do ....?

Postby Bongtrees » Fri Aug 21, 2009 4:59 pm

DavidSearl wrote:
When the business is first started, it has to begin on the "modulos" system. This scheme taxes the business on a modular basis, not on its real earnings. If the business is a restaurant, the tax will be based on the number of tables, for example, and if the business is market trading, it will be based on the size of the van used. More tables, more tax. Bigger van, higher tax.

You cannot opt out of this system for the first two years. After that, if you wish, you can apply to go on the regular system, keeping every bill and declaring it. So your English asesor did what he had to in that case. The plan works in favour of some operators and against others, but it is obligatory for all.


Well I disagree and AFAIK it is not obligatory for everyone to begin on the modulos system.

I did not have to do it and after reading your post asked several others (all Spanish) who also said that it is not obligatory either.
In a time of universal deceit, telling the truth is a revolutionary act. George Orwell

Campo Living
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Re: What should we do ....?

Postby Campo Living » Tue Aug 25, 2009 9:44 pm

Thanks for your reply

Like Bongtrees, I didn't think the modulos' system was obligatory for the first 2 years.

I've been self-employed since beginning of this year and our Spanish Gestor has definitely set me up so that I submit my facturas/records on a quarterly basis and I'm not on a modulos' system.

My understanding was that only large businesses or individuals with a lot of work would benefit from the modulos system, as it wouldn't matter how much their turnover was, they would only be liable to pay tax/IVA they had committed to under that scheme.

As my husband is a self-employed plumber, there would be no way this modulos' scheme would have been beneficial for him when he was just starting out over here!

We will definitely consider a meeting at the Agencia Tributaria office although our worry is that because my husband was set up on this modulos' scheme, the previous aesesoria didn't keep correct records - for example, it's only since we've been with our Spanish Gestor that he told us all invoices submitted need to have an NIE/passport number on them, so not sure if we're opening up a bigger can of worms!?!

Your further comments would be appreciated. Many thanks

Jool
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Re: What should we do ....?

Postby Jool » Tue Aug 25, 2009 10:24 pm

Invoices need an NIE number on them to be legal......and the CIF/NIE of the people who are invoicing you or whom you are invoicing, if non spanish the relevant VAT number needs to be on them for those people you bill. Each March you must submit a list of all invoices paid out or claimed of 3000 euros and above, failure to do so incurs a large fine

A passport number is NOT sufficient

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DavidSearl
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Re: What should we do ....?

Postby DavidSearl » Mon Aug 31, 2009 5:24 pm

For Campo Living and Bongtrees,

Bongtrees, you are quite right. The "estimación objetiva" or "modulos" system is not obligatory for the first year or any other time. I was writing from memory, and on checking I find that it works like this:

Modulos is not obligatory. You can choose either the modulos or the "estimación directa" system, in which you declare what you earn. However, if you do not specify which one you choose, "modulos" is the default choice by the Tax Agency. Apparently, you did not specify your choice.

That you were not informed of the possibilities makes your treatment by your advisor even shabbier. You have a case against him and you can show financial loss.

I repeat my original advice. Go in person with all your papers.

Thanks for your correction, Bongtrees, and

Good luck with it, Campo Living
You and the Law in Spain

Campo Living
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Re: What should we do ....?

Postby Campo Living » Tue Sep 01, 2009 9:38 pm

Thanks so much for your clarification on the point re modulos' system. Fingers' crossed that we can get this sorted by dealing directly with the tax office, as suggested.


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