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Accountants | Lawyers
As
little as twenty years ago, tax evasion was a way of life in Spain
and almost encouraged. Not any more! During the last decade, Spanish
taxes have increased dramatically, particularly income tax. Although
overall taxation remains reasonably low and is still less than the
EU average, the gap is closing fast.
Foreign
residents with income or assets abroad should obtain expert advice
regarding Spanish taxes. This will ensure that you take optimum
advantage of your current tax status and also ensure that you don't
make mistakes that you may later regret.
These
days it's far more difficult to avoid paying taxes in Spain and
penalties are stiff.
Foreign
governments in Europe and Scandinavia have been known to share information
with Hacienda, the common name for "Agencia Estatal de Administracion
Tributaria".
The
Spanish tax system is complicated and even the experts have difficulty
agreeing with the tax authorities. In short, taxes are levied by
three tiers of government: the central government, autonomous regional
governments and local municipalities. Government taxes are administered
by the Ministry of Economy and Taxation which has its headquarters
in Madrid and assessment and tax collection centres in provincial
capital towns.
There
are tax collection centres in provincial capital towns.
It is possible to go down to your local tax office where the staff
are usually quite helpful with simple queries. There is a freephone
number for Agencia Tributaria 900 333 555 or try 901 200 345.
There's a five year statute of limitations on the collection of
back taxes in Spain which means that if no action has been taken
during this period to collect unpaid tax, it can't be collected.
The
most important taxes that are relevant to foreigners in Spain are
listed here.
Taxes relating to everybody
-
Income
Tax: Payable on worldwide income of residents.
-
Wealth
Tax: Payable on capital assets, including property.
-
Inheritance
and Gift Tax: Payable on worldwide assets.
Taxes
relating to Property Ownership
- IBI The IBI is the Impuesto sobre Bienes Inmuebles, which could be
translated as "property tax". This is a municipally
levied tax and varies widely from one municipality to another
and from one type of property to another. You might for instance,
pay as little as 50 euros per year for a simple property in a
rural area. While a luxury home on a prime lot in an expensive
urban neighbourhood might cost as much as 1,500 to 2,000 year.
- Capital
Gains Tax: Payable on the profits made on the sale of property
and other assets.
- Basura: (Rubbish Collection Tax) Annual tax payable by all property owners
to the local town hall.
Plus
Valia A tax on the increase in value of a property paid at time
of sale, usually by the seller but it sometimes assigned to the
purchaser by agreement.
Taxes relating to Business
-
Company
Tax: Paid at a percentage of profits by partnerships and registered
companies.
Offshore Company Tax: Annual tax on offshore companies that don't
declare the individual owner of property in Spain or the source
of investment.
- Social
Security: Isn't strictly a tax but is payable by employees,
employers and the self employed.
- Value
Added Tax: Payable on a wide range of goods and services at
varying rates. Self employed and businesses pay the IVA to Hacienda.
IVA is the difference between the sum of IVA collected from Sales
invoices and the sum of IVA paid on purchase invoices. Calculations
relate to each calendar quarter. Payment must be made by the 20th
of the following month. (30Jan, 20April, 20July, 20 October)
- Business
Tax: IAE or Impuesto sobre Actividades Economicas. Paid by
the self-employed and companies annually. This tax was discontinued
in 2003.
Taxes relating to Motorists
- Motor
Vehicle Tax: Paid annually by all vehicle owners to the local
town hall.
 Rose & Clavel
Anglo-Spanish Chartered Accountants offer Accountancy services and business solutions in English - Setting the standards for Accountancy on the Costa del Sol.
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 UHY Fay & Co
UHY Fay & Co was founded 25 years ago with the vocation of delivering integral advisory services and establishing long-term relationships with our clients as their trusted advisors.
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De Cotta Law
Established English and Spanish speaking law firm, range of professional services, three offices in Andalucia. |
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