International Advocacy - Mevr. mr. drª Marian Aletta Does

Law, legal and legalities.

Wednesday, January 7, 2015

FILING A TAX FORM IS NOW OBLIGATORY FOR ALL
NON-RESIDENTS (INDIVIDUALS AS WELL AS COMPANIES)
IN SPAIN.


Filing a tax form is now Already some 10 years in the making is now

effective by means of Ley 26/2014, 27.11.2014 making it obligatory

for non-residents living in Spain to file tax returns in Spain, in principle

regarding their full income picture. In other circumstances solely with

respecto their Spanish assets.

As we recall Ley 26/2014 modified Ley 35/2006 of 28.11 del Impuesto

sobre la Renta de lasPersonas Físicas, which was approved by Real

Decreto Legislativo 5/2004 of 5.03 as well as other (related) norms.

These changes, as published in Offical State Bulletin BOE nº 288 -

12327 28.11.2014 - were introduced in order to 're-enforce' legal

security, providing more clarity and favouring circulation liberties

within the European Union.

With regard to non residents without permant establishment this law
distinguishes between;
1. Private persons; and
2. Legal entities;
establishing for either of these two the deductable amounts to be

calculated on the imponible basis, by remission, respectively to IRS

and Company Tax legislation.

As from 2015 on, non-residents in Spain, but resident in an other

European Member State may opt to contribute taxes in Spain under

the spanish IRS (IRPF) tax legislation.

In this manner the non-resident residing in Spain will not suffer the

taxation on the capital gains for selling, for instance, the former spanish

habitual residence, when this amount is reinvested in Spain.

Simultaenously the same Spanish inherritance tax exemptions shall be

applicable in those cases when a spanish property is inheritated by EU-

Member State non-residents.

At the same time this would favour non-resident tax payers in Spain with
residency in other EU Member State countries with a low income, to a
19% income tax. And those who are resident in Spain, - under application
of certain conditions - to only a 15% of income tax.

Thus enabling non-resident tax payers by opting for the applicability of
the Spanish tax system, an equal treatment to those who are resident in
Spain.

For all other non-residents without permanent establishment a tax of
24% will be applied.

An other result of the legislation changes is that - in principle - V.A.T.

tax= impuesto de IVA, is to be paid in the EU-Member State of residence

of the buyer.

This will ofcourse bring about advantages for some and disadvantages
for others, depending on where the purchasor has his residence, as

IVA paid and received are 'nationaly' deductable. Making the subject

of taxes,- like always - a very delicate

More or less in the same manner, these alterations are applicable to non
- residentcompanies with a permanent establishment in Spain in order

to avoid double taxation procedures, which will oblige them to first pay

in both countries and thento request the return of the paid taxes in one of
them. See art. 7 of the Treaty Convenio Tributario sobre la Renta y sobre
el Patrimonio de la Organización para la Cooperación y el Desarrollo
Económico, with regard to business benefits.

Don't forget; tax avoidance is legal, but tax evasion is illegal. Prior to
acting ALWAYS contact your own local advocate, accountant, or tax
advisor.

Choosing to pay taxes in the one or the other EU-Member State

Countries may fill your daily life with a whole lot more sunshine.

Note: No rights, which so ever, can be obtained from this article.

source: http://www.boe.es/boe/dias/2014/11/28/pdfs/BOE-A-2014-12327.pdf