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International Tax Newsletter - Spring/Summer 2012 - Spain

SPANISH WEALTH TAX FOR NON-RESIDENTS

The wealth tax was approved on 6 June 2011. The Spanish Parliament also restored the obligation to contribute to wealth tax for years 2011 and 2012.

The tax is charged on 31 December 2011 and 2012 and the obligation falls on net assets (assets and rights with the deduction of charges and taxes).

The minimum exemption for residences increases from EUR 150,253.03 to EUR 300,000 and the tax exemption base increases from EUR 108,182.18 to EUR 700,000.

NON-RESIDENTS WITH PATRIMONY (REAL ESTATE, USUALLY ON THE COAST) IN SPAIN ARE REQUIRED TO:

  • File the tax if the property value exceeds EUR 700,000 (if individual) or EUR 1,4Mn (jointly owned by spouses).
  • Appoint a Tax Representative in Spain to act as treasurer. Breaching this obligation is a punishable act.
  • Compulsorarily file if taxpayer has zero quota and net assets exceeds EUR 2Mn.

OTHER TAX CHANGES

1. Corporate tax rates 

Micro companies, with an annual turnover not exceeding EUR 5 million, will pay 20% tax on the first EUR 300,000 of taxable income for years 2011 and 2012 and 25% on excess profits. Those with fewer than 25 employees will need to maintain or create jobs.

2. Prepayments 

These are payments based on the forecast taxable income of the period. During 2011, 2012 and 2013, there is a general rate rise to 24% for companies whose annual turnover is between EUR 20Mn and EUR 60Mn and 27% for those with more than EUR 60Mn.

3. Rise in withholding tax rates 

Withholding rates rise from 19% to 21% in the general case and from 35% to 42% for remuneration of managers and board members.

4. Value added tax 

The super reduced 4% tax for first time buyers has been extended to December 2012.

5. Income tax 

GENERAL BASE

There is a new temporary tax scale with additional rates of 0.75 to 7% for General Base for 2012 and 2013.

SAVINGS BASE

There is a new temporary tax scale with additional rates of 2 to 6% for Savings Base for 2012 and 2013.

Withholding rates are amended for labour income (payroll) according to the new tax scales.

6. Residence 

Relief by acquisition of residence has been restored since January 2012.

  1. Land TaxTax rates have been increased between 4% and 10% for 2011 and 2012, depending on the date in which cadastral valuation was made.
  2. Non-residents income taxTax rates applicable to income obtained by non-residents have risen from 24% to 24.75%.

    The tax rate applicable to the transfer abroad of the income of permanent establishments and to dividends, interests and capital gains obtained by non-residents has risen from 19% to 21%.

More information on these developments can be provided by Santiago González, PKF Spain, through the EisnerAmper contacts listed at the end of this Newsletter. 

International Tax Newsletter - Spring/Summer 2012 Issue 

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