Taxes to pay if you sell your house in Spain

DEFERMENT OF TAX PAYMENTS DUE TO COVID-19

One of the foremost measures established by the Spanish Government by Royal Decree Law 7/2020, of March 12th, of urgent measures to face the economic impact produced by COVID-19, is the possibility of deferring payments of taxes corresponding to the first quarter 2020. This postponement can be carried out for a period of up to 6 months, though the debt is only exempt of interests during the first 3 months of deferment.
This deferment can be requested by all Spanish companies and freelancers who meet the following requirements:

• Having a turnover of less than 6.000.000€
• The amount of the debt does not exceed 30.000€
• The request must be made before May 30th 2020.

HOW TO REQUEST THE DEFERMENT

The application is made under a simplified self-assessment procedure, with prior recognition of the amount to be paid, in the following web site of the Spanish Tax Office:
https://www.agenciatributaria.gob.es/AEAT.sede/Inicio/Inicio.shtml
Press the option “aplazamiento y fraccionamiento de deudas/presentar solicitud”. You will need a digital certificate or a 24-hour PIN.

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EXPIRED CERTIFICATES ARE TEMPORARILY VALID

In accordance to Royal Decree 463/2020, of March 14th, those taxpayers whose digital certificate has expired are allowed to use the expired certificate within the alarm state.

In case the usual browser did not accept the expired certificate, the Spanish Tax Office recommends to install it in MOZILLA FIREFOX.

For further information, you can call any of the following telephone numbers:

901 200 347 or 91 757 57 77

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HOW TO MODIFY COMPANY BYLAWS

 

 

According to Chapter I, Title I of Spanish Capital Companies Act (R.D.L. 1/2010, of July 2nd), to modify company bylaws, it is necessary:

1.       A proposal for modification (carried out by the administrators or the partners).

2.       Convene a General Shareholder’s Meeting.

3.       Approve the Agreement to modify the bylaws.

4.       Record the modification agreement in a public deed.

5.       Register the deed of modification in the Trade Registry.

6.       Publish the agreement in the Official Gazette of the Trade Registry.

The Trade Registry itself is responsible for publishing the agreement in the Official Gazette: the entity will only have to pay for the correspondent fees.

There is one exception to the need of agreement in a General Meeting: change of the company’s Registered Office within Spain. In this case, according to article No. 285 of the Capital Companies Act, the agreement can be taken directly by the administrators, unless company bylaws had provided otherwise.

An Extraordinary General Meeting can be constituted:

1.       without prior notice when all capital is present or represented and the partners accepted unanimously holding the meeting, or

2.       with prior notice of, at least, 15 days in advance (in case of limited companies)

The agreement needs of a reinforced legal majority, consistant of half plus one, in case of limited companies, and the absolute majority of the capital presented or represented in the General Meeting (provided that the capital presented or represented was, at least, 50% on first call and 25% on second call).

 

 

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THE SPANISH TAX OFFICE CHECKS THE PAST OF NEW BUSINESSES

The Spanish Tax Office will promote prior review of reprehensive behaviour of new entities. The purpose of this review is to prevent future tax fraud and will be carried out within the campaign called “right from the start”, scheduled for the current year.

The Annual Control Plan affects measures of transparency of information and assistance to taxpayers in the compliance of tax obligations, particularly census obligations.  

Companies included in Immediate Information Supply that have a turnover below € 6,000,000 will receive a VAT draft declaration, which will make it easier for them to declare Corporate Tax.

Finally, Income Tax books will be compatible with VAT ones, thus reducing formal obligations of the taxpayer.

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WITHHOLDING OF DIVIDENDS PAID TO A SPANISH LIMITED COMPANY

Is it necessary to withhold on dividends paid by a Spanish limited company, when the receiver of these dividends is another Spanish company?

The answer will depend on the percentage of ownership (or the value of the participation) and the time the participations have been held in the capital of the investor.

1.  If the participations represent a percentage which is greater than 5% (or they have a value greater than €20.000.000) and they have been held in the investor’s equity, at least ONE year before the collection of dividends (or if they are going to be held for the remaining time), OR if both companies belong to a fiscal group, the dividends are NOT subject to withholding (Art. 128.4.d. LIS u. 61 RIS).
2. Otherwise, dividends are subject to 19% withholding, which must be declared using a form 123.

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VAT SCHEME FOR AGRICULTURE & FISHERIES

 

This special VAT arrangement is characterized by the absence of output VAT (except in case of import, EU acquisition or reversal of taxable person). Since there is no output VAT, input VAT cannot be deducted. In order to neutralize the impact of output VAT, there is a flat-rate compensation in every operating sale: 12% for agriculture operations and 10,5% for livestock and fisheries operations. This percentage is applied to sale price of products or services, excluding indirect taxes.

REQUIREMENTS

It is applicable to the owners of agricultural, livestock, forestry or fishing farms that had not opted out this scheme, unless they had ceded the farm or were in an integrated livestock regime.

It is not applicable to activities of transformation, processing of manufacturing of natural products, sale of own products mixed with others acquired from third parties (unless they are mere preservatives), sale of products outside the farm, sports and recreational activities, sea fishing, independent livestock and accessory services that are not included in the scheme.

Trade, cooperative and agricultural processing companies can not use this special arrangement. Self-employed whose turnover in this special scheme has exceeded €250,000 in the previous year and self-employed whose turnover in other VAT arrangements had exceeded €250,000 in the previous year cannot apply it either.

WAIVER TO VAT AGRICULTURAL ARRANGEMENT

Taxpayers may waive to this special arrangement by delivering a form 036 or 037 to the Spanish Tax Office. The waiver has a minimum validity of 3 years. A taxpayer who practices a deduction of input VAT is understood to have resigned tacitly to this special arrangement.

FLAT-RATE COMPENSATION

The refund of the flat-rate compensation (12% or 10,5%, as explained above) must be paid by the recipient of goods or services. However, in case of exports, EU operations and operations provided to recipients who are established outside the territory of application oft he tax, it is made by the Public Treasury.

BEGIN OR END OF THE SPECIAL ARRANGEMENT

When an activity changes from general to special VAT scheme, the owner is obliged to pay the compensation corresponding to future deliveries of natural products already existent on the date of change.

When an activity changes from special to general VAT scheme, the owner will have the right to deduct input VAT corresponding to operating goods affected to the activity on the date of change.

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OBLIGATIONS OF SELF-EMPLOYED ON OCCUPATIONAL HEALTH & SAFETY

Do freelancers really have no obligations regarding occupational health & safety? The answer to this question will depend on the SITUATION of the self-employed.

In general terms, a freelancer who has no employees is not obliged to comply with occupational health and safety regulations; on the other hand, a freelancer with employees MUST comply exactly the same health and safety regulations as any other company.

Besides, a freelancer who SHARES FACILITIES OR WORK AREA with other workers is obliged to comply with occupational health & safety regulations, even if he has no employees. This case is commonly known as „COORDINATION OF BUSINESS ACTIVITIES“.

Notice that prevention regulations require the employer to have a preventive plan, risk assessment, preventive measures and specific training for the position. This also includes knowing how to properly use personal protective equipment and coordinating business activities.

In such cases, the simplest way of fulfilling legal requirements is counting with an EXTERNAL PREVENTION SERVICE, which can help you in the professional comply with preventive regulations.

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VAT MINI ONE STOP SHOP

Since 2015, all telecommunication, broadcasting, TV and electronically provided services (hereinafter “TBTSE”) are taxed in the state of establishment of the recipient.

This rule has incredibly increased indirect tax burden. To reduce it, on January 1st 2019 it was established that, when TBTSE provided to final consumers located in other EU states do not exceed €10,000 (VAT excluded) they will be taxed in the state of the service provider, although the taxpayer may opt for taxation in other UE state where he is established.

Also with the aim of reducing indirect tax burden, an optional VAT scheme is created: Mini One-Stop Shop (hereinafter MOSS), a scheme that allows TBTSE entrepreneurs and professionals submitting their VAT returns only in the state in which they have registered as TBTSE operators.

Since January 1st 2019, TBTSE entrepreneurs and professionals who are not established in a UE country may use MOSS scheme, provided that they are registered in a UE country for VAT purposes. Thus, two variants of MOSS are created: external and internal.

EXTERNAL MOSS

External MOSS is applicable to those entrepreneurs or professionals not established in a UE country who provide TBTSE to individuals established in the UE. If the state of identification (and, therefore, of taxation) is Spain, TBTSE entrepreneurs and professionals are obliged to register with a form 034, to submit a quarterly form 368, to pay their VAT in time, to keep records of operations included in MOSS and keep them for 10 years and to issue an invoice when the recipient of the operations is established in Spain.

INTERNAL MOSS

Internal MOSS is applicable to those entrepreneurs or professionals established in the UE but not in the country of consumption, who provide TBTSE services to individuals established in an UE country.

TBTSE entrepreneurs or professionals whose country of identification is Spain are not allowed to deduct input VAT supported in the operations performed in MOSS in their 368 quarterly declarations, but they are entitled to ask for the refund of input VAT correspondent to operations which have been carried out in the state of consumption.

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VAT CASH RECEIPT APPROACH

VAT CASH RECEIPT APPROACH

This optional special scheme allows that sales and services are recorded as revenues for VAT purposes when they are collected, deferring declaration and payment of output VAT. Consequently, input VAT can only be deducted when purchases are paid.

However, the cutoff date for the deferral is the 31st of December of the year following the performance of the operation.

SUBJECTIVE REQUIREMENTS

Cash receipt approach can only be applied to taxable persons whose turnover in the previous calendar year has not exceeded €2.000.000. To calculate the turnover, VAT law takes:

·         all sales and services,

·         excluding

o   VAT

o   Sales equalization percentage (where appropriate)

o   Sales and services provided in previous years (where appropriate),

o   Occasional supply of real estate,

o   Supply of capital goods,

o   Supply of investment gold,

o   Financial operations

Operations excluded of cash receipt approach are considered to be carried out at the time of the operation.

OBJECTIVE REQUIREMENTS

Cash approach can be applied to all operations carried out in the territory of application of the tax but for

·         operations in simplified scheme or in the special schemes of agriculture, equalization, investment gold, services provide electronically or group of entities;

·         exports and EU operations;

·         EU acquisitions;

·         operations with reversal of taxable person;

·         imports and assimilated operations and

·         own use of goods and services.

CHARACTERISTICS OF THIS SPECIAL SCHEME

VAT is accrued at the time of total or partial collection and only for the amounts actually collected. Consequently, the moment of collection must be proved.

The right to deduct input VAT arises at the time of total or partial collection, with a cutoff date of 31st December of the year following the performance of the operation.

 

 

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ONLY TWO DAYS LEFT TO DECLARE CHILDCARE ALLOWANCE

This declaration has necessary to be submitted in the month of January.

The General State Budget Law of 2018 (6/2018) provides the possibility of increasing maternity benefits up to 1000 euro, depending on the child’s birth date (article 81.2). Most specifically, deduction increase can be applied from the moth following to the birth, as follows:

• Child born in January 2019………………. Deduction of 11/12 x 1000€
• Child born in August 2019………………… Deduction of 4/12 x 1000€

In order to make this benefit effective, it is necessary that the nursery school submits to the Spanish Tax Office, an informative declaration No. 233. This declaration is to be submitted in the month of JANUARY of the year following the dates the information refers to (e.g.: information of 2019 is declared in January 2020).

The declaration contains information relating the identification and authorisation of the nursery school, child data, parents data, months in which the child has been in childcare, annual expenses and subsidized amounts (article 69.9). 

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VAT SCHEME FOR GROUPS OF ENTITIES

 

It is applicable (on a voluntary basis) to businessmen and professionals who are part of a group of entities linked to each other in the financial, economic and organizational orders, provided that each entity resides in the territory of application (Iberian Peninsula & Balearic Islands). 

The application of this regime places the entities that compose the group in the obligation of Immediate Information Supply. 

CHARACTERISTICS 

      The tax base is determined by differentiation between:

1. INTRAGROUP OPERATIONS –The tax base is calculated as the cost of intragroup operations with supported VAT (goods & services), provided that those operations give the right to VAT deduction, in accordance with article 94 LIVA. 
2.  OPERATIONS WITH OTHER ENTITIES (which do not belong to the group)- Each entity oft he group calculates and declares individually its own VAT.

To calculate the liquidation, the entities of the group will apply the SPECIAL PRORRATE.

LEVELS

This VAT scheme has two levels: normal & advanced (article 163 sexies cinco, in relation to article 163, octies, uno & tres LIVA).

·         NORMAL – each entity belonging to the group makes a group declaration, considering the deliveries and provision of services and the acquisitions and imports with respect to the entity it declares.

·         ADVANCED – The parent entity presents a single declaration for the entire group of entities, subject to the individual agreement of each of the subsidiary entities. 

CONDITIONS

The VAT scheme of group of entities requires the individual agreement of the entities that have opted for its application. The agreement must be adopted by the Board of Directors in the month of December of the year immediately preceding the one in which the agreement produces its effects and it has a minimum validity of 3 YEARS in case of normal level, and 1 YEAR, in case of advanced level. These deadlines are automatically extended, unless expressly waived. 

The VAT scheme of groups of entities will cease:

1. in case INDIRECT ESTIMATION becomes mandatory or
2. in case of breach of obligations arising from this VAT scheme (e.g.: declarations).

SPECIFIC OBLIGATIONS

The parent entity is responsible for the compliance of tax obligations derived from the VAT scheme of groups of entities; both the parent and each of the dependents are responsible their own individual obligations (article 164 LIVA).

The parent company is responsible for: 

1. COMMUNICATING TO THE SPANISH TAX OFFICE the fulfillment of requisites, the adoption of correspondent agreements, the option for the aplication of this VAT scheme, the list of entities belonging to the group, any modification that affects the VAT scheme, waiver of the VAT scheme, option for the advanced level and waiver to the advanced level. 
2. SUBMITING PERIODIC AUTOLIQUIDATIONS of the group of entities.
3. HAVING AN ANALYTICAL INFORMATION SYSTEM, based on reasonable criteria of imputation of goods and services used, directly or inderectly, totally or partially, in the performance of operations referred to in article 163.octies.uno of LIVA.

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