TAXES APPLIED TO MY PROPERTY IN SPAIN IF I AM RESIDENT IN ANOTHER COUNTRY

SELF-EMPLOYEE CAPACITY WHEN THE ENTREPRENEUR LIVES ABROAD

HOW TO OBTAIN THE VAT REFUND WHEN YOU ARE A TOURIST

Taxes to pay if you sell your house in Spain

TAX DEDUCTIONS IN ARAGON

INCOME TAX EXEMPTION OF SEVERANCE PAYMENTS FOR SENIOR MANAGERS

Spanish Supreme Court No. 2727/2017, of November 5th 2019, No. 1197/2013, NSJ049903 of April 22nd 2014 and National Court March 8th 2017

The purpose of this short article is to briefly comment on the change of judicial criterion regarding the tax treatment of severance payments to senior managers.
Not so long ago, the Spanish Supreme Court considered that any severance pay to senior managers was entirely subject and not exempt. This was the criterion, for instance, of the Sentence No. 4175/1994 – NFJ0004226, of December 21st of 1995. Hence, advisers recommended to always practice withholding.
However, today the proper interpretation seems to be just the opposite.
The last example of the new judicial trend can be seen in the sentence No. 1528/2019 of the Supreme Court, of November 5th of 2019, which sets aside an administrative sanction against a company that had not made a withholding to severance payment of a senior manager, which they thought to be exempt.  They based on article 11 of Royal Decree 1382/1985, of August 1st, which establishes a minimum compensation of 7 days of salary per year of service, with a limit of six monthly payments. This caused a sanction of the Tax Administration.
And, as explained, the sentence of the Supreme Court of November 5th 2019 resulted in the total elimination of the sanction.
How could such a radical change have taken place?
The key to this issue lies on whether the severance pay established by article 11 of the implementing regulation for senior managers is mandatory or not: article 7.e of the Law No. 35/2006, of November 28th, of Income Tax, declares exempt all severance payments that are mandatory according to the Statute of Workers or its implementing regulations.
The new argument of the Supreme Court considers that:
·        senior managers have a right to receive severance payment in case of dismissal;
·        the law does not establish the amount, allowing the parts to set it in the contract and
·        in case the parties had not referred to the amount, a minimum of 7 days of salary per year of service, with a limit of six monthly payments is immediately applicable.
The sentence is based on a preceding criterion, accepted by the sentence No. 1197/2013, NSJ049903 of the Supreme Court itself, of April 22nd 2014, in which the Court did not accept the validity of a contract that allowed the dismissal of a senior management without any compensation.
Needless to say that some doctrinal sector is now applicating for the refund of the undue amount.

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CORPORATIONS OBJECTIVE ESTIMATION

MAINTENANCE ALLOWANCE

WORK ABROAD

FREELANCER OR LIMITED COMPANY

ASSET COMPANY

ENERGY EFFICIENT VEHICLE

HAS THE SPANISH NATIONAL INSTITUTE OF EMPLOYMENT ACCEPTED THE TEMPORARY LAY-OFF FILE SUBMITTED BY YOUR COMPANY?

Over one month ago, on March 14th, the Spanish Government declared the alarm status. Within the first month of it, Spanish companies submitted 480.000 temporary lay-off files, that affected more than 3.000.000 workers throughout the Spanish country.

The high number of requests has caused delays in the procedures. To such an extent, that in April many workers have not even received an answer concerning their unemployment allowance.

If you want to know whether your temporary lay-off file has been admited or not, you can log into the following website of the Spanish National Institute of Employment and get the pertinent information by using your digital certificate or a „cl@ve“ password:

https://www.sepe.es/homepage

Once inside, click on the following:

1.       „PERSONAS“

2.        „PRESTACIONES“

3.       „CONSULTAS DE LA PRESTACIÓN“

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HOW TO SAVE TAXES

WHO MUST FILE INCOME TAX RETURN 2019

EXTENSION OF DEADLINE FOR THE SUBMISSION OF QUARTERLY TAX STATEMENTS

The Spanish Government has published today the Royal Decree Law No. 14/2020, of April 14th, which extends the deadlines for the presentation and payment of tax returns belonging to taxpayers whose turnover in 2019 had not exceeded 600.000€. Most specifically, this Royal Decree Law extends the deadlines fort he presentation of quarterly statements until May 20th 2020.

The above mentioned Royal Decree Law has entered into force today. The Government and the Ministry of Finance are empowered to adopt the necessary measures to develop this Royal Decree Law.

For further information: https://www.boe.es/boe/dias/2020/04/15/pdfs/BOE-A-2020-4448.pdf

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NET RETURNS FOR AGRICULTURE REDUCED

Net return rates applicable in the objective estimation method of the personal Income Tax have been reduced for agricultrural and livestock activities affected by exceptional circumstances. For further information: https://lnkd.in/g4pT5Xr

#asesorfiscal #binissalem #mallorca #spain #

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THE BURDING OF PROOF BELONGS TO THE TAX ADMINISTRATION

The Superior Court of Justice of Cataluña concludes that it is the Tax Administration who must prove the existence of a liberality. This conclusion takes place in a sentence of May 23rd 2019 concerning a legal case in which the Tax Administration alleged that the market value of the services prerformed by a partner to a company was much higher than the one invoiced by the partner. The difference, according to the tax administration, was a liberality subject to taxation.

The Court understands that the Tax Administration is bound to proof that the value of the benefit is different from the one reflected in the accounts (STSJ No. 34/2018).

For further information: http://www.poderjudicial.es/search/AN/openDocument/bb185e911ceaba85/20190806

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THE SPANISH SOCIAL SECURITY HAS SUSPENDED THE COLLECTION OF APRIL 2020 CONTRIBUTIONS

Yesterday expired the deadline to request for deferral of Social Security contributions correspondent to the month of April 2020.

Due to the exceptional situation caused by COVID-19, the Spanish Social Security has decided to suspend deadlines for the collection of all contributions which deferment has been requested. Until the Spanish Social Security can resolve the hundreds of thousands of applications submitted, no debt claims will be issued, no surcharges will be applied and there will be no modification in the taxpayer’s situation of being up to date with Social Security. 

If you have requested the deferment of April 2020 contribution, you can get further information about the situation of your requestment in the following link of the Spanish Social Security website:

https://sede.seg-social.gob.es -> ciudadanos -> otros procedimientos -> Consulta de solicitudes de la Tesorería General de la Seguridad Social presentadas por Registro Electrónico

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LAST DAY TO REQUEST THE DEFERRAL OF APRIL 2020 SOCIAL SECURITY CONTRIBUTION

Since April 8th 2020, only 48 hours prior to the deadline to request the deferral of April 2020 Social Security contribution (article 34 of Royal Decree Law No. 11/2020), the web of the Social Security finally allows online petition of that deferment. 

To ask for the deferral, log into the following link of the Social Security before midnight today (24:00h of 10.04.2020): 

https://sede.seg-social.gob.es/wps/portal/sede/sede/EmpresasyProfesionales/recaudacion/04recaudacion/!ut/p/z1/rVJRb5swEP4te-CR3Bk7gPdGqzZtmqzqMprgl8oBQ6gCpkBLt1-_S_qSSmuyqbNkWXf67vPdfR8oWIGq9UtZ6L60td5SnCj_gTNfMIlsNsHrC4zi-U0s-R2fRGNY7gH4wYkQ1N_UfwBAebL-HhSotO6bfgNJZzLzkNq6N3WZ2c7BXcJBUzWt6TTFrUn1c6ZTGs5BFAfhjqZJywySsUgFHc_NkGlXcOG7MpfMNYHkQmjp5UZQ2-pYZ_vG94BjmznOwGAKqtja9ZsMUb3mYQGqNblpTTt6bim96fum--qgg8MwjApri60ZGRr0TxUb2_WwegeEBd0r3P10ZM3IICGZggPATXxGgMtbKeLAQwIsX0ozQFzbtqJ-F_-4zhP0_L_Qj29DZFP0ZujPQ4zk3SKefWMcg-CT9NNTJiUxvHZ-PicxGt1v3LLOLawO3bd6b0YqKB-fnlRE3t7Z-ZWE-4y5myqOq5D7369-zczSPZucr8PhR17R8_N1nHz5DS16YTQ!/dz/d5/L2dBISEvZ0FBIS9nQSEh/

Once inside the page, the first option must be chosen (“APLAZAMIENTO EN EL PAGO DE DEUDAS A LA SEGURIDAD SOCIAL”). 

This procedure can be done with a digital certificate or with a 24 hours password (Clave), in one’s own behalf or on behalf of a third party. 

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EXTENSION OF DEFERMENT OF TAX PAYMENTS

The Royal Decree Law No. 8/2020, of March 31st, has extended the possibility of deferment to the tax debts with regional and local administrations (Royal Decree Law No. 11/2020).

The measures adopted by this Royal Decree Law, particularly by its article No. 33, are basically the following:

1.       Temporary suspension of VAT, special tax on electricity and special hydrocarbon tax for electricity, natural gas, manufactured gas and petroleum gas distributors whose invoices could not be collected due to the financial situation created by the alarm status (article No. 44.4 RDL).

2.      Possibility of deferring a maximum of 6 months debts of less than 30.000€ derived from custom declarations delivered between 02.03. and 30.05.2020(article No. 52 RDL), provided that the recipient’s turnover did not exceed 6.010.121,04€ in 2019.

3.      Possibility of deferring payment deadlines of debts with regional and local administration (article No. 53 RDL).

4.      Extension of terms to file appeals which should have been filed between March 3rd and April 30th 2020.

5.      Exemption of the gradual part of the tax on asset transfers to notarial deeds of novation of mortgage loans and credits that are produced as a consequence of the financial situation derived from the alarm status.

 

 

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HOW TO DISINFECT FILTERING FACEPIECES

There are, at least, four key aspects that must be taken into consideration when sterilizing or disinfecting filtering facepiece respirators:

·         Effectiveness against the target organism (e.g.: COVID 19)

·         Safety fort he person wearing it (e.g.: no off-gassing of chemicals into the breathing zone)

·         The disinfection cannot affect the respirator’s fit

·         Not damage the respirator’s filtration

If the filtration is damaged or the respirator does not fit, it will not help reduce exposure to airborne particles at the level indicated by the supplier (e.g.: FFP2, FFP3, etc).

By the time being, no disinfection method has met all four criteria. Thus, none of them is currently acceptable.

Based on currently available data, it is not recommendable to attempt to sanitize, disinfect or sterilize filtering facepieces.

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CHANGES IN THE ANNUAL INFORMATIVE STATEMENT ON SECURITIES & INSURANCE (FORM No. 189)

The Order No. HAC/175/2020, of February 4th, replaces the previous form of annual informative statement of securities & insurance (form No. 189) by one directly readable by the computer. The new statement introduces the following changes:

·         The cell “CLAVE DE MERCADO” is modified, in order to distinguish between countries of the European Union and other foreign countries.

·         The cell “NÚMERO DE VALORES” is modified, in order to use the same calculation formula as the annual declaration of financial assets (form No. 198).

·         The new form adds the cell “CLAVE DE TITULARIDAD”, to distinguish the condition of the bare owner of values that are the object of the declaration.

All these modifications enter into force on February 29th of 2020 and are applicable for the firts time to the statements corresponding to 2019.

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ADVANTAGES OF ENERGY EFFICIENT VEHICLES

Has your company provided you with an energy efficient vehicle? You might meet the requirements to reduce that return in kind by 30%

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HOW TO SAVE TAXES

ACCESS TO TAX DATA & DEADLINE FOR INCOME TAX DECLARATION 2019

The Spanish Official State Gazette has recently published the Ministerial Decree HAC/253/2020, of March 3rd, which, among others, approves new Income Tax declaration forms, terms and form of presentation of these declarations and the procedures to obtain and confirm tax information. 
 

The deadline for the submission of Income Tax[1] and Capital Gains Tax returns[2] corresponding to fiscal year 2019 starts on April 1st of 2020 and ends on June 30th of 2020, except in case of payment by direct debit of the entire amount or of both installments (in which the deadline ends on June 25th of 2020).

It is important to remember that the state of alarm does not affect the deadlines for submission of Income Tax and Capital Gains Tax returns (Royal Decree 465/2020, of March 17th).

The new forms simplify the identification of tax residence, the declaration of capital property income and economic activities in direct declaration (which are now declared in a single section), the process of tax refund, by means of an annex “D”, in which taxpayers can identify the fiscal identification number of their suppliers.

To obtain the reference number, taxpayers must use the amount in box 505 of the 2018 return.

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[1] Forms D100, 100 & 102

[2] Form D714 & 714

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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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