Tax

The firm, Arcos & Lamers Asociados is an association of lawyers, economists, accountants and fiscal advisors, members of the Malaga Bar and/or Economist Associations, with extensive experience in their professions.

Arcos & Lamers Asociados, Tax Lawyers and Accountants in Spainhave the pleasure to state below the main changes of the different Spanish tax laws that are in force at the time of drafting this information.

  1.  TRANSFER TAX  (Impuesto sobre transmisiones patrimoniales ITP).
  2.  SALE OF PROPERTIES SUBJECT TO VAT (first transfer of a property from the promoter) VAT AND STAMP DUTY. (IVA –ACTOS JURIDICOS DOCUMENTADOS AJD).
  3.  INHERITANCE TAX (Impuesto Sucesiones y Donaciones).
  4.  WEALTH TAX.
  5.  NON RESIDENT INCOME TAX FOR INDIVIDUALS.
  6.  RESIDENT INCOME TAX FOR INDIVIDUALS.
  7.  RETENTION ON RENTAL AGREEMENTS FOR BUSSINESS PREMISES.
  8.  SPANISH COMPANIES. COMPANY TAX.

TAX NEWS 2014.

Since many years new  tax developments have been implemented affecting different taxes, being applicable for residents and non-resident in Spain. We shall analyse some of these developments frequently  affecting us:

1. TRANSFER TAX  (Impuesto sobre transmisiones patrimoniales ITP)

The applicable Transfer Tax for transfer of dwellings including up to two garages, will be the following:

DWELLING, PLUS 1-2 GARAGES:

VALUE RATE
Up to EUR 400.0000 8%
From EUR 400.000,01 up to EUR 700.000 9%
From EUR 700.000,01 and ongoing 10%
  • i.e. a property of EUR 600.000:
For the first EUR 400.000 EUR 32.000
For the balance EUR 200.000 EUR 18.000
TOTAL EUR 50.000.

TAX NEWS 2014.

ONLY GARAGES:

VALUE

RATE

Up to EUR 30.0000

8%

From EUR 30.000,01 up to EUR 50.000

9%

From EUR 50.000,01 and ongoing

10%

  • i.e. a garage of EUR 40.000:
For the first EUR 30.000 EUR 2.400
For the balance EUR 10.000 EUR    900
TOTAL EUR 3.300

2. SALE OF PROPERTIES SUBJECT TO VAT (first transfer of a property from the promoter) VAT AND STAMP DUTY. (IVA –ACTOS JURIDICOS DOCUMENTADOS AJD).

Properties: The applicable VAT is 10% VAT. The reduced VAT is applicable in the sale of properties including a maximum of 2 garages.

The applicable Stamp Duty is 1,5%.

Plots: Vat for acquisition of plots is 21%. There is an exemption of Stamp Duty in case of setting up a Spanish SL company or increase of capital of a  Spanish S.L company.

TAX NEWS 2014. 

3. INHERITANCE TAX IN SPAIN (Impuesto Sucesiones y Donaciones).

The rate of the tax goes from 7,65% up to 36,50%. In Andalucia, the rates has been increased from properties with value over EUR 398.777,54, as follows:

VALUE EUR QUOTA BALANCE RATE
398.777,54 80.655,08 398.777,54 31,75%
797.555,08 207.266,95 on going 36,50%

4. WEALTH TAX.

For the year 2014 the Wealth Tax has been re-activated, for individuals with a wealth over EUR 700.000. This Spanish Wealth Tax declaration has to be presented during finantial year 2014.

This is a progressive tax based on the value of the wealth, being the rate from 0.2% up to 2.5% i.e. a property with a value of EUR 1.000.000 would pay a tax of approx. EUR 733, follows:

EUR 1.000.000

Less     700.000 Exemption

EUR    300,000 AMOUNT SUBJECT TO TAX.

VALUE

TAX

Up to EUR 167.129,45 334,26 (0,2%).
For the balance  EUR 132.870,55 398,61 (0,3%).
TOTAL 732,98

Please note that in Andalucía, the rate will be increased in a 10% over the general rates, being a tax transferred to the Regional  Government.

TAX NEWS 2014.

5. NON RESIDENT INCOME TAX FOR INDIVIDUALS.

For the tax due on the 31.12.2012 and to be settled during 2013, the rate remains the same, being 24,75%.

The capital Gain Tax generated due to a sale of a property in Spain for non Fiscal Residents is 21%.

Retention in the sale of properties remains the same, 3%.

6. RESIDENT INCOME TAX IN SPAIN FOR INDIVIDUALS.

In Andalucía, the applicable general rate has been increased, which goes from 24,75%  up to 52,00%.

As a guideline:

INCOME EUROS

RATE

33,007 to 53,407 40%
120,000 to 175,000 49%
Up to 300,000 51%
Over 300,000 52%

Capital Gain Tax  and retentions on capital income have been increased as follows:

INCOME RETENTION
For the frst EUR 6.000 21%
For the following EUR 18.000 25% (up to EUR 24,000)
For over EUR 24.0000 27%

TAX NEWS 2014.

 7. RETENTION ON RENTAL AGREEMENTS FOR BUSSINESS PREMISES.

The retention tax on rental agreements of bussiness premises is 21%.  

8. SPANISH COMPANIES. COMPANY TAX.

Spanish companies:

  • For companies with turn-over more than 10 million euros, the general rates are the following:

–          30%. for the first 300.000 euros profit.

–          35% for the following ones.

  • For companies with turn-over less than 10 million euros, with less than 25 employees, the general rates are the following:

–          25%. for the first 300.000 euros profit.

–          30% for the following ones

–          If the average of employees is maintained an additional 5% reduction on company tax could be applicable as long as the turnover is less than 5 millions.

Marbella, January 2014.

ARCOS & LAMERS ASOCIADOS.

This report has been issued byArcos & Lamers Asociadosfor informative purposes only and is not legally binding.

The same or part of the contents of the same should not be reproduced, nor given to third parties, without the authorization of Arcos & Lamers Asociados.