SPANISH CAPITAL GAIN TAX INCREASE FOR THE YEAR 2013 APPLICABLE FOR RESIDENTS ONLY.

Regretfully It’s official. As of 1st January 2013 there is a large increase of Spanish capital gain tax on the sale of properties generated with a period not exceeding of one year. The so called short term capital gain!.

This change has been included in the Spanish General budgets for 2013 (Presupuestos Generales del Estado- P.G.E.), and we can confirm that this will, regretfully, mean an increase in the Spanish income tax for residents. The short term capital gain tax is as per the beginning of 2013 taxed at the marginal rate of Spanish Income Tax, which goes between 24.75 and 52% for short-term gains produced in trading financial operations (sale of mutual funds, stocks, etc…) and real state (homes, premises, land,….). This change is only applicable for the gain generated less than a year from date of purchase to the date of sale.

The Spanish legislator is as from the opinion that the implementation of this change of the Spanish Income Tax law will reduce and avoid sort term sales reducing the speculation in the Spanish property market.

Arcos & Lamers Asociados, lawyers in Spain and accountants in Marbella, Málaga, Spain would like to clarify:

• For Fiscal residents in Spain the Capital Gain Tax on sale of property generated in more than one year, as you may of noted on previous blogs, is going as per a scale from 21% to 27%

• Capital Gain tax on sale of property generated in less than one year would be taxed as from a scale of 24.75% up to 52%.

For instance, if a Spanish taxpayer is taxed at the minimum rate currently 24,75%, and made the sale of some shares/property that generate short-term capital gain, he will be liable to settle a minimum Spanish capital gain tax of 24.75% up to 52% instead of 21%. Clear tax increase.

Follow the blog of the specialized tax lawyers of this English speaking Spanish law firm where you will be kept informed on Spanish legal and tax news.

Do not hesitate to contact this multi lingual lawyers, accountants, tax advisers of Arcos & Lamers Asocaidos in the event you need any clarification on this subject or additional information with regards to Spanish Tax legal system.

Arcos & Lamers Asociados, your property lawyers in Spain. Specialists in Spanish Inheritance procedures, Registered Accountants in Marbella, Málaga, Costa del Sol, Spain.

Marbella, January, 2013.