In the following, we present the main tax changes you must consider if you have already invested in Spain or if you’re thinking about investing or to do business in this country.
1. As a result of the recent judgment of the European Court of Justice (judgment of 09.03.2014), with which the unequal tax treatment of tax residents and non-tax residents was declared illegal, the tax on the inheritance of property in Mallorca between relatives amounts to 1%.
2. In selling a property in Spain, the tax rate on capital gains is reduced from the current 21% to 20% in 2015, and to 19% in 2016. Nevertheless, from 2015 onward, all sold properties will end paying higher taxes than before. The reason for this is that the update (correction to inflation) and reduction coefficients are omitted. This two measures will have a greater negative impact on properties purchased before 1994.
3. On 29.10.2014 The U.K. has written with Spain a letter of intent (the so-called. “Berlin Declaration”). It represents a radical historical progress in terms of transparency and international tax control. It uses as a guideline the agreements of the FATCA model of the United States. I includes the following measures.:
– Financial institutions (eg banks, but also custodians, brokers and insurance companies) must record as per date 31.12.2015 the balance of clientes accounts, and contrast them to the older financial status. They also have to identify for new customers their tax residence country from 01.01.2016 onwards.
– The financial institutions have to report yearly interest payments and dividends, income from certain insurance contracts, balances on accounts and capital gains on financial managened portfolios.
– For the first time in September 2017, the Tax authorities can exchange this data with each other automatically.
4. Spanish companies incorporated or formed in 2015 pay 15% tax on their profits, fort wo years.
5. For british pensioners living as residents in Spain: The spanish tax authorities grant a period of six months to clean up their tax situation if they did benefit from a pension from abroad and did not declare or pay taxes on it. Pensioners can pay the taxes now, without penalties, surcharges or interests. This is from January 1, 2015. For those who decide to get in order with their spanish tax duties, they should submit supplementary declarations for non-barred years (up to 4 years).