And town halls are worried that the legislation, which demands the declaration of overseas assets worth more than 50,000€, is ill conceived and has already spread “havoc and panic” in their communities.
Passed by Royal Decree last November, the rules require Spaniards and expats classed as fiscal residents to make a declaration by 30th April or face prohibitive penalties that could exceed the value of any undisclosed holdings.
Expats facing being caught up in Madrid’s trawl through the country have already branded the law “the new Spanish Inquisition” and believe the declaration is a forerunner for new taxes or levies in a “money grab” by the recession hit state.
Enter a White Knight. Oscar Anton is Deputy Mayor of Javea and its councillor for Finance. Supported by other town halls he is calling on Madrid to rethink its new law.
The leader of Xabia Democratica – a political party supported by a large number of expats in the Marina Alta town – he has organised two meeting with finance experts, the second was last night (Thursday) to help explain the declaration rules.
TARGET
However, Mr Anton believes the asset declaration exercise is missing its intended target – Spanish citizens moving money abroad to avoid taxes – and instead hitting foreign residents keen to abide by the rules.
“People living here and paying taxes must declare assets over 50,000€. Why? Because the government is not thinking of the expats but the Spaniards sending money out of Spain,” he said.
“Madrid wants to know how much is going to Switzerland or Germany or wherever. But what has happened? In this area and mainly in places where there are large numbers of expats facing this situation of having to declare everything. They are already paying their income taxes.
“I want to present a motion explaining to Madrid that they don’t realise what they have done to the expat – the spirit of the law was for the Spanish not foreign residents.”
Mr Anton said the declaration did not mean new taxation but added: “Everyone is in a panic because of the economic situation (in Spain) and this kind of thing does not help.”
He said he would underline the importance of expats to local economies and how much money they brought into the country.
QUESTION
“I want to say to Madrid that we are not happy about the law and the government must limit things because in future people will not choose Spain to make a new home because the state will be asking you a lot of questions,” said the politician.
“People are coming here to retire and relax or to work – they pay their taxes, we do not want more taxes from them because they spend their money in our shops, restaurants and bars and for our services. It is wrong to get to these people.”
Meanwhile the fight back by worried expats against the directive continues to gather pace with a ‘manifesto’ being prepared to show the extent of fears in the foreign community.
A petition is also being urgently being prepared for Brussels raising important questions with the European Parliament regarding legitimacy of the declaration process under European Union law and complaints have also sent to the European Commission – with the possibility of a challenge in the European court of Justice.
Part of the draft manifesto states: “We are now becoming increasingly concerned that we are being targeted under the terms of recent anti-fraud and asset declaration laws being forced to reveal in great detail sensitive personal information and data tom others including authorities with no guarantees that this information will not be used in a tax or asset grab to follow from the declaration or to conduct detailed reassessments of past tax returns.
“We are further concerned about the disproportionate penalties for even minor reporting errors, when these derive from information provided under different reporting systems and are passed via third parties in a form few of us understand.”
Source:
RTN