Further to the 360 days of sun the Spanish culture, good food and architecture amongst others, being able to obtain residency through the purchase of a property increases the appeal of Spanish property to overseas investors.

Even though still at drafting stage, the programme of overseas investors obtaining residency through the purchase of a property is creating much needed new interest in Spains property market.

After the prices for new build dropped by almost 182% between June 97 and June 07 Spanish was one of the worst hit by the well-known credit crunch. Many sources confirm that the prices have dropped between 20% and 50% and more than that in some areas.

The new project: “Proyecto de Ley de apoyo a los emprendedores y su internacionalización” will grant residency to investors from outside the European Union who spend €500,000 or more in local Spanish property.

Experts at Residency in Spain, have said that if the draft law remains unchanged, it will grant qualifying investors a special visa allowing them to stay in Spain for up to a year and also a further two-year residency permit, renewable every two years instead of the 90 days which they are allowed to remain in the country now.

Investors will have to comply with some basic financial and personal criteria and some of these criteria will be being able to prove they can cover their living expenses, having a clear criminal record and being able to fund the initial €500.000. Financing over this amount will be an option but not below. The permit will be extendible to certain direct family including children under the age of 18.

Source: www.spanishlegal.com

For more information contact Lexland Abogados on +34.902.555.299 or email comunicaciones@lexland.es

• From 1st January 2013 the deduction for investment in main residence has been eliminated. Those who have obtained it before December 31st 2012 or that had paid amounts before that date for the construction, expansion, rehabilitation or work for disability reasons in its usual home can continue to apply this tax benefit.
• As of July 15th 2012 for those who obtained a dwelling before 20th January 2006 the tax offset is suspended.

• Tax for State lottery prizes that exceed € 2,500 will be subject to this new tax on personal income of 20%.

• Capital gains and losses arising from the transfer of elements that had remained in the possession of the taxpayer for a period shorter than one year will be considered part of the general tax base and therefore excluded from the savings tax base.
•  From the October 31st 2012 shall be charged on the general tax base of the exercise in which capital gains are found unjustified, i.e. the possession of property or rights that are inconsistent with the declared income of the taxpayer. This unless proven of sufficient evidence by owner that possession of the property is above the legally prescribed period of limitation. The term capital gains are not justified for those goods that have not been complied with its reporting requirement in the Special Tax Declaration (model (750).

• Compensation because of a completion of an employment or trade relationship and whose amount exceeds certain limits, are excluded the reduction of 40%. 

• The percentage of withholding applicable to professional activities has increased since September 1st, 2012 from 15% to 19%, applying as a temporary measure which will be used by 21% until 31st December 2013, soon to become 19%. This measure will also have their application for employment income derived from teaching courses, conferences, symposia or arising from the development of literary, artistic or scientific works. According to Royal Decree Law 20/2012 those professional covered by the reduced rate of 7% will turn to be 9%.
• Deductions for investments included the use of new technologies by employees will continue through 2013.
• For entrepreneurs with turnover below 50% of its operations to individuals fixed as of January 1 excluding modules, affecting those whose incomes exceed € 50,000 per year and also are discharged in the activities practiced in the retention of 1% (bricklaying, plumbing, carpentry, painting, etc.).
• From the November 19th, 2012 has been set a limit of cash payments and which amount exceeds 2,500 Euros in transactions in which either party is a trader or professional acting as such. If payments by installment should add all fractional parts to calculate the limit.

Obligation of Information about Goods and Rights Located Abroad

Through the Royal Decree 1558/2012, of the 15 November, by adapting the rules of the Tax Law 58/2003, of the 17 December, the Directive 2011/16/EU on administrative cooperation in the field of taxation has been transposed, especially with regards to the exchange of information necessary for the settlement of taxes. Then on January 31st the HAP/72/2013 Order of January 30 was passed, approving the Tax Form 720, which relates to the Obligation of Information about Goods and Rights Located Abroad.

Essentially, this legislation allows for better coordination in obtaining information about tax obligation on EU Member States, although the reporting obligation extends beyond the EU territory and covers open accounts in foreign entities engaged in banking or credit traffic and on certain rights spelled out in the rule, also deposited, placed or managed abroad, including information on property and rights thereto.

This will introduce an obligation to report certain assets located abroad and whose value exceeds € 50,000 on December 31 each year, to all natural and legal individuals resident in Spanish territory, to permanent establishments, heritages and civil communities.

While in the future this statement shall be filed between January 1st to March 31st, the 2012 statement must be submitted between the 1st February to the 30th April 2013, in accordance with the Sole Additional Provision of Royal Decree 1715 / 2012, of the 28th  December.

We are now in a position to be much more specific about how to provide advice with regards to this new requirement, not exactly imposed by the Spanish Tax authorities, but by the Directive 2011/16 of the European Union.

First of all, please note it must be submitted electronically using a specific electronic signature which in most cases proves very difficult to obtain and you need to be in Spain to do so. So unfortunately it is very unlikely you will be able to file this yourself, and therefore you will require the aid of a professional.

Secondly, point out that you are subject to this obligation if:

You are a Spanish resident (this includes any citizen or foreign national residing in Spain, Business entities, Inheritances in abeyance, Partnerships, etc.), or have a permanent establishment in Spain.

When the value of your assets abroad exceed a value of 50,000 € (individually)

Thirdly, we must differentiate 3 different groups of assets which are subject to this obligation, and we will proceed by explaining the information to gather and provide the information to the Tax Authorities:

Accounts and deposits with financial institutions located abroad

Information to be provided:

Bank name and address

Swift code, Iban code and account number

Name of account holders and third parties with access to the account

Date account was opened or closed

Date in which any third parties were given access or had their access cancelled

Balance of the account dated 31^st December of the previous year

Average account balance of the last quarter of the previous year

Values, rights, insurances and annuities deposited, managed or obtained abroad.

This group has to be subdivided again into another 5 subgroups:

Values ​​located abroad:

Information to be provided:

Company name or full name of the legal entity

Confirmation of registry details of the company or entity

Value of the shares dated 31st December of the previous year

Vale of the share capital or equity capital dated 31st December of the previous year

Number and class of shares you hold

Rights located abroad:

Information to be provided:

Company name or full name of the legal entity

Confirmation of registry details of the company or entity

Value at 31 December of the securities transferred to third parties for capital or securities contributed to the legal instrument

Value, number and class of securities or the securities provided by such shareholder.

Shares in the share capital or endowment of collective investment institutions located abroad:

Information to be provided:

Company name or full name of the legal entity

Confirmation of registry details of the company or entity

Value at December 31 shares held, number and type

Life and disability insurance when the insurer is located abroad:

Information to be provided:

Company name or full name of the legal entity

Confirmation of registry details of the company or entity

Surrender value at 31 December.

The policyholders personal details

On temporary or lifetime income obtained as a result of the delivery of a capital in money, or economic rights of real or personal property:

Information to be provided:

Company name or full name and address of the insurance company

Value of income capitalization at 31 December

Identification of the beneficiary

Immovable property or rights in immovable property situated abroad:

Information to be provided:

Country or territory in which you are located.

Address

Acquisition date

Acquisition value

* Note: The obligation extends to any taxpayer who had been the holder or beneficial owner of securities or rights during 2012 but no longer is on December 31st, and must provide the information on the date on which such termination occurred.

Finally, please note that the last day for filing the information (Form 720) for 2012 will be on the 30th April 2012.

What would be the applicable penalties be in case this annual statement is not filed?

According to paragraph 2 of the Eighteenth Additional Provision of Law 7/2012, of October 29, the consideration of the offense is very serious and is punishable in accordance with the following rules:

The penalty consists of a 5,000 Euros fine per item or set of data on the same account, asset or Real Estate property, which should have been included in the statement or had been provided incomplete, inaccurate or false, with a minimum of 10,000 Euros.

The penalty shall be 100 EUR per item or set of data on the same account, asset or liability or property with a minimum of 1,500 Euros, when the declaration was filed after the deadline without prior notification from the Tax Office. Likewise, if the filing of the anual statement is not done electronically via the internet or via written communication it would also be sanctionable.

At Lexland Solicitors we are able to solve any questions regarding this matter and also represent you with regards to this matter on an annual basis.  Please contact us for further information by phone on +34.902.555.299 or by email to comunicaciones@lexland.es  

 Spain requires urgent measures to curb and place a stop signal to the executions of unpaid mortgages and evictions. Even the two main political parties tried to come to an agreement given the gravity of the situation, especially when there has been a increase in suicides by people who were about to be evicted from their homes.

A new Royal Decree-Law 27/2012 has been published with regards to urgent measures to strengthen the protection for debtors. In its explanatory memorandum it states that "attention to the exceptional circumstances facing our country, motivated by the economic and financial crisis, in which many people who took on a mortgage loan to purchase a primary residence are in trouble to meet their obligations, requires the adoption of measures which, in various forms, help alleviate the situation of the debtors'

This new norm of just two articles but with an additional disposal, another transitory and two final provisions has as a key point Suspension of evictions of primary residences, particularly for vulnerable groups.  The question is: Who are included in these groups? (Article 1.2 RD-Law 27/12):

• Large Families, in accordance with current legislation.
• Single parent families with two dependent children.
• Family units in which there is a child under 3 years of age.
• Family units in which some of its members have a declared disability of over 33 %, dependency status or a disease that incapacitates them permanently to perform any kind of work activity.
• Family units in which the debtor is unemployed and has exhausted all unemployment benefits.

f)     The family units who live in the same household, in which one or more members who are united with the debtor or spouse by blood relationship to the third degree of consanguinity or affinity, and who are have a declared disability of over 33 %, dependency status or a disease that incapacitates them temporarily or permanently to perform any kind of work activity.

g)    Family units where there is a victim of domestic violence, in accordance with current legislation, in the case that the property to release constitutes their primary residence.

However the norm sets that for the application of the suspension of the eviction process, they must also attend a series of circumstances (article 1.3 RD-Lay 27/12), like for example the total amount of income of the family unit which has to be within the limits that have been set or that there is sufficient proof of a significant alteration in the family units circumstances.

When do you provide to do this? The article 2 of RD-Law 27/12 sets that you can file the proof at any stage of the mortgage execution process and before the eviction process takes place, to the judge or notary in charge of the procedure.

For more information with regards to this matter please don’t hesitate to contact us via comunicaciones@lexland.es  or +34 952 77 88 99, and someone will be happy to assist you.

At Lexland Abogados we fight for employee rights, counting a brilliant portfolio of success from our previous representations. With a thorough understanding of labour tools, such as the FOGASA fund, our experts get to straight to the nub of the problem and help our clients to claim their compensation for cases such as unfair dismissal, harassment in the work place, and many other labour disputes.

Our labour lawyers also work hand in hand with companies to help improve interrelations between employee and employer, as well as assisting to create labour contracts, pensions, dismissals, collective agreements… and of course defend those who succumb to unfair dismissal, disability, labour accidents, etc.

As a business, our labour advice can be essential. With tax savings techniques that can tailor your contracting to your business needs, you not only fulfil the exact needs of the company, but you may also save time and money doing so. We can even develop protocols assisting you with many other general and specific tasks. 

With a portfolio of numerous successful cases, and many companies hiring us year in year out, the expertise of our professionals speaks for itself. If your company is looking to reduce labour costs without reducing quality, let us show you how and contact us today! Our services can assist you to do it all without affecting employee rights – an absolute imperative for us. Likewise if you’re an individual whose employee rights have been affected, let us fight for you!

Please don’t hesitate to contact us via comunicaciones@lexland.es or +34 952 77 88 99, and someone from our labour department will be happy to assist you.

The Lexland Team

Currently the Spanish Government holds inheritance taxes for non-residents at 35%, whereas Spanish residents pay close to zero. The European Commission has quite rightly noted that this is an unfair treatment of non-residents and has brought the case to the European Court of Justice arguing that Spain is violating EU treaty freedoms. The verdict is expected soon, and is likely to force Spain to amend its Inheritance tax laws, allowing 1000´s to claim back over payments.

Around 60,000 British families have been affected by this overtax for properties and assets they inherited in Spain, with estimate figures hitting a worrying €490million! With British Expats wrongly charged for these taxes, action groups have been established to represent those who have been trapped by the policies.

Stringent time limits have been placed for claims, allowing only 40,000 of the 60,000 affected to file a claim due to rules permitting those claims only related to the previous 4 years.

If you think you may have been affected by this overpayment don’t hesitate to get in touch, and find out what refund you could be eligible for! Contact us via comunicaciones@lexland.es or by phone at +34 952778899.

Source: The Telegraph

Where can I set up my business to improve the taxation of my company? What aspects do I have to consider? What are the pros and cons of fiscal havens?

One of the long unresolved matters in business is the optimization of taxation, which often when attempted without legal advice can seriously damage the company. It is for this reason that we shall focus on this issue for this article, focusing on the use of tax havens as a tax improvement tool.  

When we speak about tax havens we are referring to those territories in which their fiscal systems offer low or zero taxation, often especially favouring none-resident citizens and companies. They are characterized for the possession of flexible mercantile and financial legislation due to the legal, banking and commercial protection in place, as the fiscal havens deny informing and collaborating with many countries.    

One of the many advantages is the speed in which it takes to create businesses, banks, insurance companies, and many other legal forms – quite the opposite to the inflexible requirement driven legal processes in Spain. Other characteristics that Tax Havens provide include political, economical and social stability, a network of communications and a developing banking/financial sector to benefit Havens for both legal and natural entities alike.   

One of the most commons fallacies in international fiscal planning is that using fiscal havens presupposes illegal or fraudulent activity; however the reality is that the proliferation of money laundering or fiscal fraud is normally due to the bad communication between the countries.

Nationality and territory are basic aspects in setting up your company in a fiscal haven. In this sense, the relocation of the fiscal residence is an important point to take into account. That is to say that when a taxpayer is considered a fiscal resident of a particular territory, they must change fiscal status to another territory. This can be done by either individuals or companies and we must keep in mind that for each situation the law changes.

In Spanish law, corporation tax establishes the criteria to determine the residence of a legal entity with the purpose of determining their personal contribution obligations. The use of fiscal havens by companies occurs mainly through the establishment of new companies, as their does not exist a way in which to relocate the headquarters of an existing company. For individuals, they look for countries where there are no or low taxes, or territories in which the fiscal system is based on the principle of territory, with the purpose of only assessing income that is internally produced, and not those from outside of said territory. This works as a mechanism for tax avoidance, and is usually applied by people with high incomes such as elite athletes, international artists and shareholders of big companies.        

Nowadays relocation is common practice, so certain countries have normalized a set of measures to prevent/discourage the change of residence for possible elusive or evasive motivations.

Countries like Switzerland and Liechtenstein all permit non-resident to carry out operations (off-shore societies), as does Monaco who by not assessing the incomes or present exemptions helps to avoid assessments. On the other hand, countries like Honk Kong or Panama only bear in mind the incomes from the taxee’s principle territory.  

In short, the taxation of companies in particular is a difficult task that without professional help can be harmful; therefore if your goal is to invest offshore, set up a company, open a bank account abroad, or improve your taxation in Spain, don’t hesitate to contact a lawyer specialised in this field, you’ll certainly need their help! Contact us directly by comunicaciones@lexland.es or +34952778899 for assistance with your tax planning today!

Though the necessities of a Will are now widely understood, many are still ignorant to the advantages of a Living Will. Living Wills are becoming more and more popular in this day and age, as people live longer lives, and medical treatments advance. A living will is a legal document that a person uses to make their wishes known regarding life prolonging medical treatments. It can also be referred to as an advance directive, health care directive, or a physician's directive. This should not be confused with a Living Trust, which is a mechanism for holding and distributing a person's assets to avoid probate.

Generally, a Living Will describes certain life prolonging treatments. You, the declarant, indicate which treatments you do or do not want applied to you in the event that you either suffer from a terminal illness, or are in a permanent vegetative state. It does not become effective unless you are incapacitated; and until such a point you are able to change and state what treatments you do or don't want. It is very important to have a Living Will as it informs your health care providers and your family about your opinions and desires for medical treatments in the event that you are unable to speak for yourself.

At clearly a very difficult time for your family, a Living Will can smooth the process and reassure your family that they are acting with your interests. You may also choose to designate a health care power of attorney or health care proxy, which gives someone of your choice the authority to make health care decisions for you in the event you are incapacitated. The person you designate is supposed to consider what you would want, so be sure to talk with them about it. It may be a difficult conversation, but you're asking someone to take on a great burden for you - letting him or her know what you want lessens that.

A living will does not become effective until certain certification is provided. Your doctor would be required to declare you as terminally ill, or permanently unconscious, this opinion would then need to be seconded by another doctor. This means that if you suffer a heart attack, for example, but otherwise do not have any terminal illness and are not permanently unconscious, a living will does not have any effect. You would still be resuscitated, even if you had a living will indicating that you don't want life prolonging procedures. A living will is only used when your ultimate recovery is hopeless.

Saying all of this, these documents will be on no good if no one knows about them. Though difficult, communication is essential with your family and loved ones about your wishes. Many people feel that creating a Will is depressing, and put it off until a tragedy triggers its need, and the consequential unnecessary stress. Advance planning need not be gloomy, but instead a stitch in time that allows you and your loved ones a sense of security and understanding. It is important to discuss the options over with your doctor and any person you wish to designate as your health care proxy. By talking about these subjects, you can better understand what you want and have your questions answered. Once you've decided what it is you do or don't want, you can make your wishes known, and maintain a peace of mind, knowing that they will be respected.

If you're interested in learning more about the possibilities of a Living Will contact us today by comunicaciones@lexland.es or +34952778899. After all, they say a stitch in time saves 9.

The Lexland Team

We are once again in the midst of the Income Tax Campaign for 2011, running from May 3rd to July 2nd. With only 2 weeks left to submit your returns, have you completed your tax draft?

Every year the Tax Agency estimates the amount of tax that you will be liable for based on the data relating to you that they have access to.  In our experience many tax returns are filed incorrectly, and there are often changes needed to ensure that the right deductions have been represented. It is for this reason that we always recommend that you always have your draft tax return reviewed by a professional, as it is your best interests to file your taxes in an efficient manner. You may even be eligible for a full reimbursement of your taxes paid!

Who needs to apply?

All those who have applied for deductions for property investments, company savings accounts, double taxation benefits, social security mutual benefits, or reductions to the contribution base of pension plans or protected assets of disabled persons, are obliged to file a tax return even if they have earned less than €22.000,00 as a yearly income.

How to apply?

Taxpayers may apply for a copy of their tax return for individual Income Tax for the year 2011, from April 10th until July 2nd 2012; they then may confirm this draft from that date until July 2^nd of the same year. The draft can be obtained online via the Tax Agency’s website (www.agenciatributaria.gob.es), although the Tax Office will post the draft to taxpayers whom have not applied for it online as of May 3rd, which is the official start date for the Income Tax Campaign in 2011. Any necessary amendments must be carried out prior to July 2^nd, so with the deadline soon encroaching, time is of the essence! 

If the results of your tax return infer that you are entitled to a reimbursement, you must confirm your account details no later than June 27^th to receive them via a direct debit.

A few changes this year

• The maximum base for the deduction of investment in a primary residence in the cases of the purchase or rehabilitation of a primary residence has increased to €9.040,00. As it has done also for the amounts deposited in a home savings account. 
• The base for installations and adequacy of a main residence on the grounds of disability has also increased to €12.080,00
• Main residence improvements will no longer be limited to the taxpayers primary residence and as such will have a larger group of potential beneficiaries due to its increased annual limit from €53.007,20 to €71.007,20
• There is an improvement on the amount deductible having been increased from 10% to 20% and increasing from €4.000,00 to €6.750,00 the maximum annual deduction base.
• Deductions for double taxation have been abolished on dividends pending application, as over 4 years has passed since the imposed limit in 2006.
• The deduction for the birth of a child or an adoption has been repealed as of January 1^st 2011

It is highly recommended that you always have your draft tax return reviewed by a professional, as from experience we can guarantee you that many of them are filed incorrectly and as such do not represent the right deductions! We´d like to remind you that our team of specialized members remain at your disposal for any queries or representation in this matter so contact us today.

T: +34 952778899

Email: Comunicaciones@lexland.es

We realise that we've been quiet for quite some time, so for those of you that don't already know who we are, here's a glimpse into our History, Philosophy and capabilities!

We're a leading firm of lawyers in Marbella offering high-quality legal services for both private clients and businesses alike, as much as financial institutions and the Spanish public sector. Lexland Abogados is renowned for its capabilities as a multidisciplinary firm capable of providing a comprehensive and flexible service, with specializations spanning practically all areas of the law.

Founded in 2005 from a collaboration between Bermúdez de Castro y Lobato Asociados, De Pasqual y Marzo Abogados, D&C Abogados y Carretero Internacional, our background provides over 40 years of experience in the legal world; bringing the best of the old, and incorporating the best of the new!