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Legal & Fiscal Advice

A blog specifically in mind of expats living in Spain, aimed to provide legal advice, guidance, and information on a wide range of issues affecting the expat community. All the latest information, from the best experts in the field!

Keys to apply for 2012 Tax Return
Monday, April 15, 2013 @ 2:57 PM

From the 2nd of April to the 1st of July taxpayers may confirm the draft to the Treasury
 
As usual every year, the Tax Campaign begins with the application of the draft. Taxpayers may apply for a copy of their tax return/fiscal data for individual Income Tax for the year 2012, from April 2nd until July 1st 2013, according to the Order of the Ministry of Economy and Finance. In addition to this, they may confirm the draft, whatever the result, from that date until July 1st of the same year.
 
Who has to file a tax return?
 
In any case, a taxpayer who only earns up to €22.000 per year from the same source is not obliged to file income tax. If the income is from more than one source then the amount received from the second (and so on) must not be more than €1.500. Taxpayers who earn €11.200, as a maximum annual income are exempt from the obligation applied to multiple income sources, provided that the sum of the second or other incomes is greater than €1.500.
Certain taxpayers are obliged to file a tax return in order to apply deductions for property investments, company savings accounts, international double taxation, social security mutual benefits, as well as reductions to the contribution base of pension plans or protected assets of disabled persons. Therefore, these rules still apply to those who have earned less than €22.000,00 as a yearly income.
 
Deadlines
 
The deadline to request and confirm the return/fiscal data for individual Income Tax is April 2nd to July 1st, coinciding with the deadline to confirm the draft income online with result to return and payment without deposit. If the results of your tax return infer an amount will be repaid to yourself and you want this to go to your account, you must confirm the details no later than June 26th.
 
As every year, may apply for the draft only taxpayers who have earned employ income, investment income with retention or deposit, treasury bills, real estate income imputation maximum of two properties, patrimonial profits or payment on account and grants for the purchase of a main residence. No draft may be requested for those who conduct a business or obtain income from different sources than those mentioned above.
 
Tax Novelties
 
Dwelling
 
  • 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.
 
State lotteries and games
 
  • Tax for State lottery prizes that exceed € 2,500 will be subject to this new tax on personal income of 20%.
 
Capital Gains
  • 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).
 
Declaration of assets abroad: introduces the obligation to report certain assets located abroad and whose value exceeds € 50,000 on December 31st each year, to all natural and legal individuals resident in Spanish territory, to permanent establishments, heritages and civil communities or partnerships.Those who does not meet this requirement will be subject to a penalty system.
 
Labour
 
  • Compensation because of a completion of an employment or trade relationship and whose amount exceeds certain limits, are excluded the reduction of 40%. 
Economic activities
 
  • 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.
 
Lexland Abogados recommends that you always have your tax return reviewed by a professional, as from our experience we can guarantee that many of them are incorrect and as such do not represent the right deductions. We would like to remind you that our team of specialized members remains at your disposal for any queries or representation in this matter.
 


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5 Comments


james s said:
Monday, April 15, 2013 @ 3:48 PM

Could you please post an article on how to complete the new Spanish world assets declaration?


Ted said:
Wednesday, May 8, 2013 @ 9:33 PM

Hi there,

I have been trying to find as much information possible on tax refund in Spain, but it all seems a bit overwhelming, especially the documents in Spanish and I am fluent.

I am really confused, because some say you don't have to file for tax refund if your salary was below 22k, while others say you have to do it either way.

I have worked in Spain exactly 188 days. Worked for a multi-national in Barcelona and quit my job. I got my finiquito and the other documents that says how much I have earned, paid tax etc.

I am currently in the UK, not a resident here, but I am very in doubt whether I should claim tax refund as I don't want to end up paying this, not that they can do anything.

So what is the right answer? Claim or just leave it.

Cheers
Ted


Lexland Abogados said:
Monday, June 24, 2013 @ 12:20 PM

Hi Mr James,

You can find in our blog a post named Obligation of information about goods and rights located abroad. If you need further information do not hesitate to send us an email at comunicaciones@lexland.es.

Thanks,
Lexland Abogados


Lexland Abogados said:
Thursday, July 4, 2013 @ 1:13 PM

Hi Ted,

Being confused with Tax returns in Spain is something quite frequent. You definitely have to file the Spanish Tax return for last year before the end of the month, not because you are obliged, because your are probably entitle to receive some money back. Please contact us if you require further information.

Regards,
Carlos Maestre, Lawyer & Tax Advisor at Lexland



Ron said:
Friday, September 27, 2013 @ 3:47 PM

I had an investment bond with a UK life company for 20 years in England and used to take 5% tax free income per year which was the allowance in the UK. For the last 12 years i have been living in Spain and have just surrendered this bond. The Life company have informed me the total gain over the 20 year period is 100,000 euros. What would be my Spanish tax liability on this?



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