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The Plenary of the Civil Chamber of the Spanish Supreme Court, in its judgment No. 265/2015 of 22 April, has ruled on the unfairness of default interest in loans without mortgage warranty concluded with consumers.

The judgment is based on the doctrine of the Court of Justice of the European Union and states that in the personal loans not secured with a mortgage and concluded with consumers, the general clause which establishes a default interest that exceeds the remunerative interest by more than two percentage points is abusive.

The consequence of this statement of abusiveness is that the loan will bear only a remunerative interest, thus completely eliminating the percentage increase on which the default interest is based.

The judgment states also that in banking contracts concluded with consumers, it is presumed that all the clauses are general conditions of the contract and thus subject to abusiveness control, unless it is dutifully proved the existence of a negotiation and that in such negotiation the consumer obtained some advantage in return.

salvadormv@serveco.es

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On 24^th and 25^th March 2015 were passed two judgments by the Supreme Court (TS), which have come to clarify certain legal controversies that existed regarding the “floor clauses”.

We remind you that the floor clauses are those established in mortgages with a variable interest rate, under which the interest rate cannot be lower than that provided in this clause. The current economic situation, where the rate of reference (usually 1-year Euribor) has reached historic lows, has resulted in the client/borrower paying a higher interest rate due to the application of such floor clauses.

The first time the TS addressed in general terms the issue of the floor clauses was in the Judgment 241/2013 of 9^th May, which came to void, for being abusive, the floor clauses in the mortgages of the entities BBVA,  CAJAMAR and CAJAS DE AHORRO DE GALICIA, VIGO, ORENSE Y PONTEVEDRA.

But this judgment of 2013 opened two big questions left unresolved:

1) Not all the floor clauses were declared illegal: only those that by their lack of clearness did not allow the consumer to identify the real economic consequences of the clause.

2) It was not clearly established from the time when it was possible to claim back the interest unduly charged by the bank.

The Judgments of 24^th and 25^th March 2015, have clarified these issues in the following sense:

1) All the floor clauses applied by the financial entities, due to its redaction, are void by lack of clearness, independently of the education or economic situation of the customer. This reasoning is one more argument to declare void in the future those floor clauses in the mortgages of companies and individual entrepreneurs that have not the condition of consumer (in the sense of the Spanish Law of Consumers and Users). The Supreme Court has not yet ruled specifically about this possibility, but different Provincial Courts (among which is that of Murcia) have done it, giving the reason to the company.

2) It is only possible to claim back the interests unduly charged by the Bank since 9^th May 2013.

If you have any doubt regarding floor clauses, please do not hesitate to contact us.

salvadormv@serveco.es

We inform you about the novelties regarding forms 303 for VAT to submit this last term of year 2014 and form 390 and who are obliged to fill it in or not during the next month of January 2015, and about some novelties about the payment of the VAT of importation of goods.

390 and new 303

First of all, there will not be obligation to submit the form 390 those who pay their VAT on three months basis and will pay their VAT on the simplified system and/or hire urban real estate goods. In exchange, page 3 of VAT form changes substantially and in it, you will have to display in the fourth term of the year all the annual information that used to be displayed on page 6 of form 390 that now you don´t have to submit. VERY IMPORTANT: if the activity would cease during the year and therefore there wouldn't be obligation to submit the last term of VAT form 303 then you are obliged to submit form 390.

Importation VAT for year 2015

Those entrepreneurs that pay their VAT on monthly basis, can choose to defer the payment of the VAT for importation of goods and aggregate that amount to their month VAT declaration (a new box has been included to display this information on new forms 303). This choice has to be communicated to the Tax Office before January the 31st of 2015.

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2015 TAX REFORM - TAXATION ON RENTALS

Reduction on revenues from the rental of real estate:

When the rental came from an estate use as habitual dwelling of the tenant, there is a reduction of 60% of the net rent and this reduction rose up to 100% when the tenant was aged between 18 and 30 years old. This reduction of 100% disappears.

Also for the revenues obtained on no regular basis or with a generation period of more than two years, the percentage of reduction on them falls from 40% to 30% and the total amount to apply that reduction on, cannot be over €300,000.

Revenues from economic activities:

To consider rentals from a real estate as an economic activity, the possession of a commercial local is not a requirement anymore. It is just needed to have an employee full time.

Deductions for the quote of tenants:

The deduction for tenants for the payment of their rentals of his habitual dwelling disappears. If tenants have been living on a rent before 2015 and have been entitled to deduct for that rental, they will keep the right to keep on do it so during the existence of that rental according with former regulation.

Serveco

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antoniojara@serveco.es

1) Disposal of funds of a pension plan or similar products:

For the already existing cases that allowed the anticipated disposal of the funds placed on a pension plan (serious condition or illness and long term unemployment), now the law foresees a new one: the amounts link to the investments placed more than 10 years ago. As they can be disposed in anticipate they can be object of seizure as well.

Withdrawing of these amounts can be simultaneous with new placements in the fund provisions for the contingencies that might occur. The disposal of these amounts related to investments placed more than ten years ago will be able to be effective from 1 January the 2025.

2) Limits to contributions to pensions plans:

The limit to the contributions to pensions plans of the spouses that don't develop any job or economic activity or in case of developing doesn't provide incomes over €8,000 is risen from €2,000 to €2,500 per year.

And limits for contribution to own pensions plans now for all kind of tax payers no matter their age are the lower of these two limits:

- 30% of their revenues from jobs or economic activities or

- €8,000 per year (before the tax reform it was €10,000 per year and €12,500 if taxpayers was older than 50 years-old).

3) Pensions plans and reduction of 40% or 75% for contributions made before 1 January 2007:

It gradually dies out the possibility of making the option for the previous Income tax law.

Remember that with retirement is not compulsory to dispose of a pension plan either in terms of the periodic rent or in terms of a whole amount of capital in just one go. So if retirement takes place from 2015 on, the reduction of former law of 40%-75% foreseen in case you apply for the payment of the funds of the plan in one payment will be effective if you apply for it during the years 2015, 2016 or 2017. Afterwards, the capital will be reimbursed to the pensioner without tax reduction of any kind.

If retirement took place between 2011 and 2014 and funds haven’t been applied in capital yet, reductions will be effective if application of the capital funds takes place within the period of the next eight years from retirement date.

If retirement took place in 2010 or previously and funds haven’t been applied in capital yet, reductions will be effective if application of the capital funds takes place before 31 December 2018, otherwise this tax benefits will be lost.

2015 TAX REFORM

Exemption for the first € 1,500 of dividends

This exemption disappears.

Sales of preferential rights to acquire shares

These sales don't reduce the acquisition value of the shares they come from. Now they will be taxed on the sale period as capital gain. And in the moment of their transmission, the financial broker will have to make retention on account of the seller's income tax. This regulation will be enforced on 1 January 2017.

Capital gains excluded from taxation in cases of investment

People over 65 years old, besides the case of exemption when they sell their usual dwelling, now have a new case of exemption when they sell any kind of asset, if the product of the sale is invested within the following six months to set up a life annuity in their favour. The maximum amount that can be destined to this life annuity is €240,000.

When the total amount perceived for the sale is not totally invested, the capital gain will be taxed proportionally to the amount not invested. If the money invested in the life annuity is reimbursed in advance, the exemption is not applicable and therefore it would be necessary to pay the unpaid taxes.

Revenues coming from an insurance established in favor of the mortgage creditor

When there is a life insurance in favour of the bank over the loan guaranteed with a mortgage, to cover the permanent incapacity of the borrower, in case that incapacity happens and therefore the debt disappears, the borrower would be taxed for the disappearance of the debt as if he/she would have been the beneficiary of the insurance.

New exemption for the Long Term Savings Plans

There is a new financial product called Long Term Savings Plans. The positive revenues coming from these new plans implemented as life insurances, deposits or financial contracts, will be tax free if the tax payers do not dispose any amount from them in the term of five years from its setting up.

This Long Term Savings Plans will initiate with the payment of the first premium or the first placement and they will be call off with anticipated, even partially, reimbursement of the amounts placed before the five years term, or when the tax payers might make placements over €5,000 in one year.

Placements to these Long Term Savings Plans cannot be over €5,000 per year in any of the years of existence of the Plan. If any of these conditions is broken, then the Bank would charge tax retentions over all the revenues arisen from the beginning of the Plans as payment in advance of the tax that the tax payer will have to face for the loss of the exemption.

Just as it happens with the 100 € tax devolution for maternity, these are negative taxes, and the taxpayers can apply for its payment in advance through the year and they won´t have to wait to make the final tax return.

So, tax payers that develop an activity that includes them in the Social security either as self-employees or employees for someone else are entitle to a tax deduction of €1,200 every year for each descendant or acendant with a disability as long as these disabled people lived on account of the tax payers that apply for these tax deductions.

Large families are entitled to the same tax benefit of €1,200 per year and the figure just double in other €1,200 if the family is large family of special condition.

These tax benefits will rule from 1 January 2015 and the application form will be ready on January or February.

On 2nd August, the Regional Government of Murcia passed a bunch of tax measures in order to strengthen the economic growth:

Region of Murcia Tax over transmissions of goods

The acquisition of real estate goods by youngsters under 35 years old or by companies held 100% by these people will be tax with just 5% of tax over transmissions of goods.  

Region of Murcia Inheritance Tax

Reduction of 99% over cash acquired in the inheritance

 A new reduction is passed and it is a 99% discount of the tax to pay for those heirs that aim the money from the deceased or from a life insurance policy to the acquisition of shares in a company or to initiate or widen an individual company.

The amount of money the reduction of 99% can be applied over is up to 300.000 € and 450.000 € if the heir is a person with at least a 33% of disability

Acquisition of an agricultural company

The new law passes a reduction of the value of the agricultural company of 99%.

Region of Murcia Donation tax

Reduction of 99% of cashed donated for the acquisition of a first company by people under 35 years old

The amount of money the reduction of 99% can be applied is up to over 300.000 € and 450.000 € if the heir is a person with at least a 33% of disability instead of the 100.000 € and 200.000 € the former law displayed.  

Reduction of 99% of the value of real estate donated for the development of a first company

This new reduction is passed and it covers additional requirements.

The value of the property the reduction of 99% can be applied over is up to 300.000 € and 450.000 € if the heir is a person with at least a 33% of disability

antoniojara@serveco.es

The Spanish Tax office has implemented a new procedure to speed up and ease the devolutions of tax returns subjected to any kind of examination. The name of the procedure is called "Verifica" (Verify).

With your tax reference number, you can check whether the Tax office considers if you have the profile to be included in this new procedure or not. If you are, and always considering you have an electronic signature or a PIN 24hours, you will be able to:

• If you agree with the incidences that the Tax office has detected, you can give conformity to them and the devolution calculated by the Tax office will be ordered automatically.

• If not, you could submit allegations to the objections the Tax office has. The advantage is that IS YOU the one that initiate the official procedure to obtain the devolution whenever you want, and you won´t have to wait until the Tax office decides to check your tax declaration.

In general terms and for everybody, is approved the exemption of the possible capital gain that could arise because of the transmission of the habitual dwelling of the debtor to the bank, to call off the loan obtained to pay the property. This with effect from January the 1st of 2014 and for transactions made in the last four years.

Therefore, in case you declared a revenue for this, you can apply for the revision of your income tax declaration to obtain back the tax paid back then. In exactly same terms for the “plusvalía” due to the Town Hall.

Probably the introduction of this tax measure in the Income Tax is something more of a wink to the society than effectiveness on pocket of citizens affected by a bank execution, as the value of the property now is much lower than it was when it was originally bought, but it could really have some economic effect on the “plusvalía” tax due to the Town Hall, as the rules to calculate the “profit” arisen with the bank execution of the property had nothing to do with the real economy of the transaction, and therefore the citizen affected by forced transmission of the property of its habitual dwelling could be given back the tax paid, or at least to obtain the nullity of the tax debt arisen when it happened.