Spanish and United Kingdom Law

Since its promulgation, Spain has joined countries that aim to attract residents of great fortune.

There is currently an international struggle on how to attract residents with great international private fortunes. Spain has taken its time in joining these and the legislation is still lacking in important aspects, however, it is progressing. The UK, France and Germany or more recently, Portugal and Greece, just to mention a few, have been offering for decades, visas, residence permits and tax advantages for foreigners in exchange for them making investments and/or acquiring real estate in their territories.

Spain has attracted more than 2.000 millions of euros thanks to these initiatives

From 2014 to 2017, Spain has attracted more than 2.000 millions of euros thanks to these initiatives. Data that has shown how our country, despite its delay in the development of these measures, it has finally joined the bandwagon of its European peers and step by step, it has turned into one of the most popularly chosen countries of residence.

Everything began with David Beckham. Not with him, but with his law, or better said, with the law that took its name from the tax reform after his arrival to Real Madrid, in 2003. And, in the midst of galactic maelstroms, was approved in Spain a tax regime that sought to boost the economy and the talent of highly qualified and specialized managers and professionals.

Office that advised Beckham in the United Kingdom and the Spanish

In those years,I worked at an office that advised Beckham in the United Kingdom and the Spanish measure surprised us very pleasantly. We always had the doubt of whether this tax regime would have been approved in the same way if the subject was an Atleti player, but this is another debate.

The Beckham Law offered in 2003 to the impatriates the possibility of paying only for income obtained in Spain and with the reduced rate of non-residents, instead of being taxed as residents by world income and rates close to 45%.

In 2010, this advantageous tax reality suffered cuantative cuts as its application to the salaries that do not exceed 600,000 euros per year. In this way, high level athletes were excluded, which made the signing of international stars more expensive and ... Read more

As we announced in our last article, the New Spanish Law reforming Self Employed conditions came into force on the 1st of January 2018. These are some of the new measures that bring more clarity and benefit to the freelance worker:

1. VAT Deductible expenses for self-employed people working from home.

Contractors working from home can deduct a percentage of the total home surface used for business. This must be negotiated in advance with the tax office.

2. Utilities and other property-related deductible expenses.

Part of their utilities are deductible such as; council tax, property management fees, house insurance, rent, electricity, gas, water, telephone and internet bills. Utility Bills can be deducted applying 30% to the total house area used for business.

• E.G. A freelancer working from home has a house electricity bill per amount of €100 plus €21 VAT; as this uses only the 20% of the place for professional activities the VAT amount this can deduct is the following: 21 x 20% x 30% = €1,26 on VAT

3. Accommodation and meals allowances related to business.

Food, meals and accommodation which take place during the development of professional activities will be exempt from income tax with the limited amounts detailed on the chart below:

How can you deduct these expenses:

1. Expenses related to working days and linked to professional activities
2. Expenses being paid with debit or credit card or through a bank transfer
3. Expenses with a proof of payment document that indicates date, intention and verified payment
4. Expenses related to restaurants and catering establishments. Petrol stations or groceries will not be deductible.

4. Other deductible expenses.

Health insurance premium – which covers the insured; wife or husband and children under 25. Maximum deduction limit will be 500 Euros per person and 1,500 Euros per person for those with a disability.

Mobile phone – If you only have one mobile line ... read more

Eva de Francisco

Project Manager
For and on behalf of:
Del Canto Chambers

The Decision has already aroused the first controversies in the Spanish legal scene and in the Consumers Associations that will undoubtedly raise this case to the European Court of Justice which will have the last word to say.

The decision of the Spanish Supreme Court

It is not the first time that the CJEU corrects and amends the decision of the Spanish Supreme Court. Although, the complete sentence has not been published yet. The Supreme Court agreed with the banks in detriment of the consumers considering the AJD Tax (Actos Jurídicos Documentados) should be paid by consumers.

Who pays mortgage expenses

We advanced in our last article Who pays mortgage expenses – lender or borrower? The jury is still out , that clients were expecting this decision as a good opportunity to recover part of their high amount paid on mortgage expenses.

Patricia Suárez, President of Asufin (Association of Financial Users)

Many voices have been already heard against this decision; Patricia Suárez, President of Asufin (Association of Financial Users) who quotes that “the economic impact on banks and the increase in litigation may have weighed on this decision, but Magistrates have been wrong “

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