New Asset Reporting Law for Spanish Residents

I haven't seen anywhere whether or not these assets  are likely to be taxed although I would expect that once all the information is to hand it is very likely. Also we do not know if it will be the whole amount   or just the amount over 5,000€

Johnx-I think you are wrong about  not many ex pats having in excess of 50,000 in assets in each category- many have properties in the UK, many have investments and savings accounts. The cash cow is being well and truly milked!

Sorry a slip of the keys too much Christmas pud Yes I am aware that it is 50,000

Mike

I said

Scuba it is 50,000 euros and if a tax resident  had over 1 million euros  in assets, worldwide (it used to b e much less)  they have always been required to declare the assets and pay patrimonio tax on it.

It should have read

........     if a tax resident  had over 1 million euros  in assets, worldwide (it used to b e much less)  they have always been required to declare the income on the  asset and pay patrimonio tax on it.

scubamike-it's50,000 NOT 5000!

This new requirement is not for income tax purposes-it is a declaration of assets, whether they are liable for tax or not in Spain or anywhere else, so many different assets previously not needing to be declared now have to be.. Even if you are making income tax returns you still have to do it, and the information required is very detailed, so accountants WILL need actual documentation, not figures scribbled on a piece of paper. Roberto got it right when he said that if you are making tax returns the Hacienda can scrutinise you even more, but if you haven't registered why would they-you're under the radar. Unfair. Everyone should be compulsorily entered on the Spanish tax system so that they can be chased up? via the padron?

I may have had some problems with my noughts today but I would struggle to find six noughts in my worldwide assets

Campo.

and the information required is very detailed,

I have not seen anything about what detals will be required other than (each) asset over 50,000 will need to be declared.

Please let me know where I can read the info which you have.

Thanks  John

White and Baos solicitors, Costa Blanca News.Round town News legal advice column.

Form is modelo 720

To asist those who would like to know too.

However I would draw attention to the line :- 

  The Spanish authorities are stepping up the fight against tax fraud, especially against undeclared assets for which no tax is paid

So it would appear they are not looking for new ways to tax people but to recover tax which should already have been paid. Thus us honest guys (thats all of us I am sure)  have nothing to fear.

The Spanish authorities are stepping up the fight against tax fraud, especially against undeclared assets for which no tax is paid. Recently new Laws 7/2012 and Royal Decree 1558/2012, have been passed in this regard.Thus, under this new legislation, our readers have to consider that there are new obligations to report and inform the Spanish tax authorities regarding assets, goods and rights held outside of Spain.

1. ASSETS AND RIGHTS ABROAD WHICH MUST BE REPORTED TO THE SPANISH AUTHORITY.. - Accounts located abroad, this includes savings accounts, deposits, credit accounts, etc.. - Shares, rights, insurance policies and annuities deposited, managed or obtained abroad.

This includes trusts, pools of assets without legal personality, interests in collective investment institutions, (investment funds), life insurance policies, etc. - The real estate property and real rights on them, located abroad.ETC.

2. WHO IS REQUIRED TO REPORT AND INFORM THE TAX MAN:Amongst others:- Individuals and companies resident in the Spanish territory.- Permanent establishments in Spain belonging to non-resident individuals or entities.-Inheritances before being accepted, or other subject without legal personality, etc..

3. THE INFORMATION AND DOCUMENTATION TO BE PROVIDED:The documentation will depend on the type of assets. Broadly speaking, the first requirement would be that the identification details of the assets or right be provided. Secondly, all details of the entity where the assets or right is engaged. Finally, all the economic details of the assets, that means balances, surrender values, etc., referring to the last day of the year, that is to say to the 31th of December.

4. WHEN YOU ARE NOT REQUIRED TO REPORT:Amongst others; entities fully exempt of taxes do not need to provide this information, also accounts abroad when they are in banks domiciled in Spain.Similarly, when all assets of the same kind, together do not amount to more than 50,000 Euros, according to the calculation methods which are set in the laws mentioned above

.5. DEADLINES FOR REPORTING:The reporting period is set from the 1st of January to 31st of March of the following year. That is to say, the first statement / declaration to the tax man it should be done in the first quarter of 2013, regarding the assets and rights of the year 2012.The law also predicts penalties for failing to comply with this obligation.If you find yourself in this situation, and i.e: you are tax resident in Spain but you have assets abroad whose value is above the ones stated, our firm can assist you in fulfilling your obligation to communicate them to the taxman or, where appropriate, consult with the person who normally would assist you with your tax obligations in Spain

.The information provided in this article is not intended to be legal advice, but merely conveys general information related to legal issues.White & BaosTel: +34 966 426 185 E-mail: info@white-baos.com White & Baos 2012 – All rights reserved

John: " If they do, and they derive any income from them, that income is taxable ONLY IN THE UK  not in Spain. "

Not too sure what you were referring to here; if you have a deposit account, for example, anywhere outside Spain that pays interest, that income is taxable in Spain, if you are a fiscal resident in Spain. Why would it be payable in the UK? 

"Its reintroduction, following the published law, will only be for a two-year period, 2012 and 2013, which corresponds to tax periods 2011 and 2012, respectively.

The reason, following the law’s own wording, is to “weather the financial storm which afflicts Spain at a time where those who own more have the moral obligation to contribute more to society following the legal principle enshrined by art 31 of Spain’s Constitution”. As from 2014 this tax will be abolished, in theory, again. Don’t hold your breath."

Mmmm.......

I see annuities are included. So, someone who is receiving a regular income from a UK annuity, and declaring it, and paying any tax due on it, will now have to find out exactly how much their "pot" is worth and declare it if (as is likely in many cases) it's more than 50k - not that you can liquidate such an asset. Why?

As for this new legislation being widely publicised, yes, I am aware of it being mentioned in the papers and on the radio, and obviously by all interested parties (lawyers, accountants etc.) who see an opportunity to make some more money out of yet more bureaucracy, but shouldn't us law abiding, fully registered citizens reveive an official notification direct from Hacienda, explaining exactly what is required of us? I'm sure there's a huge slice of the population who don't read the papers. 

This message was last edited by johnzx on 30/12/2012.

 John said, relating to rental income on a UK property

"If they do,   and they derive any income from them,  that income is taxable ONLY IN THE UK  not in Spain".

I agree that rental income income derived from a UK property is taxable in the UK, BUT, my understanding, is that it is also taxable in Spaina, lthough you can obviously offset the UK tax paid, to avoid double taxation.

** EDITED - Inciting- Against forum rules **

INCOME ON PROPERTY RENTALS IN UK IS TAXABLE ONLY IN THE UK.

THAT MEANS,  IN THE UK NOT ANYWHERE ELSE.

 Johnzx

Firstly I am not a she.

Secondly, what makes you think I know nothing about this. Just because I've disagreed with you, doesn't mean I'm wrong, and you're right. I'm very happy for you post our private discsussions in  the public forum. So please do not post insulting comments about me.

With regard to the actual issue, then as you quite rightly point out, fiscal residents of Spain are subject to tax on worldwide income. Their is an agreement between Spain and the UK which sets out where income can be taxed, and with regard to income from UK property it does not say, unlike government pensions, that it shall be taxable only in the UK. It says it "may be taxed" in the state in which it is situaued (in this case the UK). My understanding of this, is as I then posted

This message was last edited by johnzx on 31/12/2012.

This message was last edited by johnzx on 31/12/2012.

This message was last edited by johnzx on 31/12/2012.

 Johnzx

I'll not respond to the rest of your post, because, frankly I find your comments quite patronising, but this statement is incorrect.

Fine BUT, in the situation you are referring to  that does not apply in the Double Taxation Agreement between Spain and UK, but bewteen UK and other countries.

In case you still think I'm wrong, then I suggest you read the Double Taxation agreement between the UK and Spain, and in particular Article 6, because I quoted directly from it. Why would you think I would quote from the double taxation agreement with another country.

If you still think I am wrong, then could you point me to a source which confirms your understanding, in which case I will happily bow to your superior knowledge and apologise.

** EDITED - Against forum rules **

This message was last edited by EOS Team on 31/12/2012.

This thread was getting out of hand and abusive so it was "Hidden" pending review.

The thread topìc has been restarted so we have locked this one to avoid duplication.

Please remember to keep your cool AT ALL TIMES even when you strongly disagree or dislike another member's attitude.

DON'T post abuse against other members in a thread, please complain to us via the "Spam post or abuse? Please let us know" option (at the bottom of every post) so we can review it and take the appropriate action.

The new thread can be seen here:
What has happened to the "Reporting assets outside of Spain" thread?