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"We can pay cash for most things or use our French debit cards so have no need for a local Bank and if we travel to and from France, Portugal and Gibraltar how would the Spanish authorities ever know how long we have been in the country." Rosetti - during your sabbatical here, paying cash for everything, you will rely on many things. You will rely on tradespeople to fix things, you will rely on cooks in restaurants, you will rely on bar staff and shopkeepers to charge you the right amount. You will rely on the staff of the Ayuntamiento to organise rotas so that streets are swept and garbage is emptied. You will rely on there being local police ensuring your car and your home are safe. You may rely on a health service staffed by skilled professionals. All those people were educated and trained in the Spanish system, paid for by people paying tax in Spain. There may be things we can complain about in Spain's infrastructure, but for day-to-day living things trundle along OK, thanks to hundreds of thousands of people doing their jobs, educated and trained through tax. During our time here, whether it be our lives or merely a sabbatical, we benefit from the spending of tax-payers' money in Spain. Why would one not want to contribute to that same system?
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Blog about settling into a village house in the Axarquía. http://www.eyeonspain.com/blogs/tamara.aspx
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Tamara, not everyone shares your benign Weltanschauung. The quote below is from one of many responding to Bruce Krasting's piece in current ZeroHedge. If one was doomed to spend 24/7 haunting a forum board, ZH would give more variety and intelligent info than most. I am not being patronising.
All flight capital is not dirty money, most of it is protecting it from corrupt politicians. The politicians make laws to confiscate wealth thus making their theft technically legal and all efforts to evade their greedy grasp criminal. Making broad general accusations of "good guys" and " bad guys" is reckless and presumptuous. One must be careful of assuming that all large accumulation s on wealth are stolen , extorted, or obtained by some sort of immorality as that is pure socialist nonsense and lies.
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Interesting views from people to my thoughts on the difficulty I have had in gtting a residents visa. Spain has made it too difficult so am having a vacation albeit a long one of a year or so in a Country I've never visited. Indeed in my 30 years in Europe living and working in Spain the only other countries I have visited is Italy and Switzerland, so I wanted to experience living in another Country before resuming my work in France.
As a vacationer I do not expect to be pay local taxes and I certainly don't expect to declare my worldwide assets or income.
Spain should welcome me renting a house that's been empty for 4-years, employing local staff. All of which are very happy to be paid cash - in fact they suggested it. We have been here only a short while but have not any one that was not happy to accept cash including theowner of the property and the local vet when one of our dogs needed treatment.
My impressions so far are cash is well received and except for our French number plates on the Audi are blending well with the 'local' way of doing things.
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I remember years ago the Balearics introduced a "tourist tax" payable by all visitors arriving in the islands, something presumably Tamara would be very much in favour of. They dressed it up as some sort of "green" tax, which of course it wasn't. As far as I recall, they scrapped it when visitor numbers dropped sharply as tourists turned to the Costas & Canaries in their droves!
Regardless of whether Rossetti pays cash for everything or not, he is surely contributing every time he spends any money? Every meal in a restaurant, every drink in a bar, every shop purchase, carries IVA, not to mention the tax on the fuel for his car, so he's paying tax into the Spanish system. I say, welcome to Spain, thanks for coming, and enjoy your stay (vacation)!
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"Get your facts first, then you can distort them as you please"
Mark Twain
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Regardless of whether Rossetti pays cash for everything or not, he is surely contributing every time he spends any money? Every meal in a restaurant, every drink in a bar, every shop purchase, carries IVA, not to mention the tax on the fuel for his car, so he's paying tax into the Spanish system.
But all of us who live here do that, but we also pay the required taxes, without which there would be nothing for 'tourists' to come to !
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_______________________
"Get your facts first, then you can distort them as you please"
Mark Twain
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I suppose any money is welcome now, given the current situation. One would understand that Rossetti would have paid tax on his earnings in France or is he actually working in Spain? and I've missed the point... I haven't read all of the thread. But it seems to me that paying cash to the vet, local workers and rent etc is a way that people avoid paying IVA and the ones that receive it, avoid paying income tax or social security. So petrol, restaurants etc would contribute into the system but the rest probably wouldn't. (until it is re-spent on something that carries IVA) The only reason for paying a vet in cash is so that he doesn't have to declare the earnings. This unfortunately is one of Spain's major problems. If the country supported the freelancers and professionals more, especially at these times, they would probably declare everything. The problem for many is that if they declare everything then they are not left with enough to survive on and would probably go out of business or on the dole, which would almost certainly start costing the government even more money. High social security payments, tax retentions of 21% on every invoice etc means you have to do a lot of business to earn a salary, they do not have the cash flow they had before when retentions were less. If you run a company the story is different, it is easier to manage but costs more. The vast majority of people who are out of work, welcome cash because it is their only way of generating an income. No it is not right or correct, but the vast majority of Autonomos in Spain do have to juggle payments and invoices to even earn a basic salary now and support their family. Not everyone is the same but many don't pay into the system because they are effectively being selfish, thinking of themselves in order to assure their family can eat and live under a roof.
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A donde el corazón se inclina, el pie camina.
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i think it's unfair for someone to tamper with my post of 09h04 which was simply and only "So, you agree with Ross?" and add some crap about "income tax and patrimonio tax". i haven't a clue what patrimonio tax is and have no wish to learn. but am resentful of people putting bullshit words in my mouth. it makes one wonder about the integrity of what else i read on this site.
while i'm here, john, i'll try and give you a lesson in logic. i don't want to scroll back but Ross said words to the effect that the only reason anyone would want to know details of his overseas assets was to put their hand in his pocket.
you answered with words to the effect that both the usa and spain wanted to know so they could levy taxes. you didn't say that they also wanted to send him christmas cards or award him overseas-investor club card points, which he could spend at his local mercadona.
to me, you seemed to confirm - precisely - the point the Ross had made, to wit, the only reason they wanted to know was to put their hand in his pocket. and no other reason.
so i replied "So, you agree with Ross?".
to which you answered: "sorry but I do not see your logic on that one."
i am at a loss.
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Well I've had a good read through this thread, from people arguing over petty things like where a bond should be listed if it's for example a dated coupon corporate bond; a perpetual corporate or maybe what is really a bank term deposit, which may have been labelled a bond through to other people moaning about visitors paying their taxi drivers and restaurateurs in cash!
I'm interested because I was thinking of buying a villa for holiday use for myself and family. WAS interested.
In recent years I have rented serviced apartments or villas for a month or so once or twice a year and received marvellous hospitality and enjoyed the varied delights of Valencia; Marbella; Barcelona etc. etc including watching some great football to boot (sorry I couldn't resist that) eating great food and making a few friends as well. In brief, I have come to love Spain.
However I must say to people knocking "long term tourists" for not allowing themselves to be mugged by the thieves and incompetents in government I can only say stop being such bitter and stupid people. Without the money spent by tourists in the busy times you won't have the facilities to enjoy off-season. And any tax liability is on the head of the receiver, not the spender. Relax - brush that chip off your shoulder. Be pleased that "Rosetti" or anyone else is at least turning up and spending some money - without that how can wealth be created within a state to pay for services like hospitals and police? You don't honestly think that ALL Rosetti’s cash spend goes under someone's mattress do you? I often spend up to 80 or 90 days in other countries and none has ever suggested I pay tax there. Not even the good old United States.
Regarding taxes I can tell you that saying to an inspector, "Ooh I didn't declare my income on my flats back in Bayswater because I paid UK tax on it" isn't going to garner much sympathy. You should of course declare the income and ensure your accountants produce the tax certificate to ensure you don't pay "double tax". Just as you do with your dividend income from shares. The registrar will always send a tax certificate even if you hold the shares in nominee names. You still have to declare that dividend income. Remember that you are the one responsible not your accountants, they aren't going to pay any fines and interest for you. YOU sign the form.
However my main reason for replying on this blog is to say that I first heard of the new taxes from an accountant who headed the text message to my phone, "CANCEL ANY PLANS TO BUY IN SPAIN".
This was well timed as I have rented a very nice villa in Marbella at the end of April with the intention of finally biting the bullet and buying somewhere. Now I definitely won't.
My opinion on taxes for people buying a holiday home is that obviously they should pay income tax on any rental income gained in that jurisdiction and obviously the net / gross will always be declared "back home" but again, in reverse of the previous situation tax paid in Spain will be taken into account by ones UK accountants and Her Maj. Seems fair to me. Then one will obviously pay local taxes, what we called rates when life was normal, you know when market stalls weren't called "Pop Ups" and if someone slipped over the first thing you did was go to their aid and not video them for YouTube. I can't think any fair minded person would object to paying those taxes.
However anyone who has worked (no, not lazed around employed by local government drinking coffee and moaning about stress and compensation while ignoring the phone and booking your holidays to be taken during your next extended sick leave) - WORKED for a living for 40 years and paid a fortune in PAYE and NI will surely have had enough of being stung by scroungers and incompetents and I guarantee that this new range of taxes on non-residents will lead to a further drop in property prices. I just rang a friend who had sold a villa 5 years ago and was considering buying back in now at substantially less than he sold at and he said, "God no - no way - are you mad?". Things will only get worse now.
Like New York when it was bankrupt. It got back up there by lowering taxes and throwing out the excesses of bureaucracy - not front line workers like dustmen but office scroungers and bosses. Higher taxes will lead to a lower tax take as it always does and the spiralling mess of debt and front line cuts will continue. Don't forget this is all about the bailout and the consequences of it. And this is how it really works as observed by an American friend....
It is a slow day in a little Spanish village. The streets are deserted. Times are tough. Everybody is in debt, and everybody lives on credit.
A rich German tourist drives into the village and stops at the local hotel. He puts a $100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night.
The owner gives him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the $100 note and runs next door to pay his debt to the butcher.
The butcher takes the $100 note and runs down the street to repay his debt to the pig farmer.
The pig farmer takes the $100 note and heads off to pay his bill at the supplier of feed and fuel.
The guy at the Farmers Co-op takes the $100 note and runs to pay his drinks bill at the tavern.
The publican slips the money along to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him services on credit.
The hooker then rushes to the hotel and pays off her room bill to the hotel owner with the $100 note.
The hotel proprietor then places the $100 note back on the counter so the rich traveller will not suspect anything.
The traveller comes down the stairs, picks up the $100 note, states that the rooms are not satisfactory, pockets the money, and leaves town.
No one produced anything.
No one earned anything.
However, the whole village is now out of debt and looking to the future with a lot more optimism.
And that, is how the bail out package works!!
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_______________________
"Get your facts first, then you can distort them as you please"
Mark Twain
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from johnx earlier in the thread
I was chatting with a couple of Spanish women who work for a Government Ministry, both are above average intelligence (one has a doctorate and is her husband holds a senior position in Hacienda). I mentioned the new tax law on disclosure of information on assets held outside Spain, and very surprisingly, neither knew anything about it.
I was wondering if others here with Spanish friends have discussed the new law, and if so, what their Spanish friends' general opinion on the law is..
i have lots of spanish friends people i know and they no nothing about any of this or even care about it.
they hate it when i put money on the table for any reason and always tell me that in spain `we put money under the table`
from my experience the average spanish pikey person has no concern for a lot of the things we discuss on here such as paying for things and taxes.
their bank accounts are one way and they intend to keep it like that.
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i coldnt stay away from you miserable whining whingers for some reason
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How can we afford to ignore this law when the penalties are so horrendous. We certainly don't like it but have no choice. How can the people Mungry spoke to be so ignorant about it?
Svenn-it is not petty to try and clarify this very intrusive law-knowing which asset goes into a specific category can mean the difference between needing to divulge it or not.
Don't know what most of your posting was about, but I do agree that this new law will put many off buying in Spain
I received an email from a tax accountant that I have asked questions about the new tax. She said it was very long, about 22 pages and hard to understand. Completing that will be fun then!
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Will those foreign assets then be included to asses the newly reinstated wealth tax or will they be taxed in another way?
Barry
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Will those foreign assets then be included to assess the newly reinstated wealth tax or will they be taxed in another way?
Barry
All ones assets, where ever they were, have always (for the years when Patrimonio Tax was payable) been liable to Patrimonio Tax. So nothing will change, except perhaps it will be more difficult to 'forget' to disclose them.
This message was last edited by johnzx on 04/02/2013.
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_______________________
i coldnt stay away from you miserable whining whingers for some reason
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This new reporting law could have a significant impact in a number of ways.
Johnzx has already mentioned Patrimonio tax, and previously I have mentioned rental income. I'm not even going near capital transfers between partners, which is allowed and done all the time in the UK, but there are NO allowances for this in Spain, and technically is subject to gift tax - although nobody declares it. But note, they now have access to the information you provide.
However, one other potential imapact is inheritances in the UK. Traditionally, people have ignored inheritances they receive in the UK, and thats been the general advice they have recieved. It's not mentioned in the double tax agreement between Spain and the UK, and it is taxed differently in the UK
In the UK it is taxed on the estate of the deceased, whereas, in Spain, as we know, it is taxed on the beneficiary, with very low allowances except for property in some provinces where the beneficiary is a resident in the province.
As we know, Spain taxes its residents on ALL worlwide income and assets. This means if you inherit say £50,000 in the UK lthis year- this is technically taxable in Spain, less the appropriate allowance. As I said earlier, the advice has always been to ignore this and not bother declaring in Spain. However, if this is the case now, then you have a problem, because you have to declare this next year under the new rule, either because its your first declaration, or its an increase of €20,000 on a previous declaration.
If you don't declare it, then you face the potential penalties that involves, as previously discussed, and if you do, and haven't declared it this year and paid tax on it, then you face the penalties for that instead. But, more importantly, you now face having to pay the tax on the actual inheritance itself.
I was reading a lawyers blog the other day, where the actual advice was not to declare it - that was 2010. There were some questions at the bottom, and the advice to one last month, was that it was payable, but whether you declared it was upto you. Not sure thats good advice, unless you understand the risks.
This message was last edited by kathyslad on 04/02/2013.
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Well this is from the Hacienda website and sums it up (google translation, but pretty clear)
In the event that the Model 720 is present on any of the reporting requirements on assets and rights located abroad, could we check whether they match income declared? What if income corresponding to undeclared could regulate?
Yes, you could check the property and rights declared corresponds to income subject to having been declared, and if it is found that stem from unreported income could be regularized in accordance with current regulations.
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Unless they were tipped off about this and any assets overseas how would they know? How are they going to monitor this unless they they have some reason to suspect and invesigate? Even then they would have to have some idea of where to start as I don't think the authorities are yet joined up to that extent.
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Poppyseed
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This is the original of the post by Kathyslad
http://www.agenciatributaria.es/AEAT.internet/Inicio_es_ES/La_Agencia_Tributaria/Campanas/Declaraciones_informativas_2012/_INFORMACION/Ayuda/Preguntas_frecuentes__Modelo_720/Un_solo_modelo_para_tres_obligaciones_de_informacion_diferentes.shtml
This is another on-line translation:-
If a person or entity is required to submit disclosure statement, model 720, both by accounts located in foreign financial institutions, such as values, rights, insurance and revenues deposited, managed or obtained abroad, and for real estate located abroad and rights thereon, would be declared the three obligations of information in the same model?
Yes, each of the three blocks of goods, constitutes an obligation of different information, but three reporting obligations are articulated through the same information model. In this way three reporting obligations would be fulfilled by completing the model 720 informing all goods and rights with respect to the obligation to inform.
Rules: Each of the following blocks of information, constitutes an obligation of different information:
Accounts in financial institutions situated abroad. This information obligation is regulated in article 42 bis of the General Regulation of the activities and procedures of tax inspection and management and development of common rules of procedures for the application of taxes, approved by RD 1065 / 2007, of July 27. (In the 720 model corresponds to the value of the "key type of good or right" "C").
Values, rights, insurance and income deposited, managed or obtained abroad. This information obligation is regulated in article 42 ter of the aforementioned General Regulation approved by RD 1065 / 2007, of July 27. (In the 720 model corresponds to the values in the field "key type of good or right", "V", "I" and "S").
Real estate and rights over immovable property located abroad. This information obligation is regulated in article 54 bis of the General Regulation approved by RD 1065 / 2007, of July 27. (In the 720 model corresponds to the value of the "key type of good or right" "B")
This message was last edited by johnzx on 04/02/2013.
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This is the original of the post I made
En el caso de que se presente el Modelo 720 respecto a cualquiera de las obligaciones de información sobre bienes y derechos situados en el extranjero, ¿se podría comprobar si se corresponden con rentas declaradas? ¿en el caso de que se correspondan con rentas no declaradas, se podría regularizar?
Sí, se podría comprobar si los bienes y derechos declarados se corresponden con rentas susceptibles de haber sido declaradas, y si se comprobase que tienen su origen en rentas no declaradas se podría regularizar conforme a la normativa vigente.
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