Any legal questions related to Coronavirus situation in Spain?

In regards to amounts deposited in Courts, the General Secretary of the Administration of Justice has  established that the delivery of them to the parties or third parties will be considered of urgent nature during the period of validity of the state of alarm.

I am pleased to answer any question, as always, of course

M

I agree 100% with Baz's comments.

I reckon 100% that this has become futile.

Thank you so much for further clarification Maria.

This latest directive initially sounded like potential good news for those who managed to get their successful rulings enforced to the point where the Banks subsequently paid monies into the court ready for forward transfer, but those forward transfers did not take place and were delayed for whatever reason. ( which in itself has been contentious even prior to Covid 19).

Now, according to the latest directive, it sounds as though monies should be released by the courts to the legal representatives.

For those confused by the processes and subsequent delays it’s worth reflecting that there appear to be three types of processes to take account of however.

The return of principal monies, The return of awarded interests, and The return of awarded costs.

What many do not appreciate and for the sake of transparency ( and therefore it’s  worth noting) is that the return of principal monies appears to assume an initial % deduction of costs,  which at a later point in times is reassessed ( for those who were successfully awarded costs and/ or interest). 

This therefore requires further legal processes that require judicial approval. This judicial approval requires that Barristers submit calculations for interest and costs to the judge, and only at a later point in time will the return of awarded interests and / or costs be confirmed for subsequent return to the client. And in some cases these are not handled as one process but two? 

But again it needs to be stressed that the Banks in these additional processes requiring judicial approval can contest these calculations and the judge then has to make his/ her decision accordingly.

So in terms of those who have already had principal monies returned to the Courts by the Banks they will presumably only have nett amounts returned.

Those who have had interests and / or costs already paid into the courts will only have the relative reassessed amounts returned as per the judicial approval.

This also makes the assumption however that all of the above can only and rightly be administered under the imposed working conditions for Covid 19. 

Is the bottom line therefore, as Acer appears to suggest, that it appears highly unlikely that release of these monies, (currently held in court bank accounts) to the legal representatives will in reality be actioned, since this is dependant on court administrators who are understandably being expected to isolate in the current scenario?

Or are you under the impression Maria, that all monies currently already deposited into court accounts will be returned to the legal representatives as per the recent directive, and  thereafter remain in law firms accounts ( client accounts?),  for quite some time before being able to be forwarded on to the clients?

The comprehension re subsequent movement and safeguarding of monies due for return therefore appears critical to reassuring clients, given the major insecurities that have arisen during this last decade and beyond, let alone the Covid 19 scenario, so communication and education such as exists on EOS forums has the potential to minimise stress and misunderstandings.

It is this aspect that some posters find hard to comprehend, but for those who have been exposed to all manner of stumbling blocks and obstructions to achieving justice to date, surely clarity and transparency will help at the very least to better understand the complexities that go some way to explain the many complex reasons for delay.

For that Maria, I for one remain very grateful to you for your patience and willingness to answer questions, and I trust and hope this helps in some small way for clients to be better placed to comprehend the uncomfortable realities associated with return of monies that so many have been long awaiting.

Thank you again Maria, and stay well all. 

Hi

i have a holiday home in Spain which I also rent out. All my rent is declared and I pay Spanish taxes. I don't expect any rental income this year now, plus my salary in England has been reduced by 40% for the foreseeable future. Will I be eligible for a mortgage holiday from my Spanish bank?

Thanks

Finchley 

I don't know if you have picked this up

As from January those not resident in the EU will have to pay 24% tax on the GROSS income from letting. That means, unlike now, one will not be able to deduct any expenses, before applying the tax.   Electric, community, IBI, etc.  It will mean almost no income.  

More worrying than mortgage payments

No, I didn't realise that! Obviously not an issue for this year!

thanks

Thank you for this service. I have a potential problem and would like to know

whether I need to act soon to avoid disadvantageous effects.

==

I am a citizen of Ireland normally resident in UK. Since late January I have

been present in Spain and was booked to leave on a flight on 19th March.

As I am on a small island I am reliant on inter-island transport to get to

an international airport and usually need to leave the island on the day

before the international flight. Sadly the 18th March ferry was cancelled

on the evening of 17th and there were no alternatives for reaching the

airport in time for the flight back to UK.

Although I have a booking for a flight on 2nd May there are now no

realistic prospects of any flights in May (the one on 2nd May is now

formally cancelled) and so I expect to stay in Spain until June at least.

==

My problem is avoidance of becoming tax resident by being in Spain

for more than 182 days in the calendar year. Normally I am meticulous

about avoiding this situation but am constrained this year.

I have ZERO income in Spain (my living costs being met by transfers

of funds from UK) but do not wish my UK income to be subject to

taxation in Spain. Is there likely to be an exemption that allows me

to avoid having to report to the Spanish tax authority as my stay in

Spain will have been extended by exceptional circumstances and

not because of any intention on my part?

However, there are allowances for some expenses. These include a proportional part of the house insurance, IBI, the community fee, property repairs, cleaning, property management fees, and water and electricity if paid by the house owner. You can even claim expenses against mortgage interest and the lawyers fees for the completion of your tax return. 

Could for some be confusing, best to get the correct Legal Advice from proper Spanish Tax Advisors.

Yes, Baz. those are allowances which can be claimed if you are a EU citizen. There are no allowances for non-EU citizens and Johnzx is pointing out that we won't be EU citizens (the Brits, that is) from next year.

The bit you quoted gives an example for EU/EEA residents

Total rental income: 15,000

Deductible expenses: 3,600

Tax base: 11,400 (15,000 – 3,600)

Tax rate: 19%

Tax due: 2,166€ (11,400 * 0.19)

I think this is the next line down on the bit you quoted;

Taxation for non EU/EEA residents

If the non-resident resides outside the EU or EEA, their IRNR tax rate will be 24%. Moreover, they are not allowed to deduct any expenses related to property maintenance or management.

It even gives an example for non-EU citizens

Example

Using the same example as above (which shows an EU citizen tax and allowances), a person who has an annual rental income of €15,000, and expenses of €3,600, will pay the following tax on their rental income in Spain:

Total rental income: 15,000

Deductible expenses: 0

Tax base: 15,000

Tax rate: 24%

Tax due: 3,600€ (15,000 * 0.24)

This is the example I posted a while ago:-

Here is an example, although the expenses I have shown might be a bit higher that most would experience

Examples

EU national

Annual gross income  8,000

Allowable expenses    6,000

19% taxon 2,000             380

Net profit                      1,620

Non EU national

Annual gross income   8,000

24%  0n 8000                1,920

Expenses                        6,000                  

Total out goings            7,920

Net income                        80

Hi finchleyflyer:

i have a holiday home in Spain which I also rent out. All my rent is declared and I pay Spanish taxes. I don't expect any rental income this year now, plus my salary in England has been reduced by 40% for the foreseeable future. Will I be eligible for a mortgage holiday from my Spanish bank?

Law with basis for mortgage holidays in Spain are for Spanish residents. In any case, many banks are offfering even better conditions that those minimums stablished by Law to both resident and non residents. If you want , you can contact me privately so I can see if we can negotiate with your bank. I am quite sure there will be something you can obtain, specially if the deed has some abusive clases.

Thanks

Dear Lan R555:

Of course, specially if that has been the pattern of your stays in Spain during the last years, there will be a way to oppose the Tax administration the forced nature of your conntinued stay in Spain adnn avoid being considered a Spanish Tax resident.

Please, let us know how this goes...

Best wishes of health

Maria

Maria,

Please could you advise if the courts in Spain have reopened yet? If not have you been given any indication when this might be and will the courts be closed for a summer recess anyhow?
Have you been informed of any background discussion taking place as to how safety and social distancing will impact the Spanish justice system, in particular how this will realistically impact ( timewise) existing claimants currently awaiting judicial rulings or procedures related to enforcement of their rulings and return of their monies from the Banks or courts?

Do you have information from the authorities in this regard? 

Many thanks and all best wishes for your good health.

The progressive reactivation of the  judicial activity has just begun this week. Proceedings deadlines  remain suspended while the state of alarm is in force, electronic filing of briefs has already been allowed for weeks. We are receiving Court sentences, have been receiving them during the whole period of state of  alarm which started in mid March. 

Since yesterday, the 12th in June, the Government Rooms of each Judicial area have to restablish the presential ( face to face) judicial activity in several phases.

At the beginnig,  a mixed service provision system will be maintained (face-to-face work and teleworking), reducing the hours of public hearing and limiting it to the days when in-person actions are to be held. In any case by June 2nd is planned that all staff will be back to Court offices. 

It was a while ago and seems to have got lost in some of the replies (how unusual) but the question somewhere was if someone gets stuck in Spain during the state of alarm due to CV-19, would they be classed as residents if they overstay the amount of time. 

A new official state bulletin has been release BOE/SND/421/2020 which states that all stays, visas, documents and so on will be extended by a period of 6 months after the state of alarm ends. Those exceeding the 90 days normally required to apply for residency have been extended by 3 months after the state of emergency. So no need to panic on that score.

Those who are stuck outside Spain during the state of alarm will not have that time counted as an absence for purposes of residency applications, particularly important for those waiting for permanent residency.

Mariedav:

As per today´s opinion of the Tax Authorities in Spain, it will depend on if Spain has a Doube Taxation Avoidance Treatry signed with country of conflct or not. If there is not, at present, precedents of Spain Tax Authorities indicate that forced days of stay in Spain due to COVID 19 will be counted in. That needs to be challenged, in my opinion.

M

In today´s decree on extension of inmigration visas, the only related commentary is the following one:

Absences from Spanish territory.

In order to consider accredited  the continuity of residence, absences from Spanish territory as a consequence of the impossibility of returning to Spain by COVID-19 will not be computed.

> As per today´s opinion of the Tax Authorities in Spain, it will depend on if Spain has a Double

> Taxation Avoidance Treaty signed with country of conflct or not.

What would initiate such "conflict"?

Does Spain have a Double Taxation Avoidance Treaty with UK?

> If there is not, at present, precedents of Spain Tax Authorities indicate that forced days of stay

> in Spain due to COVID 19 will be counted in. That needs to be challenged, in my opinion.

How strong does the force need to be to create "forced days"?

My airline reservation has been transferred to 9th July but should I be attempting to take the

Wizz Air flight to Luton on an earlier Saturday evening?

==

I believe that I have a right to be in Spain as I am a citizen of the Republic of Ireland and have

my NIE issued in 2015. My concern is avoidance of any obligation to complete Modelo-720

rather than any permissory documentation, Usually I ensure that I spend less than 183 days

each calendar year in Spain - with no trip more than ninety days. I have a permanent residence

which I have occupied since 2014 with my personal chattels and have a rental agreement that

allows occupation in person whenever I wish.

My intended strategy is to ignore the potential problem but if it arises I would be willing to be

included in any challenge. ALL my income emanates from UK with Zero from Spain. In UK, I

am exempt from making an annual tax return but do pay any tax assessed by HMRC.