17 Aug 2011 2:32 PM:
Hello Faro,
The European Treaty is there to allow international trade between Countries within the European Community, the treaty allows a Company from a European County to operate within any other EU Country and the Company can decide in which jurisdiction it would like to pay it's Tax. This can be the Country in which it is operating (Spain in this case) or the Country in which it is registered (the UK in this case)
I will demonstrate below ::
A UK Limited Company has to have a CIF number to operate in Spain which is supplied by the Tax office in Spain.
The UK Company will request a Certificate of Residence from the Tax office (HMRC) in the UK demonstrating it is a Tax Resident Company of the UK.
Once a UK Company owns a property in Spain the Company has a legal obligation to submit a Zero Tax Declaration every January to the Tax office in Spain for the ownership of the property.
When the UK Company Tax Declaration is submitted to the Tax office in Spain, along with the Company UK Certificate of Resident then under the EU Treaty, Spain has to accept the Company is a non Resident Company of Spain and cannot Tax the UK Company.
The above is how every UK Company can operate in Spain and I do not see how at any stage you are hiding anything from the UK or Spanish Tax Authorities, quite the opposite I think, this is also part of the due diligence gwm will have to make sure the UK Company has been doing when gwm looks at purchasing the UK Company mentioned which owns the property in Spain.
In relation to a trading UK Company then I am not suggesting it will be for everyone but it is an additional advantage for those who wish to take advantage of it. I know of a lady and gentleman who own in Algorfa, Alicante, and when they bought their Spanish property into a UK Company structure they then setup a dog grooming business which operated through the same Company and when they submit their Company accounts to the Tax office in the UK they are classed as a trading Company, no problem here.
This message was last edited by Property On Finca Parcs on 17/08/2011.
This message was last edited by Property On Finca Parcs on 17/08/2011.
Thread:
Purchasing a property with a UK company
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