January 2008
By the letter of current laws, if you reside in Spain for more than 183 days in a calendar year you are considered a resident for tax purposes and you could possibly be obliged to pay tax in Spain on your worldwide income
You are officially permitted to remain in Spain for 90 days with the possibility of an extension for a further 90 days and if you exceed the allowed period and fail to obtain a Residencia Certificate you could possibally be fined up to 12,000€, although very unlikely.
ADVANTAGES OF RESIDENCIA STATUS
- You are completely legal in Spain and as a member of the European Common Market you do not require a work permit.
- You are not required to pay tax on your main residence whilst non-residents pay as much as 1.5% of the Catastral Value ( the rateable value ) per annum under the title of wealth tax.
- You can apply for the cessation of tax in the uk from the date of your residencia certificate and thereon transfer the obligation to Spain if this be beneficial with the exceptions of state pensions from member states which are subject to deductions in the member states.
- Certain fiscal advantages whereby taxes withheld on income and bank deposits etc can be reclaimed.
- You may arrange external accounts in one or more banks and relocate funds between the accounts.
- On the sale of your property you receive the full proceeds whilst a 3% retention to the tax office is retained from the proceeds of sale by a non resident and by the term proceeds we are relating to the declared value indicated on the sale documentation
- Capital gains tax is a maximum of 18% for a resident seller and the previous liability of 35% for a non-resident seller has now been amended to the same 18% for a non-resident seller.
- There is no capital gains liability for a resident seller over 65 years old if
they have occupied the property for 3 years of more whilst there is no such agreement for a non-resident seller.
-----------------------------------------
The European Commission has instituted changes to the system whereby under these proposals the following situations will apply:
- a) For a stay in Spain for under 6 months, EC citizens would not be subject to any formality other than the requirement to hold a valid identity card or passport.
- b) For a stay of over 6 months to be obliged to comply with registration regulations with the appropriate authorities to obtain a residencia certificate instead of the previous card, in conjunction with the holding of a valid identity card or passport from a member state
- c) After 3 years of legal and continuous residence member state citizens have a legal right to obtain a permanent residencia certificate supported by their NIE ( fiscal ) number
- d) The residencia certificate is not valid in respect of capital gains liabilities and allowances in respect of property sales and to protect and retain these rights an application must be made to the Hacienda (tax office) for a “ Certificado de residencia fiscal “ to protect the residential sellers rights and allowances.
----------------------------------------------
These notes are intended as an indicative quide and should not be enacted upon without taking the advice of an appropriate expert or Gestoria
.
|
