By Euro Weekly News Media • 18 February 2013 • 10:48
ARE you sitting comfortably? Taken the daily Valium? Good, then I will begin.
Life for us expats in Spain, it seems, is about to become a whole lot more complicated and perilous within the next couple of months.
If you’ve been reading the financial comments here in The Euro Weekly News or opened recent emails from your diligent tax advisor you know what I am talking about.
In case you have been on the moon or in denial, let me sum it up in a simple, non-financial advisor sort of way: before the end of April you have to tot up all your savings, flats, houses or shares you happen to own outside of Spain and jot them all down online on the relevant parts of the Tax Agency Form 720. Because this government wants a cut.
Sounds easy enough? Think again… because if you missed something – maybe the inheritance from Dear Aunty Ethel – you will have to pay 150 per cent of what you failed to declare as a fine. And yes, that means you will have to give away the whole inheritance plus half again from some other pocket to clear the ‘multa‘, a Spanish word we risk becoming all too familiar with.
Oh and remember when you followed the UK government advice and invested in tax-free Personal Equity Plans or Individual Savings Accounts back in Blighty? You have to declare those, too, because here in Spain they are taxed. And although it is not strictly related, never give any money to your spouse, because that too could be taxed at 7 per cent. In fact, there are very few parts of life that are not taxing.
Of course, taxes are a necessary evil and we do live in this country so it is only fair that we pull our weight. It’s just that these latest measures seem a tad Draconian, designed to trip up those without a team of specialists behind us.
The new law is not intended to target expats specifically, rather the wealthy Spaniards who have tucked away nest eggs in distant tax havens. But since many expats still have a property or a savings account outside Spain, we are the ones who have to be particularly careful, especially since we’re unlikely to enlist the top tax gurus to guide us through the minefield placed in our path. Mistakes can be more than costly, they can be ruinous, so it may be worth seeking some professional advice after all.
Unemployment may well run at 26 per cent but at the tax advisors’ they’re working around the clock, it’s a real bonanza year for this lot.
In fact, with the swings and roundabouts in this sector, every year is a good year. Which leads me to conclude two things; firstly, that all the unemployed should beeline it to the nearest university and study finance, and secondly, that Benjamin Franklin was spot on when he said that nothing in life is certain except death and taxes.
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Spain should be aware that the retired ex-pat brings approx. ÃÂ£20,000 a year to this country and if tax registered pays tax on this income, unlike most of the Spanish wealthy who as you say have their black money stashed abroad, i for one do not have any savings however my wife has and always has had savings, but she gets a very reduced (60%) basic state pension, she does get a meagre income from those savings (approx ÃÂ£85.00 a month), however your article would suggest she will pay tax on her savings regardless of her redcuced pension status am i correct in this assumption
If you pay tax on your savings in the UK why should you be required to pay it again in Spain ? It can’t be right, surely ?
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