6 months to regularize your spanish income taxes due to undeclared pension.

 

The law provides that resident in Spain must declare all their income in this country irrespective of their source, without prejudice to the various international treaties could establish. Many residents who receive income from their countries of origin or others think it's done enough to be paying taxes at source and not take into account the fact that not to fill up the income tax in the country where they live or not including all the worldwide incomes may cause them penalties, surcharges and default interest.

The Ministry of Economy published a press release in which it stated that residents that already have pensions from abroad and did not include them in their resident taxes will have a period of six months without penalty to regularize undeclared pensions.

 

 

The draft law to reform the income tax and the Income Tax of Nonresident approved Friday by the Cabinet includes a provision to that effect. From the Ministry of Economic this is justified claiming ignorance of taxpayers, based on the characteristics of these people, old age pensioners, who have greater difficulty to understand the Spanish legislation, the average have lived many years abroad and in usually do not have large fortunes.

 

 

The Spanish tax authorities have discovered in recent years the existence of taxpayers resident in Spain that receiving pensions from abroad that were not properly declared in the income tax. These groups will have a special adjustment period of six months from January 2015. In this period, affected taxpayers may submit self-assessments of additional tax periods not prescribed in who have received pensions from abroad that have not been declared.

 

Taxpayers should enter 100% of the corresponding amount of tax being exempt from penalties, surcharges or interest on arrears. This measure applies to both foreign pensioners resident in Spain, as Spanish pensioners who have returned after being migrants in other countries

 

In addition, in order not to harm those taxpayers who have already regularized their tax situation spontaneously and paid penalties, surcharges and interest for late payment the Government will cancel by law such sanctions and penalties that will be returned to the taxpayer.

This measure, that is expected to come into force in January 2015, can be a good opportunity to tidy your taxes in Spain, as always we recommend that you contact your tax advisor to get the best professional advice.

You can download a copy of the Cabinet press release here

For further details do not hesitate in contact VP Advisers.