GOVERNMENT UNVEILS AUSTERITY PACKAGE

The Cabinet on Friday approved 27.3 billion euros of savings for the rest of the year — the biggest austerity package seen in Spain’s modern democracy — with the hopes that the country will stay on track to meet its deficit-reduction goal for the end of 2012 and avoid the same bailout fate that was suffered by Greece, Ireland and Portugal.

Speaking after a meeting of the Cabinet, Finance Minister Cristóbal Montoro described the country’s finances as “critical,” and reiterated that the government’s aim is to bring down the deficit by the end of the year from the current 8.51 percent of GDP to 5.3 percent, in line with Brussels’ demands.

“Spain will keep its good faith by ending the year with a solid deficit figure, as we pledged \[to Brussels\],” Montoro said.

The government plans drastic cuts in all the ministries with an average reduction of 16.9 percent of spending — two percentage points higher than the figure Prime Minister Mariano Rajoy cited on Tuesday. In all, 17.8 billion euros will be slashed from the central government’s expenditures.

The biggest cuts will be made in overseas aid through international cooperation and development programs, with 594 million euros of cuts.

The Cabinet also approved hiking taxes on big businesses and increasing court and other legal fees as new sources of projected revenue. The government hopes to rake in some 12.3 billion euros by eliminating corporate tax deductions, including suppressing a controversial goodwill tax break that made it easier for Spanish companies to purchase foreign firms and expand overseas.

Deputy Prime Minister Soraya Sáenz de Santamaría ruled out new taxes, including another hike in value-added tax (VAT), which was increased in 2010 from 16 percent to 18 percent.

“We are in a desperate situation when it comes to the fiscal outlook,” Sáenz de Santamaría told a news conference after the Cabinet meeting. “We are looking to turn the situation around as well as laying the foundations for growth and job creation.”

Montoro also announced that Spaniards who have overseas accounts to avoid paying taxes or currently have domestic earnings being paid under the table will be given a chance to regularize their finances by paying a 10-percent fee on the revenue declared, without any other fines or sanctions. The finance chief said he hopes to bring in another 25 billion euros with this amnesty.

The Cabinet also approved a seven-percent hike in electricity rates, and a five-percent hike in gas rates beginning Sunday.

The government’s plans will go to parliament on Tuesday, and are expected to be formally passed in June.

Spain’s new financial goals come as European finance and economy ministers, meeting in Copenhagen Friday, agreed to create a permanent bailout fund for the euro zone with a temporary lending capacity of about 700 billion euros for member states.

Economy Minister Luis de Guindos, who was in Denmark for the meeting, said that “Spain will no longer be a problem for the Union” as he presented his colleagues with the Spanish budget plans.

The budget was presented months later than usual given that the Popular Party took office in December.

Source: ELPAIS

New Non Resident percentage. Fiscal changes (I)

With the new year, some fiscal changes have arrived within. One of the most important for many of our clients is the update over the Non Resident tax.

From the 1st of January 2012 until the 31st of december 2013 (both included), the new general rate will be 24,75%. This percentage has been increased from the previous 24%.

This tax could affect you for example if you are non fiscal resident but have a house in Spain. When you will be declaring your annual non resident tax from 2012 it will be slightly higher.

In case you have premises in Spain and are Non Resident, your tenant will be also holding each month the 24,75% instead the 24%.

A CALL TO PAY TAX OFFICE DEBTS

From December 1st, the Spanish Tax Office is going to have the phone number 901 200 345 in order to pay debts equal or lower than 18,000€. By this process the taxpayer can give them a bank account number and the Tax Office will make the charge there.

Althought this payment way is not going to be able for companies, self employed people (autónomos) can use it.

By this method you also can pay those debts that your supplier has with the Tax Office in case that Hacienda contacted you (your supplier's clients) to receive the payment in behalf of the supplier in order to cancel their debts. So in this way no more payment letter applications are needed.

3rd QUARTER TAXES

Now is the time to present the 3rd Quarter taxes declarations. Do not wait until the last moment and bring us the quarter's invoices.

We want to remind you that next week October 12 is the Spain's National Day and as bank holiday, our office will be closed.

2010 INCOME TAX 30 €

The 2010 Income Tax campaign has started today until June 30th. If you are fiscal resident in Spain you are obliged to declare it, or if you do not reach the minimum incomes level it, maybe it could be beneficial to you to declare it and get a refund if you are able.

In VP ADVISERS we will study your case and we will produce your 2010 Income Tax (Declaración de la Renta) tax for just 30€ (IVA included). Make the most of this opportunity and book for an appointment now.

And if you are Non Resident, we can produce your Non Resident tax for just 30€ (IVA included).

We are based in:

La Mosca Commercial Centre, 1st floor, premises 8
Flamenca Beach, Orihuela Costa
965327714 / 615722273
vpadvisers@gmail.com

Do not hesitate. Contact us!

TAX SWINDLE (AGAIN)

The spanish tax agency (Agencia Tributaria) warns of a new e-mailing swindle.

Again, this year we remind you to be careful if you receive any e-mail at your inbox about a taxes refund. Fake e-mails sent are being detected as a way of phising assault. The e-mail forges the Agencia Tributaria signature and logo.

The e-mail asks you to fill personal data in an external link, again with fake Agencia Tributaria signature and logo. The tax agency suggests to be careful with suspect comunications. Even more if these e-mails ask for bank accounts numbers.

Finally, bear in mind that spanish tax agency won't ask you by e-mail for any personal or economic information, credit card numbers or taxpayers bank accounts.

FIRST QUARTER TAXES

April has arrived so here it is the first quarter tax declaration period. The deadline is April 20th. But if they are going to be charged on bank account, the deadline is April 15th. Do not wait until the last day and remind to bring us the remaining invoices in advance.

Apart from this, the Income tax campaign oficially starts today, so on the next weeks you should receive the fiscal details for the Declaración de la Renta 2010. The presentation period for the renta will be from 2nd May until 30th June.

If you are not a VP ADVISERS client, you can contract our services in order to produce your 2010 Income Tax just for 30€. And if you need to present your Non resident tax, our fees are also 30€, so forget about paying expensive quotas or fees. VP ADVISERS wants to help you and make things easier for you.

Visit us in LA MOSCA COMERCIAL CENTRE, 1st FLOOR, Unit 8 (Above Supercor, next to Athena Taverna), FLAMENCA BEACH, ORIHUELA COSTA.

Or Contact us by Phone: 965327714/615722273
Or by e-mail: vpadvisers@gmail.com

FIGHT AGAINST FISCAL FRAUD

Spain's Tax Office (AEAT) will be paying closer attention to professionals they suspect of failing to fully declare their income, and those claiming unemployment benefit while working on the side, in an effort to bring a greater portion of the country's underground economy to the surface.

At a time when the government is striving to fill a huge hole in its finances, the AEAT's action plan for 2011 was presented Monday in the official gazette. Tax officials are being asked to be on the lookout for professionals with signs of wealth that are incongruent with their tax declarations. They will also be trying to keep tabs on false declarations of expenses.

In their battle with tax cheats, inspectors will step up joint action with their colleagues in the treasury and labor arms of the Social Security system, and will make visits to businesses where undeclared activity is suspected.

Source: EL PAIS.

2010 NON RESIDENT TAX JUST FOR 30€

2011 has arrived and within it, it also starts the period to declare the 2010 Non Resident Tax for those owners of a property in Spain who are residents in a foreign country. You have the whole year (2011) in order to declare it, but as you should already have the paperwork from SUMA (Alicante region office for local taxes) it could be a great idea letting this presented from now.

A person is considered resident in Spain by the Tax Office in this cases:

- Spending more than 183 days (Half year) in Spain.
- Has the work activity main core set in Spain.
- His/her wife, husband, and/or children until 18 years old are residents in Spain.

The fiscal residence in another country has to be certified by the Fiscal Authorities from that country. And usually the certificates are valid for a year.

A person could have the residence certificate in a country, but could not be consider fiscal residence in it. Residence and Fiscal Residence are different things.

A house could also being rented by its owners and if they are non resident, they have to declare every quarter the incomes in a different income tax. The time in the year

Normally we talk about the Non Resident Tax only over properties, but it is applied for all the incomes that a Non Resident could receive in Spain (Job, Renting, Capital Gains, etc). The deadline to declare the tax changes depending on what kind of incomes are you receving.

We have one of the lowest quotas in the are. Our fees are only 30€. Come to visit us in our office. We will be happy to welcome you and we also offer low cost fees in other services including business registration, accountancy, conveyancing, taxation, NIE& Residence, Traffic Managements, Wills and more.

We are in
La Mosca Commercial Centre, Upstairs, Unit 8
Flamenca Beach, ORIHUELA COSTA

Phone: 965327714 / 615722273

4th QUARTER TAXES

January 31st is the last day to present the IVA & advanced income tax payment for the 4th quarter (July, August and September). When you collect your taxes you will also get the annual informatives declarations.

Bear in mind the deadline if you are going to pay it by bank account is the January 25th, and Tax Office will charge you later on last day of declaration deadline.

TAX CUTS FOR SMEs

Spanish government president, Rodríguez Zapatero, announced tax cuts for small and medium-sized enterprises, and the end to the 426€ benefit for the unemployed as from February in an another anti-crysis measures pack.

Zapatero stressed that the new tax measures were designed to promote investment and employment, especially for SMEs, hence the reduction in corporate income tax by extending the tax base from its current 120,000€ mark to 300,000€. Until now, enterprises with incomes higher than 8,000,000 € were not considered SMEs. Now that limit is set in 10,000,000 €.

The end to the 426€ benefit for unemployed people with no other cover has also been announced. The benefit payments will come to an end in February, when the last extension finishes.

ELECTRICITY BILL AGAINST TAX EVASION

From the beginning of 2010, the electric companies are obliged to declare a list of electricity charges by cadastral reference number. First declaration will be made on March 2011 with the 2010 information.

What does this mean? We all know that many people are not declaring rent from houses where are located business or professional activities. So the tax office has supposed there is a huge fraud on this. A business should to be set up in commercial units or premises. The rent has to be declared by the owner and the 19% payed by the tenant every three months.

By this decision, Hacienda could be able to check if some "empty houses" have electric activity that should be declared.

The Modules fiscal way will be also affected by this because many incomes declarations are depending on "Electricity charges" parameter.

[UPDATED] TAX OFFICE TELEMATIC NOTIFICATIONS IN 2011

Today we can know by the Order in Council 1363/2010 that from the 1st of January 2011 on, the spanish Tax Office will send the notifications to limited liability companies (SL) and public limited companies (SA) besides others (those legal entities whit a NIF that starts by N,W,U,V) by telematic ways instead of the actual paper notifications.

All these companies should have a digital signature in order to log in into their electronic addres account on the Agencia Tributaria website, and certify the notifications reception.

According to the government, this action has been taken following the costs cut plan, but many companies maybe are not still ready to apply this.

UPDATED: Finally, Mr. Gaspar Caballo, AEAT Management CEO had said recently that this new law will only be applied on the bigger companies (Grandes Empresas), or companies who were registered in the monthly IVA refund or export businesses. There are no changes in this over the medium and small companies by the moment.

3rd QUARTER TAXES

October 20th is the last day to present the IVA & advanced income tax payment for the 3rd quarter (July, August and September).

Bear in mind the deadline if you are going to pay it by bank account is the October 15th.

2ND QUARTER: IVA & INCOME TAX

We want to remind you that July 20th is the deadline for second quarter (March, April, June) payments of both IVA and Income tax.

Remember that from July the IVA rates change. From now on, 18% general rate, 8% reduced rate and the 4% lowest rate keeps without changes.

IVA INCREASED. NOT OUR PRICES.

Yesterday, the IVA rates were finally increased by the government. From now on, the new rates are:

18% general rate and 8% reduced rate. The 4% lowest rate remains without change. You can check it with more detail in our previous post.

In order to help our clients at these difficult moments, we decided to do not make any changes in our prices. Take a look at an extract of our price list here.

And contact us for other services.

-VP ADVISERS-

INCOME TAX SWINDLE

The spanish tax agency (Agencia Tributaria) warns of a new e-mailing swindle.

If you are asking for a refund over your 2009 Income Tax, be careful if you receive any e-mail at your inbox. Fake e-mails sent as "phishing" action, were detected on June 10th and inmediatly messures has been taken by the government in order to finish this fraud. It makes reference to a kind of information which "makes impossible" the refund. The e-mail forges the Agencia Tributaria signature and logo.

The e-mail ask you to fill personal data in an external link, again with fake Agencia Tributaria signature and logo. The tax agency suggest to be careful with suspect comunications. Even more if these e-mails ask for bank accounts numbers.

Finally, bear in mind that spanish tax agency won't ask you by e-mail for any personal or economic information, credit card numbers or taxpayers bank accounts.

2009 RESIDENT TAX

Don't forget the 2009 Resident Tax deadline is 30 June 2010.

SPAIN INCREASES ITS VAT RATES FROM JULY 2010

The 4% rate – to be kept at 4% in July 2010
This is applied to items considered to be of basic need. It includes basic bread,
frozen dough, eggs, cheese, milk, beans and fruit and vegetables.
Books, magazines and newspapers.
School material with the exception of electronic items.
Medicines for human use.
Vehicles for the disabled, wheel chairs and collective transport for the disabled.
Prosthesis and implants.
Official protection housing.

The 7% rate – to increase to 8% in July 2010
Foodstuffs in general, with the exception of those in the 4% band, soft drinks.
Animals destined for human consumption or breeding.
Items used in agricultural, farming and forestry activities, such as seeds and fertilisers.
Contact lenses and glasses.
Disabled lifts and items for the diagnosis of illnesses.
Health assistance services, social services, and dental work.
Imported artworks and antiques.
Hairdressing.
The handing over of housing, including garages and annexes.
House construction (between promoter and contractor).
Services supplied by artists and technicians.
Sports, cultural and recreational services, exhibitions and fairs.
Funeral services.
Hotel and restaurants, cleaning of streets and public gardens.
Rubbish collection.
Transport of passengers and motorway tolls.

The General Rate – now 16% to rise to 18% in July 2010
All other products, including alcoholic drinks, tobacco, animals used in
bullfighting, agricultural machinery.
CD’s.
Devices for the diagnosis and monitoring of pregnancy.
Television and radio services.

THE TAXPAYER AND RESIDENCE

While residents in Spain pay taxes on their income worldwide, nonresidents
are taxed only on their income from sources within Spain. That is why residency is so important.
A. Residence of the individual
Individuals are deemed to be residents in Spain when they meet any of the following criteria:
• They remain in Spain for more than 183 days during a calendar year. In order to determine the period of stay, sporadic absences are included in the count, except those where the tax residence in another country is proved. In the case of countries
or territories labeled as tax havens,the Tax Administration can demand proof of stay in that tax haven over a period of 183 days in a calendar year.
In order to determine the period of stay, temporary stays in Spain that are the consequence of contractual obligations in agreements of cultural or humanitarian collaborations performed free of charge with the Spanish Public Administrations are not included.
• Their main base or centre of activities or economic interests is, directly or indirectly, in Spain.
Also, it is presumed, except if proved otherwise, that a taxpayer has his usual place of residence in Spain when, using the above criteria, his spouse -not legally separated- and underage dependent children are permanent residents in Spain.
In addition, individuals of Spanish nationality who prove their new residency in a tax haven (Appendix V), will continue to be deemed residents in Spain for income tax purposes (Impuesto sobre la Renta de las Personas Físicas - IRPF), both in the taxable period during which they change their residency as well as in the four tax
periods thereafter. However, this rule will not apply to individuals resident in Andorra who prove their status as wage-earning workers, provided that they comply with certain requirements.
An individual will be considered either as resident or nonresident for the whole calendar year, because a change of residency does not interrupt the taxable period.