New driving laws in Spain and other useful information May 9, 2014 15:34:04 GMT
Post by Carper on May 9, 2014 15:34:04 GMT
Just found this on another forum.
New Spanish Traffic Laws Come in to Effect on 9 May 2014
May 8th, 2014
On the grounds that ‘ignorance of the law is no excuse’, all drivers in Spain are advised immediately to familiarise themselves with the detail of the new traffic laws which are coming into effect on 9 May 2014 (Ley 6/2014 modificando la Ley sobre Tráfico, Circulación de Vehículos a Motor y Seguridad Vial 339/1990); a mere 21 pages!
Among the new provisions are the following:
1. Speeding fines apply for exceeding the limit by just 1kph! On some motorways, the speed limit is being increased from 120kph to 130kph, but in many towns, the speed limit is being reduced from 30kph to 20kph.
2. If the Guardia Civil observe a motoring offence and note the vehicle registration number, this provides sufficient evidence to prosecute- no need for them to stop vehicles.
3. A minimum fine of 1,000 Euros will be payable by drivers caught driving whilst double the drink drive limit or above; or in all cases for reoffending drink drivers; and drivers under the influence of drugs.
4. The Guardia Civil can seize any vehicle carrying children without legally compliant child seats.
5. The very specific rules as to where children must sit in the vehicle (according to age/ height) must be observed, otherwise drivers face heavy fines.
6. Cyclists under 16 years of age must wear helmets.
7. Drivers have much higher duties to ensure the safety of cyclists of all ages.
8. Speed camera/ radar detectors are prohibited.
9. An EU Directive is to be implemented so that driving offences committed in one EU country are reported to the EU country of registration of the vehicle in question.
10. Much stricter rules are being implemented for the Spanish registration of foreign registered vehicles kept in Spain.
The above is by no means exhaustive. As can be seen, the new rules are far reaching. Knowledge of the details and observation of the requirements in practice is of fundamental importance.
It is clear from the increased powers to prosecute and fine drivers, that the Spanish Authorities ‘mean business’ with these important legal changes.
Please SHARE this with your friends and contacts who drive in Spain, to help them to be lawful (and to avoid fines!).
10 Reasons to Register on the ‘Padrón’ in Spain
April 28th, 2014
The Padrón is the register kept by each Town Hall in Spain, of the people who live in the town- either as property owners or tenants. The closest UK equivalent is the electoral roll.
It is compulsory for residents of more than 6 months in an area to ‘empadronarse’- to be registered on the Padrón (as a separate administrative process from residency applications) but many fail to do so.
Some of the advantages of ‘empadronamiento’ (being registered on the Padrón) are:
1. It can provide taxation advantages (eg. Spanish Succession Tax).
2. It enables children to be enrolled for local education.
3. In the case of limited school places, it is used as one of the criteria for awarding places (determining catchment area).
4. It is required in order to be registered for local healthcare services.
5. It provides an entitlement to vote in local and European elections.
6. In some areas, it is required to be able to use municipal facilities at discounted rates.
7. Town Hall funding is affected by the number of people on the Padrón. So, registering helps boost your local Town Hall’s resources for local services and facilities.
8. It is necessary in order to purchase and register a car in Spain.
9. It is necessary in order to marry within the local municipality.
10. It is necessary for benefits/ social services access; and to use the local employment agency (Job Centre equivalent) facilities.
Registration on the Padrón is a simple exercise- and is either free or just a nominal charge is made, depending on the area. Specific requirements in terms of documentation vary from town to town. So, before applying, it’s always best to make a preliminary visit to the Town Hall, to get a full up to date list of requirements.
Warning of 80% tax charge on Spanish inheritance
April 11th, 2014
Spanish tax law can undoubtedly lead to very unfortunate fiscal consequences in the event of inheritance by beneficiaries who are unrelated to the deceased- including unmarried / same sex partners, particularly if the relationship is not ‘recognised’ with civil status.
So, the bad news is that advisers who warn of the exposure to Spanish Succession Tax rate of 80% (or even slightly more) are confirming what could theoretically happen.
However, it should be stressed that such a high rate of taxation would only apply in the very worst Spanish tax case scenario. For example, with a very high value Spanish estate; already wealthy beneficiaries; and no family or marriage connection between the deceased and the beneficiaries.
But in any event, even with Spanish estates of more modest value, the impact of Spanish Succession Tax can still be unexpectedly harsh. So, it’s clear that planning is essential in all family situations involving Spanish property ownership, to prevent the risk of legally avoidable Spanish tax liability arising.
Advising non-Spanish owners of Spanish properties is complex and specialised area of Spanish legal practice, and without the correct advice, major Spanish tax problems can easily arise.
We are happy to talk through any potential cases (without obligation). Together we can explore the solutions that are available to achieve succession wishes, in a tax efficient manner.
Does Spanish Residency Mean Painfully High Taxation?
March 24th, 2014
Spain’s fabulous weather, its rich culture, its relatively modest cost of living, and its close proximity to other European countries, have always meant that it is a dream destination for many, to reside and to savour all the country has to offer. For those who are prepared to ‘take the plunge’, the demographic changes in Spain over recent years; and the economic impact of the financial crisis have in many ways only added to its desirability and feasibility as a potential country of residence.
Official figures confirm that 13% of Spanish nationals have emigrated from Spain in the last 2 years. And as a result of the impact of the economic crisis and concerns over taxation changes, a huge number of non-Spanish nationals have returned to residency in their countries of origin over the same period. So, the total population of Spain now stands at around just 70% of the UK population. But Spain is almost 4 times larger than the UK!
Also, the over-building in Spain during the pre-crisis period and subsequent Spanish property price crash mean that there remains a significant over-supply of properties- in many cases, owned by very keen sellers. So, a relatively under-populated country offering clear quality of life benefits and incredibly attractive property investment opportunities…
OK, so where’s the catch?!
Many who have abandoned Spanish residency over recent years have expressed concerns about taxation- in particular, the impact of the Spanish Wealth Tax and Spanish Succession Tax.
The Spanish Government’s recent reintroduction of the Wealth Tax; and obligation for Spanish nationals and Spanish residents to disclose (and be taxed on) overseas assets, was met with dismay by many. But in fact, the impact has been found by the vast majority to be far less harsh than was originally feared.
Also, much has been made of the reductions in allowances in Spanish Succession Tax. But again, under Spanish tax law, when expert estate planning advice is obtained and implemented, there are many ways quite legally and legitimately to reduce the impact of succession taxation.
As regards Spanish income tax and other direct taxes, there are agreements and practice directives in place between the Spanish Tax Authority and those of many other countries, to ensure fair fiscal treatment in dual jurisdictional cases. So, for those who are properly advised and correctly meet their tax declaration and payment obligations, the position (in most cases) is neither as complicated nor as onerous as might be feared.
Of course, individual circumstances always need to be considered carefully- it is never a case of ‘one size fits all’ when it comes to Spanish taxation and estate planning.
Many factors are relevant to determining tax liability, including even which part of Spain you are dealing with.
In conclusion, we always recommend that before any decision or investment commitment in Spain is made, our clients take the opportunity to understand fully their fiscal obligations, and to implement their tax and estate planning accordingly. By planning intelligently to reduce tax liability as far as Spanish law permits, and then promptly filing tax returns and paying the tax that is due, one invariably achieves the most efficient result.
Ignorance of Spanish tax law is no excuse; and equally, proper awareness and fiscal compliance (in accordance with expert professional advice) need not be as financially devastating as many fear to be the case.
How to get an N.I.E. Number for Spain
February 27th, 2014
In many cases, particularly for Spanish property sales and purchases; and inheritance matters, N.I.E. numbers (Spanish fiscal numbers) are of critical importance. They are usually required extremely urgently, in order to avoid delays in legal transactions and/or increases in tax liabilities.
There are three principal ways to obtain N.I.E numbers:
1. In person, in Spain at a National Police office. This usually involves three stages: the attendance to present the paperwork and ID documentation; payment of the issuing tax; and finally, return (in person) to collect the N.I.E. Certificate (usually after 7-10 days). There are independent service providers available, who assist with the paperwork and provide guidance on the process. So, for individuals who are able to be in Spain for the period indicated for this process (and whose knowledge of the Spanish language is adequate), it is quite straightforward.
2. In person, at a Spanish Consulate office (for example, in the UK: in London, Manchester or Edinburgh). In this case, the process can be extremely lengthy and inconvenient, as the Spanish Consulate operates as a ‘post box’ for submitting the application to Madrid; and thereafter, communication has to be to a Spanish address. We would only usually recommend this option in exceptional and non-urgent cases.
3. Through an authorised representative, in Spain. There have been changes of practice and procedural requirements over the years; and also documentation requirements differ between areas of Spain. ID and legal representation has to be specifically proved, so expert/ professional representation is generally essential, to avoid problems and delays.
The issue of N.I.E. numbers is one of the first points to be covered in any of our client cases. We provide full guidance and assistance to our clients in overcoming this legal hurdle. Obtaining N.I.E. numbers is not usually a ‘stand alone’ service that we provide (although there are others who specialise in this service). However, we do have a system in place for our client cases, where we can quickly and simply obtain our clients’ N.I.E. numbers for them, when needed.
Can Spanish Succession Tax be reduced by having a Spanish Will?
January 27th, 2014
In many cases, the answer is: yes!
It is often possible to deal with Spanish estate planning and structuring so as to reduce the impact of Spanish Succession Tax within the Spanish Will.
If you have a Spanish Will, this can assist in reducing Spanish Succession Tax in the following ways:
1. It ensures that you have the flexibility you are legally allowed to select your beneficiaries; so that the most tax advantageous succession route in the circumstances can be identified and provided for.
2. It secures the best legal basis for a fast and economical succession process, following a death. This helps to ensure that the legal process can be completed within the very tight timescales allowed under Spanish tax law. Conversely, any failure to comply with the statutory timetable (for example, delays caused by not leaving an up to date and valid Spanish Will) can expose beneficiaries to increased tax liability, through the imposition of interest and penalties on the tax debt.
It is perfectly legal and acceptable to organise your estate succession in Spain, so as to minimise the exposure to Spanish Succession Tax- as far as legitimately possible in the circumstances. In advising our clients, we consider all available routes to achieve this. As our team is independent and not tied to any single process or structure; we are able to provide objective and case- specific advice in each individual client scenario. This ensures the most cost effective estate planning solution within the constraints of each case.
Tax Shock for Poorly Advised Buyers of ‘Bargain’ Spanish Properties
January 8th, 2014
Expert professional legal advice is always necessary when purchasing properties in Spain, both to avoid legal problems; and also to avoid unwelcome tax surprises.
A detailed fiscal analysis is essential in order to evaluate costs and taxes at the time of the transaction. But furthermore, to assess the risk of exposure to future tax liabilities.
Anyone who has bought or sold property in Spain will be aware that Spanish properties have two values- the market value; and the official fiscal value.
Prior to the collapse in Spanish property prices over the last 5 years, in the majority of cases, the market value exceeded the fiscal value. But now in many cases with reduced market values, the fiscal value exceeds the market value.
Buyers of Spanish properties pay a transfer tax of 8-10% of the declared purchase price.
But if the fiscal value of the property is greater than the declared purchase price, during the 4 year period following the transaction, the Spanish Tax Authority can demand an additional amount of transfer tax, by substituting the (higher) fiscal value for the declared purchase price.
For example, take a Spanish house previously fiscally valued at 500,000 Euros. Quite commonly, this may now be sold for 250,000 Euros. The buyer now pays the transfer tax of 25,000 Euros. However, the buyer must budget for a further 25,000 Euro tax liability, which may be demanded (along with interest/ penalties) any time within the 4 years following the purchase.
This is nothing new- but it is convenient for many advisers involved in Spanish property transactions to ‘play down’ the risks. Also, many advisers are inexperienced; or lack legal and fiscal expertise; and are therefore simply unaware of the risks.
At Legal 4 Spain, our mission is to be clear with our clients as to the risks and liabilities in Spanish property dealings. This ensures that all relevant legal and financial details are ‘factored in’ to the negotiation of a price and budgeting.
Armed with the correct advice and knowledge, property investment in Spain needn’t be viewed as the risky proposition many commentators would have you believe.
Spanish Residents also facing 3% retention tax on property sales?
December 17th, 2013
The understanding since its introduction has been that the 3% tax retention on Spanish property sales by foreign owners is applied only to non- Spanish resident sellers. Conversely, Spanish resident sellers should not suffer the same deduction.
However, the recent tightening of the rules and practice guidelines in this area has meant that in many cases, sellers who are Spanish residents are falling into the traps for the unwary; meaning they are also losing 3% of the proceeds of their Spanish property sales, in tax retention.
The reclaim process in applicable cases can be very lengthy and convoluted. So, many Spanish property sellers end up simply ‘writing off’ the 3% even though really, they should be entitled to have the tax retention refunded, hence the reference to the loss of the 3% in practice.
It is important to appreciate that in this context, Spanish residency has two component elements. The first is legal or factual residency (generally evidenced by a Certificate of Residency). The second aspect, which is of equal importance, is that the positive step must also be taken to become fiscally resident in Spain; and annually to file the corresponding tax declaration in Spain. (In most cases, this is an obligation of Spanish property owners, in any event).
Provided that these fiscal obligations have been complied with in all respects and for the requisite period; when a Spanish property sale is agreed, the Spanish Tax Authority should issue a Certificate of Fiscal Residency. This, combined with the evidence of factual residency, should satisfy the Notary and the Spanish Authorities that no 3% tax retention should be made.
It should be noted though, that even for non-Spanish residents, a later tax assessment can be made following the sale, and capital gains tax charged, depending on the facts and figures of the case in question.
Additionally, all sellers (Spanish resident and non- Spanish resident alike) still have to pay ‘Plus Valia’, the municipal tax on Spanish property sales. This is calculated by reference to Catastral (rateable) value and the period of ownership.
In conclusion, it is essential to have reliable professional guidance on tax issues and transactional costs, before agreeing terms for a Spanish property sale. Otherwise, there is no certainty as to the net sale price which will be received. Please speak to our team at Legal 4 Spain, for clear advice and competitively priced legal representation on Spanish property sales.
How to Avoid Legal Problems with Spanish Property Transactions
November 27th, 2013
The international Press has had a field day over recent years, as to the supposedly ‘high risk’ nature of Spanish property ownership- from demolition orders for planning defects; through properties falling down with no right to compensation for distressed owners; to unscrupulous intermediaries disappearing with client funds.
But the common theme throughout these cases usually passes unmentioned. Either there was no professional legal representation at the time of purchase or sale; or worse still, unqualified/ incompetent legal representation.
Obviously non-Spanish owners of Spanish properties would never dream of property dealings in their own country without proper legal representation. So it is quite astonishing that in Spain, often with no knowledge of the legal system or even the language, they decide to ‘take a flyer’ in terms of the detail of the legal process!
It is precisely because of the well-documented risks in Spanish property ownership and the frequent lack of clarity as to transactional costs and taxes, that independent professional legal representation is essential for Spanish property sales and purchases.
With proper professional advice, instead of taking a high-risk gamble, owners of Spanish property can invest intelligently and securely in real estate in Spain.
Some key points for buyers and sellers of Spanish properties:
1. Ensure that your lawyer speaks your language fluently. For a significant investment such as real estate, everything must be completely clear.
2. Ensure that your lawyer is qualified and registered in Spain with the Colegio de Abogados, to be certain of professional regulation. (And check that there is adequate professional indemnity insurance in place to cover the risk of any problem with their work).
3. Ensure that your lawyer is dual qualified both in Spain and in your own country, to have a full grasp of all the tax implications of your Spanish property investment. This enables dealings in Spanish real estate to be conducted in the most tax efficient way, having regard to your tax liabilities both in Spain and in your own country.
4. Ensure that your lawyer acts independently from the estate agent, developer or other parties to the transaction. If there is any connection, ensure impartiality and professional clearance of any risk of conflict of interests.
5. Ensure that your lawyer provides you at the outset with a clear written budget of all costs and taxes; and undertakes to follow up at the end of the case with a final, clearly detailed cost and tax summary.
6. Ensure that your lawyer operates an individually designated client accounting system for your full financial security.
7. Ensure that your lawyer provides a written report on title, well in advance of a contractual commitment, confirming all title and planning information in relation to the property. All parties to a transaction must be completely clear on all aspects before a contractual commitment is made.
8. Ensure that an initial private contract is entered into, with a deposit paid on exchange of contracts. This provides security for both parties; and protection against wasted/ abortive costs and unscrupulous behaviour in terms of last minute negotiations.
9. Ensure that your lawyer (usually in conjunction with the estate agent) attends to the transfer of services to the property following completion.
10. Specifically ask your lawyer to confirm the above points, to ensure that nothing is overlooked; and that you are fully protected by your legal representation.
The above is a non-exhaustive checklist- really just the bare minimum. Please speak to us at Legal 4 Spain when considering a sale or purchase of a Spanish property, to ensure you have the best quality legal representation to protect your interests fully; but always at a competitive cost.
Avoiding Excessive Spanish Bank Charges
November 5th, 2013
Nearly all Spanish property owners have a Spanish bank account, to pay property outgoings; and also to have a Euro banking facility, for general expenditure in Spain. But almost always, they are shocked at the high charges for holding and operating a Spanish bank account.
But the real sting for Spanish bank customers can come when a funds transfer needs to be made, either in or out of a Spanish bank account.
Two cases have been referred to us recently- one where a client made a transfer from their Spanish Euro account to their UK Euro account (having sold their Spanish house), and the Spanish bank charged 1,700 Euros for the transfer. Another, where an inward receipt of Euro funds from a UK Euro account was charged at 400 Euros. Both cases involved major Spanish banks; and in both cases when challenged, the banks dropped the charges.
We found it curious that Spanish banks should purport to charge such high fees in the first instance; and then with little discussion, simply back down completely.
The first issue is quite straightforward. UK nationals in particular, are accustomed to fairly modest fixed fees (or even zero cost) when making electronic payments; and routinely zero cost for electronic receipts of funds. In Spain however, when the electronic transfers are international, (even transfers in Euros), the default position in many cases, is for the bank to charge on a percentage basis, rather than a fixed fee.
Clearly this is commercially unjustifiable; as the process/ cost to the bank is identical, whether the transfer is for 10,000 Euros or 1,000,000 Euros. So logically, a standard fixed fee should be applied.
And also, the growing awareness of the SEPA (Single Euro Payments Area) European Union Regulations, which are currently coming into force, is certainly a helpful factor for Spanish bank customers who are concerned about high charges.
In Regulation 924/2009, the European Parliament decreed in particular, that charges for electronic payments between EU member states (of up to 50,000 Euros) must not exceed the applicable charge for an equivalent national transfer.
As national transfer charges are very much lower (and generally zero for electronic receipts) the SEPA Regulations should be introduced into the discussion with your Spanish bank as to applicable charges, before any significant transfer into or out of your Spanish bank account is authorised.
Quite possibly for larger funds transfers, splitting the payments into smaller amounts (sub- 50,000 Euros) can considerably reduce the charges. Indeed, the most PR conscious Spanish banks are already including in their standard terms, free transfers for up to 50,000 Euros within Europe, waiving even the limited fee they would otherwise be entitled to charge under the SEPA Regulations.
These are very positive developments for Spanish bank customers; but during this process of realization / change, it remains necessary to discuss and negotiate charges with your Spanish bank before authorising significant funds transfers, so as not to be caught by the bank’s default charging structure.
If necessary, new bank account opening in Spain is now easier than ever before. A small amount of research and paperwork can lead to huge savings, by moving to an alternative Spanish bank, which offers competitive charges as a standard feature.