La entrada Colaboraciones Profesionales desde 2023 se publicó primero en Avantia.

In the context of the current regional and national election cycle, personal taxes have become one of the defining issues in terms of domestic political agenda. The coalition of the left running the national government advocates the present high tax approach, particularly among the affluent.  The opposing conservative parties, with significant wins at the recent regional elections, uphold significant reductions and exemptions of wealth and inheritance taxes.   The outcome of the next general election on 23 July 2023 will shape the path of Spanish personal tax policies for the next parliamentary term.

In terms of the basics of Spanish personal tax for 2023, Spanish tax resident individuals remain taxed on a worldwide basis.  The marginal income tax rate for regular and investment income and gains are set around 50% (depending on the region of residence) and 28% respectively.

An individual’s exposure to Spanish personal taxes depends on their tax residence status, as determined by the Spanish domestic law and the provisions of any relevant Double Tax Treaty.  Tax residence tests under Spanish law consider (i) presence in Spain, (ii) direct or indirect economic ties to Spain and/or (iii) close family ties to Spain.  Tie break tests under Double Tax Treaties largely adopt the OECD model.

Individuals who are tax resident in Spain in any given calendar year will generally be taxed on a worldwide basis for income, wealth and inheritance and gift tax purposes.  Individuals who are non tax resident in Spain in any given calendar year will only be taxable on a Spanish situs/source basis.

Given the large number of foreign individuals with second homes in Spain and a stable presence in this country, tax residence has been specifically highlighted as one of the target areas of review by the Spanish Tax Compliance Control Plan for 2023; to this effect, the Spanish tax inspection is now actively using Big Data and Automatic Exchange of Information resources to pinpoint specific individuals and situations. These investigations often result in large tax assessment under aggressive technical criteria and subsequent lengthy court cases – sometimes under tax fraud charges.

Individuals, including settlors, grantors or beneficiaries of trusts or foundations, who declare themselves as non-tax resident in Spain but spend time in this country, even below 183 days, or have a substantial Spanish asset base or activities (directly or indirectly), are “tax nomads”, declare themselves as tax resident in certain favourable jurisdictions (e.g. Portugal, the UK, Switzerland or Italy) or have been reported as Spanish tax resident under CRS, FATCA or other, are strongly recommended to examine their tax residence status.

In this context, uncompliant taxpayers or those applying untenable technical positions (either as regards their tax residence status or in other situations e.g. vested beneficiaries of trusts who fail to disclose their interests in their Spanish returns) are strongly encouraged to consider filing remedial returns to avoid potential Spanish tax fraud charges.

Qualifying individuals relocating to Spain may now benefit from the improvements in the Spanish Special Impatriation Regime in 2023.  This is a six-year regime available to employees or directors of a Spanish company.  Qualifying individuals limit their Spanish personal income tax liability to Spanish source income and gains, plus employment income worldwide.  Spanish wealth tax and solidarity tax is limited to net Spanish situs assets and there is no obligation to file 720 Information returns.

Under the new provisions, availability of the regime is extended to remote workers, certain entrepreneurs and high skilled professionals.  Individuals appointed as directors of Spanish companies carrying on a trade or business may now qualify for the regime even if they are full owners of these companies in certain cases.  Spouses and children under 25 may now also benefit from the regime as part of a family group, subject to a number of requirements and limits.

Wealth tax continues to apply in 2023.  Under general rules, the marginal rate continues to stay at 3.5% for individuals with a net asset value in excess of EUR10.7 million (with a EUR700,000 tax free allowance). This tax is fully transferred to the Spanish regions, so situations vary significantly, with Madrid and Andalucia applying a full exemption. Exposure to this tax may be reduced significantly with efficient tax planning.

On 29 December 2022, a new Temporary Solidarity Tax was enacted into law.  This is a new federal tax which the Spanish regions cannot reduce or abate and applies to both Spanish tax resident and non-tax resident individuals.  The tax has an initial duration of two years (2022 and 2023), but has been technically designed to allow for future extensions and applies to Spanish tax resident individuals with taxable net worth in excess of € 4 million. This tax coexists with the existing Wealth Tax – any Wealth Tax paid in the region of tax residence is fully creditable against the Solidarity Tax.  Therefore the new tax is particularly relevant to taxpayers who reside in regions currently operating a Wealth Tax exemption (Madrid and Andalucia) or reduction (Galicia).

Potential tax planning mechanisms as regards this new tax include income limitation strategies in order to maximise the application of existing capping rules, the application of Business Property relief as well as shifting wealth via intergenerational gifts.

As regards developments on taxation of real estate, with effect from 2022 onwards, foreign wrappers of Spanish situs properties have been brought into the scope of Spanish Wealth Tax/Solidarity Tax.  As a result, shares in private foreign entities with Spanish real estate with a direct or indirect value amounting to 50% or more of its total asset base are deemed Spanish situs. According to the Spanish tax authorities, tax must be levied on the whole of the taxable value of the shares in the foreign entity (therefore including any non-Spanish asset in the structure).

Potential tax planning strategies in these cases include broadening the asset base of the foreign entity to dilute the overall value of Spanish assets in the structure or certain debt restructuring actions.

As for inheritance and gift tax, regional benefits on spousal and close family free transfers continue to be of application to cross-border estates and gifts, both EU and non-EU.  Mid-term, particularly depending on the outcome of the imminent general election, these may be substantially curtailed, reintroducing a full inheritance and gift tax, potentially with rates which might be in the region of 28% to 32%.

In this scenario, taxpayers with interests or ties to Spain are strongly advised to perform an Inheritance and Gift tax review to make use of current exemptions which may potentially be phased out or curtailed in the next Parliamentary term.  Tax planning possibilities include free transfers of bare ownership of assets, retaining a legal right of use, shifting a significant portion of the family’s wealth to the next generation.  Planning for the best legal way to allocate and manage rights post-transfer is of critical importance.

International Private Clients should therefore undertake a review of their Spanish personal tax situation in view of the uncertainties ahead and consider shifting wealth over to the next generation in an orderly, flexible and overall tax effective manner.

Javier Estella Lana

Patricia García Mediero

Gabriel Pérez de Cárdenas

Partners

Avantia Asesoramiento Fiscal y Legal

La entrada SPAIN: An Introduction se publicó primero en Avantia.

Leer la noticia completa

La entrada El impuesto sobre grandes fortunas enseña su cara: análisis y vías de planificación se publicó primero en Avantia.

The impact of the aftermath of the pandemic, paired with the current cost of living crisis in a context of high inflation and escalating energy costs, will be shaping the economic policy actions of the Spanish government until the end of the current parliamentary term, expected in Autumn 2023. The injections of both domestic and EU public funds into the Spanish economy in an attempt to ease off part of their adverse effects will in all likelihood continue to have substantial implications in terms of domestic tax policies. Taxes, including personal taxes (which were already raised in 2021), are likely to either remain in their higher-end level or even increase in the medium term.

In terms of the basics of Spanish personal tax for 2022, Spanish tax resident individuals remain taxed on a worldwide basis. The marginal income tax rate for regular and investment income and gains continues to be around 50% (depending on the region of residence) and 26% respectively.

An individual’s exposure to Spanish personal taxes depends on their tax residence status, as determined by the Spanish domestic law and the provisions of any relevant Double Tax Treaty. Tax residence tests under Spanish law consider (i) presence in Spain, (ii) direct or indirect economic ties to Spain and/or (iii) close family ties to Spain. Tie break tests under Double Tax Treaties largely adopt the OECD model.

Individuals who are tax resident in Spain in any given calendar year will generally be taxed on a worldwide basis for income, wealth and inheritance and gift tax purposes. Individuals who are non tax resident in Spain in any given calendar year will only be taxable on a Spanish situs/source basis.

Given the large number of foreign individuals with second homes in Spain and a stable presence in this country, tax residence is one of the main target areas of the Spanish tax inspection, now actively using Big Data and Automatic Exchange of Information resources to pinpoint specific individuals and situations. These investigations often result in large tax assessment and lengthy court cases – sometimes under tax fraud charges – and are based on an increasingly aggressive interpretation of the Spanish and Treaty provisions regarding an individual’s tax residence situation.

Individuals, including settlors, grantors or beneficiaries of trusts or foundations, who declare themselves as non-tax resident in Spain but spend time in this country, even below 183 days, or have a substantial Spanish asset base or activities (directly or indirectly), or have been reported as tax resident under CRS, FATCA or other, are strongly recommended to examine their tax residence status, particularly if they are “tax nomads”, claim tax residence in low-tax jurisdictions or are applying beneficial personal tax regimes in their jurisdiction of tax residence.

Taxpayers with passive investments abroad may fall under the punitive Spanish CFC provisions for income tax purposes. This may have a special impact on individuals with US, Canadian, Dutch, Luxembourg or other similar holding structures. Spain also has exit tax provisions in the form of a taxable gain deemed arising on 31 December of the last year of Spanish tax residence. This may however be postponed in a number of situations and there are special provisions for transfers of tax residence within the EU.

Spanish tax resident individuals holding an interest in non-Spanish assets must continue to file Form 720 Information returns. However, the most burdensome aspects of its penalty regime have been abolished following the sentence of the European Court of Justice against Spain of 27 January 2022 (Case 2019/C432/35). The ordinary four-year statute of limitations provisions have also been reinstated as a result of this sentence – which had in practice been abolished and turned limitless by the original Form 720 legislation. This in practice eases Voluntary Disclosure procedures, as taxpayers are no longer facing legal uncertainties with extremely burdensome economic consequences caused by Form 720 provisions.

Taking this into account, as well as the material reduction in surcharges introduced in 2021, uncompliant taxpayers or those applying untenable technical positions (e.g. vested beneficiaries of trusts who fail to disclose their interests in their Spanish returns) are strongly encouraged to consider filing remedial returns to avoid potential Spanish tax fraud charges.

Individuals relocating to Spain may still opt to apply the Special Impatriation regime in 2022. This is a six-year regime available to employees or directors of a Spanish company (with less than a 25% shareholding). Qualifying individuals limit their Spanish personal income tax liability to Spanish source income and gains, plus employment income worldwide. Spanish wealth tax is limited to net Spanish situs assets and there is no obligation to file 720 Information returns. However, at present no protection is provided from Spanish inheritance and gift tax and it does not extend to spouses and/or dependant children.

There is however draft legislation, still under Parliamentary debate, aimed at improving the regime, including favouring the relocation to Spain of «digital nomads» (entrepreneurs in digital businesses and remote workers) and extending the benefits to qualifying spouses and children.

One of the focus areas of the Spanish tax inspection is the review of «sham» Special Impatriations, generally questioning the reality of employment arrangements, resulting in large tax assessments and even tax fraud charges. We strongly encourage individuals applying this regime to review their specific basis of application by reference to current inspection practices.

Wealth tax continues to apply in 2022. Under general rules, the marginal rate continues to stay at 3.5% for individuals with a net asset value in excess of EUR10.7 million (with a EUR700,000 tax free allowance). This tax is fully transferred to the Spanish regions (from 2021, non-residents may also apply regional regulations), so situations vary significantly, with Madrid applying a full exemption. Exposure to this tax may be reduced significantly with efficient tax planning.

As regards developments on taxation of real estate, the Spanish Administrative Valuation is now generally speaking the minimum taxable value of real estate for Spanish tax purposes (determined by the Spanish administration by reference to Spanish public deeds of sale). This is increasingly giving rise to significant tax increases on transfers of real estate affecting both resident and non-residents, so intergenerational gifts or sales will now require particularly careful planning.

As for inheritance and gift tax, regional benefits on spousal and close family free transfers continue to be of application to cross-border estates and gifts, both EU and non-EU, by application of a complex set of rules. Mid-term, these may be substantially curtailed, reintroducing a full inheritance and gift tax, potentially with rates which might be in the region of 28% to 32%. Increases in inheritance and gift tax (resulting from streamlining actions across regions) are now backed by the White Paper on Tax Reform, made public in March 2022 and largely expected to be the basis of any future tax policies by the current government.

In this scenario, taxpayers with interests or ties to Spain are strongly advised to perform an Inheritance and Gift Tax review to make use of current exemptions which may be phased out or curtailed during the current Parliamentary term. Tax planning possibilities include free transfers of bare ownership of assets, retaining a legal right of use, shifting a significant portion of the family’s wealth to the next generation. Planning for the best legal way to allocate and manage rights post-transfer is of critical importance.

International private clients should therefore undertake a review of their Spanish personal tax situation in view of the high-tax landscape ahead. Taxpayers should make use of the current (but somewhat diminishing) tax favourable environment in most Spanish regions in order to shift wealth over to the next generation in an orderly, flexible and overall tax effective manner.

Javier Estella Lana
Patricia García Mediero
Gabriel Pérez de Cárdenas

Partners
Avantia Asesoramiento Fiscal y Legal

La entrada SPAIN: An Introduction to Private Wealth Law 2022 se publicó primero en Avantia.

The tax rate will be 0% for the first 3 million Euros, 1.7% for taxable net worth between 3 and 5.3 million Euros, 2.1% for taxable net worth between 5.3 and 10.7 million Euros and 3.5% for taxable net worth in excess of 10.7 million Euros.

Valuation rules and the general structure of the tax will be identical to the current Wealth Tax.  Therefore, Business Property Relief will apply under the same conditions as at present – this however does not provide a total tax exemption on business assets, as it only applies to net assets used for the purposes of trade or business.

There will also be capping rules, limiting the total High Net Worth Tax, Wealth Tax and Income Tax payable to 60% of the total taxable income for income tax purposes – with a minimum High Net Worth/Wealth Tax payable of 20% of the gross High Net Worth tax in any event.

Existing exemptions under Wealth Tax will remain of application, including a principal private residence exemption for the first 300,000 Euros of taxable value and a de minimis amount of 700,000 Euros (which do not apply to non Spanish tax residents).  Therefore, in general, a Spanish tax resident individual will be exposed to the new High Net Worth Tax if his/her taxable net worth exceeds 4 million Euros.

This new federal tax will coexist with the existing Wealth Tax levied by the Spanish regions.  Any Wealth tax paid in the region of tax residence will be fully creditable against the new High Net Worth Tax.  Therefore the new tax will be particularly relevant to taxpayers who reside in regions which currently operate a wealth tax exemption (Madrid and Andalucia) or reduction (Galicia).  Taxpayers in other regions with a taxable net worth in excess of approximately 15 million Euros will also be affected by the new tax, as its 3.5% marginal rate exceeds the current marginal rate in a number of regions (2.75% in Catalonia, 3.00% in Asturias, 3.03% in Cantabria, 2.5% in Galicia, 3% in Murcia and 3.45 in the Balearics); these taxpayers will pay Wealth Tax in their region of residence and High Net Worth Tax to the Spanish federal authorities on the balance up to the marginal rate of the new tax.

The new High Net Worth Tax will apply to taxpayers under the Special Impatriation Regime (generally known as “Beckham rules”), as well as non Spanish tax resident individuals, on Spanish situs net worth in excess of 3 million Euros.  This tax will be collected and audited by the Spanish federal authorities. Non-residents holding the majority of their assets in Madrid or Andalucia will be the most affected by the new tax, as they are currently exempt under present Wealth Tax regulations.

Spanish tax resident taxpayers who may be contemplating a transfer of tax residence outside Spain should note that this is a complex process with substantial tax implications, which must take into account, among other factors, remaining links and investments in Spain, the new jurisdiction of tax residence and the application of exit tax provisions in Spain.  In practice, transfers of tax residence abroad will very likely be exposed to a detailed Spanish personal tax audit, now even more likely with the introduction of this new tax, so this is a situation that requires detailed prior Spanish tax planning.

As regards potential tax planning and tax minimisation alternatives, in general, one of the most tax efficient strategies is limiting the obtention of taxable income for income tax purposes in order to maximise the application of the capping rules, with a view to limiting the new tax to 20% of the gross tax payable.

It will also be essential to consider the possibility to apply, maintain and meet the requirements to apply Business Property Relief, a complex but highly efficient alternative, as well as increasing the number and value of qualifying assets, a matter that requires detailed analysis.

Prima facie, this new tax is covered by the Double Tax Treaties signed by Spain which include wealth taxes, which allows for some tax planning in certain cases.

Another potential tax planning strategy would involve gifting assets which would otherwise be subject to the new tax to descendants, under adequate and efficient legal provisions and administration clauses.  There are several regions in Spain with near Inheritance and Gift tax exemptions on close family transfers, allowing for individual gifts of 3.7 million Euros to descendants which would subsequently be free from High Net Worth Tax under its de minimis provisions.

Other potential avenues would include the gift of bare ownership over certain assets, with the donor retaining a lifetime usufruct (right of use) right, so that the new High Net Worth Tax would be split between the bare owner (with a de minimis amount of 3.7 million Euros) and the usufructuarian.  This would have the added benefit, of great importance in this high-tax environment, of granting protection over potential future changes in the Spanish Inheritance and Gift tax legislation repealing in practice the current close family exemptions, under the same mechanism as is now being put in practice in respect of Wealth Tax.

If you wish to discuss in further detail or address individual situations, please do not hesitate to contact us.

La entrada The new temporary solidarity High Net Worth Tax: outlook and potential tax planning alternatives se publicó primero en Avantia.

After a long period of stability, owing to a succession of minority governments with limited capacity to pass tax reforms followed by the dramatic shift in priorities imposed by COVID, 2021 has started off with some substantial personal tax developments with significant impact on international private wealth clients. Personal tax changes will continue to take place during the current parliamentary term.

In terms of the basics of Spanish personal tax for 2021, Spanish tax resident individuals remain taxed on a worldwide basis. In 2021, the marginal income tax rate for regular and investment income and gains is around 50% (depending on the region of residence) and 26% respectively – an increase of five and three percentage points from 2020.

Further developments in terms of income tax have taken place under the Anti-Tax Fraud Act, published into law on 11 July 2021. These include changes to the existing CFC regime, in line with ATAD (EU Directive 2016/1164). We strongly recommend reviewing taxpayers’ holding structures to assess their vulnerability under these new provisions.

The Anti-Tax Fraud Act just passed also includes an overhaul in the definition of “Tax Havens”, to be reclassified as “Non-Cooperative Jurisdictions” – states (including Treaty jurisdictions) defined as opaque, with no effective exchanges of tax information and/or UBOs, imposing zero or low taxes or with offshore regimes for passive investments.

Crucially, the definition will allow the inclusion of “Harmful Tax Regimes”. The existence of tainted regimes in an otherwise cooperative jurisdiction theoretically opens the way to the potential inclusion of special impatriation regimes for individuals (including Portugal, Italy or the UK). Developments on this matter will need to be followed up closely and expatriation plans outside Spain must be carefully examined.

Individuals holding an interest in non-Spanish assets (now including cryptocurrencies) must continue to file Form 720 Information returns. The most burdensome aspects of its penalty regime are under appeal before the European Court of Justice (Case 2019/C432/35). Conclusions from the EU Advocate General will be released on 15 July 2021, and it is widely expected to rule against Spain.

Individuals relocating to Spain may still opt to apply the Special Impatriation regime in 2021. This is a six-year regime available to employees or directors of a Spanish company (with less than a 25% shareholding). Qualifying individuals limit their Spanish personal income tax liability to Spanish source income and gains, plus employment income worldwide. Spanish wealth tax is limited to net Spanish situs assets and there is no obligation to file 720 Information returns. However, no protection is provided from Spanish inheritance and gift tax and it does not extend to spouses and/or dependant children.

At present, there are some initial Parliamentary initiatives aimed at improving the regime, to favour the relocation to Spain of “digital nomads” (entrepreneurs in digital businesses and remote workers). However, these are still in their very early stages and no developments are expected short term.

One of the focus areas of the Spanish tax inspection is the review of “sham” Special Impatriations, generally questioning the reality of employment arrangements, resulting in large tax assessments and even tax fraud charges. We strongly encourage individuals applying this regime to review their specific basis of application by reference to current inspection practices.

Wealth Tax continues to apply in 2021. Under general rules, the marginal rate has increased to 3.5% for individuals with a net asset value in excess of EUR10.7 million (with a EUR700,000 tax free allowance). This is a full one-point increase from 2020. This tax is fully transferred to the Spanish regions, so situations vary significantly, with Madrid applying a full exemption. Exposure to this tax may be reduced significantly with efficient tax planning.

The Anti-Tax Fraud Act just passed contains important additional changes – life insurance policies with no redemption rights (including unit-link insurance products) are now fully taxable. As a result, many International Private Wealth clients will see a substantial increase in their Spanish Wealth Tax which we recommend planning for in advance.

In addition, the Act includes provisions amending the valuation of Spanish real estate for Wealth Tax, Inheritance and Gift Tax and Transfer Tax purposes. The Spanish Administrative Valuation has now become the minimum taxable value, determined by the Spanish administration by reference to Spanish public deeds of sale. This will trigger significant tax increases on transfers of real estate affecting both resident and non-residents, so intergenerational gifts or sales will now require particularly careful planning.

Finally, as a positive development, the Act allows non-EU residents to apply regional Wealth Tax provisions. This is of particular relevance to non-EU tax resident taxpayers qualifying to apply Madrid regulations, as they are now allowed to benefit from the current wealth tax exemption.

As for inheritance and gift tax, regional benefits on spousal and close family free transfers continue to be of application to cross-border estates and gifts, both EU and non-EU, by application of a complex set of rules. Mid-term, these may be substantially curtailed, reintroducing a full inheritance and gift tax, potentially with rates which might be in the region of 28% to 32%.

In this scenario, taxpayers with interests or ties to Spain are strongly advised to perform an Inheritance and Gift Tax review to make use of current exemptions which may be phased out or curtailed during the current Parliamentary term. Tax planning possibilities include free transfers of bare ownership of assets, retaining a legal right of use, shifting a significant portion of the family’s wealth to the next generation. Planning for the best legal way to allocate and manage rights posttransfer is of critical importance.

Due to the substantial number of foreign individuals with a stable presence in Spain (including those overstaying due to COVID restrictions on mobility), tax residence is one of the main target areas of Spanish tax inspections. These investigations often result in large tax assessments and lengthy court cases – even under tax fraud charges.

Individuals, including settlors, grantors and/or beneficiaries or trusts or foundations, who declare themselves as non-tax resident in Spain but spend time in this country, even below 183 days, or have a substantial Spanish asset base or activities (directly or indirectly), or have been reported as tax resident under CRS, FATCA or other regimes, are strongly recommended to examine their tax residence status, particularly if they are “tax nomads”.

Likewise, uncompliant taxpayers or those applying untenable technical positions (e.g. vested beneficiaries of trusts who fail to disclose their interests in their Spanish returns) are strongly suggested to consider filing remedial returns to avoid potential Spanish tax fraud charges. Under the new Anti-Tax Fraud Act, surcharges on voluntary disclosures have been materially reduced.

International Private Clients should therefore undertake a review of their Spanish personal tax situation in view of the changes already introduced, the amendments only just introduced under the Anti-Tax Fraud Act and other potential tax increases mid-term. Clients are strongly encouraged to make use of the current (but already diminishing) tax favourable environment in most Spanish regions in order to shift wealth over to the next generation in an orderly, flexible and overall tax effective manner.

Javier Estella Lana
Patricia García Mediero
Gabriel Pérez de Cárdenas

Partners
Avantia Asesoramiento Fiscal y Legal

La entrada SPAIN: An Introduction to Private Wealth Law se publicó primero en Avantia.

Una treintena de abogados cuyos conocimientos técnicos sobresalen especialmente en cuanto a la fiscalidad de grandes fortunas y grupos empresariales.

https://www.expansion.com/juridico/actualidad-tendencias/2021/11/08/6188fa4b468aeb0c4a8b45ee.html 

La entrada Los socios de Avantia entre los asesores más destacados en España 2021 se publicó primero en Avantia.

We hope you, your families and colleagues are safe and healthy. We are writing to update you on developments regarding the personal tax environment in Spain.

The Spanish General Directorate of Taxes has recently publicly released their Annual Tax Enforcement Plan for 2021, laying out the focus areas of the Spanish tax authorities for reviews, audits and inspections for this year.

Below is a brief summary of specific target areas of special relevance to International Private Wealth Clients:

• Review and audit of individual tax residence in Spain, specifically as regards taxpayers identified as non-tax resident in the Spanish tax database but who the Spanish tax authorities have indications of:
  • Significant presence in Spain
  • The existence of a relevant or operating center of economic interest
  • The existence of close family ties in Spain
• Full incorporation of actual data received by reason of international exchange of information mechanisms (CRS, FATCA and other). The Spanish Tax Administration will inform taxpayers of relevant international tax information on their records throughout 2021 as part of their tax fraud prevention practices.
• Unprecedented use of IT tools and Big Data in order to profile taxpayers and determine specific individuals targeted for audit and inspection procedures, particularly on the basis of their connections to:
  • Intermediary entities and holding structures (such as trusts, foundations, partnerships etc)
  • Their position or potential position as UBO of entities with a Spanish asset base.
• Specific review and audits of Wealth Tax and Inheritance Tax filings.
• Review and audit of transfers of individual tax residence among different regions in Spain in order to apply beneficial regional tax reliefs and exemptions..
• Specific review of Business Property Relief claims for Inheritance and Gift Tax purposes, particularly regarding the emoluments test..
• Specific areas for potential criminal prosecutions under tax fraud charges are highlighted as follows:.
  • Simulated non tax residence in Spain
  • Use of opaque structures
  • Focus on professional “facilitators” of tax fraud

Reviews and audits on these identified class of taxpayers will be undertaken and coordinated by the Spanish Central Unit of Control of High Net Worth/Ultra High Net Worth Taxpayers, now fully operational.

We would strongly encourage clients and advisors to identify their potential exposure to a Spanish tax inspection in 2021 by particular reference to these focus areas and to obtain advice on how best to manage their potential exposure and their Spanish tax situation in advance, considering the likelihood of receiving a notification of a commencement of a Spanish tax inspection in the coming months..

We would of course be happy to provide further advice if you have any queries or wish to discuss further any of the above issues or any other Spanish tax or legal matter which we may assist you with.

La entrada Spanish Annual Personal Tax Enforcement Plan 2021 se publicó primero en Avantia.

Patricia García Mediero, speaker at the webinar ‘Wealth Taxes – The Future of Taxation in a Post-COVID World’, Thought leadership webinar 2, STEP Global Congress.

La entrada STEP Webinar Video: Wealth Taxes – The Future of Taxation in a Post-COVID World – 23 October 2020 se publicó primero en Avantia.

La entrada US-UK Tax Planning COVID-19 Webinar Video se publicó primero en Avantia.