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  • The Balearic Government to pay 3.6 mill euro for declassifying the ‘es Canons’ building
    development in Art

    The Supreme Court rules in favour of the owners Cala Veya SL, who will receive compensation worth millions.


    The Balearic Government have been sentenced to compensating the Cala Veya SL corporation, owner of the ‘es Canons’ site in the Artà region, in the sum of €3,687,288.83 plus interest as a result of the declassification of building land under the region’s Subsidiary Bylaws on the basis of local regulations which redesignated the site from building land to a protected area.

    The Supreme Court ruled on 5th October on the appeal for reversal brought as much by the Balearic Government as the Cala Veya SL corporation, owner of the site. The ruling now announced by Supreme Court, according to the site owner’s lawyer, Miquel Ripoll, “puts an end to a whole case history of claims and judicial processes triggered by declassifying this building land”.

    The ‘es Canons’ site, located next to the Sant Pere Colony and together with the Betlem housing development, has an area of more than a million square metres. It was a decision that went against the Balearic Executive in 2005 when the Balearic Islands High Court’s first ruling was announced.

    Proceedings

    The first proceedings had already taken place in November 2007 in the Supreme Court, confirming a decision from the Balearic High Court of Justice that sentenced the Artà Council to returning the ownership of the ‘es Canons’ property which it had previously given to the Cala Veya SL corporation in 1992, causing the loss of the public ownership of the land which had existed until then. Now with this additional sentence by the Supreme Court, matters have come full circle, with this compensation worth millions for the owners. The declassification of ‘es Canons’, carried out in 2000 by the first Progress Pact, meant the loss of public ownership of the land which housed a former military barracks, a space used as a holiday camp by the local Council and where the traditional Pancaritat is celebrated during Easter.

    Project

    As the owners pointed out “with the last urban designation of this area of the Artà coast before the declassification, the urban exploitation of ‘es Canons’ had been kept down to a maximum of 2,000 hotel beds built next to the Betlem housing development, while the rest of the sector, which also includes the aforementioned barracks and the ownership’s houses, had to be given up free of charge to the local council for their public use”.
     


    This is something that the Balearic Government’s Law 1/2000 wiped out, thus preserving the natural environment and landscape of that untouched area of the Artà region. Now, with the passing of this latest ruling, it has been twenty-one years since the beginning of the whole process. So at the moment the town of Artà continues to enjoy this leisure space, all the time keeping in mind that it belongs to Cala Veya SL.

     

    http://ultimahora.es/mallorca/noticia/noticias/part-forana/el-govern-tendra-que-pagar-3-6-millones-por-desclasificar-el-urbanizable-de-es-canons-en-arta.html 

     

    Multa de 3,6 milions per la protecció d'Es Canons - RTVMallorca

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Articles

  • What is an NIE number?


    NIE stands for "Numero de Identificacion de Extranjeros" (or Foreign Identification Number).  Any foreigner with a social, economic or professional interest in Spain is required to have an NIE number, a unique number identifying them within the Spanish tax system.

    The Ministerio del Interior (Ministry of the Interior of Spain) is responsible for the issuing of NIE numbers and both EU and Non EU residents are required to have one.

    An NIE is required for any of the below (but not limited to):-

    - Purchases in Spain such as a house, land, business, vehicle or boat
    - Acquiring a mortgage or applying for credit of any kind
    - Working for a Spanish Company
    - Applying for Residencia (Residence)
    - Applying for a driving licence
    - Opening a bank account
    - Paying tax
    - Starting up a business


    The application may be made directly by the applicant themselves at the relevant National Police Station in Spain, or with the Spanish Consulate within the applicants country of residence, or via a representative in Spain providing that representative is given legal power of attorney by the applicant.

    At the time of application the following documents must be provided:-

    - A completed Standard Impreso-solicitud (EX-15) form
    - Original passport of the applicant and a photocopy of the same
    - Two passport photos (sometimes not required, but advised best to bring in any case) If applying via a legal representative, the legal representative must provide a notarised Power of Attorney document (Modelo de Representación) stating they may act on the applicants behalf (this must specify it is for the NIE application process), plus their own identification. So this form must be signed by both the applicant and the legal representative. (Although this may only apply to non EU citizens) it is best that all applicants bring with them a statement providing an explanation as to why they are applying for NIE and the reasons that should qualify them for receiving the NIE.


    If the applicant intends to apply for their NIE in person it is advised to arrive at the relevant offices as early as possible as long queues can be expected. After submitting the application the NIE document will arrive in the post usually within two weeks (although this may vary depending on the region the applicant is applying to).  If applying via a consulate or via alternative representation turnaround times may be longer.

    What does the NIE number look like? It is an A4 size document stating the persons full name (as it appears on their passport) place and date of birth and nationality.  It will also have the stamp and signature of the Spanish Police and of course the issued NIE number.

    The NIE may be requested as means of identification for such activities like taking out a mobile phone contract, registering with your local DVD rental shop or a routine stop/check by the police, so it is advisable that you photocopy the original and keep a copy with you in your wallet or purse at all times.

    Ripoll & Mateu Solicitors can assist you through the process of obtaining an NIE number within a prompt and reasonable time and strongly advise that you begin the application of your NIE number as soon as you arrive in the Balearics as you may need to produce it to complete on a property purchase or for any other product.
     

    Whilst every effort is made to ensure the content of this article and all others contained within this site is accurate, it is not to be relied upon or used as a substitute for any formal kind of legal advice and is intended as a guide only.  For full legal advice in all such matters please contact Ripoll&Mateu directly. 

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  • Non Residents Taxation: IMPUESTO SOBRE LA RENTA DE NO RESIDENTES


    If a person has a financial or professional interest in Spain they will be liable to pay income tax to the Tax Authorities in Spain.
     
    How they are taxed and the rate at which they are taxed will depend on whether they are deemed either resident or non resident for tax purposes and this is based on where that person spends the majority of their time.  If they reside in Spain for 183 days or more in any one financial year (1st January to 31st December) they will be considered Resident for tax purposes.  However, if they spend less than 183 days in Spain they will be deemed Non Resident for tax purposes.  (Please note that holding an NIE number does not automatically grant a person residency for tax purposes, only a certificate from the tax office can do that). 
     
    There are two types of income tax that non residents are liable to pay:-
    1. Tax on property which is not rented out (therefore solely for the owners personal use)
    2. Tax on property which is rented out
     
    1.  Tax on property which is not rented out.
    Even though the property is simply for the owners sole use and the owner has received no financial gain or benefit from it during the fiscal year, the tax authorities in Spain still see that owner as receiving a kind of benefit from owning and using the property.  Therefore, a tax is applied to the property and is due by the owner.  The tax due is calculated on 2% of the cadastral value of the property (a value set based on the official statistics recorded in the title register of the property, often set by the local Town Hall).  It becomes due every year in December and the tax will accrue.  A rate of 24.75% is then applied to the 2%=value and this is the tax amount due from the owner.  The owner has 6 months from the end of the financial year in which to file his tax return and this can be done electronically or submitting a paper copy to the tax office.   If the property was rented out for a number of days within the financial year, or the property was purchased during that financial year, tax will be due on the prorated taxable days.
    * the rate is 1.1% for all properties where the value has been revised after 1st January 1994.
     
    2. Tax on property which is rented out.
    As there is an actual income being received the tax is applied to the rental sum and is due each time the rent becomes due.
    Tax at a rate of 24.75% of the gross rental income is applied.  The tax is applied to the gross rent however if the owner is EU resident then they are allowed to deduct expenses that have arisen directly from the source of the income and can prove that the expense would not have arisen in any other circumstance.  A tax return is due to be filed no later than one month after each rent payment is due.  Again, this can be done electronically or by submitting a paper copy to the tax office.
     
    Specific forms are used for each circumstance:-
     
    Form 210 - an ordinary return for tax on income derived from rental payments or for tax on non rented property
    Form 215 - a collective return (if the owner has other means of income which is taxable, it is also stated on this form)
    Form 214 - this form is used for owners that have only one property, it is for their sole use and has not been rented out or has attracted any other kind of income.  This is a simplified form which also combines the Impuesto Sobre el Patrimonio (IP) - "Wealth Tax" for which non residents are also liable and must also be declared annually.
     
    Ripoll & Mateu Solicitors will be happy to advise you on the subject of Non Resident Income Tax.  
     

    Whilst every effort is made to ensure the content of this article and all others contained within this site is accurate, it is not to be relied upon or used as a substitute for any formal kind of legal advice and is intended as a guide only.  For full legal advice in all such matters please contact Ripoll&Mateu directly. 

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  • Non Residents & Residents Taxation: Impuesto Sobre el Patrimonio (IP) (or Wealth Tax)


    Amongst other taxes that Residents and Non Residents are required to pay such as Income Tax, Capital Gains Tax and Inheritance Tax, a further tax has been reintroduced for the 2011, 2012 and recently extended to include the 2013 tax year periods and this is called Wealth Tax (Impuesto Sobre el Patrimonio).

    Wealth Tax looks at the net worth of an individuals estate and taxes them accordingly on their position as at 31st December each year. 

    Residents and Non Residents are both subject to this tax, however, they are taxed according to slightly different parameters and some of the allowable deductions available to Residents are not available to Non Residents.   (Although another difference is that Non Residents are only taxed on their assets in Spain, rather than their assets in total, which is the case with Residents). 

    Both Residents and Non Residents are allowed a tax free net worth of 700,000E. 

    Residents can then also qualify for a Permanent Dwelling deduction of 300,000E per Resident.  This is to say that a Resident can deduct 300,000E from the net value of his Hem, before tax is applied to the remaining amount.  Non Residents do not qualify for this allowable deduction despite owning, and living in, a property in Spain. 

    So for instance a Resident could potentially qualify for a 1000,000E tax free net worth, but a Non Resident will only have a 700,000 tax free net worth and must be taxed on the full net value of his Hem in Spain.

    To determine the value of the property, the highest of the below three values are taken:
    - the cadastral value as quoted on the IBI receipt which is dated within that specific tax period
    - the value applied by Tax Authorities during an individuals independent tax assessment
    - the price paid on the title deeds
    If there is a Spanish mortgage on the property this is also deducted as it is only the net asset that is taxed, therefore mortgage debt is not factored in.

    Various other assets are taken into account when calculating an individuals net worth and these are (but not limited to) gold, stocks and shares, yachts, jewellery, cars, bank balances and antiques.

    Although Residents and Non Residents have different allowable deductions, (non Residents are subject to the national law, whereas Residents may be subject to the locally imposed and often more lenient variation of the National Law) the rate of tax is the same for both and this is on a sliding scale from 0.20% on 701,000E and over, through to 2.5% on 10.700,000E and over.

    Wealth Tax in Spain was first introduced in 1978 and ran until 2008 where it was suspended indefinitely.  However the law justifies its return being due to weathering “... the financial storm which afflicts Spain at a time where those who own more have the moral obligation to contribute more to society...”. 

    Ripoll Mateu Solicitors will be happy to advise you fully on the subject of Wealth Tax and any other tax related issues. 

    Whilst every effort is made to ensure the content of this article and all others contained within this site is accurate, it is not to be relied upon or used as a substitute for any formal kind of legal advice and is intended as a guide only.  For full legal advice in all such matters please contact Ripoll&Mateu directly
     

     

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  • IBI (Property Tax) & Rates and Rubbish Tax


    IBI (Impuesto sobre Bienes Inmuebles) is a property tax payable by all owners of property in Spain.  The Municipal Town Hall takes the cadastral value of the property and applies a percentage calculation (usually between 0.5% and 1.1%) to that figure which becomes the IBI payable on the property.   It is due annually and in advance.  The Local Town Hall will advise you of the IBI due and payments may be made via Direct Debit.  If a Direct Debit instruction is not set up you may pay during the voluntary period (set by the Municipal Town Hall), please do pay within that stated period as late fees can apply. 

    Rates & Rubbish Tax - A rate is also due for the collection of rubbish and this is payable yearly.  The amount payable is again set by the Municipal Town Hall based on the cadastral value of the property and in some cases it is charged alongside water use and disposal which is payable every three months.

    Cadastral Values are set by the Spanish Tax Authority and is used in calculations such as IBI (above), IRNR (Impuesto sobre la Renta De No Residentes) and Wealth Tax.  The calculation is determined by many factors but is mainly based on the value of the land plus the value of the building and it's usage, size and location, amongst other considerations. 

    Ripoll & Mateu Solicitors specialise in Fastighetslagstiftning and will be happy to advise you further.

    Whilst every effort is made to ensure the content of this article and all others contained within this site is accurate, it is not to be relied upon or used as a substitute for any formal kind of legal advice and is intended as a guide only.  For full legal advice in all such matters please contact Ripoll&Mateu directly.  

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  • Taxation: Spanish Resident Companies


    A Company is considered resident for Tax purposes in Spain if:
    • it's registered office is in Spain
    • it was incorporated in accordance with Spanish Law
    • it's headquarters are in Spain, meaning that general control, management and activity takes place in Spain.

    Income tax of 25- 30% on their income less expenses and VAT.  (25% applies to small and medium sized companies - defined by an annual turnover of less than three million Euros - and is applied to the first 120,000 Euros of taxable income).  The company has 6 months and 25 days following the end of their financial year end in which to file their tax return with the Agencia Estatal de Administración Tributaria.  However, if the company has an annual turnover of six million euros they are required to pay three instalments on account in April October and December of that financial year, as well as filing their tax return 6 months and 25 days after that same tax year end. 

    All companies with an annual turnover of one million Euros or more are subject to pay IAE tax (Impuesto de Actividades Economicas).  The rate of tax is determined by the size of the company as well as its location, number of employees and usage, amongst other factors, and is due annually.

    VAT (IVA) this is currently 21% on most goods and services, however a reduced rate of IVA, and super reduced rates apply to certain goods and services such as health products and equipment (10%), toll roads (10%), exhibitions and fairs (10%) and books, newspapers and magazines (4%).   (Please note that IVA applied to the sale of property and land in Spain is charged at different rate).

    Please contact Ripoll & Matteu for further advice.

    Whilst every effort is made to ensure the content of this article and all others contained within this site is accurate, it is not to be relied upon or used as a substitute for any formal kind of legal advice and is intended as a guide only.  For full legal advice in all such matters please contact Ripoll&Mateu directly.  

     

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  • Special Tax on Real Estate owned by Non Resident Offshore Companies (or Gravamen Especial Sobre Bienes Inmuebles de Entidades No Residentes)


    A company is considered Non Resident for tax purposes in Spain if (any one or all of) the below criteria does not apply:

    - the company's registered office is in Spain
    - the company was incorporated in accordance with Spanish Law
    - the company's headquarters are in Spain, meaning that general control, management and activity takes place in Spain.
     
    A Non Resident company owning property in Spain, which is furthermore considered 'an offshore company' (here is a list of countries deemed offshore as per a recent update to Spanish Law - in Spanish),  is subject to a Special Tax (Gravamen Especial), calculated at 3% of the cadastral value of the particular property.  This tax is due at the end of each financial year and is required to be paid by the end of the January following the end of the relevant tax year.  This Special Tax is declared by completing Form 213.

    It is worth noting however that if a non resident offshore company continuously or habitually performs their general business activity in Spain, as opposed to them simply owning property in Spain, they may actually be exempt from this tax.  Non Resident Offshore companies should seek full legal advice in respect of their tax status.
     
    A further tax that applies to Non Resident companies is VAT (IVA).  The standard rate of IVA is currently 21% on most goods and services.  However a reduced rate, and a super reduced rate, of IVA apply to certain goods and services such as health products and equipment (10%), toll roads (10%), exhibitions and fairs (10%) and books, newspapers and magazines (4%).   (Please note that IVA applied to the sale of property and land in Spain is charged at different rate).
     
    Spanish Law requires Non Resident individuals and Non Resident companies to appoint a legal representative when forming a company in Spain or declaring tax in Spain.  Ripoll & Mateu include this assistance in their range of services and will be happy to advise you fully. 
     
    Whilst every effort is made to ensure the content of this article and all others contained within this site is accurate, it is not to be relied upon or used as a substitute for any formal kind of legal advice and is intended as a guide only.  For full legal advice in all such matters please contact Ripoll&Mateu directly. 
     

     

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  • VAT - Impuesto Sobre el Valor Anadido (IVA)


    VAT is payable on the supply of most goods and services in Spain at a standard rate of 21%.  This is a tax on the end consumer, being an individual or a company, and is automatically included into the price of the said product or service.

    Companies - both resident and non resident - are liable to pay VAT and they are in most cases allowed to deduct any VAT borne, against any VAT they have charged on the supply of their product or service.  If a company is a non resident but deals with goods or provides a service in Spain, or distance sells to consumers in Spain, they can submit VAT returns without having to form a local (resident) company.   These companies would apply for a tax ID called a "CIF de No Residente sin Establecimiento Permanente", (Tax ID for a non resident with no permanent establishment).  

    For certain goods and services VAT is taxed at the reduced rate of 10%, such as health products and equipment, toll roads, exhibitions and fairs, accommodation and hotels and bar services.  

    A 'super reduced' rate of 4% is applied to the cost of items such as goods from a chemist, some food and drink, construction work, selected newspapers, books and magazines whilst VAT exempt goods and services include education, medical services and the renting of residential property.

    VAT at the standard rate is applied to the sale of new build property if at least one of the parties is a professional (in the business of buying and selling property) or company, VAT at the reduced rate of 10% applied under the same circumstances but if the property is bought off plan.  If the purchase of property is between private individuals VAT does not apply and instead ITP (Property Transfer Tax) is payable. 

    VAT returns are due quarterly on the 20th day of the month following the reporting period and an annual return is also due, to be filed by 20th January following the reporting year.

    Under Spanish Law a Non Resident Individual or Non Resident Company is obliged to employ the services of a local solicitor in order to deal with their tax obligations.  Please contact Ripoll & Mateu for further advice on this subject.

    Whilst every effort is made to ensure the content of this article and all others contained within this site is accurate, it is not to be relied upon or used as a substitute for any formal kind of legal advice and is intended as a guide only.  For full legal advice in all such matters please contact Ripoll&Mateu directly. 
     

     

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  • Tourism License (Ley General Turistica Decreto 13/2011 25th February)

    For anyone wishing to let their property in Mallorca on a Holiday Let basis, they must first obtain a Tourism License from the Local Tourism Authority. This is done by submitting Appendix 1.

    Only certain types of properties are eligible for a Tourism License and these are "Viviendas Vacacionales" (holiday Hems), namely detached houses  and semi detached houses (adosados pareados) in residential areas.  Apartments in residential areas are not eligible for the Tourism License.  However, the building in which the apartment sits can apply for a Tourism License but only if all of the other apartments in the building are also linked to the rental activity and all owners transfer management of their apartment to one single agent or individual.

    "Apartamentos Turisticos" (tourist apartments) are the only apartments legally eligible for Holiday Let status and these apartments are defined as such by the overall building or complex being designed specifically for the holiday let market.  The complex must have services in place such as a management company contactable within daytime office hours, a 24 hour emergency contact service and a cleaning service. 

    For a Tourism License to be granted, the owner must complete a Declaration of Commitment which officially states the commencement date of rental activity on the property and furthermore contains the following information (as instructed under Article 19.3 Decreto 13/2011):-

    i. - An accurate and truthful description of the property (see ii.) and that the property fulfills the criteria required for a  Tourism License  i.e
    - that is an individual house or is semi-detached and is set within rustic land
    - it has a maximum of 6 bedrooms for 12 people
    - it has a minimum of one bathroom for every 3 persons
    - is following the local planning rules
     
    ii.- Description of the property:
    -  name, address
    -  plot size
    -  number of rooms
    -  surface area of all rooms, balconies, gardens and terraces
    -  characteristics of the building such as number of floors, location
    -  floor plans or simple drawings of the house
     
    iii.- Identification card of the applicant

    iv.- Proof that certain information (as defined in the conditions of the license) is supplied and left at the property at all times.  Eg - instruction manuals for the appliances and installations such as air conditioning units, heating systems, etc.  Emergency Services telephone numbers must also be supplied and instructions of what to do in case of fire.  

    iv.- Tax form stating a payment of 24.84€ per person (pax) permitted in the property
     
    Once the above documents are submitted to the Town Council, Holiday Let rental activity can commence at the property.   However, the license is granted without prejudice of any subsequent inspection from the Tourism Department who may arrange to visit the property at a later date to ensure everything is in order and that the property complies with their criteria.    

    Please see the below link for further information

     

    Whilst every effort is made to ensure the content of this article and all others contained within this site is accurate, it is not to be relied upon or used as a substitute for any formal kind of legal advice and is intended as a guide only.  For full legal advice in all such matters please contact Ripoll&Mateu directly.

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