The High Court in the region of Valencia has ruled in favour of a British couple, Mr and Mrs Roy.

It told the Spanish tax authorities to repay them for being charged a capital gains tax levied at 35% instead of 15%.

A spokesman for the Roys’ law firm said it was gathering similar cases, with an average claim worth £14,100.

“This discriminatory law was in force for many years,” said Emilio Alvarez of Valencian law firm Costa, Alvarez, Manglano.

“It will have affected thousands of people,” he added.

Read more…

Britons who use their overseas accounts to pay for their Spanish mortgages and essentials such as utility services and council taxes, have been required by Spanish banks to produce a residence certificate or “Residencia” since March last year.

Failure to produce the new documents could result in bank accounts being frozen and mortgage repayments stopped.

However, some Spanish banks have failed to contact homeowners or given short notice to produce the papers.

One reader, Simon Wells, 52, from Walthamstow, East London, said that on August 15 he was told by his Spanish bank, Cajamar, to produce the documents by September 15.

“This is not easy to do as you have to register in person at a Spanish police station and then have it stamped by a town hall official. We were warned our account could be frozen.”

The requirement is part of an EU initiative to crack down on tax dodgers. Spanish residents are taxed at source, so to avoid paying tax there you have to prove non-residence status.

Britons — there are about 145,000 with bank accounts and properties in Spain, said broker Savills Private Finance — have to declare gains made in Spanish bank accounts to the UK taxman.

You qualify for non-resident status in Spain if you spend fewer than 180 days a year in the country and are able to produce the new document.

Anyone who bought a property before the new rules came into effect may be asked by their Spanish bank to produce the Residencia. Those who bought property after they were introduced will have been told of the requirement.

Residence certificates include your name, address, nationality, date of registration and the “Numero de Identificacion de Extranjeros”, a tax number for foreigners in Spain.

The Spanish Tourism Office said: “If you have a Spanish property, and have not been asked to produce this document, I suggest you contact your bank directly.”

Homeowners can contact the Spanish Ministry of the Interior’s immigration directorate helpline for more advice on 00 34 913 639 071.

To apply for the non-residency certificate you usually need to go in person to the Oficina de Extranjeros or police station in your province of residence.

The document costs about €10-€13, although if you go through a lawyer you may have to pay more than €120 (Approx. £97.20).

Find the nearest Oficina de Extranjeros at mir.es/SGACAVT/extranje/directorio.html

Article courtesy – Times Online.

The Spanish tax office confirmed at the weekend that it has obtained the names of 100 Spanish citizens believed to have evaded taxes in Liechtenstein

3 March 2008

MADRID – The Spanish tax office confirmed at the weekend that it has obtained the names of 100 Spanish citizens believed to have evaded taxes in Liechtenstein, becoming the 15th country involved in an international probe into fiscal fraud in the Alpine principality.

Tax officials did not disclose the identity of the suspected tax evaders, although most are believed to be wealthy business owners with millions of euros of financial assets deposited in Liechtenstein banks. They are among hundreds of people named on a DVD purchased by the German government from an informant last month, which ignited the international scandal.

Since then 15 countries have said they are investigating tax fraud by their citizens in Liechtenstein. The number of people under investigation by Spain is comparable to those being probed by the United States, while Italy says it is investigating 150 people and France 200. Germany says more than 1,000 of its citizens are suspected of evading taxes to the tune of EUR 4 billion.

According to Spanish authorities, tax officials are attempting to determine the full extent of the evasion carried out by Spanish tax payers. Those who owe the tax office less than EUR 120,000 will face fines and sanctions imposed by the tax office directly, while those owing more than that amount can expect to face criminal charges in court, authorities said.

[Copyright EL PAÍS / LUCÍA ABELLÁN 2008]

A rapidly expanding international probe into tax evasion centred on Liechtenstein spread to Spain on Tuesday.

27 February 2008

MADRID – A rapidly expanding international probe into tax evasion centred on Liechtenstein spread to Spain on Tuesday, with the Spanish tax office confirming that it is joining a growing list of countries investigating citizens with bank accounts, companies and foundations in the Alpine principality.

The potentially massive case of tax fraud emerged earlier this month when Germany admitted to paying EUR 4.2 million for information on German nationals with accounts at LGT, a private bank owned by Liechtenstein’s royal family. Britain, France, Italy, Sweden, New Zealand, Australia and the United States have since launched their own inquiries. Spain on Tuesday became the latest to target its citizens who had allegedly been using LGT to hide money from the tax office.

“We are analysing information about Spanish citizens included in these lists of bank accounts and deposits in Liechtenstein, which were used, presumably, for tax evasion and fiscal fraud,” the Spanish tax office said in a statement.

It said that after it has studied the information it will decide whether to launch further investigations or to turn individual cases over to prosecutors to bring criminal charges.

[Copyright El Pais 2008]

José Luis Rodríguez Zapatero, the Socialist prime minister who is seeking re-election on March 9, is facing a barrage of criticism this week after promising a €400 ($591, £297) tax rebate for 13m wage earners and pensioners. The measure is expected to cost €5bn, or one-quarter of the government’s fiscal surplus of 2 per cent of gross domestic product.

The prime minister said the rebate was aimed at “stimulating” Spain’s slowing economy. With rising inflation and mortgage payments he wanted to put more money in people’s pockets, Mr Zapatero told a Socialist party conference.

But Comisiones Obreras, the biggest trade union, called the €400 rebate “opportunistic” that smacked of being “a one-off payment for voting Socialist”.

“A blatant attempt to buy votes with public monies” complained Convergencia i Unió, a Catalan nationalist party, which said it would denounce Mr Zapatero’s “banana republic tactics” to the Spanish election watchdog.

Other groups, including some Socialist party allies in parliament, said there were better uses for the government’s fiscal surplus, such as education, home help for the elderly, and other social programmes.

While the opposition Popular party calls Mr Zapatero’s proposal “naked electioneering”, its own tax proposals are equally controversial.

In a bid for the female vote, the Popular party proposes that working women should pay less tax than men. The conservatives want to cut the tax bills of female workers by €1,000, arguing this will encourage women to continue working after they have children and mitigate the cost of childcare.

However, lawyers and feminists have attacked the proposal for being unconstitutional.

“The impact of tax cuts for women could have the perverse effect of lowering female wages even further,” said Asunción Ventura, a professor of constitutional law, writing in the newspaper El País. “Women might be forced to accept lower wages knowing that their tax bills would be lower.”

In addition, the two main Spanish parties say they will simplify the tax regime, abolish wealth and inheritance taxes, and lower the corporate tax rate, currently 30 per cent, to make Spanish business more competitive in European terms. The Popular party wants to raise the tax exempt threshold to €16,000 a year – a level it says would exempt four out of 10 Spaniards from paying income tax.

The Socialists say their measures would also exempt low wage earners from paying income tax.

Neither party had planned to fight the election over the economy. But the end of the Spanish property boom and the international credit squeeze has brought economic worries to the fore.

Copyright The Financial Times Limited 2008