Living in Spain
Tax in Spain | Cars in Spain | EU Pet Passports
Tax in Spain: top
As little as twenty years ago, tax evasion was a way of life in Spain and almost encouraged. Not any more! During the the last decade, Spanish taxes have increased dramatically, particularly income tax.
Althugh overall taxation remains reasonably low and is still less than the EU average, the gap is closing fast. Before you decide to settle in Spain permanently, you should obtain expert advice regarding Spanish taxes. This will ensure that you take optimum advantage of your current tax status and also ensure that you don't make mistakes that you may later regret.
These days it's far more difficult to avoid paying taxes in Spain and penalties are stiff. However, despite the efforts of the authorities to curb tax dodgers, tax evasion is still in evidence and many non-resident home owners are among the worse offenders, being paid 'cash in hand' thus avoiding value added tax (IVA) and income tax. Cash is also preferred by many Spaniards for payment, rather than cheque or credit card, even when large sums are involved. The Spanish tax system is complicated and even the experts have difficulty agreeing with the tax authorities. In short, taxes are levied by three tiers of governemnt : the central government, autonomous regional governments and local municipalities.
Government taxes are administered by the Ministry of Economy and Taxation which has its headquarters in Madrid and assessment and tax collection centres in provincial capital towns. There's a five year assessment and tax collection centres in provincial capital towns. There's a five year statute of limitations on the collection of back taxes in Spain which means that if no action has been taken during this period to collect unpaid tax, it can't be collected. At last count there were around 15 different taxes for which individuals are liable.
The most important are listed hereafter.
Residents Income Tax. Payable on worldwide income Business Tax. Paid by the self-employed once a year.
Company Tax. Paid at a percentage of profits by partnerships and registered companies.
Property Tax. Paid by all property owners. Wealth Tax. Payable on capital assets, including property.
Capital Gains Tax. Payable on the profits made on th esale of property and other assets located in Spain. Inheritance and
Gift Tax. Payable on worldwide assets. Rubbish Collection. Annual tax payable by all residents and non resident property owners.
Offshore Company Tax. Annual tax on offshore companies that don't declare the individual owner of property in Spain or the source of investment.
Social Security. Isn't strictly a tax but is payable by employees and the self employed Motor Vehicle Tax. Paid annually by all vehicle owners.
Value Added Tax. Payable on a wide range of goods and services at varying rates.
Non Resident Property Owners are responsible for: Income Tax, Capital Gains Tax, Wealth Tax, Inheritence and Gift Tax
Cars in Spain top
To buy a car in Spain you need more than just money. A foreigner must have one of the following:
- A residence permit
- "Escritura" (title deeds) of a house (dwelling not a office) in his personal name
- Certificate of "Empadronamiento"
- Rental contract of one years duration
You will agree the price and payment terms with the dealer who will usually handle all the paperwork for the vehicle transfer procedures and if a new car pay the taxes on your behalf.
If you have a used car that you wish to scrap when you buy a new one, the government will reduce your new car tax by 480.80 euros or 721.00 euros if you scrap a leaded fuel car for an unleaded fuel one.
There is an increasing used car market in Spain and "Vehiculos de Ocasion" are spring up all over the place. The price of used cars in Spain is generally higher than in Northern european countries. Many used cars are ex-rental models and these can represent good value for money.
The used car dealer will usually handle the transfer procedures for you. In a private sale you will normally benefit for the services of a "Gestor". Make sure you agree with the seller who will pay the transfer costs (Gestor) and transfer taxes (4%).
You can do the transfer yourself if you have more time than money at the "trafico" offices. Formally known as the "Jefatura Provincial de Trafico".
Almeria: Hermanos Machado, 4.
Cadiz: Santa Rafaela María, 2.
Cordoba: Avenida Conde Vallellano, 3 y 5.
Granada: Carretera Alfacar, 1.
Huelva: Avenida Escultora Miss Whitney, 19.
Jaen: Avenida Santa María del Valle, s/n.
Malaga: Avenida Mauricio Moro, Edif. Américas.
Seville: Páez de Rivera, 4.
A full list of offices with phone and fax numbers and email addresses can be found on the trafico website at www.dgt.es.
You will need the following documentation:
- Completed Application form
- Circulation permit (car document) signed by the seller
- Paid up municipal tax receipt
- Receipt of vehicle transfer tax paid to Hacienda of 4% of sale price
- ITV (Inspección Tecnica de Vehiculos) (MOT in UK) certificate plus a photocopy
- Residence permit plus photocopy
- Stamped addressed envelope (for return of car document)
- Fee 40.20 euro
If you sell a used car make sure that the transfer is done properly or the new owner may forget something and you will remain liable for municipal taxes and parking tickets. The same applies if you scrap a car.
Buying Rental Cars
The rental car industry is thriving in Andalucia thanks to a constant influx of tourists. An offshoot of this industry is a second hand car industry that features almost new cars that even come with a limited guarantee - all at a fraction of the cost of buying a new vehicle.
To find a second hand rental car, begin by visiting the car rental companies and car dealerships to enquire about the current selection of these vehicles. Often your choice of models and colours will be slightly limited, but perhaps not as much as you might expect. In fact, there are usually vehicles available in all categories ranging from luxury to economy.
During the first year following the purchase of your ex-rental car you may be required to service the vehicle at the dealership in order to ensure the guarantee is valid.
EU Pet Passports top
With the introduction of the EU Pet Passport it’s now relatively easy to take your pet abroad with you. Once your pet has been microchipped and vaccinated against rabies it can be issued with a pet passport which is used when travelling to other EU countries.
When can your pet re enter the UK?
Your pet may not re-enter the UK until 6 calendar months has elapsed from the date the blood sample, which led to a satisfactory test result was taken. E.g. for a blood sample drawn on 1 April 2006, the earliest re-entry date is 1 October 2006. Please remember that any rabies booster vaccinations following the date of blood sampling must have been administered on time.
Treatment for ticks and tapeworms
Before re-entering the UK your pet must be treated by a vet against ticks and tapeworms. The tick treatment must be licensed for use against ticks. A tick collar is not acceptable. The treatment for the tapeworm must contain praziquantel and must be given between 24 and 48 hours before your pet is checked-in to travel on an approved route into the UK. Animals travelling from the UK on day trips must be treated in the UK before departure to meet timing requirement.
Make sure that the vet reads the microchip first and completes all the details in sections VI and VII of the pet passport.
Speak to your vet for specific advice before travelling abroad and for information on diseases which occur in Europe that are not found in the UK.
PETS website: www.defra.gov.uk/animalh/quarantine/index.htm
PETS Helpline 0870 241 1710 (Monday to Friday 8.30 – 17.00 UK time)
E-mail: pets.helpline@defra.gsi.gov.uk (make sure you include your postal address and daytime contact number)
