Wealth Tax is back

We were hearing it through the grapevine but it is now official; Decree Law number 13/2011 approved on Sept 16^th 2011 modifies the previous Decree Law on Wealth Tax from 1991, restoring Wealth Tax.

The Government insists that this is a temporary measure covering tax years 2011 & 2012 which are paid in 2012 & 2013. The law shall be revised on January 2013.

During these past couple of years, wealth tax wasn’t in fact abolished but had a 100% bonus therefore it was 0 cost for the tax payers. With this new Law, the tax will be paid accordingly based on a gradual scale from 0.2% to 2.5% whereby the highest percentage corresponds to tax payers owning larger assets. The percentage is taxable on the net base of wealth owned at 31st Dec. This tax is now collected by the different Autonomous Communities. 

The threshold has been raised and now targets the wealthier taxpayers. The personal exemption has been increased from 108.182,18€ to 700.000,00€ applying applies to both Residents and Non-Residents. Nevertheless there still is a difference in the calculations as Residents in Spain are liable to wealth tax on their worldwide assets and on the contrary Non Residents are only liable to assets located in Spain. 

The Home exemption has also been raised from 150.253,00€ to 300.000,00€. (Needless to say that you cannot file for the home exemption of 300.000,00€ if you are a Non-Resident). 

One of the major changes is that Non Residents in Spain (individuals and companies) are obliged to name a fiscal representative for the below stated cases: 

• Non-Resident Tax Payer operating through a Permanent Establishment.
• When required by the Tax Office due to the amounts and characteristics of the assets.
• When owning a property in Spain ( applicable for individual Non-Residents who are obliged to present Wealth Tax).

The fiscal representative must be a Resident in Spain and the appointment must be notified to the Tax Office. This is a serious measure and non compliance will incur in fines. 

Should you have any questions regarding the changes in the Wealth Tax Law, please give us a ring on 952 78 31 39 and we will be happy to help.