GRANTING A SPANISH WILL IN PANDEMIC TIMES

Coronavirus pandemic has activated and rescued the article 701 of the Spanish Civil Code from oblivion for the first time after 131 years.

This article allows granting Wills before 3 witnesses, even at the hospital, in the event of a pandemic (regardless the testator is affected or not) without doing so before a Public Notary.

• How must I do it?

There are some requirements so that the Will is valid:

• It must be signed by 3 witnesses over 16 years old with full legal capacity and speaking the same language as the testator. The witnesses must also personally know the testator and being able to judge is s/he is sound of mind and memory to grant the Will. Those to be named heirs or legatees cannot be the witnesses, nor their spouses or relatives to the fourth degree of consanguinity or second degree of affinity.

• It must be written, preferably by the testator or if this is not feasible, by any of the witnesses. However, if this in not possible, it would be enough with the memory of the witnesses, or through analogic or digital means where the last will of the testator may be recorded for its later playback. It would be also possible to grant the Will by providing the witnesses with a note or memory of his/her last Will.

• This Will must be eventually formalised in a Public Deed before a Public Notary so that it is fully valid. For that, the testator’s death certificate as well as any document proving there are no later Wills granted must be provided.

• Is the Will valid forever?
• It will be valid is this is formalised in a Public Deed within 3 months after the testator’s death (even if the death is not caused by the pandemic).
• It will remain ineffective 2 months after the risk of death or the pandemic have ceased.

THE BECKHAM LAW: DOES IT AFFECT YOU?

The “Beckham Law” is a Spanish Tax Decree aimed at all foreign displaced workers living in Spain (Régimen Especial de Trabajadores Desplazados) effective from 2005.

• What does the Beckham law imply?

According to Spanish tax law, individuals who spend more than 183 days during a tax year in Spain are considered tax resident. This implies they are liable to submit their personal tax return in Spain covering all their worldwide assets and income. (See more “Spanish Tax Renta – RENTA 2019)

However, this Decree changed the tax law allowing an individual who has moved from another country to Spain the choice of being taxed either as a Spanish resident or as a non-Spanish resident. This means that those choosing being taxed as a non-Spanish resident shall only declare their Spanish income and assets and may avoid tax on their worldwide income for a period of up to 6 tax years provided certain conditions are met.

• Which are the requirements for applying for this special regime?

1. Not having been resident in Spain during the 10 years prior to settling in Spain
2. Being displaced to Spanish territory as a result of a labour contract.
3. The work must be effectively carried out in Spain, even if it as allowed to work outside up to 15% of the job time.
4. The employer must either be a Spanish company or entity, or if this is not a Spanish resident, the employer must operate through a permanent establishment located in Spain.
5. The incomes derived from the employment relationship are not exempt from taxation under Spanish income tax law.

• How can I opt for the Beckham law?

If you comply with the above-detailed requirements, the form 149 must be submitted before the Spanish Tax Authorities in order to apply for this special regime.

After that, you must fill your tax return under this special regime with form 151, which must be submitted between the 1^st of April and the 30^th of June of each year.

Not sure which tax return you must submit? No worries! Andalucia Lawyers’ team will be happy to help you! Contac us!

Submit your Spanish Tax Return (RENTA 2021)

• What is the RENTA?

The IRPF (Impuesto sobre la Renta de Personas Físicas) is the Spanish nearest equivalent to personal income tax. Every year, Spanish residents must declare their annual income from the previous calendar year from the 1^st of April to the 30^th of June – this is called the RENTA.

• Am I a Spanish resident?

Individuals become officially resident in Spain for tax purposes if they live more than 183 days of the calendar year on Spanish territory or if the principal centre of activity or physical base of their economic interests is in Spain.

For more detailed information on how tax residency is established or if you are unsure about whether you are a Spanish resident, read our article How Do I Know if I’m a Spanish Resident or Non-resident for Tax Purposes?

• Must I submit the RENTA?

You are only exempt from declaring if your income falls below these established thresholds:

• You earn a sole income of €22,000 as an employee already subject to employer deductions.
• You can benefit from a reduced limit if your income is earned from more than one employer and is under €12,000.
• Your bank interest and other investment income is under €1,600.
• Your rental income is under €1,000.
• You receive income from employment, investment capital, economic activities or capital gains up to a combined limit of €1,000 annually or you have capital losses below €500.

However, please note that it is compulsory to submit your tax return in the first year of you become a tax resident in Spain. Therefore, if you became a Spanish tax resident in 2021, you must file the RENTA 2021 income tax return between the 1st of April and the 30th June 2022 regardless of your income level.

• What earnings do I have to declare?

As a Spanish resident you are taxed on your worldwide income. Therefore, you must declare all earnings, regardless of where they come from. This includes pensions from your home country (except for some civil service pensions). These rules apply even if your income is not paid into a Spanish bank account. A deduction for double taxation is applicable to all earnings that are taxed abroad thanks to double taxation treaties that Spain holds with other countries. As a result, you will not be taxed twice on the same income.

• Submit your Spanish Income Tax Return for 2021 (RENTA 2021)

Don’t forget to submit your tax return for the 2021 tax year during April and June 2022 – the deadline to present submit your RENTA (2021 tax return) is the 30th of June 2022. If you would like advice about your tax situation or you would like us to assist you with your Spanish income tax return, please do not hesitate to contact us.