Following instructions from Spanish Foreigners Office, from 6^th July and until the 31^st December 2020 -providing there is no extension of the transition period-, all UK nationals willing to keep their condition as residents in Spain after Brexit could exchange their green residency permits for new ones called “TIE” (non-EU residency cards). For the moment it is just an option, but these non-EU residency cards could be compulsory after transition period as per information from the Foreigners Office.

You could be in any of these situations:

• TEMPORARY RESIDENCY CARD
  • If you have legally lived in Spain less than 5 years – you can exchange it for the new residency permit that will be valid for 5 years.
  • If you have legally lived in Spain more than 5 years, but you do not have the permanent residency card – you can exchange it for the new residency permit that will be valid for 10 years.

• PERMANENT RESIDENCY CARD
  • You must exchange your permanent residency card for the new residency permit that will be valid for 10 years.

The process is quite simple:

1. Obtaining appointment at the Foreigners Office (Brexit)
2. First visit: submitting the application.

This time you would need to bring a photograph and they will take your finger print.

You will need to pay a small administrative fee.

1. Waiting for a couple of weeks until card is ready
2. Second visit: collecting your new residency card

It is quite important to exchange your residency card before the end of transition period, otherwise the green card would no longer be valid and you would need to apply for residency with strict conditions for non-EU citizens.

If you would need any further information or assistance on our behalf, do not hesitate to let us know.at www.andalucia-lawyers.com

SPECIAL TAX ON PROPERTIES OWNED BY NON-RESIDENT COMPANIES IN TAX HEAVENS COUNTRIES

• What are the basic characteristics of the special tax on real estate owned by non-resident entities?

Entities residing in a country or territory considered a tax haven that own or possess real estate in Spain are subject to Non-Resident Income Tax through a special tax that is due on December 31 of each year and must be paid in the following January. It is declared through the form 213.

The tax base is made up of the cadastral value of the real estate and a 3% tax rate.

• Is there any exemption?

The following entities are not liable to pay this special tax:

• States, foreign public institutions and international organisations
• Entities that carry out economic exploitations different from the simple possession or lease of real estate
• Companies listed on officially recognized secondary stock markets

• Why should I pay this special tax?

The Spanish Tax office (AEAT) is sending notifications to all those entities that own real estate in Spain that have not submitted this tax.

The payment and submission of the last 4 years which has not prescribed is being claimed along with penalties and interests.

• How can I pay this tax? Can the entity tax situation be changed?

In Andalucia Lawyer we can assess the pros and cons of continuing with an opaque structure that perhaps made sense years ago, but that can be questioned today. Get in touch!

MASSIVE REQUIREMENTS FROM THE SPANISH TAX OFFICE TO POTENTIAL SPANISH TAX-RESIDENTS

The Spanish Tax office is sending requirements with regards to their annual tax return to many citizens that are considered as potential tax residents in Spain. They are sending letters requesting to those who may be liable to submit their tax return of all the years that are still in force (i.e. from 2015 on).

Some of the letters state the following: “from to the data provided by the Administration of the United Kingdom, it is deduced that you have received a pension subject to taxation in Spain according to the double taxation agreement signed with that country. Thus, it turns out that you are obliged to file a Personal Income Tax return corresponding to the 2015, 2016, 2017 and 2018 financial year, form 100, since there are not records proving the aforementioned obligation has been fulfilled”.

1. How does the Tax Office know if I am a tax resident in Spain?

There are different ways by which the Tax Office may know that:

• If you live more than 183 days of the calendar year on Spanish territory
• If your main activities or economic nucleus or base reside in Spain, directly or indirectly
• If your (non-legally separated) spouse or minor children live in Spain
• If you have applied and obtained a Spanish residency permit
• If you have used the Spanish public health system

2. What happens if I am a tax resident and I have not submitted my tax return?

• You are still in time to submit your tax return for 2019 between the 1^st of April and the 30^th of June 2020
• If you have not submitted it for the previous years, the sooner you do it, the fewer surcharges will be applied
• It is always better to submit the tax return out of time than waiting to receive the Tax office requirements as this implies penalties and higher surcharges
• Heirs of the taxpayers are obliged to fulfil the outstanding duties for this tax return (except for the penalties).

3. How can I ensure if I am liable to submit my tax return?

Very easy! You just need to contact us! Each country’s tax system is different and so it is very important to hire tax experts (especially in double taxation) to ensure you are meeting your tax duties and avoid unpleasant surprises even 4 years after!