New adjustment to special Tax on Real States Entities of Non-Residents

NEW ADJUSTMENT TO THE SPECIAL TAX ON REAL ESTATE ENTITIES OF NON-RESIDENTS

On December 28, 2012 the Official Government Bulletin (BOE) published Law 17/2012 of the State Budget for 2013, as well as accompanying law, Law 16/2012, to adopt various measures to strengthen tax revenue.

We have emphasized the modifications introduced in the adjustment of the Special Tax On Real Estate Entities Of Non-Residents:

1. – Securing the Special Tax. – The adjustment of Article 40, introduced by Law 16/2012 and put into action on the first of January, 2013, concerns the income of non-residents. At the beginning of 2013, only resident entities in a country or territory which is considered a tax haven will be subject to pay said Special Tax on properties or estates possessed in Spain. Amending the previous regulation, those which were subject to the payment of the Special Tax, in principle, were all the non-resident entities which are owners of real estate in Spain, however a system of exemptions was established, which is as follows: Non-Resident entities in Spain were exempt from said Special Tax, estates in our country, that would have been located in States with Agreement containing an information exchange clause, and provided that the individual owners of said entities would have been residents in Spain, or in their case, in States with Agreement of the same characteristics. Therefore, at the beginning of 2013, the resident entities in other States will be dropped from being subject to pay the Special Tax, as long as they are not considered tax havens; therefore, the owners of said Entities will not be obligated to file a return or prove their identity.

2. – Taxable base and tax rate. – The taxable base is the assessed value of the property and the tax rate is 3%.

3. – Impact on the property in case of transmission – Article 45.3 of the Law concerning nonresidents income, introduced into law by Law 16/2012 which was put into action on the first of January, 2013, impacts the real estate paid to the Special Tax, in the course of transmission by a non-resident company to a third, it is stated, that the acquirer should check that the transition of the real estate (the company located in a tax haven) has paid the Special Tax during the years that it has been the owner.