Tax..
 

Does everyone have to do a Tax return now..someone said there is new rules..

Re: Tax..
 

it's in your interest to do one - a lot of people are having problems because they haven't done so in the past

some pensioners are having to pay a higher rate on their prescriptions because Spain has no record of their income so they assume the higher rate

Re: Tax..
 

Medicine was free for pensioners..and under the new rules you pay now.. as a pensioner do i have to do a Tax return.

Re: Tax..
 

as I said - it's best to - even if it's a nil return - you might even get a rebate!

there is more than one prescription payment level for pensioners - those with higher income pay more (can't remember the details, but they are on here somewhere) - if you can't prove that you are on a lower income 'they' might assume a high income & out you on a higher rate

the best way to 'prove' income is to make a tax declaration - that's how they check

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A rebate.. dont think so as i have never paid anything in..and i pay the high rate of €6 .00

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ah - but you might owe less than you have paid in the UK.....

you are supposed to declare all you worldwide income in Spain, if you are resident here - but in the past 'they' have always said that if your only income is a pension from another country which has already been taxed, then not to bother


but now 'they' say that you really should have............

Re: Tax..
 

You do not have to have paid anything in. If you are very lucky and the numbers work in your favour you can get a rebate because of any interest on bank accounts.

Rosemary

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do you mean the higher rate for prescriptions?

if that's what you mean it's because they think you're rich - now you have to prove otherwise



unless you are rich of course ;)

Re: Tax..
 

I have been living in Gran Canaria for 4 years now..my pension and rent from my house comes to £1000 =€1200 a month.. i do not pay UK Tax as there are 2 of us..i pay here €500 rent and €600 to buy food a month..my money is in a UK bank.

Re: Tax..
 

In which case you should have been making a Spanish tax declaration for the last 4 years as your income is well over the minimum limit for declaring.

You could be fined for not doing so. I suggest you make sure that you do so next year for this years income. Just because the money goes into a UK account makes no difference.

Re: Tax..
 

Why did you think you did not need to submit a tax return?

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Fred..I was told that as i am the only one with any income for me and my wife ..we are under the Tax Code here and dont need to pay anything..We are not bringing in enough to pay Tax..

Re: Tax..
 

You were wrongly advised.

The income you quoted puts you above the minimum level to declare. The fact that there are two of you is irrelevant as it is the family income that determines whether you have to declare. You will probably end up paying little or no tax but that doesn't mean you don't have to declare it.

Re: Tax..
 

So i am not taking anything out of the spanish system as all my income is in the UK .. I still have to pay tax on my UK pension to spain

Re: Tax..
 

Unless it is a UK Government pension (not the UK state pension) it should be taxed in Spain and you can get it paid free of any tax in the UK.

If you live in Spain for more than 183 days in a year you must pay Spanish tax on all your income, wherever it comes from.

Re: Tax..
 

to be fair though a lot of people have been wrongly advised about this

I know someone who was advised by their accountant here in Spain to keep non-resident bank accounts even though they are resident & even though they have quite a decent (high) income from pensions & other things, that they don't need to do a tax declaration here

it's all hitting the fan atm for them

Re: Tax..
 

And it's bound to get worse as Hacienda try and claw back as much unpaid tax and fines as they can.

Rajoy says he isn't going to increase taxes but they could raise a few billion by clobbering those that haven't paid what they should have paid.

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I am always amazed that people who live permanently in a country think they are "not taking anything out of the Spanish system". Just by being in a country you are benefitting from the security and protection provided by the government (police, army etc), and who do you think pays for the infrastructure ? - err the Government. The Government has no money, it is all raised from the people through taxes, both direct and indirect, but you can't pick and choose which you want to pay.

Re: Tax..
 

Well said. And welcome:-) People just don't realise. and some of these same people are the ones who complain about 'immigrants taking from our system' in the UK, even when those 'immigrants' work and pay their taxes!
We choose to live here and we should live by Spanish rules. Sure we can complain about them. (And my beef is we should be able to vote). But we still have to fit into the Spanish system. Just as we expect people who want to live in England to live by English rules and laws.
Get a gestor and declare your income. You might find that you get some or all back if your income is low. I do. Yes, you have to wait until August or September to get it back (you pay quarterly). But that's the way the system works...for everybody in a fair world. ;)

Re: Tax..
 

You only pay quarterly if you are autonomo - surely?

MOST of us do just one tax return every June.


You'd be surprised - I thought I didn't 'pay in' (as I don't work or get a pension), but I still get a rebate every year!

Re: Tax..
 

I pay my tax in Spain just as I did in England, and like everyone else I would like to pay as little as possible without breaking the law.

I've found that in Spain, if possible, it's best to stay under the radar. The system is different and sometimes hard to understand, which is why people often need a Gestor to advise them.

Hacienda is going flat out under the new austerity drive to claw back taxes and they're not taking prisoners, and foreigners are an easy target.

And rebates? That's just rabbit hole stuff.

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Que?

Are you (trying) to say that it doesn't happen?

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Yep, You're right I think.

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If you are trying to say it doesn't happen I can attest that it does. I got a significant wedge paid back to me two years running. And extra early this year. I think they've got a more efficient system this year. Of course, if you're an Autonomo and your products are IVA-able you'll not get that back, Just a reduction for the VAT/IVA you've paid out.

Re: Tax..
 

I can only tell it the way I've found it over the years. When you enter a place of officialdom in Spain as an expat, you're in enemy territory. The usual practice is that after eventually getting to the front of the queue, you will be handed a Modelo of some sort (there are many of them), with instructions to take the form to the nearest bank and pay a fee. That's before they've even taken your name.

It's highly unlikely that you will have all the correct documents in place after your second queuing, and even if you have they are likely to ask for something nobody has ever thought of before.

And about rebates. Neither I nor any of my friends have ever had a rebate from a Spanish institution, whether it's Hacienda, Telefonica, or any of the other utility companies. I know for a fact that most of them have a computer system not programmed for rebates.

And I've never heard a funcionario say the word Sorry, they're not trained for it.

(And if you live in an area covered by the Costa Blanca News and look at today's font page, you will find a partial explanation - they're too busy surfing for porn with rate payers money to bother about a daft thing like rebates).

Re: Tax..
 

In the 10 years that I've been working in Spain I have received a rather decent rebate every year (circa 1k€). I've also found Hacienda to be very efficient. They send me an SMS text message in April saying that my draft tax return is available for consultation online. I look at it and make any adjustments. I OK it, and bingo, 10 days later the refund is in my bank account. No paper or gestor is involved. I don't actually know why I get the refund though. I guess my employer pays too much tax from my salary each month for some reason. It's the same with mi mujer as well.

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I've had rebates from Telefonica :D

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Clearly you haven't been involved with Hacienda.

If you make an appointment (the only option) to go in and get them to help you with your tax declaration you will find them very helpful, even surprised that you have bothered!

You do not need reams of paperwork, they don't even want to see your UK P60's. You just tell them your personal details and how much income you have and they will put it into their computer and print out the forms for you to take to the bank to pay your tax.

Try doing that with the UK HMRC and you will think it is the Spanish Inquisition again!

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I suppose Spain is such a vast country with so many different regions which have different practices.

Here's my recent experience with the tax office, Suma, the road tax one, in Torrevieja. I had sold on a car and registered the sale with Trafico and the local Suma office (and probably God as well).

This year I found that I had paid the Suma on the sold car, I think it was by bank standing order. Anyway, I attended the office with all my paper evidence, and was turned away. I returned with my secret weapon, my wife, who is as Spanish as can be, although she was born in London.

A different lady, it seemed to be all ladies in this busy office, dealt with my wife and was as rude as the rest of them. But she made a fatal mistake when she tried to be rude in Valeniano, my wife having learned her Spanish in Barcelona, many years ago.

The air turned blue and I blushed at such language, mostly from my angry wife. A lady supervisor came out of her back office and invited my wife and I into her office. Tranquillity and peace returned immediately and the supervisor admitted that Suma owed us around 80 Euros.

But she then politely explained that Suma only collected money, they didn't have a system in place to pay it out. She jokingly took out her purse and offered to pay it from her own money, but she only had 15 Euros in her purse.

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No, not recently Fred. My personal circumstances haven't changed much for a few years now and I use a Gestor. I must admit I'm a bit worried now because some of my friends also have Civil Service pension taxed at source in the UK, and Hacienda are now asking for that tax to be paid in Spain as well. For the first time, I believe.

Re: Tax..
 

Tricky one this.

Some financial experts think that the UK Government pensions should be included in the Spanish tax declaration, others don't.

The tax treaty is not abundantly clear on this point as it says that UK Government pensions should "only be taxed in the UK". That doesn't say that they should not be declared in Spain. There is a special box on the tax return where these should be entered - they certainly are not entered in the main income box. Under the usual rules you would expect the tax paid in the UK to be offset against the Spanish tax which is still the case.

The problem is that if you include the UK pension it might affect the tax rate that you pay in Spain by lifting you into a higher tax bracket on the rest of your declared income. This does seem to be the case if you do include the details on your return but only if you have a reasonably high income.

It's a very complicated subject and the tax calculations are also pretty weird.

Best to carry on with the way you have been doing it. The real problem is with people who have UK Crown pensions as well as a UK state pension and possibly other income (private pensions and investments) and then, because the Crown pension (and their state pension, unless they have taken steps to get it paid gross) is taxed in the UK, think that they don't have to declare the UK state pension and any other income.

Re: Tax..
 

I could be heading for a double whammy on this one because I'm due to draw down a Spanish 'pension' after making autonomo payments for a few years. My Gestor has been brilliant over the years, but he's totally flummoxed over this one.

So am I.

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I don't see it being a problem - you just add it to any other income (apart from the Crown Pension) and declare it as earned income.

It's just another income source - nothing special about it from a tax point of view.

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Thanks, Fred, but it's a bit more complicated than that. My Gestor is a shrewd old boy, but he's retiring before the budget next year.

He did give me some advice and I'll mention it briefly in case it helps someone, but I won't be taking the advice myself.

He suggests putting everything in my wife's name, returning to the UK, on paper, and coming back, officially as a tourist. I wouldn't want to live that way.

Re: Tax..
 

Yes i get the old age pension and £340 rent for my house..

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So you definitely need to make a declaration.

The rental from your UK property is taxable in Spain but you can deduct the UK tax paid.

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My rent income is only about £4000 a year..

But thanks for the information..I will see an acountant here and see what he does for me..thanks again everyone..

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If you can live with such a minute transgression of the law, just about the level of not paying a parking ticket, don't tell anyone.

Re: Tax..
 

I am new to this site so please excuse any faults on my part.

I lived for about 9 months in Gran Canaria and did the NIE and Social Security but they will be out of date now.

I am looking to go back to the Canaries on a permanent basis, as a long term renter, and would like to do everything legally. So all I will comply with all necessary registrations.

I know that Canary Island tax law is very different to that of mainland Spain.

So any ideas as to what I could expect from the following as a retired 58 year old.

1. I would have little or no Spanish income.
2. Rental income , less expenses but not taxed, from Germany.
3. Variable but small income from a numbered account in Liechtenstein.
4. Potential capital gain on above assets.
5. Potential capital gains from UK assets.
6. At 65 a proportion of UK and Swiss state pension.

The rental income would not be sufficient to live from and supplement would be required from the numbered account capital. Potential to split numbered account then declare a part. Bear in mind htat income/divorce tax has already been paid on all this stuff in the locations where it was earned.

Any ideas as to information sources or advice.

Re: Tax..
 

quick question - how long ago did you get your NIE etc ??

when I was given my NIE I was told it was "for life", so if you go back to Spain you will be able to use the same number.

other than to say that Spain now requires all residents to have adequate financial and medical cover to meet their needs so they will not be a drain on the country's finances, I will leave the rest to others who know more about these things

kr