front cover.qxd 09/02/2005 14:26 Page 1 - AIP

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es-money.qxd 07/02/2005 15:53 Page 24 MONEY 24 Taxation THE VARIOUS TYPES OF TAXES INCOME TAX - IRPF (see page 22) — employees' income tax is deducated at source by employers; self-employed workers pay the tax quarterly (pago fraccionado). Non-residents who earn money from a Spanish source, and non-residents who own property should file an income tax declaration. Residents and non-residents with income in Spain (other than that made from property letting) must make their annual income tax declaration between May 1 and June 20. WEALTH TAX (Impuesto sobre el patrimonio) — payable by residents and non-residents on high-value capital assets, including property, cash in bank accounts, vehicles, boats, life insurance, jewellery, stocks and shares in Spain. Residents are entitled to an allowance of €258,435 against wealth tax. There is no allowance for non-residents who must pay tax on all their assets in Spain. PROPERTY/REAL ESTATE TAX OR RATES (impuesto sobre bienes inmuebles urbano, IBI)— paid by all property owners, resident or non-resident, to go towards street cleaning, education, council administration, local sports amenities etc. IBI is calculated according to the fiscal or rateable value of your property. Ask at your town hall when to pay as they may not send out a bill. WASTE COLLECTION/MAINS DRAINAGE TAX (basura y alcantarillado) — annual tax payable by all property owners. CAPITAL GAINS TAX (impuesto sobre incremento de patrimonio de la venta de una bien inmeuble) — residents pay 15 percent, non-residents 35 percent of the profits made on the sale of property and other assets such as a business, antiques or stocks and shares in Spain. INHERITANCE AND GIFT TAX (impuesto sobre sucesiones y donaciones) — payable by beneficiaries within six months of a death if the person died in Spain. BUSINESS TAX (impuesto sobre actividades economicas/IAE) — paid by all businesses with annual turnover exceeding €1 million. COMPANY/CORPORATION TAX (impuesto sobre sociedades) — 35 percent on profits made by partnerships and registered companies such as Sociedad Anonima (SA) or Sociedad Limitada (SL). OFFSHORE COMPANY TAX (impuesto especial) — annual tax on offshore companies that do not declare the individual owner of property in Spain or the source of investment. MOTOR VEHICLE TAX (impuesto de circulacion) — paid by anyone who owns a Spanish-registered vehicle. The amount is based on the age and the power of the vehicle and the region you live in. The larger the city is, the higher the tax. For an average car, it costs about €60 a year. For detailed information on managing your finances as an expat, check out www.expatica.com/spain SPAIN EXPAT SURVIVAL GUIDE WWW.EXPATICA.COM
es-money.qxd 09/02/2005 15:07 Page 25 Insurance The Spanish take out fewer policies than Northern Europeans, but the insurance market in Spain has still grown considerably over the last ten years. Some types of insurance are obligatory in Spain: third-party car insurance, thirdparty property liability insurance for tenants and home owners and mortgage life insurance for anyone who has a mortgage. Voluntary insurance includes private pensions, health, household, travel, car breakdown and life insurance. If you need to make an insurance claim, you may need to report the incident to the police within 24 hours. Spanish law is likely to differ from that of other countries so obtain legal advice if you need to make anything more than a minor claim. There are many foreign insurance companies, direct telephone insurers, insurance agents and brokers (corredor de seguros) who deal specifically with expatriates. Look in the Yellow Pages under Seguros for local details. In Spanish resorts you will find many independent British and foreign brokers. Shop around for quotes and ask friends and colleagues for recommendations to avoid using a disreputable company. Since 1994, Spanish residents can insure their car, home or life with any insurance company in the EU, with the insurer needing to be registered in Spain. Using a foreign insurance company means the policy and any claims will be written in your language. They may charge more than a Spanish company, however, and the policy may still need to be written under Spanish law. If the policy is written in Spain, get a legal adviser to check it before you sign anything. If you wish to cancel a policy, most companies request that you write to them with two or three months notice, otherwise they will automatically extend your policy for a further year. Even if your possessions are simple, home and contents insurance is a sound investment. There are many foreign insurance companies, telephone insurers, agents and brokers (corredor de seguros) who deal specifically with the needs of expatriates. WWW.EXPATICA.COM SPAIN EXPAT SURVIVAL GUIDE 25 MONEY
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