With the deadline rapidly approaching expats will need to act immediately if they live in Spain and hold any assets outside the country.
London, UK (PRWEB UK) 25 April 2013
Pryce Warner International Group – Expats in Spain have until April the 30th to declare full details of their overseas assets to the Spanish tax authority.
According to the Olive Press, failure to do so can lead to very heavy fines.
According to the Telegraph, new regulations in Spain designed to target tax evasion will require expats to declare full details of their overseas assets worth more than €50,000.
Every full time resident of Spain, will be required to declare the value of these assets as of December 31st 2012.
There is now an increased urgency for any expats who have not yet declared their assets as the deadline is next week and the minimum fine is €10, 000, whilst the maximum fine can be 150% of the total tax owed.
Expats are considered resident in Spain if they spend more than 183 days per year in the country or if their partner and dependent children live there.
New changes to HMRC’s statutory residence test (the method used to determine British citizen’s country of residence) means some expats may also need to double check if this means they are now considered resident in Spain.
Pryce Warner International Group have produced a tax planning guide to help expats with this matter.
Expats should be aware that all their assets will be considered as part of the €50,000 threshold. This includes bank accounts, property, shares, insurance policies and annuity income.
Due to the low threshold number, anyone that owns property outside of Spain will almost certainly be affected by these new requirements.
Pryce Warner International Group have over the past several months recorded a 30% increase in the number of expats looking to sell overseas property in order to avoid complications due to the new tax requirements.
David Retikin, Director of Operations at Pryce Warner International Group, a financial services company for expats, commented: “With the deadline rapidly approaching, expats will need to act immediately if they live in Spain and hold any assets outside the country. The potential fines that can be demanded for not declaring overseas assets are ludicrously high, even the base rate of €10 000 is far in excess of what most expats would ever be legitimately required to pay in a given year. Considering how high the fines are and how poorly information on these requirements has been divulged to expats, this is clearly an attempt by the Spanish government to drum up cash in the short-term, and not combat tax avoidance. Whatever the motive behind this, the most likely scenario is that these requirements will actually drive existing expats out of Spain, and significantly discourage new expats from settling there.”