2008 December | Tax Precision | International Tax Forum

Archive for December, 2008

THE “OFFICIAL” WEALTH TAX ABOLITION.LEY 4/2008 DE 23 DE DICIEMBRE.

Friday, December 19th, 2008

The Spanish Parliament has now passed “officially” the legislation abolishing the Ley 19/1991 de 6 de Junio del Impuesto sobre el Patrimonio (Wealth Tax Act) .

The Wealth Tax Act itself was not abolished as it is part of the more complex Spanish sistema de financiación de las Comunidades Autónomas (regional finance system), which requires a much larger – and politically charged – discussion with the Gobiernos Autonomicos.

The Ley 4/2008 de 23 de diciembre, por la que se suprime el gravamen del Impuesto sobre el Patrimonio(…), was published on the Spanish Government Official Gazette (BOE) in Christmas Day. The legislation was passed by the Spanish Parliament the 23rd December 2008 and will apply to tax years starting 1st January 2008 onwards.

The Wealth Tax abolition is instrumentalised by terminating the obligation to submit a wealth tax return and by applying a 100% deduction to the taxable base. This deduction is referred to in the Third article of the Ley 4/2008.

The deduction is applied to all taxpayers, both Spanish residents (Obligacion personal) and non residents (Obligacion real) regarding Wealth Tax (Impuesto de Patrimonio).

The following Articles of the Wealth Tax Act have been repelled by this new Ley 4/2008.

Article 6 and Disposicion Transitoria regarding the obligation for non residents to appoint a Tax Representative in Spain
Article 36, 37 and 38 regarding the obligation to submit a return and payment of the tax

After a year where we have got to know each other around the Wealth Tax abolition, we are very happy to end the year with this, our last 2008 posting, wishing you all a Happy 2009!!!!!

Tags: Spanish Tax
Posted in Domicile, Spanish Tax residence and nationality | No Comments »

GIBRALTAR TAX REGIME .- NEW FAVOURABLE EC COURT RULE

Friday, December 19th, 2008

We welcome the EC Court of Justice ruling against the European Commission argumenting that Gibraltar’s corporate tax reform constitutes illegal state aid.

The Judgement from the Eight Chamber of the Court of First Instance says: “It follows from all of the foregoing that the Commission has not established the existence of selective advantages stemming from the three aspects of the tax reform that are at issue. Therefore, by classifying those aspects as State aid, the Commission made an error of law in the application of Article 87(1) EC.”

As reported by Down Jones Deutschland, ” Gibraltar’s tax regime must be considered as Gibraltar’s only and not as a part of the UK.’s, the Court of First Instance said. The court ruling means Gibraltar won’t have to match UK. tax rates and it won’t lose the fiscal independence that is key to its ability to attract businesses seeking favorable tax treatment within a sovereign British territory.

The commission investigated the Gibraltar tax reforms after the UK notified it in 2002 of Gibraltar’s plans. Gibraltar is seen as part of the UK for the purposes of EU membership.

The reform aimed to abolish the 35% corporate tax rate and replace it with payroll tax and a business property occupation tax – both capped at 15% of profit. This, the commission said in a 2004 statement, meant “offshore companies with no physical presence in Gibraltar won’t incur any tax liability at all.”

The commission found the tax reform violated EU state aid rules as it resulted in a lower corporate tax rate (15%) for Gibraltar companies than for UK. companies and favored certain sectors over others.”

Tags: Double Tax Treaty
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LIECHTENSTEIN AND US TAX COOPERATION. IS SPAIN FOLLOWING THE OECD TREND?

Saturday, December 13th, 2008

The US and Liechtenstein signed an agreement for the exchange of information on tax matters.

According the International Tax Review “The US government is leading the way on expanding information exchange,” said Jesse Eggert, attorney adviser at the US Department of Treasury. “This is a comprehensive information exchange which pierces bank secrecy.”

This is another encouraging step toward a more transparent economy. The move is particularly welcomed as Liechtenstein is not included in the list of OECD cooperative jurisdictions .

We look forward to see the Spanish government moving in this direction instead of pursuing an inquisitional approach to offshore jurisdictions, as reflected by the infamous RD 1080/1991, a 17th years old Statute, still in force, criminalizing MOST offshore jurisdiction. It is very unfortunate that the Spanish government is neglecting to consider the OECD position, by accepting that 35 Jurisdictions are complying or planning to comply with the international rules for information exchange. We would like to see a change of approach.

Meanwhile, from Tax Precision we continue advocating for all the OECD countries to increase the network of bilateral tax agreements and information exchange protocols with cooperative offshore jurisdictions, and beyond. We believe this is a much efficient and effective approach to fight tax evasion.

Tags: Double Tax Treaty, OECD, Spanish Tax
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FIRST ELECTRONIC APOSTILLE ( E-APOSTILLE) IN EUROPE

Saturday, December 13th, 2008

The web page of The Hague Conference on Private International Law reports the very good news.- the issuing of the first Electronic Apostille in Europe!.

For those of us working with international documentation and deeds, this comes as a breeze of fresh air, which we look forward to further development.

The Hague Conference web page reports:

“The Superior Court of Murcia (Spain) recently issued the first electronic Apostille (e-Apostille) in Europe.

This Apostille, issued within the framework of an international adoption procedure, is perfectly consistent with the model proposed under the e-APP. Please click here to read the press release from the Superior Court of Murcia.”

Tags: Double Tax Treaty
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SPANISH WEALTH TAX UPDATE

Thursday, December 4th, 2008

Today the Spanish Parliament Diary (BOCG) has published the Proyecto de Ley, to amend the Wealth Tax Legislation by “abolishing” in practice the Wealth Tax charge for residents and non residents.

The legislation has been approved by the Parliamentary Commission appointed for drafting this Act. The Proyecto de Ley must still be approved by the Spanish Parliament. The Legislative reference is 121/000008 published today, 4th December 2008, in the Boletin Oficial de las Cortes Generales.

The Wealth Tax is amended by abolishing the tax rate. Is this technically a formal abolition of the Tax? The answer is No. T he only certain thing is that no wealth tax will be chargeable for residents (obligacion personal) and non residents alike (obligacion real).

The abolition of the tax charge leaves the Tax without its primary purpose, the collection of taxes from the taxpayer.

Why is not the legislator abolishing the Tax itself? I do not really know.

Is the Spanish Government interested in keeping the door open for the future? it may be the case.

Is the tax office interested in keeping the formal obligation to submit a NIL tax return to keep controlling the value of the assets for Inheritance or Income Tax purposes? This will be seen when final legislation is enhanced.

What is likely to be the time frame for final approval? The Parliament has got technically until the end of the tax year to do so, and they will utilize every available second.

Over the last decades the Spanish Parliament has adopted the bad habit to publish tax legislative amendments with the annual budget -which happens to be the last week of the Tax Year. We can expect a similar pattern for the final passing of this legislation.

Therefore, you will be able to find the final approval by checking www.konsilia.es/blog from Trafalgar Square or Puerta del Sol the 31st December 2008. By the way, Feliz Año Nuevo!!!

The approved Proyecto de Ley includes some context for the Wealth Tax amendment in Section IV, which mentions the anachronism of this tax as well as the legislative technique to effect the amendment.

The amendment is mentioned in article third of this Proyecto de Ley titled Amendment to the Ley 19/1991, of sixth of June, regulating the Wealth Tax. This is a short article modifying article 33 of the existing Law by applying a 100% allowance to the taxpayers, both residents and non residents. The article repeals articles 6, 36, 37,38 and the transitional clause.

There are many questions to be asked, which are not and will not be included in the final approval of this Proyecto de Ley. Therefore, for those of you who has been asking, is this really approved? the answer is keep watching this space.

Tags: Wealth tax
Posted in Domicile, Spanish Tax residence and nationality | No Comments »

A STITCH IN TIME, FINANCIAL WISDOM FROM AROUND THE WORLD

Monday, December 1st, 2008

A Stitch in Time

A compendium of proverbs from around the world for these trying financial times.,

By Ben Schott, New York Times, December 1, 2008.

Posted in Miscellaneous | No Comments »