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.taxprecision.com 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