Posted on February 9, 2008 by Fernando Del Canto

Gibraltar, Spain and the United Kingdom

In the Anglo Spanish tax and legal world, the position of Gibraltar, both for proximity and for the uniqueness of its legal and tax regime is fascinating. A very good place to get some professional information about Gibraltar is the Grant Thornton site.

From the years of the Utrecht Treaty in the 18th Century, times have changed substantially . Today Gibraltar, a territory of the United Kingdom, has developed an unique position in the European Union and in the global financial markets.

Culturally, Gibraltar reflects the influence and coexistence of Britons and Spaniards with a clear Mediterranean flavor. 

 

Politically Gibraltar has become a unique jurisdiction in the European Union territory. Gibraltar. Whilst Gibraltar under Article 227(4) of the EEC Treaty is within the European Union by virtue of being a European territory for whose external relations Britain is responsible, Article 28 of the 1971 UK Assession Treaty relieves Gibraltar from the common customs tariff, the common agricultural policy and the harmonisation of turnover taxes, in particular VAT.

The relationship between the three governments of Spain, UK and Gibraltar is progressing in the context of the Tripartite agreement signed in Cordoba in 2004 provides a route plan to continue improving this cooperation.It is a robust jurisdiction claiming its place in the global economy and the issue of decolonization and independence from the United Kingdom and Spain is under review in the United Nations

Over the years Gibraltar has positioned itself as a great place to do business internationally and all the Financial and Tax Directives are applicable. Anti Money Laundering provisions and Know Your Client protocols in Gibraltar are applied with strict adherence to EU and OECD protocols.
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Posted on February 3, 2008 by Fernando Del Canto

Spanish Corporation Tax rates for 2008

Starting this accounting year (1/1/08)  the Spanish corporation tax rate is 30%.  It is important to notice that  Small and Medium Enterprises (PYME) will have a reduced rate, which works as follows: 

25% Corporation Tax rates for profits up to 120,202 Euros

30% for profits above the 120,202 Euros threshold

There are several other important considerations regarding International Accounting Standards, which we will be discussing in subsequent notes. 

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Posted on January 9, 2008 by Fernando Del Canto

Spanish International Holding Company ETVE

The  ETVE, is a very efficient holding company structure to repatriate dividends outside the European Union. Please read our ETVE article and let's know your comments

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Posted on January 6, 2008 by Fernando Del Canto

Spanish company to hold property

I am looking into the possibility of buying some properties in Spain for investment purposes. Is it better from a tax point of view to do this as an individual or as a company? D. Searle, Brighton UK

From an investment point of view the company option must be considered. The main reason is that the company offers the possibility of organising the business in a more professional way, keeping it separate from your private assets. The company will pay corporation tax when disposing of the property of 25-30% which is higher than personal tax at 18%. This is perhaps the only downside of the company option. The company structure is exempted from the annual Wealth Tax and Income Tax for non resident individuals, which means that usually for more than €600,000 it could be more efficient to run the properties using a company. From an Inheritance Tax point of view the company may offer more opportunities to organise your estate planning, if we organise the shareholding efficiently or use international structures and trusts. Another advantage of using a company is that the company will be able to rent the properties and claim the original VAT paid if a proper trading activity is registered for tax purposes. Capital allowances or depreciation can be claimed as a deductible expense in yearly bases if the company files accounts statutorily, which will reduce the capital gains tax payable over time. Management expenses can be also offset against income and the directors can draw a salary too. It is always worth asking your adviser to outline the difference between company and private acquisition in your particular case, before starting a property investment portfolio.

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