Thursday, April 28, 2011

Spanish bureaucracy gets funny

Sorry if you have seen this before. I put it on the main website under "Autonomo : the Movie" but it is worth a look, even a second look. It´s a short film from the No Todo FilmFest (Spanish but with English subtitles) that features a young woman trying to register as autonomo and coming up against an intransigent bureaucrat. Sounds very unpromising material but actually is extremely well done and anyone who has dealt with Spain´s officialdom will agree that it is achingly true to life. Thanks to the client (an autonomo himself) who alerted me to it. It is 3 1/2 minutes long -

Our autonomo service is not quite as painful: Services for self employed / autonomos Spain

Thursday, April 21, 2011

Spanish tax form 210 - All change!

A bit of a technical post this week that will only be of much interest to non resident Spanish taxpayers. The system for paying taxes as a non resident changed on 1st April. The changes are not huge but the bureaucratic fiddling about is likely to cause some confusion.

To recap for those of you who are not familiar with Spanish non resident taxes, the tax system in Spain is a bit different to that in the UK when it comes to foreign property owners. In the UK, and most countries, a foreign property owner would only pay tax if they actually earned income in the country e.g. they rented out the house when they weren't there.

Spain taxes rental income like that but also has a quirky and irritating rule that even foreign property owners who don't rent out their property and have no Spanish income must register for and pay income tax. The tax can vary from 20-30€ up to several hundred € a year depending on the rateable value of the property. There is a full description on our main website - Spanish Tax Form 210.

The tax is still payable and the form for paying is still the same (modelo or form 210) but:

- there is no longer a paper copy of the form available so you can't go to the tax office and get a form to fill in
- you either have to complete the form online or print out a copy from the website and present it at the bank
- where there is NIL tax to pay or a return to the taxpayer then this has to be presented (or posted "certificado") at the Agencia Tributaria office
- it can now be used for whatever income non residents have, the main categories being earned income from Spanish assets (e.g. rent or dividends), capital gains and imputed income from property.
- the modelo 215 which was used for rent in the past has now been replaced by the 210
- returns of tax to a taxpayer can now be made to an overseas account (non-Spanish)

That's about it but it's a new law so as we go through the year and start doing our clients' non resident tax returns then we may learn more about how this is all going to work in practice. I will post any updates here or on the main site here: Changes to Spanish tax form 210

Thursday, April 14, 2011

Has the bears' case against Spain gone down the pan?

It was supposed to be PIGS in the plural not PIG. The smart money was betting on all the Euro area's peripheral economies buckling including Spain and not just Portugal, Ireland and Greece.
As Portugal finally opted to accept a bailout package, the headlines inevitably posed the question "Is Spain next?" The markets answered pretty emphatically "No". Ten year Spanish government bond yields stayed steady at just over 5% as they have they have done all year (for comparison the UK equivalent is around 4%). Traders and investors seem to have been reassured that Spain's economy is in better shape and crucially the government debt in relation to the Spanish economy much smaller than Portugal's (63% vs 83%).
Also the Spanish government seemed to have been shocked into action last year and made some labour market and pension reforms, put up taxes and cut spending and made a start on clearing up the mess in its banking system.
Everything OK then? Of course not, Spain is barely growing (GDP up just 0.6% last year), the banks have a lot of Portuguese debt, the housing market is still a disaster area and unemployment is shockingly high. On top of that the ECB has chosen to put up interest rates by 0.25% which feeds through to the EURIBOR rate which sets most Spanish mortgage rates. By some estimates this, and subsequent rises that the market expects to see, could add 800€ to the cost of the average mortgage. And of course there are the strikes we have seen recently and some big job cut announcements (Telefonica to cut 20% of its spanish workforce). Add in rising petrol prices and higher taxes and Spain is not a bear that is out of the woods just yet.
From the ADVOCO website: Spanish Income tax rates 2011

Thursday, April 7, 2011

The environment: capitalism to the rescue

If you are concerned about the planet's wellbeing, it would be very easy to get discouraged at the steady drip of bad news about the environment. The nuclear disasters in Japan were bad enough in themselves but the predictions that they will result in even greater demand for fossil fuels make them a double blow. Recently we had World Water Day to highlight the growing crisis around water shortages in many countries (see map here A Graphic Look at the World Water Crisis).
So where's the chink of light in the gloom? Business is normally seen as a threat to the environment; profit maximising companies plunder resources and strew the planet with waste. But there is another side to this: capitalism is an essential part of the solution, with or without government legislation. I can think of at least three ways that capitalism will need to be harnessed if the world is going to grow sustainably:
- investment. The huge sums required to build smart grids, cleaner power stations and renewable energy sources can only be mobilised efficiently by capitalism. We have seen the results of state-led investment programs before and they don't work.
- technology. Innovation and the profit motive go hand in hand. There are countless examples of this e.g. this gas from rubbish process Harvest power biogas
- recycling. Capitalism is essential to the cutting of waste. Although private decisions to use less carrier bags use the car less are important, only commercial logic can make efficiencies on the scale we need. As an example of this look at the whole business of recycling.
And what a big business it has become; and I am not just talking about cardboard and glass. One of the biggest growth businesses in recent years has been in recycling mobile phones. And the concept is spreading to all sorts of goods which can be reused rather than thrown away or left to gather dust in a cupboard, particularly baby-related and electrical products. Ebay has done a lot to promote recycling, as have websites like ("Don't bin it, recycle it!")
Spain doesn't seem to have such a big recycling community although I did find some fledgling "freecycling" groups here:
Even in Spain there are some good examples of businesses which save customers money and cut down on waste. As an example many people want a new computer but don't need anything too fancy or advanced. They can pick up a working laptop for a fraction of the price of a new one from businesses like

From our website Spanish Tax Form 210
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