A BRIEF SUMMARY OF THE NEW TAX AND FINANCIAL MEASURES ADOPTED BY THE SPANISH GOVERNMENT
On December 30th 2011 the newly elected Spanish government approved Royal Decree 20/2011 enacting a first package of urgent tax and economic measures to correct the Spanish public deficit.
Among these measures, international private clients should be aware of the following tax resolutions:
1. Income Tax rates (employment, business and professional income) will be raised by an additional 0.75% to 7%. The highest tax rate in excess of €300K will now be 52% for 2012 and 2013; the actual tax rates will vary from region to region.
2. Income Tax rates for investment income (such as dividends, interest and capital gains) will be raised by an additional 2% to 6%. The highest tax rate for investment income in excess of € 24K will be 27% for 2012 and 2013.
3. Special expatriate tax rate has increased by 0.75%, from 24% to 24.75% for years 2012 and 2013. This is applicable to the general Income Tax rate for non-resident individuals.
4. The Non-Resident Income Tax rate on Spanish-source investment income has been increased by 2%, from 19% to 21%. This is of course without prejudice to any Treaty relief available to foreign taxpayers.
5. Acquisitions of new residential properties will continue to benefit from a reduced rate of VAT of 4%.
6. The EU Directive 2010/24/UE regarding mutual assistance procedures among Member States on tax information sharing and collection matters is now implemented in Spain and will also apply to procedures under the terms of the international tax Treaties signed by Spain.