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Spanish residents now
need to declare all their off-
shore assets to the Spanish authori-
ties under the new reporting obli-
gation, or face costly penalties.
This is Spain’s latest initiative to
increase tax revenue, which it is
doing with both higher tax rates
and a crackdown on tax evasion
- a trend we are seeing in many
European countries. The tax en-
vironment in Spain has changed
dramatically over the last decade
or so.
Your tax planning needs to be fully
up-to-date. You should seek advice
from a specialist firm like Blevins
Franks on how best to structure
your assets to be tax efficient un-
der today’s tax rules.
Here is a summary of key tax
events since 2000.
2000, June
– EU starts nego-
tiations on its Savings Tax Direc-
tive, resolving that “with a view to
implementing the principle that all
citizens resident in a Member State
should pay the tax due on all their
savings income, exchange of in-
formation on as wide a basis as
possible shall be the ultimate ob-
jective of the EU”.
2001, April
– UK banks start
passing details of all new accounts
opened by non-residents to over
25 countries.
2002, July
– Spanish tax author-
ities reach agreement with Jersey
regarding information exchange.
2003, January
– EU ministers
reach agreement on the Savings
Tax Directive.
2005, July
– Savings Tax Direc-
tive comes into force.
The Tightening Tax Net
By Bill Blevins,
Financial Correspondent,
Blevins Franks
2006, April
– Barclays Bank is
forced to disclose details of its off-
shore customers to HM Revenue &
Customs (HMRC).
2007, February
- Four ma-
jor UK banks are made to reveal
details of offshore customers to
HMRC.
2008, July
– Savings Tax Direc-
tive withholding tax rate increases
to 20%.
2009, March
– International
pressure builds on offshore finan-
cial centres in wake of the finan-
cial crisis. Several offshore finan-
cial centres say they will cooperate
with the Organisation for Econom-
ic Cooperation and Development
(OECD) principles on exchange of
information on tax matters. Swit-
zerland agrees to relax its bank-
ing secrecy rules and exchange
more information on suspected tax
evaders.
2009, April
– At the G20 Sum-
mit, world leaders declare the “era
of banking secrecy is over” and
threaten offshore financial centres
with sanctions and blacklisting if
they fail to comply.
2009, June
– Isle of Man an-
nounces it will start to automatical-
ly exchange information in 2011
under the Savings Tax Directive,
ending banking secrecy for EU
residents.
2009, August
– 308 UK and
offshore banks are ordered to give
HMRC details about customers
with offshore accounts.
2009, August
– Liechtenstein
signs landmark tax agreement with
the UK.
2010, January
– Spanish tax
rate on savings income increas-
es from 18% to 19% on the first
€6,000 and 21% after that.
2010, June
– Spanish govern-
ment says it has received details
of 3,000 Swiss bank accounts
owned by Spanish taxpayers, and
has started to investigate. The in-
formation came from stolen data
handed to the French authorities.
2010, June
– Swiss parliament
agrees to hand over names of
4,450 UBS bank’s American cli-
ents to US government.
2010, October
– Switzerland
and the UK agree to negotiate an
accord to tax Swiss bank accounts
owned by UK taxpayers.
2011, January
– Spain intro-
duces two additional income tax
bands, taking the top rate to 45%.
2011, February
– Electricity
companies are now obliged to
provide information to the Span-
ish tax authorities regarding the
electricity usage and ownership
of every property in Spain.
2011, July
– Savings Tax Di-
rective withholding tax rate jumps
from 20% to 35%. Isle of Man and
Guernsey abolish the withholding
tax option for EU residents and start
to automatically report on interest
earnings.
2011, September
– Wealth
tax is re-introduced in Spain for
2011 and 2012.
2011, October
– The Spanish
tax office starts writing to around
300,000 property owners, warn-
ing them it is aware they have not
submitted tax returns.
2012, January
– Income tax
rates increase for everyone in
Spain, by up to 7% for higher
earners, taking the top rate up to
52% (56% in Cataluña). The fixed
rate on savings income increases
to 21%, 25% and 27% depending
on amount earned.
2012, January
– Spanish gov-
ernment announces a new crack-
down on tax evasion.
2012, April
– Spain’s tax am-
nesty is approved. The govern-
ment promises to get tough on tax
evaders after it closes.
2012, April
– Spanish govern-
ment publishes its draft anti-fraud
plan, including a measure to
oblige all residents to report bank
account and other assets located
overseas.
2012, September
– The gov-
ernment announces that wealth tax
will be extended for 2013. Short
term capital gains will be taxed as
general income, instead of savings
income, from January 2013.
2012, October/November
– Spain’s anti-fraud plan, includ-
ing the new asset reporting require-
ment, is passed into law.
2013, 30 April
– First deadline
to report your offshore assets.
Tax rates and rules will continue
to change, and the tax net will get
tighter. To make sure your tax plan-
ning is up to date and you do not
fall foul of any tax rules, take pro-
fessional advice from a specialist
firm like Blevins Franks which has
decades of experience advising
British expatriates in Spain.
Tax information has been summa-
rised; an individual should take
personalised advice.
To keep in touch with the latest de-
velopments in the offshore world,
check out the latest news on our
website:
www.blevinsfranks.com