I know most people prefer to read sound bites however it might be helpful if you read on............Yet another to visit to the Tax Office in Vilanova today in order to solicit some answers to a long running problem. Last November, I had my Spanish bank accounts blocked by the tax authorities claiming I owed them a 5 figure sum dating back to 2009. After long and quite exhausting visits to tax offices in Valencia, Barcelona and finally Vilanova, we have managed to get to the route of the problem. It is clearly a mistake on their part. In order to ‘unblock’ my accounts, I was advised to pay the disputed figure then submit a claim to get it refunded. Without boring you with the details, although we are talking about approx. €12k, I would just like to warn those ex-pats like myself to consider very carefully whether you want to become a ‘Spanish Resident for tax purposes’ particularly if you have income from your original or home country taxed at source. I opted to be completely ‘transparent’ and have completed a Spanish tax return annually since moving here. I have to pay additional Spanish income tax for the privilege !! On quite modest occupational and state pensions with tax paid in the UK, I will have to pay around an extra €2,600 for year ending 2013. For many years now there has been a legally binding law in place between countries, mostly in Europe, called a ‘double tax agreement’. Basically, if you pay your taxes in one country, the other takes this into account so you don’t pay twice ! Spain seems to have conveniently ‘forgotten’ about this. So this is the problem I have, not helped by the tax authorities blocking, and then ‘removing’ money from my bank accounts at will. In my case, they even broke into a fixed deposit account and took money ! So, think carefully about this and how it could affect you. It is my understanding that if you register as ‘non-resident’ for tax purposes, any income received in Spain will be paid gross ( no tax deducted ) and this is then reported on any return where you are domiciled for tax purposes . I am very lucky to have my partner Martin to help me. Spanish civil servants are not the most patient or helpful most of the time. So I am still waiting for my claim, submitted over 8 months ago, to be to settled and repaid in full ! I was told today that this could take at least another 12 months.
Posted on: Wed, 23 Jul 2014 16:11:54 +0000
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