Entradas

The Importance of Rent Price Appraisal in Related Party Transactions in Spain

Have you ever wondered if it’s necessary to appraise the rent price in related party transactions in Spain? The answer is yes, and at Welex, your law firm and tax advisors in La Costa del Sol, we want to explain why it is so important.

Why is an Appraisal Necessary?

When renting a property from your own company, it is crucial to ensure that the agreed value matches the market value. This not only complies with Spanish legislation but also avoids potential adjustments by the tax authorities. In short, a precise and professional appraisal protects you and ensures that everything is in order.

Legislation and Regulations in Spain

To give you some context, Royal Decree 634/2015, which approves the Corporate Income Tax Regulations in Spain, clearly establishes in its Article 17 the need to determine the market value in related party transactions. This comparability analysis with similar transactions between independent entities is fundamental. It ensures that the agreed price respects the arm’s length principle.

Article 17: Determination of the market value of related party transactions: comparability analysis

Spanish Jurisprudence

Spanish jurisprudence also underscores the importance of appraisal. For example, the Judgment of the Superior Court of Justice of the Community of Madrid No. 552/2023 allows the tax authorities to check and adjust the value of related party transactions to ensure that they are valued at the normal market price. This may include the need for an appraisal in certain cases.

«The tax authorities may check that transactions carried out between related persons or entities have been valued at their normal market value and will make the necessary value adjustments.»

Administrative Decisions in Spain

Similarly, the administrative doctrine in Spain, such as Binding Consultation No. V0746-24 of the General Directorate of Taxes, highlights the importance of valuing assets in related party transactions at their market value. This suggests that performing an appraisal is essential to determine this value.

«The market value will be understood as the value that would have been agreed upon between independent parties, allowing for any of the methods provided for in Article 18.4 of this Law.»

Implications and Limitations

Although an appraisal is generally necessary to comply with tax regulations in related party transactions, it is important to consider that methodologies and accuracy may vary depending on the type of transaction and the assets involved. Additionally, administrative and judicial decisions can influence how these rules are applied in specific cases.

At Welex, we are here to help you with any tax and accounting queries, we are expert in those areas.

To read more about accountancy in Spain, visit our blog!

https://www.welex.es/category/spanish-accountancy/

Do not hesitate to contact us for professional advice and to ensure that all your transactions comply with the current regulations.

/por

Are Invoices from a Nutritionist in Spain Subject to VAT?

Welex, your tax advisor in Spain, is pleased to provide a detailed guide on the application of VAT to services provided by nutritionists in Spain. Whether these services are subject to or exempt from VAT has raised many questions among professionals and their clients. Below, we clarify this dichotomy in accordance with current legislation.

Application of Spanish VAT to Nutrition Services

In general, invoices issued by a nutritionist in Spain are subject to VAT. However, there is a significant exception: when the services provided are specifically aimed at the diagnosis, prevention, and treatment of diseases, they are exempt from VAT according to current regulations.

Administrative Decisions in Spain

The Spanish General Directorate of Taxes has issued several binding resolutions that clarify the application of VAT to services provided by nutritionists. Some of the most relevant are:

  1. Binding Resolution No. V0781-23:
    • The VAT exemption applies to medical, surgical, and health care services with therapeutic purposes, diagnosis, prevention, and treatment of diseases, provided by legally recognized medical or health professionals.
  1. Binding Resolution No. V2538-22:
    • It reiterates that for a professional’s services to be exempt from VAT, they must meet both objective (nature of the services) and subjective (qualification of the provider) requirements.
  1. Binding Resolution No. V0477-22:
    • Specifically for nutritionists, it establishes that services aimed at the diagnosis, prevention, and treatment of diseases may be exempt from VAT. However, services with other purposes, such as aesthetic improvements or weight loss plans not related to a medical condition, are subject to VAT at the general rate of 21%.
  1. Binding Resolution No. V2129-21:
    • It expands the interpretation to include dietitians-nutritionists within the concept of medical or health professionals, as long as their services are related to the diagnosis, prevention, and treatment of diseases.
  1. Binding Resolution No. V1643-20:
    • It reinforces that health care services provided by medical or health professionals, including nutritionists recognized as such, are exempt from VAT under Article 20 of Law 37/1992.

Implications and Limitations

It is crucial that the services provided by nutritionists are clearly related to the diagnosis, prevention, or treatment of diseases to benefit from the VAT exemption in Spain. Services that do not meet these criteria, such as those aimed at aesthetic improvement or weight loss plans not linked to a medical condition, are not exempt and are subject to VAT at the general rate of 21%.

Additionally, nutritionists must be recognized as health professionals according to legal regulations for their services to be considered VAT-exempt.

Tax Advice in Marbella

If you need tax advice in Marbella, the Costa del Sol, or any other part of Spain, do not hesitate to contact our team of economists and tax advisors. At Welex, we are committed to providing the best guidance to ensure you comply with all tax regulations efficiently and safely.

/por

Tourist Rental Licenses in Ibiza, Spain: Legal Requirements and Procedures

Welex, a leading firm of lawyers and accountants in Spain, explains in this article everything you need to know about tourist rental licenses in Ibiza, Spain.

 

 

If you are considering purchasing a property in Ibiza with the intention of renting it out to tourists, we invite you to explore our blog. Obtaining a Tourist Rental Licence in Ibiza is not a straightforward process and not all properties are eligible.

Firstly, it is crucial to understand that a holiday rental covers periods of less than 30 days. To rent a property for less than 30 days, it is required to obtain a Tourist Rental Licence. Welex, a firm of lawyers and economists on the Costa del Sol, is here to answer any questions you may have.

The Tourist Rental Licence in Spain is a permit granted by the Administration, allowing owners to use their properties for tourist purposes. Each autonomous community has its own regulation, and in this blog, we will detail which properties can obtain the licence and the steps to follow in Ibiza, Spain.

It is important to note that not all homes in Ibiza can obtain this certificate. Only detached houses are eligible to apply. However, obtaining the licence does not guarantee approval, as the administration will analyse each case individually.

The following is a non-exhaustive list of minimum requirements that properties must meet in order to obtain a Tourist Rental Licence in Ibiza, Spain:

  1. Habitability Certificate.
  2. Location in Tourist Zone.
  3. History without Serious Sanctions.
  4. Antiquity of the Property: Minimum 5 years.
  5. Energy Efficiency Certificate: Category D or higher, for dwellings built after 31 December 2007; Category F or higher, for earlier constructions.

 

In addition, the following documents must be presented to the corresponding local council:

  1. Responsible Declaration of Commencement of Activity of commercialisation of Tourist stays in dwellings.
  2. Documentation on the property.
  3. Plans of the property.
  4. The number of beds for guests must be indicated, which may not exceed the number of persons legally authorised to occupy the property (as established in the cédula de habitabilidad).
  5. Certificate issued by the town hall accrediting that the property is located within the tourist rental zone.

The application must certify that the property complies with all the requirements for tourist rentals.

Once the application has been completed and the appropriate fee paid, a preliminary licence will be issued. The simple submission of the application implies the declaration of compliance with all legal requirements for renting, thus allowing to start renting the property in Spain immediately.

Subsequently, the competent authorities will carry out an inspection of the property to verify its conformity with the information declared above. In case of discrepancies, the property will be cancelled from the property register, leaving the property immediately ineligible for any activity related to tourist rentals in Ibiza, Balearic Islands.

The costs involved in obtaining such a licence for tourist rentals in Ibiza currently amounts to 600 euros for the application, plus the following fee per available bed in the accommodation:

Number of Beds Euros
1 4.300,00
2 8.643,00
3 13.029,40
4 17.459,70
5 21.934,30
6 26.453,70
7 31.018,20
8 35.628,40
9 40.284,70
10 44.987,50
11 49.737,40
12 54.534,80

 

To conclude, with reference to those properties that already have a Tourist Rental Licence, they maintain their validity and it will not be necessary to re-apply for such a licence.

Finally, and for information purposes, from February 2022 a moratorium of up to four years has been established for the construction of new tourist accommodation, as a consequence, all applications for new licences have been held back.

For more information about the Tourist Rental Licence in Spain and how to find out if the house you want to buy is eligible for such a licence, please do not hesitate to contact our team of lawyers specialised in real estate transactions throughout Spain.

/por

The constitution of a limited company in Spain.

At Welex, leading law and accountant firm in Marbella, we would like to explain briefly and simply the steps to be taken if you have decided to set up a limited company in Spain: The constitution of a limited company in Spain. It is compulsory for the company to be incorporated by signing a public deed and it must be registered in the Spanish Commercial Register.

 

 

First, you need to choose a name for the company and apply to the Central Commercial Register for a certificate to confirm that the name you have chosen has not already been registered in Spain.  An entity whose name is identical to an existing name cannot be entered in the Mercantile Register.

 

The application for the name to be registered must be made by the interested party or beneficiary of the certificate. Once the certificate has been obtained, it will be valid for a period of six months from the date on which it was issued in Spain.

 

In second place, you need to decide who will be the shareholders of the entity, the total share capital and the participation of each partner in this capital. The share capital in Spain cannot be less than one euro, and whenever it is less than three thousand euros, a figure at least equal to 20 percent of the profit must be allocated to the legal reserve until this reserve together with the share capital reaches the amount of three thousand euros. Furthermore, in the event of liquidation in Spain, if the company’s assets are insufficient to meet the company’s obligations, the shareholders are jointly and severally liable for the difference between the amount of three thousand euros and the amount of the subscribed capital. The company may also have a sole shareholder, whether a natural person or a company in Spain.

 

In third place, you need choose a domicile in Spain, at the place where the effective centre of administration and management is located, or where your principal place of business or operation is located in Spain.

 

In fourth place, you must appoint a sole director or several directors, or a board of directors, to manage and represent the company in Spain. The director may be a natural or legal person and, unless the articles of association do not allow it, does not need be a shareholder.

 

In fifth place, it will be necessary to draw up the articles of association that will govern the operation of your company in Spain, which will include, among other things, the name of the company, the corporate purpose, the registered office and its share capital, the number of shares into which this capital is divided and the nominal value and numbering of the shares.

 

Please note that the duration of the company shall be indefinite, unless the articles of association provide otherwise.

 

Once the deed of incorporation has been signed before a notary by the founding partners and the director of the company in Spain, within two months the deed must be presented to the Companies Register for registration, after settlement and payment of the corresponding taxes and expenses.

 

If you wish to have assistance with the incorporation and registration of your company in the Spanish Commercial Register, please do not hesitate to contact our offices of Welex, lawyers in La Costa del Sol. We will carry out all the necessary formalities for the incorporation of your company in Spain.

 

/por
, ,

Change of the Urban Lease Law in Spain

Do you have doubts about the actual changes in the urban lease law in Spain?

In Welex, your spanish law firm, we have prepared an easy vision about the actual situation of this juridical issue.

 

change urban law spain

 

For a more detailed information about that issue, we invite you reading our publication.

Our lawyers in Marbella can solve any accountancy in Spain related matter.

In addition, in Welex we work without rest to provide you the best legal advice in Costa del Sol, so don’t hesitate in contact us about any legal spanish issue.

/por
,

Special tax on lottery prizes in Spain

Are you interested about knowing how the taxation of Christmas lottery prizes works in Spain? Welex, your tax advisor in Marbella is pleased to write a few lines on this subject.

The well-known «Lotería de Navidad” (Christmas lottery), one of the most popular lotteries held in Spain, is actually called «El sorteo extraordinario de Navidad” (The Special Christmas Draw).

 

Read more……..

/por
,

VAT in Spain; Reverse charge

Have you ever received or been asked for a Spanish bill with Reverse charge (Inversión de Sujeto Pasivo, ISP) and not known what to do with it?

 

Have you received or have you ever been asked for a bill with Reverse charge (ISP) and you have not known what to do with it?

 

At Welex, your law and economics firm under one roof in Marbella, we would like to make you aware of this exception to the general VAT rule known as Reverse charge.

As a general rule, the taxable person is the natural or legal person in charge of passing on the VAT, working as a professional and/or businessman, to his clients through the issue of invoices. This taxpayer is also obliged to collect the VAT generated for subsequent presentation to the Tax Agency (AEAT).

In other words, as a businessman, we have the obligation to transmit the value added tax to our clients and declare it in the quarterly VAT forms.

Example VAT in Spain Reverse charge

To explain the common cycle of VAT in Spain, we will give the following example:

We have a business that is dedicated to the retail trade of shoes. Our business consists of buying shoes wholesale from company «X» at an affordable price and then trading them to a third party with a 30% profit margin.

Well, in the following example the supplier X is the taxable person as soon as he issues us the invoice with the corresponding VAT while we will be the taxpayer (final consumer who bears the VAT). Later, when we sell the shoes to our customer we will issue another invoice with its VAT to our customer and thus we become the taxable person and our customer the taxpayer.

However, there are several exceptions to the general rule. In this blog we are going to talk precisely about art. 84. One 2nd article of the VAT law (Law 37/1992) commonly known as the Reverse charge.

Reverse charge is a change in the general rule of VAT that makes the recipient of the invoice responsible for declaring the tax to the Treasury.

This implies that if we are under the exception of the article we will not be the ones in charge of charging the VAT but it will be the taxpayer’s obligation.

In this case, the taxpayer will have to reflect in the quarterly taxes the tax on that invoice for the information of the tax office.

 

What are the assumptions that condition the Reverse charge in Spain?

The Art. 84. One 2º of the VAT law (Law 37/1992) establishes the following assumptions:

a)      When they are made by persons or entities not established in the territory of application of the tax.

b)      When involves supply of unprocessed gold or semi-manufactured gold products, of a fineness of 325 thousandths or more.

c)       When involves supplies of new industrial waste, foundry waste and scrap, residues and other recyclable materials (supplies of waste or scrap of paper, paperboard or glass).

d)      In the case of the supply of services relating to emission allowances, certified emission reductions and greenhouse gas emission reduction units.

e)      In the case of the following supplies of immovable property following insolvency proceedings, the exempt supplies referred to in Article 20. One paragraphs 20 and 22, where the taxable person has renounced the exemption and supplies made in execution of the security lodged in respect of the immovable property.

f)       When the execution of works is involved, with or without the provision of materials, as well as the assignment of personnel to carry them out.

g)      In the case of the supply of the following products:

·         Silver, platinum and palladium, unwrought, powdered or semi-wrought.

·         Mobile phones.

·          Video game consoles, portable computers and digital tablets.

 

For any tax or legal question, do not hesitate to contact one

/por
Link to: Contact

Do you have any legal question?

At Welex we guarantee you a professional and individual treatment. All our professionals have years of experience in their field, which they put at your service with the aim of attending your affairs quickly and efficiently. Please contact us and we will be happy to advise you. (+34) 952 77 55 21 | info@welex.es

LEGAL WARNING | PRIVACY POLICY

Este sitio web utiliza cookies para que usted tenga la mejor experiencia de usuario. Si continúa navegando está dando su consentimiento para la aceptación de las mencionadas cookies y la aceptación de nuestra política de cookies, pinche el enlace para mayor información.

ACEPTAR
Aviso de cookies