Now that we are at the beginning of 2012, we would like to summarize the main tax changes undergone during this past year 2011. Needless to say, most of them are due to the Spanish economic context and have been taken in an attempt to improve the economic activity and sustain the public finances.
To encourage foreign investment into Spain:
- The Spanish Government enacted a Spanish Capital Duty exemption, as of December 3, 2010. This measure mainly applies on contributions made by shareholders to Spanish corporations upon their incorporation/share capital increase, which were formerly subject to a 1% Capital duty rate.
To promote a sustainable economy:
- For tax periods starting as from 6 March 2011, tax credits to promote technological innovation and environmental protection are maintained, enjoying higher rates and more beneficial limits for their application.
To reduce the Companies’ tax burden:
- Effective for fiscal years starting as of January 1st 2011, a bigger number of companies can enjoy the special and most favorable Corporation tax regime for small-sized companies as it applies to enterprises with a group net turnover, (group as defined by Article 42 of the Spanish Commercial Code) below Eur 10,000,000.00.
- Free depreciation is granted, for Corporation tax purposes, in fiscal years 2011 through 2015 for investments in new assets consisting of fixed assets or real estate investments, affected to entrepreneurial activities. In fiscal years starting in 2009 and 2010, this free depreciation scheme was conditional to the maintenance of employment, in the terms set by the Law.
To simplify compliance obligations:
- For fiscal years starting as of January 1, 2011, Spanish group companies under the Corporation tax consolidation regime are only obliged to communicate to the Spanish tax authorities changes relating to the Companies forming part of the group. Such communication is simplified as it can be done through the Corporation tax advanced payment returns and there is no need to prepare a specific filing.
To encourage entrepreneurs and “business angels” activities:
- Capital gains obtained by individuals, deriving from private investments in entrepreneurial projects are exempt, subject to certain limits.
To sustain the public finances:
- Advanced Corporation tax payments have been temporarily changed in fiscal years 2011, 2012 and 2013, and increased for Companies with a turnover exceeding 20 million €.
In addition to it, in fiscal years initiated in 2011 through 2013, companies with a turnover of, at least, 20 million € (in the preceding 12 months to such fiscal years) but lower than 60 million €, can only offset tax losses representing 75% of their taxable base previous to the compensation, (for those with a turnover of, at least, 60 million€, the mentioned limit is 50%).
As a consequence of these measures, the term to offset pending tax losses by Spanish Corporation taxpayers is extended from 15 to 18 years. This measure applies to all types of companies and to tax losses pending application at the beginning of the first fiscal year starting as from 01.01.2012.
- Individual’s Wealth tax is temporarily re-established in fiscal years 2011 and 2012.
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