This week has seen unprecedented Supreme Court action that has unleashed all kinds of mayhem on an internal level, not to mention the consequences this has had on the financial sector. Over the past few years we have seen thousands of court cases revolving around the financial sector and their methods when it comes to granting mortgages. The primary issue was in relation to the infamous Floor Clause inserted in mortgage agreements (in many cases without advising the mortgage holder!) but a Supreme Court ruling in favour of mortgage holders obligated banks to reimburse any benefits obtained which could be a few thousand euros per case. The secondary issue and the one this article referrs to has to do with reclaiming the Stamp Duty paid on the Mortgage Deed.
Following on from my April post on the same subject, it has been confirmed that sole-traders, professionals and business owners must pay four euros more than they have been paying since the last increase in July 2017. This is due to approval of the General State Budget which raises the minimum base rate from 919 euros to 932 euros, meaning that those who pay the minimum contribution will pay 279 euros per month from now on.
It isn’t all bad news… 520 million euros have been allocated from the State Budget to improve sole-trader conditions to include additional help for start-ups, better rates to hire employees and support for those who have children and/or dependents. This is turn will also include better pensions (we hope!).
Following on from when new Data Protection Laws were first reported, this is a reminder that the deadline for these laws to come into force is now extremely close. After four years of debate, new regulations were approved which means that in line with European Directives, come the 25th May 2018, we say goodbye to the old system and say hello to the General Data Protection Regulation (GDPR). In Spain, this means the Ley Orgánica de Protección de Datos (LOPD) is being replaced by the Reglamento General de Protección de Datos (RGPD).
We are now into the fourth month of the year and the changes keep coming! This time it has to do with the monthly contributions, sole-traders must make to Social Security but as was the case last year, the contribution was not altered in January, instead it was left until July and it looks as though the same is going to happen this July as well. The General State Budget for 2018 was approved on the 27th March of this year and in it a 1,4% increase on these monthly contributions was approved which equates to approximately 3,88 euros. I can imagine that some will breathe a sigh of relief because last year, the increase was almost double but at the end of the day, it is still less money in our pockets at the end of the month.
We’re now three months into the new tax year and as usual, there is much work to do, taxes to file and legislation to plough through as we try to figure out what’s new in the business world in Spain. This time it is to do with IGIC (Impuesto General Indirecto Canario), the Canarian equivalent of VAT. Since we live on a small island in the middle of the Atlantic, we had to have some advantages, right? Well, one of those advantages is a reduced VAT rate so as opposed to countries on mainland Europe that may pay around 20% to 27%, in the Canaries, the general rate is 7%. Bear in mind, everything we have is imported so this is a massive deal!
Anyway, Law 7/2017, 27th December of the General Budget for the Canary Islands was approved and within it, new legislation that directly concerns business owners and their obligation to declare IGIC. Those sole-traders and professionals whose total volume of operations for the previous tax year did not exceed 30.000 euros (excluding IGIC), may be eligible to an IGIC exemption, meaning they would be excluded from this tax. If on the 1st January 2018, they find they meet the criteria, they must inform the Canarian Tax Office (Agencia Tributaria Canaria) of their wish to either be included or excluded in this special system before the 2nd April 2018.