Every year we expect changes regarding Social Security Contributions and general procedures and this year is no exception. There have been many delays on this subject because a number of new measures were supposed to be introduced but it looks as though these may be delayed a few months so that Social Security Delegations can learn how to implement these new procedures, and another issue is as usual, the State Budget was not published on time and was only made available on the 14th January 2019.
We’re less than two hours away from ringing in 2019 in the Canary Islands but work is far from over. There are some important changes regarding the General I.G.I.C. (Impuesto General Indirecto Canario) Rate, the rate that affects the majority of businesses. Earlier today, the Canarian Government published Ley 7/2018, 28th December, General Canary Islands’ Budget 2019, which states the General I.G.I.C. Rate will be reduced from 7% to 6,5% for all delivery of goods or services that are not subject to other I.G.I.C. Rates from 1st January 2019.
There has been much talk over the past few years about bringing the Spanish Social Security system in line with the rest of Europe because as I’m sure you’re aware, sole-traders in this country pay a heck of a lot more than most other European countries (currently a minimum of 278,88 euros without taking possible reduced rates or flat-rates into consideration). In any case, the proposal currently on the table and a source of debate is for sole-traders to contribute in accordance to their income.
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.
20th April, 20th July, 20th October and 20th – 31st January… No, I haven’t gone mad! Many business owners tremble when these four dates are mentioned because it is when quarterly taxes are due and a portion of the income earned with blood, sweat and buckets of tears goes straight into the tax man’s pocket. The economy is well on its way to recover but there are still some sole-traders out there whose businesses continue to struggle and the thought of quarterly taxes or payment of their monthly Social Security contribution can send them into a panic.
One of the first things I advise new clients to my office is no matter how difficult it gets, they must always make sure to pay Social Security and the Tax Offices within established deadlines because failure to do so can set off a series of events that can snowball and leave the business owner with a mountain of ever increasing debt when late-payment interest is added on top of an existing debt. What can one do though if it is impossible to make payments on time?