Income Declaration for the Period 2023
April 16, 2024
As an international company with employees in Spain, it’s important to understand the tax implications of the Net Asset Levy and Wealth Tax.
In this article, we will discuss the tax regulations on global assets for residents and Spanish assets for non-residents.
We will also talk about the recent legislative amendment and how it affects foreign companies owning Spanish real estate.
Resident taxpayers are obligated to pay the Net Asset Levy on their global assets, regardless of their location.
The tax is calculated based on the total value of all assets owned, including property, bank accounts, and investments.
Non-residents are only taxed on Spanish assets.
This means that foreign firms owning property in Spain were exempt from the Wealth Tax, but this may change. Some investors use foreign companies to buy Spanish assets to avoid taxes.
However, as of 2022, the High Court concluded that foreign owners of foreign companies with real estate in Spain were not subject to the tax.
The Spanish government has introduced a legislative amendment that will classify shares of foreign companies with Spanish real estate as assets in Spain and subject them to the Spanish Wealth Tax.
This means that foreign companies owning Spanish real estate will now be subject to the Net Asset Tax.
The tax basis of real estate value will be determined by the higher of (a) the purchase price, (b) the cadastral value, and (c) the market value at the time of purchase, as audited by the tax authorities for the Stamp Duty Tax.
Loans contracted to acquire the property, whether or not secured by the property, may be deducted from these values when calculating the taxable value of the real estate.
As an international company with employees in Spain, it’s important to stay up-to-date on tax regulations and laws.
The Net Asset Levy and Wealth Tax can have significant implications for companies owning real estate in Spain.
At Employing In Spain, we have professionals at your disposal to help you meet your employment goals and objectives.
If you need advice on labor and employment matters, do not hesitate to contact us and schedule your appointment today. We are here to assist you with your fiscal and labor needs in Spain.
