New Spanish anti-fraud law

[legrant]

This is for anyone living or wanting to live in Spain.

A new law has just been passed which affects cryptocurrency owners and people who use a lot of cash for purchases amongst other things. The most important things of the new law are the following:

1. Tax amnesties are now prohibited
2. You can now just use a maximum of 1000 Eur in cash purchases (2500 Eur before, as in all other EU countries)
3. More countries will fall into the "offshore" status
4. You will have to declare all the cryptocurrencies you own (all their movements, purchases, sales, etc too), both in Spain and outside on the 720 Form. If you fail to do so you could pay up to 150% of the money that you have not declared


TLDR: Stay away from Spain at all costs

 

[kappakek]

things are tightening everywhere... especially in the EU since they need massive amounts of tax money to fund the gibs

 

[legrant]

things are tightening everywhere... especially in the EU since they need massive amounts of tax money to fund the gibs

Instead of making laws to make new people come to the country or make people bring money back into the country, they're just killing it

 

[mike400]

TLDR: Stay away from Spain at all costs

Or just don't become a tax resident there

 

[legrant]

Or just don't become a tax resident there

Yeah, that's not gonna work. Staying somewhere else for 184 days and then coming back to Spain won't do the job, they'll ask you for everything (proof, receipts, etc) and unless you're just working half of the year in the place you're a tax resident from and then when you're in Spain you don't do anything (which is not likely), they'll make you pay taxes in Spain.

 

[mike400]

Yeah, that's not gonna work. Staying somewhere else for 184 days and then coming back to Spain won't do the job, they'll ask you for everything (proof, receipts, etc) and unless you're just working half of the year in the place you're a tax resident from and then when you're in Spain you don't do anything (which is not likely), they'll make you pay taxes in Spain.

Shouldn't THEY prove that you are a tax resident in their country if they want to tax you?

BTW, I'm talking about a situation, where a non-Spanish citizen and non-Spanish resident starts living there for 2-4 months per year, NOT about somebody who lived there their whole life trying to become a non-resident or about Shakira who has her husband, kid and center of life there..

 

[legrant]

Shouldn't THEY prove that you are a tax resident in their country if they want to tax you?

BTW, I'm talking about a situation, where a non-Spanish citizen and non-Spanish resident starts living there for 2-4 months per year, NOT about somebody who lived there their whole life trying to become a non-resident or about Shakira who has her husband, kid and center of life there..

As I said, you just come for a few months to enjoy the country, you're good. But if you push the limits, you'll be the one having to prove stuff, they'll just claim you have to pay taxes in Spain

 

[mike400]

As I said, you just come for a few months to enjoy the country, you're good. But if you push the limits, you'll be the one having to prove stuff, they'll just claim you have to pay taxes in Spain

What does pushing the limits mean?

According to this article they did quite serious investigation on Shakira - they counted her days for 2012-2014 (183 day rule) and for 2011 they got her on the center of vital interest rule it seems...

 

[legrant]

What does pushing the limits mean?

According to this article they did quite serious investigation on Shakira - they counted her days for 2012-2014 (183 day rule) and for 2011 they got her on the center of vital interest rule it seems...

Pushing the limits means pushing the limits, quite literally

 

[Konstanz]

What does pushing the limits mean?

According to this article they did quite serious investigation on Shakira - they counted her days for 2012-2014 (183 day rule) and for 2011 they got her on the center of vital interest rule it seems...

It would have been much more difficult to prove if Shakira would have had Andorra or Gibraltar residence and spent there some time.
Her problem was that she had Bahamas residence and never went to Bahamas. Of course, most of people enjoying Spain are not rich enough to gain Gibraltar or Andorra residence.
In general authorities are more into their own citizens. To prove that non spanish citizen is tax resident is more difficult. Of course, it's case by case

 

[Piano]

This is for anyone living or wanting to live in Spain.

A new law has just been passed which affects cryptocurrency owners and people who use a lot of cash for purchases amongst other things. The most important things of the new law are the following:

1. Tax amnesties are now prohibited
2. You can now just use a maximum of 1000 Eur in cash purchases (2500 Eur before, as in all other EU countries)
3. More countries will fall into the "offshore" status
4. You will have to declare all the cryptocurrencies you own (all their movements, purchases, sales, etc too), both in Spain and outside on the 720 Form. If you fail to do so you could pay up to 150% of the money that you have not declared


TLDR: Stay away from Spain at all costs

Wow , though rules…

 

[cyprus123]

can new resident still take advantage of the beckham law?

 

[botero]

The EU isn't happy with how Spain is penalizing its tax payers calling it "disproportionate" and contrary to EU freedoms.

https://www.thelocal.es/20210715/eu-lawyer-slams-spains-huge-fines-for-not-filing-foreign-asset-declaration-forms-properly/

 

[legrant]

The EU isn't happy with how Spain is penalizing its tax payers calling it "disproportionate" and contrary to EU freedoms.

https://www.thelocal.es/20210715/eu-lawyer-slams-spains-huge-fines-for-not-filing-foreign-asset-declaration-forms-properly/

Spain doesn't give a damn though.

Also, the law is now active and there are some changes to it. You now have to declare every bank account you have outside of Spain (doesn't matter if it has $0 in balance) and you also have to all your crypto, both in exchanges or wallets you own or have control of. And besides all that, you also have to declare properties, stocks, bank accounts (again), etc outside of Spain if the combined value is over 50k Eur (this is the normal 720 Form). The only thing you don't have to declare are commodities such as gold, silver and also watches, diamonds, and similars.

 

[RGRG]

Guys,, need your help and inputs in the following scenario....

I'm thinking about moving to Spain with kids/wife using the Non-Lucrative Resident Program (coming from Mexico) (final goal for us is to get the Nationality after the 2yrs period)

My general plan is to set up an offshore account in a SAFE country focused on investment strategies and wealth management, I will be using this account ONLY for Long term compound interest investments, Dividend based investments and Short term investing ( ETFs / VWRL / REITs.. etc.. anything that generate passive income, looking at 8-10% p/year) I will be declaring my accounts and all sources of income, as well as filling my taxes every year in Spain, paying taxes as per below:

-Under Spain Tax Code a Resident has to pay 21% tax for income obtained from interest, investments or dividends, when less than <EU$50k... I have no problem with paying this tax. (However the $50k represents ONLY 30% of the total passive generated income)
-The other 70% will stay invested (thus, is not income). In order to take advantage of the following tax code: under Spain Tax Code, taxes can be deferred on Dividends or Interest that are NOT liquidated and immediately put back into the principal, such a Compounded Interest Investments. Thus, there are no taxes to be paid here (yet), until you actually take money from your investment and put it in your bank. Meaning it can remain invested & compounding/growing without paying taxes on it. Obviously I will be declaring my bank accounts and filing the taxes on time every year and living a normal live under the rules.

1. Do you guys think this scheme will work for my situation?
2. Do you consider this strategy is the best for a guy who wants to Long term invest in a compound interest passive way generating 8-10% a year (even 6 to 8%), the key here is that I want to withdraw EUR 3k-4k per month (for living expenses) staying below the EUR50k per year to only declare and pay the 21% ?
3. Based on your experience and taking in consideration this scenario? Do you recommend any better strategy? (taking into account that family is in the equation)

*Taking the Residency and Living in Dubai with Family to enjoy the 0% taxes could be a possibility, but I rather leave this scenario as the 2nd option, since Spain checks all the boxes (language, culture, live style, weather), and if my strategy is validated, I would be paying 10k per year in taxes (minus deductions, insurance, schooling, medicals etc. could be 7-8k per year) which I'm OK with that amount.
*I will need an exit strategy, but that will be in the future for whenever I want to liquidate my entire portfolio (once outside Spain), however, since we are a young family, we are talking about 20years from now (which means we can leave the investment compounding for that time frame, withdrawing only 50k per year/paying only 21% on taxes p/year while keeping the rest of the passive generated income as and addition to the principal to continue)
*It scares me to read comments here like: "stay away from EU & Spain" "EU tax hell'.. It might be all true, but if you become wealthy with clean money in Mexico, believe me, you are better off in another part of the world, and if this works, living in Spain paying 10k in taxes per year sounds more like a haven for me.

Really appreciate your inputs and recommendations on my case.

This is for anyone living or wanting to live in Spain.

A new law has just been passed which affects cryptocurrency owners and people who use a lot of cash for purchases amongst other things. The most important things of the new law are the following:

1. Tax amnesties are now prohibited
2. You can now just use a maximum of 1000 Eur in cash purchases (2500 Eur before, as in all other EU countries)
3. More countries will fall into the "offshore" status
4. You will have to declare all the cryptocurrencies you own (all their movements, purchases, sales, etc too), both in Spain and outside on the 720 Form. If you fail to do so you could pay up to 150% of the money that you have not declared


TLDR: Stay away from Spain at all costs

 

[legrant]

Guys,, need your help and inputs in the following scenario....

I'm thinking about moving to Spain with kids/wife using the Non-Lucrative Resident Program (coming from Mexico) (final goal for us is to get the Nationality after the 2yrs period)

My general plan is to set up an offshore account in a SAFE country focused on investment strategies and wealth management, I will be using this account ONLY for Long term compound interest investments, Dividend based investments and Short term investing ( ETFs / VWRL / REITs.. etc.. anything that generate passive income, looking at 8-10% p/year) I will be declaring my accounts and all sources of income, as well as filling my taxes every year in Spain, paying taxes as per below:

-Under Spain Tax Code a Resident has to pay 21% tax for income obtained from interest, investments or dividends, when less than <EU$50k... I have no problem with paying this tax. (However the $50k represents ONLY 30% of the total passive generated income)
-The other 70% will stay invested (thus, is not income). In order to take advantage of the following tax code: under Spain Tax Code, taxes can be deferred on Dividends or Interest that are NOT liquidated and immediately put back into the principal, such a Compounded Interest Investments. Thus, there are no taxes to be paid here (yet), until you actually take money from your investment and put it in your bank. Meaning it can remain invested & compounding/growing without paying taxes on it. Obviously I will be declaring my bank accounts and filing the taxes on time every year and living a normal live under the rules.

1. Do you guys think this scheme will work for my situation?
2. Do you consider this strategy is the best for a guy who wants to Long term invest in a compound interest passive way generating 8-10% a year (even 6 to 8%), the key here is that I want to withdraw EUR 3k-4k per month (for living expenses) staying below the EUR50k per year to only declare and pay the 21% ?
3. Based on your experience and taking in consideration this scenario? Do you recommend any better strategy? (taking into account that family is in the equation)

*Taking the Residency and Living in Dubai with Family to enjoy the 0% taxes could be a possibility, but I rather leave this scenario as the 2nd option, since Spain checks all the boxes (language, culture, live style, weather), and if my strategy is validated, I would be paying 10k per year in taxes (minus deductions, insurance, schooling, medicals etc. could be 7-8k per year) which I'm OK with that amount.
*I will need an exit strategy, but that will be in the future for whenever I want to liquidate my entire portfolio (once outside Spain), however, since we are a young family, we are talking about 20years from now (which means we can leave the investment compounding for that time frame, withdrawing only 50k per year/paying only 21% on taxes p/year while keeping the rest of the passive generated income as and addition to the principal to continue)
*It scares me to read comments here like: "stay away from EU & Spain" "EU tax hell'.. It might be all true, but if you become wealthy with clean money in Mexico, believe me, you are better off in another part of the world, and if this works, living in Spain paying 10k in taxes per year sounds more like a haven for me.

Really appreciate your inputs and recommendations on my case.

As far as I know, the only way you're not going to pay taxes on what the remaining 70% generates is if the companies are doing scrip dividends, which means they generate new shares and give them to you instead of giving you the cash. If you get cash in your brokerage account, you'll have to pay taxes on it even if you buy the same stock again. Also, note that it cannot be a capital increase, they must be new shares.

You may also need to pay wealth tax (~ 0-3.5%) unless you're going to live in Madrid, which is bonified to 100% (you don't pay the tax)

 

[RGRG]

As far as I know, the only way you're not going to pay taxes on what the remaining 70% generates is if the companies are doing scrip dividends, which means they generate new shares and give them to you instead of giving you the cash. If you get cash in your brokerage account, you'll have to pay taxes on it even if you buy the same stock again. Also, note that it cannot be a capital increase, they must be new shares.

You may also need to pay wealth tax (~ 0-3.5%) unless you're going to live in Madrid, which is bonified to 100% (you don't pay the tax)

Thanks for the inputs.
I will look closely to that tax code, I remember reading something like what you are mentioning.
Even so, almost positive there must be ways to roll-over those gains into aquired equity/shares, depending on the investment.

 

[legrant]

Thanks for the inputs.
I will look closely to that tax code, I remember reading something like what you are mentioning.
Even so, almost positive there must be ways to roll-over those gains into aquired equity/shares, depending on the investment.

Yeah there's probably something you'll be able to do. But make sure you're doing everything by the book, spanish taxman are a pain in the a*s

 

[knuk]

This is for anyone living or wanting to live in Spain.

A new law has just been passed which affects cryptocurrency owners and people who use a lot of cash for purchases amongst other things. The most important things of the new law are the following:

1. Tax amnesties are now prohibited
2. You can now just use a maximum of 1000 Eur in cash purchases (2500 Eur before, as in all other EU countries)
3. More countries will fall into the "offshore" status
4. You will have to declare all the cryptocurrencies you own (all their movements, purchases, sales, etc too), both in Spain and outside on the 720 Form. If you fail to do so you could pay up to 150% of the money that you have not declared


TLDR: Stay away from Spain at all costs

How the hell are they planning to enforce the last point?
People buying or selling crypto f2f or p2p bypassing the onramp/offramping from centralized exchanges would be invisible to any kind of audit.
Why would one declare what he holds in his cold wallet?

 

[legrant]

How the hell are they planning to enforce the last point?
People buying or selling crypto f2f or p2p bypassing the onramp/offramping from centralized exchanges would be invisible to any kind of audit.
Why would one declare what he holds in his cold wallet?

You are legally required to declare everything, however, you can simply not do it but you'd be breaking the law. You may or may not be caught, they may not even be able to get enough proof against you, but if they eventually do, they'll go after you.