Do you own Spanish Property via an international Company?

If so, the Spanish tax authorities may have you in their sights. In the past, tax advisors told wealthy investors that the most tax-efficient way of owning Spanish property was to establish an international company. Some international companies were set up as a layer of structures, including trust funds as the ultimate top layer. Several thousand residential properties in Spain are owned in this fashion.

Such intricate structures were created to minimise or avoid altogether paying tax in Spain, and make it easier to arrange change of ownership, for example, when the original owner is deceased and an heir takes possession. Many of these international company owned properties are valued at over one million euros today, and the tax authorities are naturally targeting such a potentially rich source. While company ownership isn't free of taxation, savings can nonetheless be substantial compared to private ownership.

Just like many other European countries, Spain is targeting any scheme that spells potential tax avoidance. Spanish tax authorities are notoriously difficult to deal with, so being prepared well in advance by contacting a tax advisor or law firm specialising in such schemes can mean all the difference, when the Spanish taxman comes knocking at your door. Ask a specialist for a compliance test to avoid a nasty surprise in the form of penalties.

International company set-up was popular for many decades, especially at the Costa del Sol, which is rich in luxury resorts, where international companies own residential property that is let out to holidaymakers. Tax avoidance schemes to minimise taxation on holiday rentals have become a favourite with Spanish tax authorities. Be unprepared and you could be facing substantial penalties. Spanish tax authorities expect foreign owners of such company schemes to roll over without putting up resistance.

Various law firms and tax advisors hold events and seminars on Spanish taxation matters throughout the year. Contact the following for upcoming events:

Belvins & Franks (https://www.blevinsfranks.com/events/country/spain/)

Malaga Province Chamber of Commerce (http://www.visitcostadelsol.com/things-to-do/chamber-of-commerce-industry-and-navigation-of-the-province-of-malaga-p13171)

British Chamber of Commerce Spain (http://www.britishchamberspain.com/parque-tecnologico-andalucia.html)