Spanish tax loophole?
From "FOH News" on 25 June 2008
The tax loophole, originally exposed by currency exchange brokers HiFX and Spanish lawyers, Costa, Alvarez, Manglano & Associates, came about after British non-residents paid a Spanish Non Residents’ Income Tax rate of 35% on any capital gains, compared to a rate of 15% paid by Spanish nationals. The firms believe this 20% overpayment "contravenes European Community Treaty rules on discrimination and therefore was unduly charged by the Spanish Government".
However, where as initial conservative figures put the total amount to be reclaimed at £11,000 per person – an estimated £37million – over the last three months hundreds of Brits have registered average reclaims of more than £19,300 each – pushing the estimated amount Brits could claim back up to £86million.
Since OPP first reported on the issue in April, more than 300 people have so far registered requests for rebates through the website www.spanishtaxreclaim.co.uk - with many more expected to come forward as word spreads.
In an attempt to explain the near doubling of monies claimed back by Brits, Mark Bodega, director of HiFX said: "Since launching the website and establishing this class action against the Spanish tax authorities, we have always said it would be extremely difficult to put an actual figure on the number of people affected by this tax issue and how much they would be able to reclaim from the Spanish government. This is largely because the Spanish government will not reveal this information, and this is why our initial estimation about the amount being able to be reclaimed was on the conservative side. However, the sums that people are coming forward to reclaim are much larger than anticipated, almost double in size. So far more than 200 people have registered to be part of the class action, which is a huge response – but we anticipate there are more than 4,500 British people affected by this, meaning there are still a lot of people who need to come forward to reclaim what is rightfully theirs."
People who have sold property previous to June 2004 have already missed out on being able to make a reclaim on their overpaid tax, as under Spanish law claims can only be made dating back over a four-year period.
Commenting on the issue, Spanish lawyer Emilio Alvarez said: "In some cases potential claimants are being put off by the lawyers who acted for them during the sale as they are being told that they will not be able to get hold of the necessary forms (Form 212) or that this consumer campaign will not succeed. As a result, we are offering to speak to the Spanish Tax Office on behalf of any clients who have doubts to ascertain whether or not they are eligible and get the forms they need."
