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Direct taxes: None.
Indirect Taxes: Depends on the usage of the real estate:
The same as above for companies.
Also there is an alternative way to buy the real estate through a company. Thus, if the real estate is affected to a business activity you can avoid all the indirect taxes. However, you have to take into account that in a future sale of the real estate (not selling the company) the company will have to pay some latent goodwill in Corporate Tax.
Besides there is a withholding tax concerning sales of real estate, under which purchasers of Spanish real estate from non-resident owners without permanent establishment must withhold 3% of the price.
◆ In case the foreign client obtains income for renting the real estate the tax obligations will vary depending on:
◆ foreign individuals (not companies) that own the real estate without renting will have to declare a presumed income. The taxable base will be 2% or 1,1% (if it is revised) of the cadastral value. The result will be taxed at the tax flat rate of 24,75%. Nonresident will have to present an annual declaration before the 31st of December of the following year.
Non-residents individuals (not companies) who own real estate or other assets located in Spain with a value from 700.000 € will have to present an annual tax declaration of Wealth Tax. The period of presentation is from 1st of May to 30th of June.
This tax is levied annually on the possession of a real estate. The general tax rates are 0.4% on the cadastral value for urban property and 0.3% for rural property, but higher rates may be applied depending on the municipality.
Non-resident Companies who acts without Permanent Establishment resident in tax havens holding a Spanish real estate or usufruct must pay annually the 3% of the cadastral value.
No! There won't be any difference.
There are no tax benefits under the New Law for non-residents. From the labor law point of view, non-residents can obtain a resident permit during one year if the investment of the real estate is 500.000 € or more.
There is no tax benefit under the new law for foreign investors.
There is no tax limit for the investment.
Any investment or disinvestment in a Spanish Company on behalf of a foreign company or an individual has to be communicated to the Economy Ministry.
Annual Tax obligations: only in the event that the Spanish company distributes dividends or pays interests to the shareholder (see point 7 taxation below). The Spanish company will be the one to pay the withholding tax of dividends and interest.
In case the shareholder is an foreign Company or an individual, in line with the Double Tax Treaty between e.g. India and Spain, the withholding Taxes in Spain will be:
➔ Dividends: 15%.
➔ Interest: 15%
If the shareholder is located in a tax haven or in a country without Double Tax Treaty with Spain, the withholding taxes in Spain for both, dividends and interests will be 21%.
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