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Newsletter No. 5 - May 2010

Clicking on the headline of each news item, you have access to the detail of it.

Details Newsletter No. 5 - May 2010

  • Royal Decree-Law 8 / 2010 of 20 May by adopting special measures to reduce the public deficit.

    In the present Royal Decree-Law are specified adjustment measures to be taken to get to close the year 2011 with a deficit of 6 per 100 of GDP, compared with 7.5 per 100 originally planned.

    Some of the measures contained in Royal Decree-Law are:

    • Reduction of 5 per 100 public sector wages
      Royal Decree-Law provides an average reduction of 5 per 100 in annual terms of salaries of public employees, which will apply to escalation criteria to minimize its effects on lower wages. The scale will range from 0.56 per 100 and 7 100 depending on income level of the professional group, will affect the staff of all levels of government and implemented on both the basic salary as on complementary. Senior management salaries will be reduced from 8 per 100 and 15 100. This reduction will be effective on the payroll as of June, and wages will be frozen for 2011.
    • Suspension of pension increases in 2011
      Is suspended exceptionally pension increases in 2011, with the exception of the lowest benefits of the system, ie non-contributory, the tax that supplements are minimal and the old regime SOVI not concurrent with others.
      In 2010, pensions will maintain their purchasing power, proceeding to the appreciation in the terms established by law in the event that the CPI November exceeds the expected increase of 1 per 100.
    • Suspensión del régimen transitorio de la jubilación parcial
      Se elimina el régimen transitorio de jubilación parcial previsto en la Ley 40/2007 cuya suspensión estaba prevista para el 1 de enero de 2013 y que preveía unos requisitos menores en el acceso a la jubilación parcial hasta esa fecha.
    • Elimination of "check-baby"
      As of January 1, 2011 is deleted deduction of 2,500 euros by birth and adoption in the income tax, known as "check-baby"as well as the economic benefit of a single payment of Social Security by birth and adoption was established simultaneously.

    Entry into force: 26/05/2010

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  • One in three drafts of income tax errorsOne in three drafts of income tax errors.

    One in three drafts of the statement issued by the Income Tax Agency (AEAT) contains errors and omissions on tax deductions, have warned the Ministry of Finance Technical (Gestha).

    In particular, the over twenty million drafts and tax data sent by the Treasury to taxpayers, about 6.3 million (30.6% of total) contain inaccuracies that may prevent them from benefiting from the corresponding tax cut.

    Data relating to deductions for homeownership, marital status, public subsidies and deductions are autonomous, as Gestha, the most common errors and omissions in the drafts of the current campaign. Specifically, a total of 3.7 million drafts have flaws in the compensation for housing and about 1.21 million by errors by marital status or births.

    In addition, technicians point out that these failures especially hurt low income taxpayers, those who can not afford professional advice.

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  • Financial limits for not making the income tax return 2009.

    No obligation to declare:.

    Taxpayers who derive income solely from the following sources, in individual or joint taxation:

    • Full return of work, with a limit of 22,000 € per year when they come from a single payer. Also when you come from more than one payer and meet any of the following two situations:
      • That the sum of the amounts received from the second and other payers, in order of amount, not exceeding the whole amount of 1,500 € annually.
      • Its only labor income consist of the passive benefits referred to in art. 17.2 to) of the tax law and the retention rate determination had been made applicable under the special procedure Art.89.A) of Regulation.
    • Full return of work, with a limit of 12,200 €.
      • Those from more than one payer, provided that the second and remaining, in order of amount, together exceed the amount of 1,500 € annually.
      • When you receive spousal support or spousal annuities foods other than those provided in Section 7 k) of this Act
      • When the payer is not obliged to retain according to Art.76 Regulation.
      • When integrated work receive income subject to fixed retention.
    • Full return on capital assets and capital gains subject to income retencióo account, along with the limit of 1,600 € annually.
    • Imputed income from real estate referred to in Article 85 of the tax law, income from capital intact not subject to withholding derived from Treasury bills and subsidies for the purchase of housing units or appraised price, with the limit set € 1,000 per year.

    Neither taxpayers will have to declare that the sole source of income intact labor, capital (or real estate) or economic activities as well as capital gains, with the limit set of 1,000 euros per year and losses of value of less than 500 €.

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  • The new treatment of VAT on Housing RenovationsThe new treatment of VAT on Housing Renovations.

    Article 2 of Decree-Law 6 / 2010, Measures for Promoting Economic recovery and employment, Making Change in VAT Aimed at boosting the activity of the housing enhabilitación:

    • From on 14-04-2010, executions of work aimed at the construction or rehabilitation of a building is deemed supply of goods when the employer contribution work running some of the materials used, provided the cost thereof exceed 33% of the tax base (by far the costs had to exceed 20%).
    • Reduce the tax rate applicable to renovation and repair of private dwellings made up to 12/31/2012.

    From on 14-04-2010 apply the reduced rate of 7% (8% from 07.01.2010) to the execution of renovation and repair work carried out in buildings or part thereof for housing, are met the following requirements:

    • That the recipient is an individual (not acting as an entrepreneur or professional), and use the property in which you make the renovation and repair for your particular application. Also included are performances of works cited when the recipient is a community of owners.
    • That the construction or rehabilitation of housing should be completed at least two years before the start of the renovation or repair.
    • That the person performing the work does not provide for implementation materials costing more than 33% of the tax base of operation.

    Therefore extends the reduced rate of 7%, so far limited to masonry, to all types of renovation and repair, such as: plumbing, carpentry, electrical, paint, plaster, installation and assembly.

    To avoid confusion, it is recommended that the invoice stating the cost of materials supplied or the condition that the cost of the materials provided do not exceed 33% of the tax base.

    Also, the lower EHA/1059/2010 ORDER modules concerning simplified VAT regime, in order to reflect the rate reduction to employers and professionals who develop activities related to the renovation and repair of private dwellings:

    • 504.1. Facilities and fittings (except plumbing, cold, heat and air conditioning).
    • 504.2 y 3. Plumbing, cold, heat and air conditioning.
    • 504.4, 5, 6, 7 y 8. Installing lightning rods and the like. Assembly and installation of kitchens of all types and class, with all its accessories. Assembly and installation of lifting devices of any kind and type. Telephone systems, telegraph, wireless telegraph and television, in buildings and constructions of any kind. Metal assemblies and complete industrial plants, not sell or provide the equipment or item covered by the installation or assembly.
    • 505.1, 2, 3 y 4. Coatings, flooring and paving and placement of insulation.
    • 505.5. Carpentry and locksmithing.
    • 505.6. Painting of any kind and type and wall paper, cloth or plastic, and finishing and decoration of buildings and facilities.
    • 505.7. Plaster and stucco work and decoration of buildings and premises.
    • CONCEPT OF REHABILITATION WORKS concrete BUILDINGS VAT through a definition of similar works and related to structural, with the aim of reducing the tax costs associated with rehabilitation activity.

    The more detailed and comprehensive definition of the concept of rehabilitation influences the rate applicable to the execution of works that are considered remedial work implementing the new concept of rehabilitation.

    That is, since on 14-04-2010, extending the concept of rehabilitation, can apply the reduced rate of 7% (8% from 07.01.2010) to the works of rehabilitation of buildings devoted primarily to housing, including premises, attached garages, additional facilities, provided that more than 50% of the building must be designed to house.

    To qualify as rehabilitation works of construction, the cost of the work to be covered by the project must exceed 25% of the purchase price of the building, if carried out in the two years prior to commencement of works rehabilitation) or market value that had the building or part thereof at the time of initiation of rehabilitation work, disregarding both the proportional part of the ground.

    In addition, the primary focus must be the "reconstruction", meaning to meet this requirement when more than 50% of the total cost of the rehabilitation project matches or treatment works building structural elements, walls or roofs or similar or related works to the investigation.

    The new rules define as works similar to rehabilitation:

    • The structural adequacy to provide a safe building construction, ensuring stability and mechanical strength.
    • reinforcement or adequacy of the foundation as well as affecting or treatment consisting of pillars or slabs.
    • The expansion of the floor area, above and below ground.
    • The reconstruction of facades and inner courtyards.
    • The installation of lifting elements, including architectural barriers intended to save for use by disabled.

    The new rules define as works related to rehabilitation:

    • Masonry works, plumbing and carpentry.
    • The measures for improving and adapting enclosures, electrical, water and air conditioning and fire protection.
    • Energy rehabilitation works.

    The cost of related works should be less than derivative works of consolidation or treatment of structural elements, walls or roofs and, where appropriate, works similar to them where they are linked to them as indivisible and not consist at the very finish or decoration of the building or simply maintaining or painting of the facade.

    Works now have the status of remedial work:

    The reduced tax rate applies to the execution of work to turn to have the status of rehabilitation work, not having it earlier, will be appropriate if the VAT on these works is payable from 14.04.2010, even when prepayments received full or partial, before 4/14/2010. Taxpayers must rectify FEES passed on advance payments for which recovery would be charged prior to 14/04/2010, although they had less than 4 years since that took place this collection.

    Implementing the new concept of rehabilitation to the delivery of buildings.

    The concept of rehabilitation is important to describe the transmission of a renovated building in the first or second transmission buildings. First transmission of a building is restored after a transaction subject to VAT and therefore VAT will be deductible in rehabilitation.

    The new concept of rehabilitation, shall apply to supplies of buildings or parts of them to turn to have the status of first deliveries and produce (earn) from 14.04.2010, regardless of whether they are received advance payments or partial, prior to that date.

    Entrepreneurs or professionals who perform deliveries of buildings rehabilitated under the new concept may deduct input tax in full or paid for goods and services used directly in their rehabilitation. The deductibility of the contributions will be born on 14/04/2010. If those fees were deducted before, even partially, entrepreneurs and professionals should adjust deductions practiced in the settlement declaration of the last settlement period of 2010.

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  • Administrator's responsibility for failing to perform the acts required to file tax returns correctlyAdministrator's responsibility for failing to perform the acts required to file tax returns correctly.

    Following the High Court Sentencing Act may declare responsible for the tax, with taxpayers, other people, caring or alternatively be provided subsidiary responsibility. In cases of vicarious liability is inexcusable the previous declaration of failure of that person, without prejudice to any precautionary measures before this statement can be adopted by regulation. The derivation of the administrative action to the responsible subsidiary previously required an administrative act, which shall be served by regulation, giving them from that moment all the rights of the taxpayer.

    When two or more joint or subsidiary of the same debt, it may be required in full to any of them. Be responsible alternative to the simple tax violations and the total tax liability in cases of serious offenses committed by legal persons, the administrators shall not performing the necessary acts that were within its competence to fulfill obligations tax violated, consents the failure of those under their jurisdiction or they adopt agreements that make possible such violations. They will also be responsible alternative, in any case, the outstanding tax liability of legal persons that have ceased trading the same managers. The provisions of this rule does not affect the provisions in other cases of responsibility in tax legislation in force.

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  • Home sales up for third consecutive month.

    The sale of homes rose in March compared to the same month last year to a total of 37,561 operations, of which 48.9% were performed on new homes and 51.1% of second-hand property, as reflected today Statistics on Transfer of Property Rights published today by the National Statistics Institute (INE).

    The increase has been possible thanks to an increase of 25.1% of home sales (19,212 operations), since the new building transactions decreased by 4% (18,349 transactions). Purchases and sales of homes rebounded in March for the third consecutive month. After two years on-year falls recorded the first ascent took place last January, up 2.1%.

    Last year ended with a plunge in home sales of 24.9% over 2008 to a total of 414,811 operations. Compared to February, sales of homes fell by 8.5% versus 7.1% rise the previous month, and in the first three months of the year, has accumulated a 9.7% rise over the same period 2009.

    Of the 37 561 sales transactions in March, 89.5% were on private housing and 10.5% on housing. The former increased by 9.2% compared to March 2009 and rose to 7.1% protected.

    The sale of previously owned homes rose in March by 25.1% year on year to 19,212 transactions, and new homes declined by 4%, with 18,349 operations in the third month of the year.

    Considering the geographic distribution, the regions of Cantabria (152) and Navarra (150) is situate at the head of the operaciones.El 57.3% of house sales were recorded in four communities: Andalusia, Madrid, Valencia and Catalonia.

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