Friday, 25 December 2009 00:00

Too many civil servants

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Along with the establishment of democracy in Spain, came the creation of autonomous regions. Soon after, the centralized power of Madrid started to decentralize. It was logical and appropriate to decentralize the administration in order to have a better understanding of the reality of the different regions, cities and towns. For that reason, the "autonomías" (autonomous regions) were created: to decentralize decisions and to bring the administration closer to the citizen. Nowadays, if we took an opinion poll about the “civil servants” in Spain and their cost to each of us, the great majority of people would say that there…
The Spanish Tax Authorities want that in 2010, as it is already common in many countries, the companies (individuals or companies) grant a power of attorney in favour of their advisors or consultants so they can submit claims and appeals, consult tax information, and receive letters from the Tax Authorities on behalf of their clients. A Power of Attorney is a legal document giving another person the legal power to represent you. In the case at hand, this power of attorney would mean the representation assignment to act on behalf of you before the Tax Authorities. These proceedings can be…
Friday, 23 October 2009 00:00

Free falling real estate market

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Due to the significant impact of the crisis in the Canaries, a large percentage of tenants of business properties are asking for a reduction in the rent they pay to their landlords. The continuous closing of businesses allows tenants to have stronger negotiation power. While this is a global phenomenon, it is very marked in the Canaries, especially in tourist areas, where all-inclusive rates are available in nearly all tourist resorts, so tourists are neither eating nor drinking outside their resorts. A decrease in consumption has caused a remarkable reduction in rent in business properties. In the tourist areas of…
Friday, 25 September 2009 00:00

Let the rich pay

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Spain is suffering one of the worst economic situations of our times after it had enjoyed a few years with spectacular and enviable economic growth, as far as the rest of the European Union is concerned. Spain has, at this time, an extremely delicate economic situation and, more importantly, the government is not giving any response to the serious situation the country is experiencing. The alarming unemployment figures of 3.6 million people or 18.5 % of the population, makes Spain a real unemployment factory and places it in first place within the European Union, where the average unemployment rate is…
Friday, 24 July 2009 00:00

I want it cheaper

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The financial crisis experienced by western countries has caused consumption and marketing trends to change quickly. Now cheaper things, or even more so, free things take priority. And this is happening in more and more sectors. Some examples of these trends are the following: Communication. SMS (Short Message Service) is being used more and more with mobile phones. The SMS service allows the user to send a message instead of making a call, which means significant savings in communication charges. On one hand, there's a greater demand for voice calls over web-based calls, which occur as a result of voice…
Thursday, 25 June 2009 00:00

Corporate Tax

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The Corporate Tax ("Impuesto de Sociedades") is the equivalent to the Income Tax ("Impuesto sobre la Renta de las Personas Físicas - IRPF") for limited liability companies (SL) or anonymous companies (SA) and even for associations, foundations, sole proprietorship companies, cooperative societies, collective societies, etc. This tax is based on the income obtained by the companies during the previous year, for example, 2008. The tax takes into account the circumstances of each company. Companies incorporated in Spain and whose offices are registered within Spanish territory, must submit an income tax form every year between the 1st and 25th of July,…
Monday, 25 May 2009 00:00

Changes in economic policy

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Spain has experienced a spectacular transformation in the last 20 years. There was an export of workers (emigrants) mainly aimed at advanced European countries. However, after the formation of the European Union and the modernization of the country, an important change has occurred. This economic launch has also extended to sports, arts, architecture, etc. Spanish companies (multinational companies such as banks, mobile telephones companies, civil works firms, etc.) are present in many European, American and Asian countries. As a result, Spain has become a member of the exclusive club of the most advanced economies in the world. During the last…
We are all facing an unprecedented economic crisis. Every day, the media talks about how bad things are and about how there is not one, but two crises: > The financial crisis, which was created by the financial institutions, both international and national ones. The appearance of subprime mortgages in the USA was the initiating factor of the current situation as banks gave money to people who couldn’t pay it back. > The Real Estate crisis. This is linked to the financial crisis. People who bought a property and then waited three or four years before reselling it, had a…
Wednesday, 25 March 2009 00:00

I can't pay my mortgages

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Nearly 60,000 houses were seized in Spain in 2008 and this year will be worse. Defaults on mortgage payments are treated by each entity in different ways, although usually it is the branch itself or the branch’s manager who, during the first weeks, contacts the customer to know the reasons behind the default and to kindly remind him that he must pay. If non-payment continues, the default notices get tougher, default interest and fees stipulated in the mortgage deed begin to accrue, which range from 5% to 6%, will be applied. If the debt is not paid in an approximate…
Related party transactions are those between companies and their shareholders, the management, or their business groups. These transactions must take place at real market price, regardless of how the transaction is actually made. An example of related party transactions is the following: suppose that the sole administrator of a company rents out a property to the company, i.e., a flat in Lanzarote to be used as offices; he cannot rent it for free nor for too expensive of a price; He must rent it at market price. And, if in reality, he is not receiving any income from such rent,…
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