Tourism is one of the most important pillars of the Spanish economy. The arrival of foreign visitors has grown from 35 million people in 1995 to 50 million in 2001. This important influx of tourism has converted Spain into the second most visited country in the world. According to the National Institute of Statistics, in 1999 tourism generated 12% of the gross domestic product and furthermore created employment for more than 10% of the working Spanish population. Following a stagnation in the number of tourists during the first six months of the year, the summer is having a worrying tendency…
Thursday, 25 July 2002 00:00

Hidden wealth

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The new European currency has contributed to the appearance of a large amount of undeclared money. The Spanish tax authorities now have a big task to investigate the money which has now appeared but which was previously undeclared. Nevertheless the black economy continues to exist in all European countries. The incomes and areas that escape tax control are, among others, the following: Income of people who are working ilegally The immigration phenomena has meant that many people who lack official papers are working clandestinely without declaring their earnings to the Tax Authorities or the Social Security. This has important consequences:…
Thursday, 25 July 2002 00:00

Companies that own property

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More and more people are deciding to buy houses and property in the name of Spanish companies. There are various reasons but it is advisable to look at what the motives are: 1. Non resident property owners must pay a yearly tax on their estate and income from urban property for own use and a wealth tax, which is approximately 0.7% of the value of the property If the property is in the name of company then this tax does not have to paid annually. 2. If the property is rented in the company name the necessary expenses that are…
Many homeowners occasionally ‘forget about’ the taxes that affect property and the existing local authority, autonomous and State controls. 1. When you buy a property, the Public Notary must draw up a public purchase deed. The Notary is obliged to inform the tax authorities of all property sales and purchases that are carried out each day. When such a purchase or sale takes place there is proof as to what person or Company is buying and what person or Company is selling. The Tax Inspectors are at full liberty to know the notarial operations that are carried out in all…
According to Demographers, more or less within the next 50 years it is quite possible that for the first time in history there will be more people of 60 years of age or more, than children of fifteen or under. In more developed areas, the number of older people already exceed the younger population. In fact, nowadays the population of people in their sixties more or less makes up 20% of the total population in almost all the countries in the European Union. In some countries such as Italy, Austria, Spain, etc., they probably exceed 40%. In Spain, almost seven…
Wednesday, 26 December 2001 00:00

Euros yes, Pesetas no

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The Euro will be present in the daily operations of a company as from the first of January: purchases, sales, bills, accounts, tax declarations, etc. The tax authorities will not accept tax returns that are not in Euros. All companies must be prepared so as to be able to present their tax returns in Euros. Taxes depend on the accounts and these must be closed at the end of the year and expressed in Euros. We should remember that January is a month of many tax declarations: quarterly for individuals, businesses, yearly resumes of personal deductions, business rents, IGIC, etc.…
Friday, 23 November 2001 00:00


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From the 1st of January 2002, the Euro will be the only currency of the European Union. All the everyday items that we buy and the transactions that we currently do in Pesetas must start to be done in Euros. These normal operations include for example all purchases, sales, bills and accounts, must all be carried out only in Euros. VALUE 1 Euro is the equivalent of 166.386 pesetas. In order to get ourselves familiar with the new currency 500 Pesetas are 3 Euros and 1000 Pesetas are equal to 6 Euros. TIME LIMIT. Until the 28th February, there will…
It will be difficult for the western world to forget the unexpected terrorist attack that occurred on the 11th of September 2001 in New York and Washington. The main symbols of economic and military power of the United States of America were hit by terrorist attacks (the World Trade Centre of New York and the Pentagon in Washington). The immediate consequences that these events have caused in Western economies are: 1. Governments of Western European countries and NATO have formed, as a safety precaution, a united front, in order to find those responsible for the attacks and to make plans…
Thursday, 25 October 2001 00:00

Tourism and the economic situation

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Tourism has been an important source of income to the Spanish economy. The tourist phenomenon began to emerge strongly in the sixties. Spain was an attractive country to visit due to the sun, beaches, the culture and the gastronomy, cheap prices and the cheerful nature and hospitality of the Spanish people, etc. The growth of tourism on a world level was less during the first eight months of 2001 than corresponding period in 2000. The world economy has, without a doubt, has suffered even more due to the events of 11th September in the United States. The number of journeys…
The RIC is a tax benefit that aims to encourage productive business investment and the creation of infrastructures in the Canary Islands whilst being the main fiscal benefit. The tax incentive was started so that there would be a lesser tax burden than the average national and European and would also compensate for the remoteness of the Canary Islands and the diffusion of the canarian archipelago. However the application of the RIC has caused a series of problems. The main problems have been: · Legal uncertainty and disputes over tax inspections. · Economic problems. There are not sufficient investment alternatives…
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