Spanish Tax Rate Changes in 2007
- The rate for small and medium limited company businesses will decrease by 1% per annum from 30% to 25% from 2007 to 2011. All Farrand and Co limited company clients fall into this category.
- The larger company rate will move from 35% to 30% over the same time scale.
| ||2007|| |
| || -||The 15% band is removed|
|First||17,360€ @ 24%||Effectively, this is an increase|
|Next||15,000€ @ 28%|| |
|Next||20,000€ @ 37%|| |
|Over||52,360€ @ 43%||Down from 45%|
- Employees earning 9,000€ or less will pay no tax, or technically, tax at 0%.
- There will be a flat rate of 18% on investment income.
- Capital gains tax will stay at 15%
- Tax relief on home mortgages will be reduced to a flat rate of 15%.
Capital Gains Tax
In January 2006 Spain lost a case before the European Court, which found that it was contrary to EU rules to charge 15% CGT on residents and 35% on non-residents. Although when Spain does anything about this will be another matter. We expect someone will have to take a case to Court in Spain first.