British expats latest news release

British Expats Assocn. - Latest news release.


Residence Cards:  We can inform readers that on 8th December 2006 we received a letter from the E.U. Justice Commission advising us that ‘infringement’ proceedings were commenced in June 2006 against the Kingdom of Spain for her failure to ‘transpose’ E.U. Directive 2004.38/EC into her national law. This Directive abolishes the requirement for Union citizens to apply for a ‘residence card’ when taking up residence in another Member State. It also provides for a number of other advantages. The Commission advise us that Spain has now notified Brussels of their intention to adopt this law and have further advised the Commission that the new law is already in draft form. Meanwhile ‘infringement proceedings will continue, until the Commission are satisfied that the new Spanish law complies fully with the Directive.

We told you so and we will keep you advised over all future developments. Both the E.U. Directive and the latest response from the Commission can be viewed on our website. We can shortly expect this new law. Meanwhile you may invoke its applicability. But be advised that various government agencies will not be aware of Spain’s declared intention.


15% Withholding Tax on State PensionsComplete nonsense. Recently one irresponsible newspaper published a letter from a reader advising others that as from 1st January 2007 the U.K. would be imposing a 15% withholding tax on State pensions. This letter was without foundation and the editor could so easily have checked with us first, since the withholding tax referred to, is of E.U. origin and relates to taxation at source on certain investment earnings within Europe. Check with your tax advisor for more information, where this may concern you and pensioners please stop worrying.


Spanish Income Tax DodgersWe warned you some time ago that the tax authorities here in Spain were about to clamp down on expatriate residents, who were failing to file an income tax return. Letters are now starting to be sent out to all expatriate residents, enquiring about their income where they have hitherto failed to submit a return, or pay income tax. We warned you not to listen to others, some of whom who should be expected to have known better, who advised you to register on your Municipal ‘Padron’, even where you are not a resident within the proper meaning of an ‘habitual’ resident of Spain. You will find all this law in place on our website. However, where your stay in Spain exceeds 182 days in any one tax year, this is another matter since there is no nexus between ‘fiscal residence and ‘habitual’ residence. However, register on the ‘Padron’ when not an ‘habitual’ ‘resident then you may well find yourself liable to pay income tax, where your income is above the threshold. Where you are an ‘habitual’ resident then you are obliged to so register in accordance with Royal Decree 2612 of 26 December 1996. We will only ever advise you to comply with the law.


Health Tourism Use of EHICThose expatriates coming from the U.K. for any single period exceeding 3 months must understand that the U.K. government consider them to have given up residence in the U.K. regardless as to whether they continue to maintain a home there. There are implications here, since when they return to the U.K. they will have to satisfy the authorities that they have indeed taken up residence there again. This includes health care and social security benefits. Once you have been absent from the U.K. for 3 months then your EHIC is no longer valid for you to use. Do so and you will be committing benefit fraud. Also be aware that computer terminals have been installed in all chemist shops here in Spain and you may get caught, particularly when attempting to obtain those repeat prescription. Further, the regional government of Valencia are determined to clamp down on health tourism. Be warned!


David R.Burrage and Peter Woodall – British Expats Association (Spain)   

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