Majorca Property News

Mallorca-Real Estate and German Tax Office

Of the estimated 500,000 Spanish properties owned by German nationals were known to a not insignificant proportion in Germany is not duly paid cash acquired. Hence the interest of the German tax authorities and others at Mallorca real estate. Escaped the German government here income taxes, inheritance taxes, or in relation to the past, significant amounts of property taxes? The German tax office comes here often, even without intensive international investigation in Spain to the destination.

Has the German tax office so far aware of the existence of a property abroad or a foreign bank account in Spain, it is not initially held intensive research in Spain on Spanish or mutual legal assistance on the path. Rather, the German tax office with knowledge of a Spanish bank account with reference to section .90, paragraph 2, of the information order, AO, invite the German taxpayer, the related account documents.

Does the Tax and account information is not requested, it will make an appropriate estimate and hence the taxpayer actually to compel disclosure. With knowledge of the German tax authorities of Spain, the property owner first in the "commitment" plausible way, for whatever paid the real estate asset acquisition was made.

Almost done letter by the German tax office first, if the tax documents, or relevant third party indications signaling the presence of Mallorca / Spain real estate or bank accounts in Spain showed. Whether and when such searches by the German tax authorities made systematic, be doubted. In any event, was already a cross-country working group from the German tax authorities installed.

It should be noted that the German tax office, - as well as any other interested citizens - to the Spanish land without special justification can make inquiries as to whether and where a certain German citizen namensmässig called on real estate assets in Spain.

The German tax office is interested in the income tax on not only the question of whether the property with Spain in Germany or not yet paid sums of money was obtained. In German resident of the property owner's interest for the German tax office are still the income - such as rental income, resulting from the Spanish property has been made.

This represents a circular to the Regional Finance Office Dusseldorf and Frankfurt a. M. clear that for taxation in Germany to determine the income from the one in Spain from being immovable property in accordance with German regulations. The self-use property is one of Spain but not in Germany to the taxable income.

Interest of the German tax office also stimulate sales gains from private sales of real estate Spain. This increased in mass, since at 1 January 1999, the speculation period for private property sales in Germany are now from 2 to 10 years was raised. This means that each is less than 10 years property object in principle the sale profit tax in Germany is governed by. Excluded are here as a central location-occupied homes and apartments.

Finally, even in Spain Properties of the German inheritance and gift taxes into account. The inheritance tax should be added that there is between Germany and Spain, no double taxation agreement, so there is no agreement on the avoidance of double taxation, but only a partial tax credit opportunity, and the German tax authorities with the Spain property market as a tax base starts.