Tax compliance and planning

By Octavio Cabrera, Director of Cabrera Rodríguez Lawyers & Tax Advisers. Lawyers, accountants, experts on tax and business planning, international transactions and investments.

In my position as director of Cabrera Rodríguez Lawyers and Tax Advisers, I would like to begin by introducing ourselves.
We are a consolidated Canarian company with over 20 years of experience, with a professional team specialised in the sector of Tax Planning and Legal Advice.
Our strength lies in tax planning and fiscal advice in connection with international transactions and investments.
We are a dynamic team made up of various professionals and consultants, skilled and competent in both the English and Italian languages, among others,
with a wide range of international experience.
At present, we have two offices in Tenerife. One is located in the centre of Santa Cruz and the other is in Adeje, in the south of the island. We also have relevant associate companies in Gran Canaria and mainland Spain.
Being based in the Canaries means we have an accumulated knowledge of the special features concerning the Economic and Fiscal Regime of the Canary Islands, provided by the EU. The special taxation regime on business income
is one of the most attractive aspects of it, of which the Special
Canary Zone (ZEC) is the most relevant, but not the only one. This singular corporate tax status is unique in Europe, and the right combination of these
tax tools provides a wonderful scenario for entrepreneurs or international companies planning to start new projects on the Islands.
Our pattern has always been the same: legal certainty together with achieving a high level of tax efficiency. We offer our clients different ways to embody their investments by using the right tax structures, as well as providing the
appropriate and suitable legal instruments. All of the above is achievable by always serving our clients’ interests and designing the most advantageous
configuration for optimal tax results.
On this occasion we would like to focus on the famous model 720, which has become a worrying topic for many people.
We are very conscious about the current concern between the taxpayer and the obligation to declare relevant information to the Spanish Tax Office. This
has been in force from 2013, and requires that individuals provide the Spanish Tax  Office with specific information about the goods and rights owned in foreign countries. The presentation is required if the value of assets or rights owned abroad is superior to €50,000 within three different sections:
bank accounts, investments, and properties and rights to them. The declaration has an informative purpose, the final date is on March 31 each year, and it applies not only to owners but also to the beneficiary of a trust. The controversy arising from this obligation is due to the penalties which become applicable due to the noncompliance of its presentation.
The amount of these penalties has recently been considered excessive by the EU, and consequently this is under investigation by the EU Commission.
In spite of all this, the process is no more than an informative declaration. Do not forget that the Wealth Tax declaration, to be filed every May/June by all
Spanish residents, requires that those whose net wealth exceeds €700,000 include all asset information which the 720 refers to. This requirement has
been in place a long time, leaving aside the period between 2008 and 2010. The only difference  is that the 720 requires an extra degree of specification
and detail but, in principle, the essence is absolutely the same, although the Wealth Tax refers to worldwide wealth, including all Spanish assets.
Spanish non-tax residents also fall into the obligation of the Wealth Tax, not the 720, with exclusive reference to Spanish assets and with the same
allowance of €700,000 net wealth.
The 720 should not frighten  or create unnecessary stress. There is always a proper strategy to regularise any foreign wealth structures, and there is no better moment than the current economic and tax environment to approach that challenge.
Using the right tools and procedures will definitely provide an updated and well designed wealth and inheritance tax plan, which will take away worries about current tax liabilities and create the right starting point for optimising
future taxation, and even succession by heirs (Wealth tax and Inheritance tax).
Filing tax returns requires not only accurate submission, but also a clever approach and valuation of every individual tax and wealth position. No individual tax position is equal to another. Every situation is special and each one requires its own personalised tax and wealth structure which needs
to fit the general requirements of the Tax Law for obtaining the right efficiency and optimisation.
It also has to meet any specific economic needs and demands of the individual
and his/her family. From that point onwards it is just a matter of compliance and periodically adjusting or improving the package.
Cabrera Rodríguez Lawyers & Tax Advisers: during the coming editions we will continue to inform readers about tax and legal topics of general interest,
which will contribute to  providing a good overview of the current tax situation in the Canaries and Spain. We also hope to generate proactive reviews from readers on their personal wealth and tax positions, which may eventually
help to create opportunities or provide the right support to face certain economic decisions. We are available for consultation,

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