Key factors for facing the risks that may be brought about by the discontinuity of your business.
Preparation and establishment of necessary voluntary arrangements with creditors.
As a result, taxpayers (individuals and legal entities) to have sold a property or land at a loss over recent years are entitled to claim the nullity of the tax paid and request a refund.
The steps towards recovering municipal capital gains tax will depend on the way in which it was paid by the taxpayer:
In any case of a claim, the taxpayer must prove that the sale was made at a loss and, therefore, the primary precept of taxation on capital gains is not fulfilled, i.e. encumbrance on the increase in value of the urban land.
According to the Sentence of the Supreme Court, only very basic proof is required, which might be the deeds of purchase and transfer of the land. Likewise, despite not being obligatory proof, it is wise to also provide evidence from an expert or a valuation.
On 9 March 2018, the Official Journal of the Spanish Parliament published the draft bill amending the consolidated text of the Law Regulating Local Taxation, approved by Royal Legislative Decree 2/2004 of 5 March (law governing capital gains taxation) to seek compliance with the mandate that the Sentence of the Constitutional Court sent to the legislator by declaring Art. 107.1, 107.2.a) and 110.4 of TRLHL unconstitutional and null and void, introducing a new case of non-liability where the taxpayer proves that they have not obtained an increase in value.
Furthermore, the annual percentages applicable to the value of the land to determine the taxable base of the tax were replaced in this draft bill with maximum coefficients established according to the number of years of ownership of the land and will be updated on a yearly basis, by way of a binding rule considering the evolution of the property market and security adjustment coefficients. Finally, as a result of the introduction of this case of non-liability, it is stated that the Councils may make the corresponding verifications.
In light of the current situation, AddVANTE recommends you start the procedure to request a refund of any municipal capital gains tax to ensure your rights to obtain said refund do not lapse. We offer our services to study your case in detail and weigh up the most appropriate action to take in your situation.
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