Unique Tax Incentives for Repatriation of Dividends to Spain

In the Following Article from NetCraman, to Spanish Law Firm established in Hong Kong recently, we can learn more about the unique incentives offered Preferred by the Spanish Government for a limited period of time, For Those Who report undeclared benefits, rights and other types of assets in Un certain juridictions (including Hong Kong).


Among the several tax Reforms contained in the Spanish Royal Decree Law 12/2012 (Hereinafter RDL 12/2012) approved on March 30th, it Should be pointed out particularly Measures that Could some impact on the taxation of Spanish Companies with subsidiaries in Hong Kong.

First of all, the RDL 12/2012 includes the establishment of a special tax of 8%, exclusive to the year 2012, on dividends and foreign source income derived from the transfer of equity securities of non-resident in Spanish territory.

This measure opens the door for the dividend repatriation with Tax advantages for companies That, DESPITE doing a real business activity abroad, were located in territories with null taxation or tax havens, making it costly to repatriate dividends since a tax point of view.

By This means, That the Spanish companies have a subsidiary in Hong Kong territory That carries on an economic activity, May repatriate the profit Obtained In this territory at an 8% rate, instead of being subject to the overall rate of 30% of the Corporate Income Tax currently in force.

We Consider This measure an opportunity to repatriate the profit earned to this date by companies located in Hong Kong to its holding company in Spain at a very Favourable taxation.

On the other hand, has had another Greater That measure impact in the media has been the voluntary regularization of the tax situation, Also known as «tax amnesty», by Which it May be Declared que no assets and rights not correspond correspondence With The ones Declared by the tax payers Within the scope of the Personal Income Tax («Income Tax for Individuals»), the Corporate Income Tax («Tax») and the Non-Resident Income Tax («Tax on Income Nonresident «).

The main features of the voluntary regularization are:

1. The regularization will only be taxed at a 10% rate, excluding penalties, surcharges and interests for late payment.

Two. The regularization Includes the following taxes: Personal Income Tax, Corporate Income Tax and Non-Resident Income Tax, as others excluding tax and net worth tax on inheritances and gifts.

Three. In order to Apply this declaration it is required the taxpayer That Have Been the owner of the property and rights at the end of the last tax period Whose deadline to submit the tax return had expired before the entry into force of the Royal Decree-Law 12/2012 ( ie December 31st, 2010).

April. The regularization excludes criminal liability for tax Offenses That May Arise from the outcrop of the income That May reveal the ownership of property and rights Declared. However, no refunds regularisations May be requested for verification Routines Within occurred occurred before the entry into force of the declaration of régularisation approved by the RDL12/2012.

May. The régularisation will be Effective until November 30th, 2012. For this purpose, the Spanish Ministry of Finance will approve the model of tax declaration in order to Implement the tax régularisation, Stating the deadlines and points of entry.

Net Craman Lawyers is a law firm providing legal and tax advice in China and Hong Kong since 2004 with offices in Barcelona, ​​Guangzhou and Hong Kong. We can assist you in meeting the Requirements and the special declaration of this special tax.

For more information, Please feel free to contact hkoffice@net-craman.com

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