Urgent

THE “COMPLIANCE OFFICER” FOR COMPANIES

4-JUL-2015

All companies in Spain, no matter their size, number of employees, will have to hire a “Compliance Officer” or appoint a person in the company to provide this legal service.

This new thing in Spain came over from Common Law countries, such as the United Kingdom or USA, as this system has been implemented there for some years now. Despite it is quite unknown here in Spain, since 1st July 2015, as New Criminal Code came into force, all companies new to be updated and comply with Criminal Code and Corporate legislation.

Compliance Officer merges as a person in charge to supervise and control all the daily legal activities of the company, its employees, in order to prevent major offences to be committed whether by employees or employees on behalf of the company.

As above mentioned, this measure has affected all companies located in Spain, including Ltd, Inc. Or even self employed people who run a business. In small companies, the Compliance Officer might be an employee, being the accountand or administrative recommendable, but having to report to an external lawyer to check if the company comply with the Laws. In bigger companies, the Compliance Officer ust be an external body, preferebly a qualified and certified Lawyer-compliance officer, member of the Law Society and any Compliance Association based in Spain.

This Compliance Officer body became mandatory due to some changes in the Criminal Code and Anti Money Laundering Laws enacted in 2010.
The main tasks will be the following:
Offer legal planning and advice in regards to General Compliance.
Coordinate the different business sectors of the company.
Supervise accountancy and turnover.
Teach employees in order to prevent and avoid offence commission.
Issue a report every month or quarterly with the CEO or Director.
Establish and set a prevention of economical offence scheme/protocol
Set a direct report of offences in case of any suspicion.

Section 31 bis of the new Criminal Code entered this new and crucial job and obligation for businesses in Spain. Along this section we can find the responsibilities in which companies and their administrators may incurr. If the company, or its administrator or manager, or even an employee committ a fraud or money laundering or forgery, among others, the consequence and Sentence which the company may face could be, depending on the amount and responsilibity involved, the temporary closure of the company premises and offices and trading prohibition; the definite closure and liquidation of the business; an economical sanction and fine of thousands of Euros or over a million Euro.

At Bufete Padilla, we have and provide this compliance officer service to self employed people, to small businesses, mid size companies and big ones since July 2015, so any queries you may have don’t hesitate in asking us without any commitment.

 

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Five things Spain’s ‛gag law’ will stop you doing from today.

1-JUL-2015

The countdown has ended. The government’s new Citizen Safety Law went into effect on Wednesday despite widespread rejection from opposition parties and many sections of society.

“Demonstrations will be freer because they will be protected from violent elements,” claims the ruling Popular Party (PP).

But the opposition accuses the government of creating “a police state” because law enforcement officers will have the power to hand out administrative sanctions that were, until now, the sole preserve of judges.

The following are five things that will be limited by the new “gag law,” as its critics call it.
Demonstrating near Congress and the Senate

The law considers an offense any “serious perturbation of citizen security” in front of Congress, the Senate or regional assemblies, even if the legislature is not in session at the time. “But what constitutes perturbing citizen security?” wonders Greenpeace, denouncing that this decision will now be in the “arbitrary” hands of the police. This measure was introduced at the time when social protest movements such as Surround Congress arose in Spain.
Taking photographs of police officers

Video cameras have become commonplace at protests in recent years. And social networks are being used to disseminate recordings that have captured police abuse on more than one occasion, and have later been used as evidence against officers. This will be harder starting on July 1, as the Citizen Safety Law imposes penalties on “the unauthorized use of images or personal or professional information” about police officers “that could endanger their personal safety or that of their families, of protected facilities or endanger the success of a police operation.” Amnesty International has complained about this, noting that journalists and other individuals’ private recordings have occasionally helped report the use of excessive force by the police.

-Stopping a home eviction

“In the name of citizen security, the new legislation bans and criminalizes such common practices as stopping a home eviction,” says PAH, a support association for home loan borrowers in trouble. The PP once went so far as to suggest ties between PAH and the Basque terrorist group ETA. The new law will make PAH’s actions harder, as the police will be able to sanction individuals who “obstruct any authority, public employee or official corporation in the exercise of administrative or judicial agreements or resolutions.”

-Protesting from above

As per the new legislation, police officers may slap fines on anyone found “climbing buildings or monuments without authorization when there is a clear risk of damage to persons or goods.” This article seems tailor-made to stop the kind of public campaigns staged by Greenpeace, this organization notes. “In this case, the offense is committed without the need for disturbing the peace or harming citizen security,” notes a Greenpeace release. It will be enough for the police to consider that “a risk” exists.

-Peaceful resistance and sit-ins

The new law means the end of peaceful resistance, say non-profit groups. The police will be able to fine anyone who refuses to break up gatherings and demonstrations in public places after “the relevant authority” has ordered it.

-Fines of €100 to €600,000

Under the new law, minor offenses will carry fines of €100 to €600, while serious offenses are sanctioned with penalties of €601 to €30,000 and very serious offenses between €30,001 and €600,000.

Font: www.elpais.com

 

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Gabriel PadillaLawyer

THE GENERAL TAXES OFFICE THOUGHTS ON NEW IHT SCHEME

The whole legal system in Spain was waiting for the thoughts and opinion regarding the new appliction of the former illegal IHT of one of the most important Institution or Office, and this is the General Taxes Office (hereinafter DGT).
DGT issued a Resolution after a consultation made last 18th February 2015 by a Spanish Resident who was going to inherit according to a Grant of Probate issued by German Succession Laws as the death occurred in this country where the deceased made his last Will and Testament.
According to the Resolution, the Spanish resident could apply same IHT rules of the region where this person lived, as if the Probate was issued in Spain.
The last 3rd September 2014, as I have previously commented in other articles in our website, the EU Court issued a Resolution which changed completely the IHT application rules in Spain, as this Resolution literally stated that the Spanish Government was not complying with the freedom of capital rules within the EU territory and was discriminating in fiscal terms between residents and non residents in Spain.
This EU mandatory and important Resolution made Spain Government to amend the IHT law in force since 1987 and some other laws in force since 2004 and 2006. This amendment was made through the 26/2014 Act introducing a new Aditional Section which established that EU residents or nin residents in Spain should be treated equally with no discrimination at all in IHT terms, notwithstanding the residence was such territory or if assets were located in such region.
Therefore, successions or donations in which the inhertitor or donator was non resident in Spanish territory, or if succession had to do with any asset located out of Spain, for example, as in the case above mentioned dated in February 2015, which the inheritor was resident in Spain but probate and rights to inherit came from Germany, so as the deceased passed away and granted his Last Will in that Country, in this particular case the Spanish Inheritor could choose to apply the ITH law of the region where most assets where located, or if there were no assets in Spain, which was the case, he could apply the law of his residence luckylly with all the reductions and allowances, but having to submit his IHT Form to Madrid’s Non Resident IHT office eitherway.

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THE UPCOMING INHERITANCE TAX (IHT) APPROVED BY THE GOVERNMENT

The PP party has presented a new Bill of Law at the Parliament, in order to rule how non residents in Spain could apply same IHT reductions and allowances as residents, to comply with the EU Tribunal Resolution since 3rd September 2014 commented in a previous article, wich established that IHT laws application in Spain were illegal and breached the EU Regulations for non discrimination.
This new Bill of Law prepared at Congress would include amendements in different Tax Laws, such as Income Tax Law (IRPF), IHT (ISD) Law, Non Residents Income Tax Law (IRNR) which is being under study for the past month of May.
New rules to avoid discriminations between residents and non residents take into consideration the effective relationship of the tax payer wih the regions where IHT or Income Tax must be paid and also with the nature or kind of asset to be inherited.
In case of an Inheritance, legacy or any similar inheritance matter, if the deceased person was resident in any EU or CE territory, the non resident tax payer could apply the same IHT allowance or reductions as if he/she was resident in this particular area, where most assets are located.
If the decased used to be resident in one of these regions, the non resident tax payer, who has address at any EU territory, would also apply for the same IHT reductions and allowances. Life insurance policies will apply IHT reductions of the region where Insurance company has got its domicile.
The IHT liquidation and return forms will have to submitted to the Non Residents Tax Office located in Madrid.
Regarding Wealth Tax, the future Law will establish that tax amount to be paid by the non resident will be calculated according to the region where most of the assets are located.

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SPANISH STATE TO REFUND 200M€ TO NON RESIDENTS DUE TO ILLEGAL INHERITANCE TAX CHARG

The Spanish State has charged over 700 million euro in the last eight years for the Inheritance Tax (hereinafter IHT) which has been applied directly to non resident citizens. However, according to first estimations about 200M€ will be refunded to this non residents, according to the EU Tribunal Resolution dated 3rd September 2014 which stated that Spain was breaching and not complying the EU Laws which established a ban to avoid discrimination in tax and fiscal terms between residents and non residents.
The discrimination was found when applying IHT to citizens, as in Spain different regions has got self power to legislate in order to establish and set taxes, tax deductions, exemptions or allowances regarding IHT. The wrong point was discovered when residents were charged even 90% or 99% less tax payment liabilities compared to non residents in some areas, for instance, according to family relationship or connection to the deceased, spouses and children could have an IHT allowance up to 99% in Asturias, Baleares, Cantabria, Madrid or Valencia Regions. Nevertheless, non residents were not applied at all this deductions and allowances, but had to declare the IHT to the National Taxes Authorities (AEAT) and pay around 34 or 40% tax instead. For example, for a Probate or Inheritance occurred in Madrid as the properties are located in this City, the deceased passed away and was resident in Munich, Germany, and the inheritor, his son, lives in Murcia, in this case IHT would be as low as 1%, but if the inheritor was resident in Munich the IHT would increase up to 30%.
In next articles we are explaining how the Government is planning to change the IHT laws in order to comply with the EU Resolution and Regulations, by charging the same no matter if you are resident or non resident.
On the other hand, Taxes Authorities in Spain are open to refund to those who claim and are entitled to this refund, providing that inheritors having IHT are Spouses and Children and within the last 4 years, otherwise refund would not occurr for not matching legal requirements. In Bufete Padilla Law Firm we could guide you and claim for your refund and your rights if you are one of these affected people.

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Gabriel PadillaLawyer

THE NEW EUROPEAN INHERITANCE RULES

The EU Inhiterance and Succession Regulation was drafted, passed and enacted by the European Parliament on the 4th July 2012, by the 650/12 EU Regulation. This new Law will be in force since next 17th August 2015 and will only be applicable in the EU States which are member of the Regulation and signed for its purpose. Denmark, United Kingdom and Ireland are excluded, but their nationals who live in signing countries of the EU will be obliged by this Law.
This EU Regulation will only be applicable and enforceable in the signing EU countries, with the exceptions of Denmark, Republic of Ireland and United Kingdom, but citizens of those countries residing or last living in countries such as Spain, Portugal, France or Italy will be obliged by this law.
Donations will not be included in this Rules, but only Grant of Probate or Inheritance, as this Regulation will establish which is the applicable Law in an International Succession when there is lack of one of this elements: nationality, residence and location of assets of the deceased.
The most difficult issue to prove of the above three is the residence or “domicile”. The first prove factor is the own statement from the testator who must set clear when signing the Will. Another prove key to show the residence is the Padron Certificate, which is issued by the Local Council through the Local Census department.
An important matter of this law is section 34 which regulates the law forwarding system. In Spain, law forwarding is ruled under section 12 of the Civil Code and there are also several Supreme Court Resolutions, such as the important issued on 23 September 2002, which stated that when there is no Will or Testament, there is only one applicable law for the inheritance when all the assets remain in Spain, if this is not the case, the applicable law would be the one that the deceased person had just before passing away.
Section 34 recommends to grant a Will to avoid any hassle when establishing the Intertanional Law conflicto, declaring expressly that the testator wishes that the Law for his/her Succession will be his/her national Law.
Section 22 states that despite the deceased granted a Will, for example in Spain, is highly advisable to provide a succession title from the deceased country, such as Grant Of Probate for the UK, or Erbschein for Germany, amongst others. Having provided this, we make sure that the last Will is real and effective.
Likewise, section 22 says that the testator/testatrix may choose. although with some limitations, which law is going to be applied to the succession. He/she may choose between the national Law before passing away, or if this person has got double nationality he/she might also choose one of the two different laws, or the law where he/she effectively live.
The EU Succession Certificate will only by applied and issued by Court in the Town/City located at the country where the deceased passed away.
Only inheritors or the executor appointed in the Will might apply for this UE Succession Certificate, and never a bank or a creditor, altohugh the Certificate is not mandatory.
On the other hand, section 69 establishes a simplifying effect, which the fact that there will only be one document, only one Succession title, translated and apostilled/legalized, so Last Will certificate will no longer be needed in Spain, as this succession title will be enough to declare and establish the Valid Will and Legitimate Inheritors.
To sum up, from 17th August 2015, all residents and non residents with assets, properties, bank accounts located in Spain, no matter their nationality, will need to check out their Wills, to make sure if the Applicable Law clause is properly clarified or not. If you want to avoid more paperwork, more costs and time waste for your future inheritors is better to grant a new and definite Will/Testament before a Spanish Notary, with the help of your solicitor-lawyer if you wish.

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