Taxation in Spain
Dear Investors,
We invite those who pay taxes on Notes in Spain to share their knowledge on how to accurately calculate, declare, and pay taxes on income earned from Notes with fellow investors.
Among things to share, it is important to specify:
- the tax base (amount on which the tax is calculated)
- Tax rate to be applied
- When the declaration must be submitted
- When the tax must be paid
- Any exemptions that might apply to this type of income
We plan to offer income summary reports that will include the most relevant information to help investors with the taxation process. The reports will be available in early January.
Spanish translation below:
Invitamos a los inversores que pagan impuestos por "Notes" en España a compartir sus conocimientos sobre cómo calcular, declarar y pagar correctamente los impuestos sobre las rentas obtenidas por los "Notes" con otros inversores.
Entre las cosas a compartir, es importante especificar:
- La base imponible (importe sobre el que se calcula el impuesto)
- Tipo impositivo a aplicar
- Cuándo debe presentarse la declaración
- Cuándo debe pagarse el impuesto
- Las exenciones que puedan aplicarse a este tipo de ingresos
Tenemos previsto ofrecer informes de resumen de ingresos que incluirán la información más relevante para ayudar a los inversores en el proceso de tributación. Los informes estarán disponibles a principios de enero.
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ismresp Thank you for waiting. Your posts should be approved and visible now.
I insist that Mintos should separate, in the income report for taxes, income from claims from Notes income as their taxation is different between them.
Regarding the above, your feedback has been shared.
Marc Martell In the beginning of 2023 there should be an official tax statement available and in case you would need any additional approval, please let us know.0 -
If you apply for double taxation deductions, you cannot apply for a deduction greater than the maximum amount of taxes that Latvia can withhold to Spanish tax residents according to the double taxation agreement, that is 10% of the taxed regular interest, 0% of capital gains (positive difference between sale price and purchase price), 0% of late payment interest and fees (for Mintos or issuer breach of contract, for the ones coming from the loans backing Notes is considered regular interest).
Also, you cannot apply for a deduction bigger than the effectly paid Latvian tax.
Asking for the refund, to the Latvian Tax Authority, of the amount of taxes that have been or will be deducted in a Spanish declaration or tax return may result in tax fraud in Spain if you finally apply for deduction from Spanish taxes (you can always amend your declaration or tax return even after the submission deadline to prevent this as long as presumed tax fraud has not expired [at the moment, it is 4 years from the deadline to submit the declaration]. If expired, it is no longer needed as you will be free from tax fraud).
If Mintos has withheld taxes over 10% because you have NOT provided proper tax resident information or a tax residency certificate, a tax return should be filled and submitted to the Latvian Tax authority to recover the excess tax. Spanish tax authorities will not refund such tax excess.
If Mintos withhelds your taxes incorrectly, contact with Mintos as soon as posible. Delay in doing that could result in having to fill a Latvian tax return form in order to get back the excess tax or lossing the right to get the excess tax back.
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Reference values for art. 91 IRPF can be found at https://www.tesoro.es/deuda-publica/otra-normativa, "Palabras clave" = "tribut"
Tipo = "Resolución".
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Taxation of claims:
Resolución Vinculante de Dirección General de Tributos, de 16 de Febrero de 2015
https://petete.tributos.hacienda.gob.es/consultas/?num_consulta=V0593-15
This follows my interpretation of Spanish tax law that even if you cannot claim the funds from the borrower because you do not have the loan contract copy signed by the borrower and do not know who the borrower is and have not notified him/she/it the assigment of the claim, the interest and late interest received from the claim or the assignment is taxed the same as if you have lended the money directly to the borrower.
Latvian law (Civil Law) and Spanish "Código civil" and "Código de comercio", are very similar respect the effects of assignment of credit claims and "cesión de crédito" (Latvian law is the one that applies for Mintos Notes and Claims purchased by the investors, independently of the Loan originator or SPV country).
Remember that in Notes, you are lending the money to the issuer, then the issuer purchases the claim and keeps the claim ownership. The issuer promises to repay you as long as the borrower or lending company repays. Interest and late interest taxed as if Notes were not backed by claims or loans. The loans only determine the redemption (capital payment) and interest payment dates of the Notes and the amounts to be paid.
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Lucja (Mintos) do you have any update on when these reports and the certificate of the tax payment to Latvia will be available?
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Hello.
Unlike other platforms/brokers, the isin of the notes does not appear in the tax report. For us it is very important not only to comply with tax obligations such as model 720, but also to be able to relate it to the account statement because the account statement is based on the isin.
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Jaime Facundo Sabater Tabernero, do you think a spreadsheet (e.g. Microsoft Excel file) with ISIN would be enough or it would require a PDF or even an stamped and sign document?
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Marc Martell
Thank you for your questions. We are working on it and the instruction how to do the claim should be available soon in this section: https://www.mintos.com/en/my-settings/tax-report/0 -
Lucja (Mintos) I've downloaded the report and I see that it shows all amounts on January 1st and December 31st. Do you plan to also provide the ability to:
- export a list of all invested notes with their ISINs/information on Dec 31
- provide the last quarter average of the available funds
Both are needed for the modelo 721 declaration
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do you think a spreadsheet (e.g. Microsoft Excel file) with ISIN would be enough or it would require a PDF or even an stamped and sign document?
I think it should be like the fiscal report, a pdf whith a header with the MINTOS data and that contains the user data along with the isin position as of 12/31
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Marc Martell
Thank you for your patience.
We are still fine-tuning the report, and meantime you can request the additional information by contacting us via this form: https://help.mintos.com/hc/en-us/requests/new?ticket_form_id=19000001402330 -
Jaime
Ok, then a PDF with ISINs should be provided. I don't know anything about the specific documents that Agencia Tributaria might ask if "modelo 720" got reviewed, as for modelo 720 I only read the regulation and seen the online form, but I haven't needed to fill it and submit it yet.
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Criteria for late interest and penalty fees taxation for claims and Mintos breaches of contract (late interest and penalty fees for the late payment of the loans corresponding to each Note by the borrower are considered regular interest) has changed, and it is applicable for tax return for the income earned in 2022:
INFORMA AEAT 138283-INTERESES DE DEMORA INDEMNIZATORIOS y 135410-INTERESES DE DEMORA TRIBUTARIOS
Now, they are “Ganancias patrimoniales a integrar en la base imponible general” instead of “Ganancias patrimoniales a integrar en la base imponible del ahorro”.
Box "Otras ganancias y/o pérdidas patrimoniales imputables a 2022" in "Ganancias y pérdidas patrimoniales que no derivan de la transmisión de elementos patrimoniales (a integrar en la base imponible general)": "Otras ganancias y pérdidas patrimoniales que no derivan de la transmisión de elementos patrimoniales".
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I've got a post pending of approval again.
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ismresp
Thank you for bringing it to our attention, your post has already been approved.0 -
Regarding the criteria for late interest and penalty fees taxation for claims. Like any law/regulation it is interpretable. I don't think it's very difficult to argue the "financial nature" of late-payment interest since we are in a situation of assignment of capital to a third party at an interest of x% up to a date and from there at an interest of x%+ and y%.
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Jaime
As far as I know, when the loan is overdue, the regular interest is not any longer generated but only late-payment interest.
So it is not x% + y%, but only y%, where x is the regular interest rate and y the late-payment interest rate.
You can define y as y = x + z, but then z it is not defined as the late-payment interest, instead z would be "a differential" between each type of interest rates.
Regarding you interpretation of late-payment interest and penalty fees taxation in Spain, I would like to agree with you, but the Spanish Tax Agency is very likely that won't.
Interest only can have finantial nature if it is agreed between parties to be paid without a breach of contract from any of the parties. Paying a loan late is a breach of contract by definition, and late-payment interest only is generated when such breach of contract happens, so it has a compensatory nature.
Assignment of capital to a third party only affects taxation if the third party is the responsible for collecting and claming the payments from the borrower, which requires to notify the assignment to the borrower.
That is not the case, as the loan originator was the original lender and it is still collecting the payments and claiming them in court, not Mintos nor the investors. In fact, the assigment contract prohibits Mintos and investors from doing that or notifying the assigment to the borrower.Only in the event of inability of the loan originator for collecting or claming loans the responsibility shifts to Mintos, the investors or a third party.
Moreover, we could try instead to convince the Tax Agency that, when buyback obligation triggers, the difference between the price paid by the loan originator and the one paid by us the investors are capital gains (ganancias patrimoniales asociadas la transmisión de elementos patrimoniales: a integrar en la base imponible del ahorro).
However, in this last case, the Tax Agency could consider that the buyback obligation is in fact a personal financial guarantee for the loan and that, in the contract, we just called it buyback obligation for evading the higher tax rate of late-payment interest (before new criteria tax rates and tax benefits were identical for both) as the loan originator is just paying the debt of the borrower in his/her name.
Imagine that loan interest has a higher tax rate than sales capital gains:
You can try to call a loan in a contract as "sale of money in installments with obligation to sell back to the seller a after a period of time", but the Tax Agency would intepret that it is a loan anyway (Art 13 de la Ley General Tributaria).0
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