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The Personal Income Tax is a personal tax that taxes the income of natural persons taking into account their nature and their personal and family situation. Check https://offshorecitizen.net/ for more information.

This tax is levied on the income generated by natural persons residing in Spain during an economic year (one year).

Tax income as an indicator of the economic capacity of each citizen

The rent is considered a tool to measure the economic capacity of each resident. This tax has a progressive nature, that is, more individuals who receive more income pay more.

In contrast to the taxes that are taxed with a fixed percentage (which are regressive in the vast majority of cases), the IRPF applies a different tax depending on each of the different income brackets.

What does the concept of rent include?

Although the main source of income or money of most individuals comes from their salary, the concept of income covers much more.

They take into account the income from work and economic activities, capital returns, such as stock dividends or interest generated by bank accounts, as well as capital gains and losses.

At the time of making the income statement, there are deductions for certain expenses set by the State and applicable to all residents in Spain who have income.

The Autonomous Communities, for their part, may apply additional deductions for their residents, as established in their competences.

How do VAT and Personal Income Tax differ?

For starters, the Value Added Tax (VAT) is an indirect tax. There are several types of VAT, with the aim that the products of first necessity have a lower tax rate than those that are secondary or luxury goods.

The VAT is a proportional tax and has a regressive effect on the income of consumers, while the IRPF is progressive.

Why is VAT regressive? Because people with less income have to allocate a greater percentage of their income to acquire a basket of the purchase of basic products than those individuals with high-income levels.

Another of the most notable differences between VAT and IRPF lies in the fact that the first is an indirect tax, while the second is a direct tax (directly taxes the income of natural persons).

Do I have to pay personal income tax if I do not receive income of any kind?

No. The IRPF taxes the income of natural persons. In case you do not receive any type of income, or from work, rental income or stock dividends, you will not have to pay the IRPF. If the opposite situation occurs, you will be obliged to pay.



Image result for cdtiLast Friday, October 24, the board of directors of the Center for Industrial Technological Development approved a total of 74 projects totaling 45.21 million euros in its Board of Directors.

Of these projects, 43 are individual R & D projects , 27 correspond to the Innovation Hotline , 3 will receive aid from the Global Innovation Line program and one internationalized project.

Of the 77 companies participating in these projects, 66% are SMEs and 31% are from medium-high technology sectors. In addition, 45% are companies that receive CDTI financing for the first time.

It is estimated that the sum of these initiatives will generate 147 direct jobs, as well as 282 indirect jobs, which means 429 jobs in total.

The grants are co-financed with FEDER funds dedicated to the promotion of business R & D + i . 14 projects will be co-financed with the Technological Fund, seven projects will have co-financing from the ERDF Madrid Operational Program and a project with the ERDF Navarra operational program.

What is loan insurance? | Loans Quebec

Image result for loan insurance

As you get older, it’s increasingly recommended to start thinking about insurance. Life insurance, auto insurance, home insurance. It’s best to think about it while you’re still young so you can enjoy it later.

Loan and credit insurance, otherwise known as creditor insurance or debt insurance, can be used to repay the balance of a loan in the event of illness, accident, disability or sudden death. Thus, if you become unable to work because of one of these circumstances, your insurance will help you cover what you owe to your lenders or creditors.

However, it is important to know that loan insurance varies from one loan to another, which means that you must have a separate insurance policy for each loan you have. The terms of a mortgage insurance policy will be different from those of a credit card balance insurance. So before taking out loan insurance, it is important to understand your options.

Make the difference between a real loan insurance and a scam

When you plan to apply for a loan and obtain insurance, you must be able to distinguish an official policy from the policy of scammers who claim to be lenders.

Unfortunately, this type of scam is happening all over the country. This usually happens when someone does not do enough research, usually online. They will have a well-presented website that offers all types of interesting loans, with low interest rates, good repayment plans etc. The borrower does not do enough research on the lender and asks for a loan. In return, the company says it will provide the loan on the condition that loan insurance be paid in advance since the “lender” takes a big risk. The potential borrower often needs financing for something important, so he accepts by providing all his personal and banking information.

Here is the problem. No legal lender will request a payment in advance. In fact, asking for a type of insurance or security deposit before a borrower receives a loan is illegal. If you are asked for it and you pay, you will not only lose the deposited money, but your banking information could be compromised. You will be told that you will have your loan quickly and you will not hear about it. That is why it is extremely important to do good research before deciding to borrow. Make sure you always search the Better Business Bureau database to see if your lender has a good reputation.

Generally, you can get good insurance for your loans through insurance companies, brokers or agents and lenders themselves (banks and traditional financial institutions).

Since loan and credit insurance is not always required, if you wish, you will need to give the provider verbal, written or electronic consent to receive the policy.

Mortgage insurance

When potential homebuyers can not make a down payment of more than 20% of the home price, which is common, lenders will require that they have default mortgage insurance. In Canada, the minimum down payment required for a house at a cost of $ 500,000 or less is 5%. The insurance costs will cover all payments that would be unpaid by the borrower, thus protecting the lender’s investments and offering the client a lower interest rate.

Initially, the borrower will have to pay an insurance premium that depends on the amount of the down payment. For example, a down payment of 5% to 9.99% of the total value of a mortgage will require a premium of 3.6% of the value of the home. In Canada, there are three companies offering default insurance: CMHC (Canadian Mortgage and Housing Corporation), Genworth Financial Canada, and Canada Guaranty Mortgage Corporation.

Credit Balance Insurance

<strong>Credit Balance Insurance</strong>

When you are approved for a new credit card, the company you signed up with will offer credit balance insurance. If you have to lose your job, get sick or have another type of injury that prevents you from working, this type of insurance will cover between 5% and 10% of the monthly balance of your credit card bill for 10 to 24 months. If you become physically disabled or die, the insurance will cover your entire unpaid balance or up to a specified amount. Ask your credit card company to see if you qualify for credit balance insurance.

Critical illness and disability insurance

<strong>Critical illness and disability insurance</strong>

Critical illness insurance will help cover the rest of your loan and credit payments in the event of critical illness that would prevent you from working. The complete list of diseases will be specified in the terms of your insurance policy.

However, there are several specific diseases that are not usually covered if you have them before applying for this type of insurance.

Disability insurance, on the other hand, will not necessarily cover the full cost of your loan and credit bills. Instead, the minimum balance of each payment will be covered in case of illness or accident that would make you physically disabled and unable to earn income. This policy will only last for a certain period of time, and once the coverage period ends or you recover your disability, you will still be responsible for the remaining balances on your loan or credit. As with other types of insurance, you will qualify for critical illness or disability insurance based on the conditions set by the insurance provider.

Life insurance (for loans and credit)

Not to be confused with a typical life insurance, in the event of the death of an insured borrower, the insurance provider will use a portion of the “death benefit” or the total value of it to pay the balance of his loan or its credit product. The premium you pay to your insurance provider will vary depending on the type of loan that needs to be paid. However, the amount that would be withdrawn from the death benefit will decrease as you continue to make payments and reduce what is left over from your loan debt.

For this reason, it is very important to note here that your family or beneficiary will not receive the full death benefit if your loan has not been repaid at the time of your death. So, if you want to leave a separate amount to your loved ones as a result of your death, you will have to pay a separate life insurance policy to get there.

Is loan insurance adequate for you?

All types of insurance are not mandatory but it can be very beneficial for you and your family to consider them. While you are in good physical and financial health, loan insurance may seem unnecessary. However, the payment of a premium for any type of insurance is the same principle as creating an emergency fund in case unforeseen situations arise, be it financial or medical.

There are of course advantages and disadvantages to opening a loan insurance policy. For example, loan insurance can help protect your credit rating in case you can no longer make your payments yourself. On the other hand, not everyone is eligible for all types of loan insurance. Your application may be rejected if you are self-employed or work only part-time. Pre-existing medical conditions such as asthma or high blood pressure will generally not be covered by a critical illness insurance policy.

Given all of these factors that need to be considered before applying for any type of insurance, including loan insurance, you should do your research, based on your specific needs, to determine what insurance is right for you.

Variable Rate Mortgage vs. Fixed Rate

Image result for fixed vs variableThere has always been a debate about variable and fixed rate mortgages. Fixed rate mortgages do not usually have the same type of risk as floating rate mortgages, but both tend to cost more than the alternative. It’s hard to decide what to do.

Do you often take risks? Do you prefer to keep things safe and pay a little more for a kind of insurance policy? Obviously, it is advisable to consult your lending institution for the best option for you, but in the meantime, it would be easy to make an appointment for a mortgage application with some basic knowledge about your pricing options.

When you make your mortgage payments, you make payments on principal and interest as well. With a fixed rate mortgage, you make the same payments every month for principal and interest. It is possible that banks offer different fixed rates, but still very similar. The fixed rate is determined by the economy and the prime rate (central rate of bank loans) at the time of your loan. It is fixed, which means that all those who have applied for a fixed rate mortgage will have the same rate. When you are bound by a fixed-term contract (usually 1, 3 and 5 years) the interest rate will not change according to all economic factors. These rates are ideal for individuals who are budgeted in advance and will not be able to make different payments each month. However, they will probably end up paying more interest. On the economic side, with a fixed rate mortgage, you can already predict an increase in interest rates in the coming years.

On the other hand, with a variable rate mortgage, it is possible to save money in the long run unlike the case of the fixed rate. The variable mortgage rate fluctuates with the prime rate of the central bank. The central bank adjusts the prime rate according to various economic factors. This means that the interest rate on your mortgage can change, given the fluctuation of the prime rate. So, if a budget is not absolutely necessary and there is more room to take certain risks, a variable rate may be the right option.

It is important to know that you are not completely constrained and limited to the type of rate you choose for the duration of your mortgage unless you believe that you can repay it within a number of years. It may be interesting for you to use a mortgage calculator to get a better idea of ​​how you fit in with these changes. Depending on the length of time you decide to use (usually 1, 3 or 5 years), you can renew your loan and try another type of rate. For example, if your money is limited when you get your first mortgage and you need to constrain yourself to a strict budget for the future, you can opt for a 3-year fixed rate mortgage.

Unless you have a stroke of luck and win the lottery or have a very high-paying job, it is very likely that you will not succeed in repaying your entire loan in 3 years, however, the possibility of having more flexibility is very big. Perhaps during those years, you received a salary increase or were able to repay more and take the risk that includes the variable rate. As mentioned earlier, if you opt for the floating rate, you may save more money compared to a fixed rate, but you will probably have to pay even more depending on the rate of preference from the central bank. It is a risk that you must be ready to take.

Whatever the rate you choose, it will have to fit well with your financial lifestyle; If your financial situation allows you to take risks, the adjustable rate mortgage could be the right option for you. If you do not want to take a risk and you prefer to make the same monthly payments each month, then go for a fixed rate mortgage. In the end, no matter what choice you make between a variable rate mortgage or a fixed rate mortgage, the bank will help you make the right decision for you.

What main news brings the income statement for 2015?

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It’s here. On April 6, a new settlement period for the income statement opens and this year with many changes. In theory, a large part of taxpayers will pay less taxes. They already began to notice it in their payrolls at the beginning of 2015 and with the following adjustment of July of that same year, but now it is when it is necessary to compare what was paid with the withholdings with all the income and deductions, and in this year, there are many novelties .

All these changes came into force in 2015, but many of them have gone unnoticed or not applied – as it happens with exempt minimums – until the time comes to confirm the draft or to use the help program (FATHER) that this year will generate more doubts than in previous years.

Talking about all the news would take us to fill many pages. Therefore, we point out the most important ones, due to their economic relevance or because they affect all or a large part of the taxpayers:

Deductible expenses and reduction for obtaining work income

Deductible expenses and reduction for obtaining work income

This year, the general reduction of 2,652 euros disappears, due to the achievement of labor income, whatever the net positive return, and whatever the amount of “other income” received. But a new deductible expense of 2,000 euros is approved for other expenses. This expense will be increased by another 2,000 euros annually, in the case of unemployed people who accept a new job that requires a change of residence, as well as an increase in the amount of 3,500 euros or 7,750 euros per year for the case of disabled active workers according to the degrees of their disability.

The dividend exemption is deleted

The dividend exemption is deleted

Dividends and participations in profits obtained by having shares in any type of entity were exempt with a limit of 1,500 euros per year. This exemption is suppressed since 2015. Dividends are already subject to a withholding when you collect it, so the change is that if last year you were paid back these advance payments, this year will not be like that.

Income from work in kind

Everything that your company gives you in kind, such as restaurant checks or life insurance taxed as work income. There are only two exceptions:

  • The amounts allocated to the updating, training or recycling of the personnel employed, when they are required by the development of their activities or the characteristics of the jobs.
  • The premiums or fees paid by the company under an accident contract or civil liability insurance contract.

Important changes in rental agreements

For the owner, a single reduction of 60% of the net declared return derived from the lease of real estate intended for housing is fixed. Until last year there was a 100% reduction when you did it to under 30s.

For the one who rents, the deduction for rent is lost for all contracts signed as of January 1, 2015, that is, it is fiscally equated to the purchase of a habitual residence that lost the deduction on January 1, 2013.

Modification of reduction limits for contributions to social security systems

The maximum limit of reduction in contributions to social security systems has been modified. Thus, the lower of the following amounts will be applied as a reduction:

30% of the sum of the net income from work and economic activities received individually during the year. The increase of this limit for taxpayers older than 50 years, which fixed it at 50%, is eliminated.

8,000 euros per year for all taxpayers. The limit previously set at 10,000 euros is modified, or 12,500 for those over 50 years old.

Contributions to spousal social security systems are also modified. This limit becomes 2,500 euros per year, instead of the 2,000 existing in the previous version of the Law.

Minimum of the taxpayer

Minimum of the taxpayer

The taxpayer’s minimum is raised. Moving from the amount of 5,151 to 5,550 euros. Likewise, the amounts are raised in reference to the age of the taxpayer. Thus, when the taxpayer is over 65 years of age, the amount of the minimum will be increased by 1,150 euros per year. Moving from 6,069 euros to 6,700 euros with the reform.

When the taxpayer is over 75 years of age, the amount of the minimum will be increased additionally by 1,400 euros per year. Moving from 7,191 to 8,100 euros with the reform.

The minimum is also raised by descendants. For the first child goes from 1,836 euros to 2,400 euros. For the second goes from 2,040 euros to 2,700 euros, the third from 3,672 euros to 4,000 euros, and the fourth and following from 4,182 euros to 4,500 euros. When the descendant is less than three years, the amount will increase by 2,800 euros per year (before the reform was 2,244 euros).

5 reasons to invest in real estate

Related imageIn 2015, the Investigator’s Pulse Global survey, conducted by BlackRock, indicated that only 16% of Mexicans invests in real estate. You may wonder then, why do some people insist that it is a good investment?

Investments in real estate are very reliable because they generate tangible value and competitive returns. According to data from the newspaper Reforma, in 2017, the price of housing, at least in Mexico City, doubled its value compared to the previous 5 years. This represents an annual growth rate of 15%, which exceeds inflation, GDP and reference rates (an indicator that reflects part of the country’s economic conditions); in a considerable way.

Several analysts say that this growth is due to a real estate bubble; however, there are many indicators that allow us to affirm that the real estate market is attractive and stable. This is due, among other factors, to the concentration of economic activities, the price of land, the legal aspects of construction, the guarantees of mortgage loans and the supply and demand of real estate; factors why investing in real estate may be a good idea. Here we talk about each one of them.

1. Concentration of economic activities

Although the economy is growing at a low rate, estimated at 2.3%, large cities have an important economic development, which implies some stability for companies and employees, who remain in the same places of work.

For example, Mexico City has 17.1 million inhabitants, but it is estimated that, every day, more than two million people travel from the neighboring states to the city to work or study. This represents a kind of daily migration to the city, which, in turn, motivates a definitive migration.

For its part, the Conapo has registered that, in the last 10 years, at least 2 million national migrants and nearly 100 thousand foreigners have settled in Mexico City. It is expected that this figure will continue to grow in the near future and, therefore, more places will be required to establish themselves.

2. The price of landRelated image

The price of land increases to a greater extent in urban centers where there is a shortage of space for construction. The land available is not only quoted in square meters, but in cubic meters, that is, the price of the land is determined depending on the number of floors that can be built. For example, in Mexico City, in the areas near Paseo de la Reforma, the prices of the departments reach figures of up to 100 thousand pesos per square meter.

3. Legal aspects of construction

In many parts of our country, building regulations indicate that buildings must have the highest standards of quality and safety, due to the seismic risk. As a result, more time is required to carry out procedures, planning and construction; better materials and better trained workforce are needed; which increases the value of the house.

4. Mortgage loans: real estate bubble control

Image result for mortgageAfter the various crises caused by mortgage loans, especially in the United States, the regulations of the Mexican financial system and the financial entities themselves have established stricter control measures. When granting a mortgage loan, banks are obliged to provide important economic guarantees to the Bank of Mexico to guarantee the liquidity and stability of the system.

According to Leopoldo Riquelme, marketing and business strategist, we are far from falling into a mortgage bubble, like the one that happened in 2008 in the United States, which originated, among other causes, due to the granting of NINJA loans (No Income , No Job, No Assets). That is, people without income could request more than one mortgage at the same time. We are also far from seeing in our stock market “junk bonds”, which transfer the risk of mortgage default from one financial institution to another.

5. Law of supply and demand

It is evident that, for example, in Mexico City there will be a high demand for housing for a long time. We can see the incessant construction of real estate developments that are even sold in pre-sale, that is, before finishing its construction.

On the other hand, after the September 2017 earthquakes, Alejandro Kuri, president of the Mexican Association of Real Estate Professionals (AMPI), affirmed that the sale and rent prices were maintained after an immediate demand was generated for more than 10 thousand homes. He also assured that less than 1% of real estate agents were affected and the sector will have a growth of 4%, which has been maintained for the last 4 years. This stable growth is an indicator of a healthy market and far from a mortgage crisis.

Due to these 5 reasons, in 2018 we will have a solid property market in which we can invest and obtain very good returns. If you think that to invest in real estate you need large sums of capital, do not worry, in our next articles, we will show you that there are real estate investment options for all kinds of budgets.


Image result for industrial competitivenessThe Ministry of Industry, Energy and Tourism has published today in the Official State Gazette an order modifying the basis for granting financial support to industrial investment within the framework of the public policy of reindustrialization and promotion of competitiveness industrial.

The purpose of the financing is to favor the development of strategic companies and projects, stimulating innovative industrial initiatives that contribute to the generation of employment and the increase of exports. This financing is granted through two calls, REINDUSTRIALIZATION AND PROMOTION OF INDUSTRIAL COMPETITIVENESS, which you can learn more in detail here.

Order IET / 619/2014, of April 11, which establishes the bases of the calls is modified in the following terms:

Article 9.2: “If the date of constitution of the applicant is the year in which the call is made or the previous one, the amount of the loan to be granted may not exceed three times its own funds. This limit is set five times to the applicant’s own funds ”
The own funds will be calculated as stated in article 19.4

Article 19.3 and 19.4 are also modified. In the case of requests with the same score, the application that has been presented before will have preference. The weights for companies constituted in the year of the call, or the immediately previous one, also vary.