tag:blogger.com,1999:blog-36507102798738529462020-08-11T14:23:17.591+02:00Lost in Sant CugatA blog about our life in Sant Cugat between 2007 and 2015, strange discoveries, amusing local news, politics, economics and cute stories about kids.santcugathttp://www.blogger.com/profile/03954580358605135521noreply@blogger.comBlogger650125tag:blogger.com,1999:blog-3650710279873852946.post-90900291946323324822017-12-23T20:10:00.000+01:002017-12-23T20:10:31.647+01:00New Wikia for collecting expat experiencesI created a Wikia (essentially a standalone wikipedia) for collecting posts and issues for helping people who are moving to Spain.<br /><br />Find it here and contribute if you want:<br /><br /><b style="background-color: white; color: #666666; font-family: &quot;Trebuchet MS&quot;, Trebuchet, Verdana, sans-serif; font-size: 13.2px;"><a href="http://spainexpats.wikia.com/" style="color: #888888; text-decoration-line: none;">spainexpats.wikia.com</a></b>santcugathttp://www.blogger.com/profile/03954580358605135521noreply@blogger.com0tag:blogger.com,1999:blog-3650710279873852946.post-53837736716106523382017-09-21T11:58:00.002+02:002017-09-21T12:06:34.792+02:00Referendum etcSince we lived in Catalonia for eight years and we still have many friends there, I feel that I am at least somewhat qualified to have an opinion. If I still lived in Catalonia, I would vote no in the referendum, but I would definitely go and vote, since I believe that in a democracy, people should be allowed to express an opinion without fear for arrest. If a significant majority wants to be independent, so be it.&nbsp;<br /><br />It's been very sad watching the escalation between Catalan separatists and the central government. If Rajoy had been trying to create the conditions that make an independent Catalonia inevitable, he couldn't have done a better job. Catalans are very proud of their nation, even if they aren't necessarily all separatists. <br /><br />Sending the Guardia Civil (which played a significant role as Franco's enforcers during the dictatorship) means alienating the people who would have actually supported a unified country. In addition, trying to solve this with heavily armed police means that at some point someone will probably get killed, and then there will be reprisals, etc. <br /><br />I'm actually reading a book on successful and unsuccessful negotiations, and unfortunately the PP and the current Catalan government perfect fit the role of the worst possible negotiators.<br /><br />I don't see what endgame Rajoy could possibly be hoping for... even if he stops the referendum, sends thousands of people to jail, and rips up the devolved government in Catalonia, what then?santcugathttp://www.blogger.com/profile/03954580358605135521noreply@blogger.com2tag:blogger.com,1999:blog-3650710279873852946.post-37370570356729983022015-08-25T00:17:00.001+02:002015-08-25T00:17:05.281+02:00Bye byeNow that I'm not living in Sant Cugat anymore, I should probably find myself another blog. Part of the reason I started with the blog in the first place was to have a semi-anonymous place to vent about my feelings and frustrations. I don't feel the urge to whinge as much anymore, which is probably a good thing.<br /><br />Anyway, good bye and thanks for reading.santcugathttp://www.blogger.com/profile/15875225582566483983noreply@blogger.com5tag:blogger.com,1999:blog-3650710279873852946.post-37913815182602911632015-07-29T09:03:00.001+02:002015-07-29T15:11:02.738+02:00Domestic help: 12 or 14 payments per year<p>Spain traditionally has had 14 pay periods: once per month and one summer and Christmas “extra”. The extra isn’t really “extra”, it is just dividing the annual salary into different fractions.</p> <p><strong>HOWEVER</strong>, 12 payments is significantly easier from an employer’s paperwork perspective:</p> <ul> <li>Social security calculations are easier, since the deductions for the “extra” is calculated differently.</li> <li>At the end of the contract, you need to pay out the proportional amount of the upcoming “extras”. This is done in a really weird-ass way (accrued simultaneously over the entire year), and effectively gives the employee an extra month’s pay.</li></ul> <p>So next time you hire someone, forget the 14 payments with extra, and just pay once per month. </p> santcugathttp://www.blogger.com/profile/15875225582566483983noreply@blogger.com1tag:blogger.com,1999:blog-3650710279873852946.post-68824136423014751932015-07-13T20:01:00.002+02:002015-07-13T20:01:25.147+02:00Modulo 720, Wealth Tax and IRAs, 401k in SpainS<span style="font-family: inherit;">pain has three asset-related filings that you are supposed to do every year. The ETE (which is only for people with &gt; 1 million euros abroad), the modulo 720 and wealth tax.</span><br /><span style="font-family: inherit;"><br /></span><span style="font-family: inherit;">The wealth tax and Modulo 720 are filed annually: the 720 is just informational, but with huge penalties, and the wealth tax might actually make you pay something. The 720 is designed to be a superset of the wealth tax, so if you file a 720 and later file wealth tax with smaller numbers, you will probably get a letter from the tax department.</span><br /><span style="font-family: inherit;"><br /></span><span style="font-family: inherit;">Pensions are generally not included on these statements as long <a href="http://jullastres.es/wordpress/?p=764">as the following hold true</a>:</span><br /><span style="font-family: inherit;"><br /></span><ol style="background: rgb(255, 255, 255); border: 0px; color: #333333; line-height: 24px; margin: 0px 0px 24px 1.5em; padding: 0px; vertical-align: baseline;"><li style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline;"><span style="background: transparent; border: 0px; font-family: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">That contributions are unavailable until a contingency covered by the plan occurs.</span></li><li style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline;"><span style="background: transparent; border: 0px; font-family: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">The contingencies covered can only be: age, extreme poverty, being widowed or orphaned and disability.</span></li><li style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline;"><span style="background: transparent; border: 0px; font-family: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">Once the contingency has happened and the contributions are withdrawn, the income is taxable</span></li></ol>The consensus seems to be that Traditional IRA and 401ks qualify under these assumptions (although technically IRAs and 401ks can be redeemed with a tax penalty, this gets glossed over).<br /><div><br /></div><div>Roth 401ks would be trickier since they are not taxable when withdrawn. There might be other valid arguments about why they might not be declarable (eg during the first five years), but I don't know if there is a consensus on this.</div><div><br /></div><div>Always talk to an tax expert before filling out a 720 form (especially filing an amended 720, which is really just an invitation to get slapped with a huge fine).</div>santcugathttp://www.blogger.com/profile/15875225582566483983noreply@blogger.com0tag:blogger.com,1999:blog-3650710279873852946.post-28992307121186516002015-07-12T19:59:00.003+02:002015-07-12T19:59:52.027+02:00Odious debt and the Greek referendumSeems like the referendum has made any deal that is "worse" than what was voted on by the people impossible.<br /><br />Even if the Greek government surrendered completely and accepted whatever deal anyone was willing to offer, its clear that the deal would not be considered legitimate since it was worse than what the Greeks rejected in their referendum.<br /><br />Any debts incurred by this new deal could be considered "<a href="https://en.wikipedia.org/wiki/Odious_debt">odious debt</a>", since it was obviously against the will of the nation, and so for the creditors, there is really no upside in offering any kind of deal.<br /><br />When the creditors talk about "trust", they are clearly worried that Greece would repudiate the deal as soon as the funds are released.<br /><br />It's also clear that as soon as banks are reopened, no one would leave a single Euro in a Greek bank anymore, so the cost of recapitalizing the Greek banks would be absolutely horrendous.santcugathttp://www.blogger.com/profile/15875225582566483983noreply@blogger.com0tag:blogger.com,1999:blog-3650710279873852946.post-50188340280342163582015-07-12T19:55:00.003+02:002015-07-12T19:55:51.172+02:00The end of consensus at the EUThe biggest fallout of the Greek debacle is going to be the shattering of the illusion that the EU could be run by unanimous consensus. In the past, the EU has always been able to paper over its differences and arrive at a messy solution, but still acceptable to all members.<br /><br />The reason for this structure has been that since the EU is an association of sovereign governments, enforcing the will of the majority of EU members against a minority would violate the spirit of the whole arrangement, and we go back to the strong enforcing their policies against the weak, which was what got Europe into the whole mess of wars of the last century etc in the first place.<br /><br />Given the gulf between different members of the EU, it's basically impossible to resolve this situation at an EU level, the only result can be that nothing happens at the EU levels, and individual governments sort out the mess on their own.santcugathttp://www.blogger.com/profile/15875225582566483983noreply@blogger.com0tag:blogger.com,1999:blog-3650710279873852946.post-1327599874565584242015-07-06T01:39:00.003+02:002015-07-06T01:39:25.481+02:00When will Germany realize it can't kick Greece out of the Euro?It's funny how German has been acting all godfather-like, saying effectively, pity if your country got kicked out of the Euro. At some point the Germans will have to realize that this is in fact a totally empty threat that would require the Greeks to voluntarily leave.<br /><br />Anything crazy the EU might want to do can't work since it would require unanimous consent, which Greece would obviously reject.<br /><br />The main shit-hits-the-fan moment will come if the Greek government decides to take control of the Greek Central Bank. The Greek Central Bank (like all European central banks) is supposed to be "independent", and effectively be under the control of the European Central Bank.<br /><br />However, as much as the ECB would like, Hungary has already shown that it can take control of their central bank when the president of Hungary sacked the board of the Hungarian Central Bank and replaced everyone with his own supporters. The ECB had a conniption and has spent the last 3 years sending strongly worded letters it Hungary, which h<a href="https://www.blogger.com/"><span id="goog_71002599"></span>as basically told the ECB to fuck off.<span id="goog_71002600"></span></a>&nbsp;Nothing has happened, and the economy of Hungary has done pretty well, and the move by the president to force all Swiss-franc mortgages to be re-denominated in local currency is fucking genius in hindsight.<br /><br />The nuclear option for the Greek government at this point would be to replace the board of the Greek Central Bank and start printing Euros. The Greek government actually has a pretty strong case that the Greek government debt isn't really that much more unsustainable than any other of the highly indebted European countries, under even relatively unoptimistic growth assumptions, and that the ECB cutting off Greece is a violation of the duties of the ECB.<br /><br />Germany is about to learn the hard way that once the veneer of civilization is removed, debt collection only works at the point of a gun. At the end of the day, people pay their taxes and debts they know that at some point, if you keep ignoring all the warnings, someone with a gun will come and take your stuff. If people realize that the worst they'll get is a strongly worded letter, it doesn't take a genius to figure out what will happen.santcugathttp://www.blogger.com/profile/15875225582566483983noreply@blogger.com1tag:blogger.com,1999:blog-3650710279873852946.post-77669398163827546762015-06-29T09:38:00.001+02:002015-06-29T09:44:24.803+02:00So much for a Greek-exit firewall<p>European stocks are set to drop about 2.5% this morning. With a total capitalization of about 11 trillion dollars, this represents a paper loss of about 275 billion dollars in the European stock market alone.</p> <p>The biggest cost to the rest of Europe is going to be a break of faith in the European governance and leadership. The fact that they would actually let the entire economy of a member of the EU crash and burn over a relatively minor issue of economic philosophy (whether is better to cut a measly 1 billion in spending or raise taxes by the same amount) shows an amazing lack of responsibility and solidarity.</p> <p>This will probably go down in history the world’s costliest game of chicken gone wrong…</p> santcugathttp://www.blogger.com/profile/15875225582566483983noreply@blogger.com0tag:blogger.com,1999:blog-3650710279873852946.post-59197227705003528592015-06-28T07:07:00.001+02:002015-06-28T07:07:55.568+02:00Reality of the Cuban Medical System<p>We have a relative living in Cuba who has recently become very ill, and we’ve been absolutely shocked at the care she has been getting. When Michael Moore praises the Cuban medical system, he really had no fucking clue as to the kind of care normal Cubans actually get.</p> <p>Cuba has one health care system for foreigners and a very different one for Cuban citizens. Cuba has a “health export” industry for foreigners and diplomats, with a modern hospital that provides world class medical care at very low prices. </p> <p>However, Cuban citizens (this includes even people who have gotten citizenship in other countries… the government will consider you Cuban if it says Havana for your place of birth) are absolutely banned from using these facilities (even if they had the money to pay).</p> <p>The “hospital” our relative is in has a room for about 50 women, no running water (the relatives of patients need to bring buckets), no sheets (provided by relatives), and obviously no air conditioning since they only sometimes have electricity. There’s no detergent, so the relatives have to wash the sheets with salt. </p> <p>Needless to say, she is doing very badly and it doesn’t look like there’s anything we can do to help. </p> santcugathttp://www.blogger.com/profile/15875225582566483983noreply@blogger.com0tag:blogger.com,1999:blog-3650710279873852946.post-73754207203581463212015-06-26T15:15:00.001+02:002015-06-26T15:15:34.701+02:00Mono-lingual Catalan education in Catalonia<p>Here’s a good article summarizing why it <a href="http://blogs.lse.ac.uk/eurocrisispress/2014/04/22/language-rights-in-catalonia/">sucks to be a student from a Spanish speaking family</a> in Catalonia. Not only are the parents isolated from being involved in the school (100% of communications are in Catalan), but children <a href="http://www.periodistadigital.com/politica/autonomias/2011/02/15/ciudadanos-catalan-nino-pegatina-roja-jordi-canas.shtml">are even being given bad grades for speaking Spanish on the playground</a>. Adjusting for socio-economic status, kids from Spanish speaking family do significantly worse in school than their Catalan speaking peers.</p> <p>Even for kids from Catalan families, their level of Spanish is so pathetically bad that they are basically unemployable anywhere else in Spain. Don’t even get me started on “oh but they learn Spanish from watching TV”.</p> santcugathttp://www.blogger.com/profile/15875225582566483983noreply@blogger.com6tag:blogger.com,1999:blog-3650710279873852946.post-67092575786761029912015-06-25T22:09:00.001+02:002015-06-25T22:09:13.174+02:00Foreign tax credit on your Spanish taxes<p>If you do your taxes using PADRE, you have to be careful about withheld taxes paid outside of Spain. For Spanish source income ONLY, you put the amount withheld next to the income and all is good.</p> <p>For non-Spanish income,<strong> you don’t do this</strong>! Very bad if you do.</p> <p>What you do instead, is pull out an Excel and calculate your total foreign income, and then the taxes you had withheld on this income. To make the calculation even more fun, you have to exclude any taxes on income that was exempt from Spanish taxes (eg the first 1500 of dividends).</p> <p>The program gives you no help whatsoever in figuring this, and you put the result in box 583.</p> santcugathttp://www.blogger.com/profile/15875225582566483983noreply@blogger.com0tag:blogger.com,1999:blog-3650710279873852946.post-38145585678937381772015-06-23T18:04:00.001+02:002015-06-23T18:04:38.659+02:00Bye bye Sant Cugat<p>So we decided to move another part of Spain. Fundamentally we realized that it made more sense for our kids to grow up closer to their family, and Barcelona was just too far away.</p> <p>Regarding Catalan: thank God I didn’t make any effort to learn it. What waste of time for the kids though. Wish the kids had spent their time learning an actually useful language like German or Chinese.</p> <p>Fundamentally, I don’t believe that a majority cultural group should have the right to force its culture and language on fellow citizens. Culture is something that should be voluntary and come from the people, not imposed by the government. What makes it even more ridiculous in Catalonia is that the canon of Catalan culture is basically a Romantic re-invention of a medieval culture that never really existed.</p> <p>I’m happy I don’t need to waste any more energy with this whole stupidity, and don’t even get me started on independence.</p> <p>Anyway, I look forward to getting my school communications in Spanish. Last year the principal gave the introduction speech in Catalan, despite claiming to be an international school. Apparently a bunch of Catalan parents thought it would be unbearable to listen to the speech in Spanish, and would rather have the international parents not understand a word.</p> <p>I also look forward to a much lower cost of living. I’ll make sure to point out to all my Catalan friends that my autonomous region is most grateful for Catalonia's fiscal contribution.</p> <p>Don’t get me wrong, I don’t feel bitter. We had a fun seven years. I just feel relieved that I won’t need to worry about this stuff anymore.</p> santcugathttp://www.blogger.com/profile/15875225582566483983noreply@blogger.com13tag:blogger.com,1999:blog-3650710279873852946.post-19387122576939099752015-06-16T07:50:00.001+02:002015-06-16T07:52:38.264+02:00Cute dogs and easy good PR<p>Something that the Spanish government <a href="http://www.thelocal.es/20150615/campaign-to-save-puppy-trapped-at-barca-airport">doesn’t seem to have learned</a> is that saving dogs (especially cute fluffy ones) is excellent PR. It doesn’t cost much money and make people think that you are a caring politician. After <a href="http://www.mirror.co.uk/news/world-news/rip-excalibur-husband-ebola-nurse-4449114">the fiasco with Excalibur</a>, you’d think they would have figured that one out. </p> <p>By the way, in case you were wondering, <a href="http://www.dallasnews.com/ebola/headlines/20150228-nina-pham-s-dog-bentley-made-it-through-ebola-crisis-president-obama-takes-notice.ece">this is how you do it</a>. </p> santcugathttp://www.blogger.com/profile/15875225582566483983noreply@blogger.com1tag:blogger.com,1999:blog-3650710279873852946.post-24254510741642226872015-06-12T15:32:00.001+02:002015-06-12T15:32:21.324+02:00What I don’t get about the Greece situation<p>If the creditors are so concerned about the health of the Greek economy, why are they threatening to shoot it if the Greeks don’t start getting serious about diet and exercise?</p> santcugathttp://www.blogger.com/profile/15875225582566483983noreply@blogger.com0tag:blogger.com,1999:blog-3650710279873852946.post-16934025339219682992015-06-10T19:34:00.001+02:002015-06-11T20:09:33.540+02:00Correct order for doing your taxes for US citizens living in SpainRemember that Spain will give you credit for taxes paid in the US, <strong>except</strong> for those you pay because you are a US citizen.<br />The correct order of doing things is this:<br /><ol><li>Calculate how much you would owe to the US if you were not a US citizen,&nbsp;resident in&nbsp;Spain.&nbsp;This only applies if you actually have US source income.&nbsp;For example, if a Spaniard has a brokerage account in the US, they would file a 1040-NR return using the rules established in the US/Spain tax treaty for how much tax the US gets to keep on US source income. Generally the rules are:</li><ol><li>Salary for work in the US: complicated. Read tax treaty</li><li>US Bank interest: nothing</li><li>Tax exempt dividends in mutual funds: nothing</li><li>Capital gains dividends in mutual funds: nothing</li><li>Ordinary dividends in mutual funds: 15% (no difference between qualified vs non-qualified)</li></ol><li>Make an estimated payment for these taxes in the US. This is important since you cannot take a credit for foreign taxes paid in Spain unless you’ve actually paid them.</li><li>File your Spanish taxes (before June 30), using the taxes you calculated as the foreign withholding.</li><li>Put the 1040-NR calculations aside and fill out a regular 1040. Use the taxes paid in Spain as a foreign credit on your US taxes. The complication ensues when you need to adjust the gross income so that your foreign tax credits don’t erase the minimums you calculated back in step one.</li></ol>santcugathttp://www.blogger.com/profile/15875225582566483983noreply@blogger.com20tag:blogger.com,1999:blog-3650710279873852946.post-34416980994197057562015-06-03T23:59:00.001+02:002015-06-03T23:59:37.376+02:00Bullying magically disappears at Spanish schools<p>Had an interesting experience the other day with an incident at school with one of our kids. Any sane person would have considered the situation bullying, but the school was absolutely adamant that this did not qualify as bullying, so nothing would need to be done.</p> <p>Turns out the reason they were so adamant has more to do with ass-covering than actual concern for children, since the law now makes schools liable if they don’t deal with bullying.</p> <p>Unfortunately, instead of helping children, this new rule seems to have actually made things more difficult for kids that are being bullied, since the school really really doesn’t want it to official admit what happened, since this would be admitting to liability if they didn’t do anything about it.</p> santcugathttp://www.blogger.com/profile/15875225582566483983noreply@blogger.com1tag:blogger.com,1999:blog-3650710279873852946.post-86114907306648132822015-06-02T19:22:00.001+02:002015-06-02T19:22:54.133+02:00Menta Poleo is not Mint<p>When you order a mint tea in Spain, most likely what you will get is Menta Poleo, otherwise known as pennyroyal in English. Pennyroyal is a bit of a controversial herb since pennyroyal oil is highly toxic to the liver and can cause spontaneous abortions. </p> <p>Some people think it helps digestion, but these are the same people that are always telling me that not wearing slippers around the house will cause me to get pneumonia.</p> santcugathttp://www.blogger.com/profile/15875225582566483983noreply@blogger.com0tag:blogger.com,1999:blog-3650710279873852946.post-23443319515517909232015-05-14T16:01:00.001+02:002015-05-14T16:01:38.387+02:00Easy solution for imputed income tax for non-resident owners of Spanish property<p>Say you don’t live in Spain but you have property here for your personal use. In addition to all the other taxes, you are also expected to file a non-resident tax return and pay taxes on the “imputed” income from the property.</p> <p>There’s a pretty simple solution to this, and that is to make sure you have other passive foreign income from a foreign country that doesn’t tax non-residents on your investments (eg Switzerland for interest or capital gains), or at least has a tax rate lower than your home country. (In some cases, this may be Spain, since Spain has a pretty low taxation of passive income).</p> <p>Then when you do your declaration, you just credit the tax you paid on your imputed rental income against the tax you owe on your other foreign income, and voila, no net tax increase.</p> <p>Some countries only let you credit foreign taxes against income from that country, so it may not work in all cases.</p> santcugathttp://www.blogger.com/profile/15875225582566483983noreply@blogger.com4tag:blogger.com,1999:blog-3650710279873852946.post-68256712271190971272015-05-14T08:43:00.001+02:002015-05-14T08:43:22.586+02:00Compensation limits for dismissal of pre-2012 workers are raised by Supreme court ruling<p>In a ruling in September 29, 2014, the Spanish Supreme court changed the rules for compensating dismissed workers. The government had passed a law that limited compensation to 720 days, and “froze” any accumulation above this limit for workers that had already accumulated this number of days (45 days per year worked pre-2012, 33 days after).</p> <p>The court <a href="http://www.kpmgblogs.es/la-indemnizacion-por-despido-y-la-sentencia-del-tribunal-supremo-de-29-de-septiembre-de-2014/">basically “reinterpreted” the law (without really giving any good reason), </a> and pre-February 2012 workers would continue to accumulate compensation until the 1260 day limit (42 months).</p> <p>For me, this means that I can work another twelve years here before I reach my maximum 1260 limit. </p> <p>Woohoo!</p> santcugathttp://www.blogger.com/profile/15875225582566483983noreply@blogger.com0tag:blogger.com,1999:blog-3650710279873852946.post-83558651615798937762015-05-13T16:24:00.001+02:002015-05-13T16:24:05.859+02:00Spanish lottery tickets and money laundering<p>Until recently, Spanish lottery winnings were not taxed, which made them an easy target for money launderers. The way it worked was like this: dirty money goes and buys lots of tickets. For example, the payout ratio is about 70% for the Christmas lottery, the dirty money has been converted into a set of winning clean lottery ticket.</p> <p>Other strategies involve people buying tickets from the winners (a felony in Spain, up to six years in jail, don’t ever sell your lottery ticket to anyone).</p> <p>This has let to some amazingly “lucky” people, like ex-Castellon president <a href="http://www.levante-emv.com/comunitat-valenciana/2012/02/19/carlos-fabra-tendra-aclarar-juicio-siete-veces-le-tocado-loteria/882672.html">Carlos Fabra</a>, who managed to win the lottery ten times in the last twelve years, winning them an estimated 3.6 million euros.</p> <p>Each year Spaniards spend around a billion euros just for the Christmas lottery alone, so it’s not impossible that this wouldn’t have been noticed, if Fabra hadn’t been so open about it.</p> <p>Now <a href="http://www.elconfidencialdigital.com/dinero/Loteria-Objetivo-prioritario-Hacienda-premiados_0_1966603321.html">that lottery winnings are taxable</a>, it’s not as an attractive a method anymore. </p> santcugathttp://www.blogger.com/profile/15875225582566483983noreply@blogger.com1tag:blogger.com,1999:blog-3650710279873852946.post-58968770752539640652015-05-08T21:35:00.001+02:002015-05-12T04:51:22.253+02:00What kind of marriage do you have?Turns out that there is an added complication for foreigners moving to Spain that have married outside Spain. You need to decide whether your marriage is a “community property” (bienes gananciales) marriage or a “separation of assets” (seperacion de bienes). <br /><br />Update: there's a third kind called "participación", where you have a separation of assets, but you have a joint right to all income in the marriage. This has the advantage that you don't need to worry about gift taxes if you give money to each other that comes from salary, etc.<br /><br />A notary told me that the default comes from wherever you got married, so if you were married in a community property state in the US, for example, by default you may be considered as having this state.<br />Your property type has an impact on a couple aspects of your life here:<br /><ul><li>For community property, almost all assets (except those acquired previous to marriage, inherited and a couple other exceptions) as owned 50/50 by both spouses, regardless of the title of the account. <strong>The dreaded Modulo 720 rears its ugly head here: if one of you have a foreign account only in their name, both of you need to declare it on your 720 form. The owner declares as owner, and the other declares as having rights to the account.</strong></li><li>Wealth tax works differently if you are in "bienes gananciales": for everything that isn't privately owned (eg pre-marriage and other exceptions), you split it 50/50 regardless of the actual title.&nbsp;</li><li>Income taxes can be filed separately and your community property status doesn’t affect this. If you have interest from an account only in your name, only you have to put it on your declaration.</li><li>Gift tax applies when a couple has “separation of assets” and a transfer is made between accounts that have different owners.</li></ul>santcugathttp://www.blogger.com/profile/15875225582566483983noreply@blogger.com2tag:blogger.com,1999:blog-3650710279873852946.post-44252380429948643872015-04-28T01:22:00.002+02:002015-04-29T18:12:32.482+02:00Why non-US brokerages restrict US citizens from US marketsIf you open a brokerage account nowadays, almost all will ask for a W8-BEN form certifying you are not a US person. For US persons (citizens, greencard holders, or substantial presence in the US), you would fill out a W-8 form.<br /><br />There are three possible outcomes (ranked from most to least likely):<br /><br />1. The bank tells you to get lost<br /><br />2. The bank allows you to open your account, but bans you from almost all mutual funds and any access to US markets.<br /><br />3. The bank allows you to open your account and access US markets, but bans you from most non-US mutual funds.<br /><br />[Update: In Spain, there would be possibility #4, the bank manager has no fucking clue and lets you do whatever you want.]<br /><br />The reason for this is simple: in order to comply with the US FACTA rules, the easiest thing for a bank to do is just certify they have no US persons as customers. <br /><br />The reason the banks ban you from non-US mutual funds is that the mutual funds have the same problem: they need to certify that none of their investors are US citizens if they want access to the US market. Also, they can't offer their product to any US clients without potentially running into problems with the SEC, which they would also prefer to avoid.<br /><br />Basically the US doesn't want US citizens owning investments in the US&nbsp;via an a foreign brokerage without knowing that these are US citizens. This is due to the fact that the US wants to be a great destination for foreign capital (without taxing interest or capital gains), but wants to make sure the US citizens don't try to circumvent this by investing in the US via a foreign company or bank.santcugathttp://www.blogger.com/profile/15875225582566483983noreply@blogger.com0tag:blogger.com,1999:blog-3650710279873852946.post-79488566797377054562015-04-23T17:45:00.001+02:002015-04-23T17:45:15.280+02:00Taxation of mutual funds in Spain<p>Spain has a pretty bizarre taxation system when it comes to mutual funds. As long as the investment meets the criteria of “collective investment” (500 investors, and you can’t own more than 5% of the capital), you can switch between mutual funds to your hearts content without any capital gains taxes.</p> <p>Feel nervous about the market? Switch to a money market fund, then switch to Asian equities, etc. As long as you don’t cash in your shares, you don’t have to pay any capital gains in Spain.</p> <p>In addition, there’s no anti-deferral rules like in the US, so any increase in price due to interest, etc is treated just as a capital gain.</p> <p>The one thing that isn’t clear is how automatically reinvested dividends are treated. European mutual funds generally don’t do yearly distributions of capital gains, interest, etc, so this doesn’t appear to be anticipated in the rules. From a lawyer I talked to, he thought that automatically reinvested dividends wouldn’t be taxed either. This is very similar to a scip dividend, which aren’t taxed in Spain either, so you have at least two arguments.</p> <p>Of course, the US doesn’t look at it that way and taxes you as soon switch funds (unless they are shares of different classes in the same fund), so you might be able to do funky things in terms of timing your sales if you want to even out your US/Spain taxation.</p> santcugathttp://www.blogger.com/profile/15875225582566483983noreply@blogger.com9tag:blogger.com,1999:blog-3650710279873852946.post-25746617778015028972015-04-23T12:57:00.000+02:002015-04-23T12:57:11.658+02:00Wash sale rules (antiaplicación): Spain vs USIf you are calculating your capital gains, keep in mind that the US and Spain have different wash sale rules (in Spanish it's called antiaplicación). A wash sale is when you sell a stock or mutual fund and buy back a substantially similar one within some period of time.<br /><br />In the US, if you sell a stock at a loss&nbsp;and buy back a substantially similar stock (or a contract to do so), you don't count this is a sale, but add this to the cost basis of the new shares instead. The rule doesn't apply for gains.<br /><br />In Spain, the rule applies for two months, but you need to declare the loss in a special box that can be used later on when you sell the shares.<br /><br />So in theory something could be a wash sale in the US, but not in Spain, either because of timing or because of currency movement.<br /><br />Oh what fun.<br /><br />I'm writing a program to do this calculation... perhaps I'll post it on github when it's done.<br /><br />santcugathttp://www.blogger.com/profile/15875225582566483983noreply@blogger.com2