Understanding Tax Regulations: Key Concepts and Definitions
Taxable Persons and Exemptions
Taxable persons: Natural persons or legal entities of Article 35.4 of the LGT, provided that they engage in any of the activities giving rise to the taxable event. Whether or not the habitual exercise of the activity is irrelevant.
Exemptions: Exempt from payment are:
- Public administrations and their agencies
- Taxpayers who are beginning activity during the first two tax years
- Other taxable persons (individuals, subject to corporation tax liabilities, institutions operating social security, public, Red Cross, disabled associations)
Tax Rates and Period
Rates of tax: These consist of an ordered list of the various economic activities including description, content, and classification of activities, and fees for each activity.
Period of tax: Stretching from the date of the start of the activity until the end of the calendar year. The accrual will occur the day when the activity starts.
Surcharges and Liabilities
Provincial surcharge: Applied to the amount of municipal fees and fixed minimum tax, and may not exceed 40%.
Tax liability: Will be calculated by applying the different elements involved in its determination, the fee rate, the weighting coefficient, the coefficient of situation if applicable municipal and provincial surcharge on the assumptions that are legally established.
Fee Rates and Article 35.4
Fee Rates: Tax rates contain a list of taxable activities that span as far as possible all economic activities.
Article 35.4: Recumbent inheritance, joint property, and other entities without legal personality is an economic unit or a separate estate.
Weighting and Situation Coefficients
Coefficient weighting: A tax element whose purpose is to invent all fees required to pay the tax.
Coefficient of situation: The municipalities may establish a scale and weigh the factors of the local physical location within each municipality.
Key Definitions in Tax Law
Decision
The decision is a legal standard of European Community law that binds its target in its entirety and directly and immediately. A decision may be addressed to the institutions, agencies, and officials of the Union, to one or more of its Member States, or individuals. In designating recipients, the decision will only bind to them.
Directive
The directive is a legislative provision of Community law which is binding on States of the Union or, where appropriate, the recipient State in achieving concrete results or objectives within a specified period leaving, however, to competent domestic authorities the proper choice of form and the appropriate means to that end.
Regulation
A regulation is a general legal rule issued by the Public Administration and subordinate value to the law.
Law
The law is a legal provision enacted by the legislature. That is, a principle established by the competent authority, which commands or prohibits something in line with the law. Your failure brings with it a penalty.
Decree
A decree is a type of administrative action issued usually in the Executive and which has a regulatory normative content, so that their range is hierarchically inferior to the laws.
Ministerial Order
A Ministerial Order is a regulatory standard that comes from any of the Ministers of the Government of Spain.