View Full Version : Other Why don't Canarians ever want to pay any tax?
I have been looking for a new rental as we want to try a couple more areas before buying a home here.
I have spoken to 6 Canarian landlords over the past week about prices, payments etc and only one of them would accept payment via bank transfer - the rest insisted on full payment in cash every month.
Two of these people own more than 10 properties each, one owns a block of 6 properties and of the others only one of them had a single property to rent out. I had the same response from a Canarian landlord when I asked about an office he has up for rent - 600€ per month but wants to put 10€ on the contract (YES - 10€ per month declared!!!) so he doesn't have to pay tax.
It seems endemic to this place that they simply do not / will not pay tax on rental income - I am wondering just how many of them actually do declare this income and how big this problem really is??!
I have come across this many times in the past and in my experience it really does seem like the vast majority of locals trry to avoid paying tax at all costs. Even the ones who own lots of properties and rent them for a living or for their pension.
Whilst this tax avoidance is not completely to blame for the financial problems here it must be having a massive negative impact on the coffers of local government - no IGIC, no income tax. I would think this would be a pretty easy target too - are they doing much about it? Or turning a blind eye?
Fivepence
19-01-2013, 15:35
Seems that all the Canarian Government's financial problems are not down to Nelson then..............:whistle:
The richest man in the Canaries is the guy who owns the factory that makes brown envelopes.....
chifleta
19-01-2013, 16:55
I have been looking for a new rental as we want to try a couple more areas before buying a home here.
I have spoken to 6 Canarian landlords over the past week about prices, payments etc and only one of them would accept payment via bank transfer - the rest insisted on full payment in cash every month.
Two of these people own more than 10 properties each, one owns a block of 6 properties and of the others only one of them had a single property to rent out. I had the same response from a Canarian landlord when I asked about an office he has up for rent - 600€ per month but wants to put 10€ on the contract (YES - 10€ per month declared!!!) so he doesn't have to pay tax.
It seems endemic to this place that they simply do not / will not pay tax on rental income - I am wondering just how many of them actually do declare this income and how big this problem really is??!
I have come across this many times in the past and in my experience it really does seem like the vast majority of locals trry to avoid paying tax at all costs. Even the ones who own lots of properties and rent them for a living or for their pension.
Whilst this tax avoidance is not completely to blame for the financial problems here it must be having a massive negative impact on the coffers of local government - no IGIC, no income tax. I would think this would be a pretty easy target too - are they doing much about it? Or turning a blind eye?
Surely you know the answer, you work at or own an Estate Agency by the looks of your advert!!!
I worked for approx. 12 years in an Estate Agents and out of the 80 to 100 apartments I controlled, only 4 owners... yes FOUR ... asked me to do proper reciepts for them .... and they were Canarians ... so it's not just the Canarians.... basically because hardly any of them declared that they were renting their properties.
I dont do long lets at all - I sell property so me having an agency is irrelevant to the conversation.
The number of Canarian/Spanish owners completely dwarves the number of owners of other nationalities - especially in the residential buy to let market, which is the topic at hand. It seems to be the culture here to avoid tax, this happens on a massive scale with locals who own and there doesn't seem to be much in the way of enforcement especially given the current shortfall in tax revenue.
Perhaps expat and non-resident owners are doing the right thing by also not declaring - they live here and "should try to fit in with the Canarian way of life" I suppose... so tax dodging it is then!
If you need any help with tax dodging advice CIM just ask 90% of the members on here and we'll gladly assist.
The other 9.9% will be happy to help when they get out of prison...:laugh:
chifleta
19-01-2013, 17:38
I dont do long lets at all - I sell property so me having an agency is irrelevant to the conversation.
The number of Canarian/Spanish owners completely dwarves the number of owners of other nationalities - especially in the residential buy to let market, which is the topic at hand. It seems to be the culture here to avoid tax, this happens on a massive scale with locals who own and there doesn't seem to be much in the way of enforcement especially given the current shortfall in tax revenue.
Perhaps expat and non-resident owners are doing the right thing by also not declaring - they live here and "should try to fit in with the Canarian way of life" I suppose... so tax dodging it is then!
You must be one of the few agencies that doesn't do lettings then, things have definately changed since the days I worked then LOL . No need to get stroppy :raspberry2: you know we all type things that are "irrelavent" to the conversation.
Yes, the culture here seems to be to avoid paying correct tax, or any whatsoever, but I can guarantee the majority of the ex-pats do exactly the same ... "ohh lets come to Tenerife where they don't pay tax" almost everyone is at it. Apartment owners that buy to exploit, business owners who give out ****ty work contracts, all nationalities, it's rife with people trying to avoid paying out money. But not many people will stand up against these gits.
Many years ago our then landlord took back each contract that had ended before he'd give the new one out. Little did he know that we kept copies. When he refused to return our deposit, he'd been such a rubbish landlord (6 months with no hot water, fridge at 12ºC and a leak in bathroom) ... well, we shopped him to Hacienda... he wasn't allowed to rent his apartments for a year, he had 3 apartments. He avoids eye contact when we bump into him in our village .... we just smile pleasantly - but there aren't many of us that have the you know whats to stand up against these people.
How many people refuse an apartment without contract? how many people accept a 12 hour work contract (yes, i've been there, and only realised when I needed to claim dole how little I was entitled to - and did I learn the lesson, nope, I took a contract with a supposed "friend" who promised a better contract, which never materialised.... what's that saying Mr Bush so eloquently messed up... fool me once, shame on me? hahahaha)...
Actually, thinking back, owners probably weren't so bad then - I paid the rent monies collected into the accounts of the majority of property owners when i was renting their properties - i'd say over 75% of rents wer paid directo into the owners account. Whether they declared or not was up to them, they knew we declared our commission.
I think that until "we" (never mind what nationality) stop renting from these type of owners, and that "we" stop working (yes yes off topic, but same basis I think) stop accepting work contracts that take the micheal, things will not change here.
6 months with no hot water, fridge at 12ºC and a leak in bathroom
I would have left after about 6 hours! I left one apartment because they said I had to wait 5 weeks for a phone line. Thinking back she was a Spanish / Canarian owner too, owned the building (around 10 apartments) wanted cash and then wouldn't return our deposit....
chifleta
19-01-2013, 17:47
I would have left after about 6 hours! I left one apartment because they said I had to wait 5 weeks for a phone line. Thinking back she was a Spanish / Canarian owner too, owned the building (around 10 apartments) wanted cash and then wouldn't return our deposit....
this was over 15 years ago... phone line? HAHAHA not in those days... we didn't even have an oven.... i'd stand in the queue at the public call box once a week to ring my family in the UK....
The owner got his come-uppance... I wonder how many others here have denounced bad owners? maybe things would slowly start to change. :whistle:
I think a government crackdown is in order - surely all of these owners doing illegal lets should be fined massive amounts of money??
Where´s the team of inspectors knocking on doors?? Makes you wonder...
chifleta
19-01-2013, 17:55
I think a government crackdown is in order - surely all of these owners doing illegal lets should be fined massive amounts of money??
Where´s the team of inspectors knocking on doors?? Makes you wonder...
It does indeedy ... in the meantime, i'm going to the cinema, happy house hunting :D
casabonny
19-01-2013, 20:02
Agreed a government crackdown is needed but remember that most of the politicians and thier staff are probably just as guilty!As far as tax IGIc is concerned being legal seems to be just a licence for the authorities to print money and take whatever they like, change rules when they want and because your legal you have no option but to pay or be fined!
we have never rented here so don't know the scale of the problem but it seems to be a global Tenerife problem but I am sure it's not just this island that has these problems.
We went in lasts year to pay our Spanish accountant, she told us what the charge was and by the look on my face she said you pay cash last year I said yes. She then looked at our file and reduced the bill by 50 / 100 euros (i forget exact amount) as we have always paid cash. Reply was if you pay cash it is xxx or bank transfer it is xxx.
PS we got a receipt for our cash payment.
Old saying. "Honesty is next to Godliness"
It appears You, CIM, are surrounded by Heathens !...:agree::pray::pray:
I have been looking for a new rental as we want to try a couple more areas before buying a home here.
I have spoken to 6 Canarian landlords over the past week about prices, payments etc and only one of them would accept payment via bank transfer - the rest insisted on full payment in cash every month.
Two of these people own more than 10 properties each, one owns a block of 6 properties and of the others only one of them had a single property to rent out. I had the same response from a Canarian landlord when I asked about an office he has up for rent - 600€ per month but wants to put 10€ on the contract (YES - 10€ per month declared!!!) so he doesn't have to pay tax.
It seems endemic to this place that they simply do not / will not pay tax on rental income - I am wondering just how many of them actually do declare this income and how big this problem really is??!
I have come across this many times in the past and in my experience it really does seem like the vast majority of locals trry to avoid paying tax at all costs. Even the ones who own lots of properties and rent them for a living or for their pension.
Whilst this tax avoidance is not completely to blame for the financial problems here it must be having a massive negative impact on the coffers of local government - no IGIC, no income tax. I would think this would be a pretty easy target too - are they doing much about it? Or turning a blind eye?
Hi CIM,
You have got the answer to your own question:
Yes, it's endemic. Yes, it's a culture. Yes, it's a big problem and yes, it has a negative impact on local government.
How can we deal with this? It's easy. Why does nobody denounce those facts? It'd be a good start.
KirstyJay
19-01-2013, 23:16
I don't think it helps that the tax you pay is used to give corrupt politicians massive salaries... I'm all for paying tax and think everyone should give out proper contracts etc, but I also want my tax euros to be spent legitimately by the government too.
I don't think it helps that the tax you pay is used to give corrupt politicians massive salaries... .
The taxes we pay not only go into the politicians' pocket as there are different tax streams that go to different places and are correctly managing.
Once again...if you know about politicians who are corrupt why don't you go a bit far and denounce them?
TheBloke
20-01-2013, 00:00
Javi... denounce is not strong enough.....I want the ****ers hanged.
Davie Thistle
20-01-2013, 00:23
Huh If I could get out of paying tax I would too!
Dirty robbin bassas!
:-)
Its like a Greek tragedy also here in spain , the EU-funded culture of greed, tax evasion and scandalous waste .
And who will pay, Its already a canarian saying, the English have lots of pasta . . . . .
Old saying. "Honesty is next to Godliness"
It appears You, CIM, are surrounded by Heathens !...:agree::pray::pray:
Glad i am not religious then, as i pay anything in cash and yes even my Spanish accountant.
Javi... denounce is not strong enough.....I want the ****ers hanged.
I understand your point, but as I said, denounce is just the beginning of stronger actions.
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Huh If I could get out of paying tax I would too!
Dirty robbin bassas!
:-)
This is, in fact, the attitude that feed our culture of taxes avoidance... if I can I will and if I could I would, but in the mean time, please I want the best standards in education, social security, roads, also want cheap flight and boat tickets, sunny days 365 days a year, I want to be the first who's attended/helped/supported when problems come up and so on.
Nobody like to pay taxes, but let admit it, they are necessary. A different thing is how the taxes we pay are managed.
I think the main problem here is the social peer issue. For example; if you see your ex-government treasurer diverting 22 million of public funds to his private Swiss bank account, whilst he was receiving over 100k€ per month salary, it sets the firm example that if Spain´s top political leaders can steal from the system, then so can we.
Once the politicians, chiefs of police forces and judges start to act responsibly with public funds, stop thieving and pay all of their taxes, that example would demonstrate it is antisocial to dodge taxes. Until then, not much will change. "If it's good enough for the government treasurer or my local alcalde who's under investigation yet still in his office, it's good enough for me!"
- - - - - - - - - - merged double post - - - - - - - - - -
Footnote; most parts of mainland Spain are equal if not worse than the Canaries for tax dodging.
atlantico
20-01-2013, 13:07
Have I got this all wrong then ?
1. You are referring to 'Retention Tax' when letting out a commercial property ?
2. I always thought that it was the tenants 'Legal Responsibility' to pay that tax ?
3. The tenant should pay this tax, and give the remainder 'in cash every month' to the landlord
4. If you do not pay this tax yourself, the landlord will claim it was the tenants responsibility to do so or will 'assume' you paid it. Tenants should then retain the receipts of payments to Hacienda.
I must be one of the 1% that pays this tax as a landlord, and my tenant pays it on my behalf.
If the landlord does not declare his rental activities as an income, then when he submits his annual tax declaration, he will be evading paying tax.
Davie Thistle
20-01-2013, 14:05
This is, in fact, the attitude that feed our culture of taxes avoidance... if I can I will and if I could I would, but in the mean time, please I want the best standards in education, social security, roads, also want cheap flight and boat tickets, sunny days 365 days a year, I want to be the first who's attended/helped/supported when problems come up and so on.
Nobody like to pay taxes, but let admit it, they are necessary. A different thing is how the taxes we pay are managed.
Twas meant to be tongue in cheek!:crazy:
But,
Specially in this country,
where most of it is either pocketed by these so called leaders as
overpaid and under worked yes men,
or wasted in pointless conflicts or on junkie wasters methadone!
to name but a few!
as for "best" of all you quoted, if - on which I doubt! - My Tax was spent on these things,
then yes, but till then I don't want to pay tax!!
As you say, nobody wants to pay tax,
specially tax that's just to fill the "coffers" of these parasites.
:(
atlantico
20-01-2013, 18:41
If the landlord does not declare his rental activities as an income, then when he submits his annual tax declaration, he will be evading paying tax.
Yes, but in Spain (Canaries) it's the tenants responsibility to pay this tax, isn't it ? Thats why the word 'Retention' is in the tax name, the tenant retains the tax payable and pays it direct to Hacienda ?
They knock on the doors of least resistance - Brits illegally renting!
I think a government crackdown is in order - surely all of these owners doing illegal lets should be fined massive amounts of money??
Where´s the team of inspectors knocking on doors?? Makes you wonder...
chifleta
20-01-2013, 18:58
Yes, but in Spain (Canaries) it's the tenants responsibility to pay this tax, isn't it ? Thats why the word 'Retention' is in the tax name, the tenant retains the tax payable and pays it direct to Hacienda ?
No Atlantico, you're talking about commercial rentals (offices, locals, bars etc)..... OP is talking about an apartment/house rental.
atlantico
20-01-2013, 19:09
yes, I am, but the OP is also talking about landlords not paying retention tax, and CIM mentioned the office rental - so I'm answering that question
I had the same response from a Canarian landlord when I asked about an office he has up for rent - 600€ per month but wants to put 10€ on the contract (YES - 10€ per month declared!!!) so he doesn't have to pay tax.
I guess we have a strange landlord, since he insist that we pay the rent via bank transfer to his S.L... Ok, he's not Canarian, but he's Italian, and last time I read any official statistics on the subject, Italians were the worst in Europe paying tax, and 92% didn't even care to file a tax return. Not sure of the numbers nowadays, though, since that was a few years ago.
Chatty Girl
27-01-2013, 16:06
Having lived and worked in Turkey as an estate agent, the Turks are exactly the same as the Canarians not wanting to pay taxes. There is a law that deposits must be held in a separate bank account for the tenant but this isnt done by the majority. Landlords usually want 3-6 months rent in advance from foreign tenants as they think they are rich so can afford this sum. Then they often write a lower rental on the property than the actual price. Its even worse with business rents and they issue 2 contracts; one with the actual price paid by the tenant and a 2nd showing the cheaper price. My Dutch friends were ripped off by their landlord but it all came to light at the trial as the landlord produced a different contract to my friends .. interesting!
It seems that people like to avoid paying taxes and wonder why their country is in a financial mess and has no decent public services or job opportunities.
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