Ecovis Malta

Malta corporate law: Malta transposes EU Mobility Directive

On 7 February 2023, Malta transposed Directive (EU) 2019/2121 on cross-border conversions, mergers and divisions, more commonly referred to as the Mobility Directive, into Maltese Law.

The primary aim of the Mobility Directive is to provide a coherent and harmonised legal framework for cross-border movement of limited liability companies across all Member States and therefore enhance the freedom to establish companies. At the same time, a harmonised legal framework for cross-border conversions and divisions will lead to better protection of employees, creditors, and minority shareholders within the internal market.

In short, the Mobility Directive introduces three key changes:

• A harmonised framework governing cross-border conversions
• Clear procedural steps for the implementation of cross-border divisions
• Enhancements to cross-border mergers regulations in alignment with the above

We support you in implementing the mobility directive.

Dr Roberta Avellino Pulé, Senior Legal Consultant, ECOVIS Malta, Mosta, Malta

In view of the complexity of cross-border conversions, mergers, and divisions, the Mobility Directive has also introduced a function for national authorities to scrutinise the legality of cross-border operations before they take effect, explain the Ecovis experts. In assessing whether a pre-operation certificate should be granted, authorities shall take into consideration the legal and economic aspects of the proposed cross-border operations, its implications for the employees, such as potential impacts on working conditions, the implications for the future business of the company, as well as the solutions offered to shareholders wishing to exit the company.

The authorities reserve the right to extend the period of assessment or to refuse the pre-operation certificate if they suspect that the cross-border operation is set up for abusive, fraudulent, or criminal purposes.

For further information please contact:

Dr Roberta Avellino Pulé, Senior Legal Consultant, ECOVIS Malta, Mosta, Malta
Email: malta@ecovis.com

Buying property in Spain after Brexit: Real estate in the Canary Islands

The Canary Islands is one of the most popular destinations in Spain for foreigners for buying a holiday or retirement home, or even a primary residence. After Brexit, the question often arises as to how the process has changed from both an immigration and taxation perspective. Ecovis expert Natalia Bonilla answers the most important questions.

Ms Bonilla, can people still buy a property in Spain after Brexit?

Of course, everyone can buy property in Spain regardless of their citizenship and whether they are from the EU or not. For the British, the purchasing process remains the same after Brexit.

How long can people stay in the property for?

For 90 days in a period of 180 days, without any need to obtain a tourist visa. For longer periods, British citizens are required to obtain a regular residence visa.

Which visa options are available for Britons wishing to stay for periods exceeding 90 days?

There are different visas covering different personal circumstances: a non-lucrative residence visa (for people who do not plan to work in Spain and have sufficient financial means and full-cover health insurance), a “Golden Visa” (a suitable option for investors, for example those investing EUR 500,000 in real estate, allowing the holder the possibility to work in Spain), a digital nomad visa, etc.

We will be happy to advise you on legal and tax issues relating to the purchase of real estate in Spain or questions on residence permits.

Natalia Bonilla, laywer, partner, ECOVIS Legal Spain – Canary Islands, Spain

What is seen as “sufficient financial means”?

This is linked to an annual index (IPREM), so it changes slightly every year. For 2023, the amount is set at EUR 2,400 per month (EUR 28,800 per year) for the permit holder and EUR 600 per month (EUR 7,200 per year) for each family member accompanying the permit holder.

Is there any possibility to obtain a permanent residence permit?

Of course. The visas referred to above have a limited initial duration (1 to 3 years), but all of them can be renewed for subsequent periods of 2 to 5 years depending on the type of permit. After 5 years of continued residency in Spain, it is possible to obtain a permanent residence permit.

What are the main tax implications?

While nothing has changed in relation to the taxation related to the purchase, there has been an increase in the rate of non-resident income tax (IRNR), triggered by the possession (imputed income) and exploitation of the real estate, from 19% to a 24%.

For further information please contact:

Natalia Bonilla, lawyer, partner, ECOVIS Legal Spain – Canary Islands, Spain
Email: natalia.bonilla@ecovis.es

Real estate France: New declaration to be filed by 30 June 2023 at the latest

Taxpayers must submit the occupancy declaration for residential premises by 30 June 2023 at the latest. If the deadline is missed, there is a penalty of EUR 150 per building. The new tax obligation applies to natural and legal persons. The Ecovis experts know the details that owners must consider.

Since 1 January 2023, housing tax has been abolished for all principal residences and for all taxpayers. However, it still applies in the case of second homes and vacant premises. Consequently, owners are subject to a new reporting obligation set out in Article 1418 of the French Tax Code (FTC), relating to the occupancy of French residential real estate i.e., houses, apartments, garages, carparks, cellars. Failure to declare, as well as the omission or inaccuracy of the information provided, are subject to a tax fine of EUR 150 per property (Article 1770 terdecies of the FTC). Once submitted, this declaration must only be updated if there is a change to the details.

Which owners are concerned?

• Individuals: owners, joint owners of real estate, a usufructuary
• Legal entities: any kind of companies or entities (trust included) owning residential premises

What information must be declared?

• The terms of occupation of the premises (personally, by third parties)
• The nature of the occupation: main residence, secondary residence, rented premises, premises occupied free of charge, vacant premises (unfurnished and unoccupied)
• The identity of the occupants (natural person: surname, first name, date of birth, place of birth / legal person: name, identification number)
• The period of occupation (or vacancy) of the premises(s) they own (beginning, end of the period of occupancy)
• In the case of seasonal rentals: the beginning of the seasonal rental period and the terms of the property management (self-managed, or under rental contract with manager), the SIREN of the manager or that of the owner if applicable, the possible classification as furnished tourism
• The monthly rent amount is optional for the time being

If you need assistance in meeting this new obligation, please contact us before 30 June 2023.

Vanessa Raindre, Tax partner, MD Legal, Paris, France

How to declare?

• For individuals, the declaration shall be made through their personal account on impots.gouv.fr under the section “manage my real estate”
• For legal entities, the declaration shall be made on their professional account (warning: this requires opening, beforehand, the service “manage my real estate”)

Normally, the properties that are subject to the filing requirements are shown on the website www.impots.gouv.fr. If not, the taxpayer must inform the tax administration. Filing the declaration also provides an opportunity to check whether the information held by the tax administration on a property is correct: nature and address of the property, batch number, precise location (building, staircase or entrance, level, door), cadastral references, surface, number of rooms etc.

For further information please contact:

Vanessa Raindre, Tax partner, MD Legal, Paris, France
Email: vanessa.raindre@mdlegal.fr