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Economy Councilman of the City of Lorca, Luis Amador, has been reported that the city council has asked the National Government's implementation of a battery of fiscal measures to protect and assist the victims of the earthquake on 11 May.

Amador has indicated that "it is a package of measures to address and remedy the various situations related to taxation that they are considering those affected by earthquakes."

Luis Amador is anticipated that this document has been prepared by the City, under the planning, supervision and coordination of the Department of Economics and Finance, in cooperation with leading professional offices of the municipality who are those who know firsthand what are the fiscal problems and needs are reflected by the citizens as a result of the earthquake.

In this noteworthy that participated in drafting law school professionals, economists, business experts, social graduates and administrators of estates.

We're talking about a practical document, which sought specific proposals the tax benefit that truly contributes to correct injustices and to protect vulnerable groups or create a breeding ground for the recovery of certain areas or zones.

Councillor of Economic Affairs has stated that given the situation in the society and the economy of the municipality after the earthquake, are necessary in a series of fiscal actions that help in the reconstruction, rehabilitation, revitalization, and economic return to normal social and must exist in any city in our country.

Fiscal measures requested are necessary to give a good boost to economic and social revival of the town after the earthquake of May 11.

So with these tax measures are requested to appropriate authorities, these measures are taken urgently to help raise again the town of Lorca, and taken into account for future similar disasters nationwide.

The proposals, in detail

As for the exhibition of the measures contained in this document has been divided explanation of each of these into two parts.

First, the proposed measure, second motivation that has led us to make that proposal.

The measures are:

1.

Reduction of Modules:

Proposal: 75% reduction over a period of 3 years, the modules for all economic activities based in Lorca to calculate their income tax return purposes.

by the method of objective assessment.

VAT:

Proposal: Reduce or modules rates applicable in the Special Tax Simplified economic activities based in Lorca to which this regime is applicable to them.

Motivation: The deep and prolonged decline of the productive and trade capacities of economic activities based in Lorca and the effects caused in whole, directly or indirectly, by the earthquake

2.

Rehabilitation Works:

- Income Tax: Proposal: To be eligible or considered as works of rehabilitation of housing all the connections as a result of the damage to these homes by the earthquake in Lorca.

- VAT: Proposed: That they would invoke the reduced rate of VAT.

(8%) all repairs and rehabilitation of buildings affected by the earthquake without any additional requirement.

- Motivation: The works are unforeseen, urgent and essential for the recovery of the normalization of the daily life of the city's economic activity and the degree of utilization of labor or materials is not determined by the desire of the owners , but the damage caused to their homes by the earthquake.

3: Deduction for investment in residence:

Proposal: For the purposes of Deduction for Investment in residence, to stay at residence obtained in the reconstruction of the demolished by the effects of earthquakes, the same conditions and limits that already had the original homes when they have been acquired by its present owners, before January 1, 2011.

Motivation: The reconstruction of homes demolished forced can not assume, for their owners, the loss of acquired rights with respect to the deduction to apply for investment in residence, prior to December 31, 2010.

The application of the deduction to the old and new homeowners, is an incentive for the reconstruction of demolished homes and regeneration of the affected neighborhoods, preventing the generation of solar islands that eventually become invisible barriers to the development thereof, for the loss of population, the existence of large vacant spaces between streets and blocks, for the likely state of neglect that is typically generated on these sites, and so on.

4.

Changes in Net Assets for compensation:

- Income Tax: Proposal: Exemption from income tax asset arising from changes the perception of compensation, grants and donations for the earthquake damage in both movable and real estate.

- Corporate Tax: Proposal: Exemption from corporate income tax, property variations arising from the perception of compensation, grants and donations, for any damage caused by the earthquake both movable and real estate.

- Motivation: Since the above compensation and assistance consistent with the expert appraisal of the pecuniary loss caused by such damage, alteration net worth due to the payment of compensation is zero, however the application of the compensation or repair damage will not occur, in most cases, in the same year that produced the same so it is impossible, in 2011, making any calculation of the variation in wealth produced.

Additionally, in the calculation of changes in equity, especially in the case of demolition is done with historic data acquisition value, adjusted for depreciation accounting, as appropriate, and the effects of inflation over the corresponding ratios, which compare compensation to current values, with an acquisition cost at historical values, generating a loss to the taxpayer for a situation that has not been caused by her will and money in taxes ahead after going to need for reconstruction of their property, so that may impair the recovery of the affected areas.

5: Reduced yields lease:

Income Tax: Proposal: Reduction of 100% of net income earned by renting housing to people affected by the earthquake in Lorca regardless of other considerations such as age of the tenant, income or duration of the lease.

Motivation: Given the enormous amount of temporarily or permanently uninhabitable housing that have been damaged by the earthquake is imperative to facilitate the start-rental housing for those affected although in many cases, these rentals and short-lived economic families precarious are uneconomical for owners.

6: Transfer of property or rights:

Income tax and corporation tax: Proposal: Exemption of capital gains that might result from the transfer of property rights thereto or if the transmission makes feasible the rehabilitation or reconstruction of it for later use as a dwelling or business premises.

Motivation: To facilitate the reconstruction or rehabilitation of those properties whose owners have difficulties of any kind to carry them out, and therefore difficult in this way to other owners and the city as a whole, the recovery of economic activity and the social stability.

7: Calculate the average number of companies.

Income tax and corporation tax: Proposal: counting, calculating the average number of firms, employees of companies directly or indirectly affected by the earthquake, which have left or dismissal after the earthquake.

Motivation: The average payroll figure is used for the establishment of rights such as freedom of depreciation deductions such as job creation for the disabled or the application of reduced tax rates or low redundancies resulting from the greatly reduced even sometimes paralysis of economic activity has meant for Lorca earthquake should not further penalize companies that, despite everything, they hold open until return to normal.

8: Deductions for house purchase or home deposit savings account:

Income Tax: Proposal: Interruption for three years, a period of four years, taxpayers have to build or endorsement of your residence or to deposit funds in accounts housing for the future acquisition of residence for the purpose of corresponding deduction.

The period of interruption of three years may be extended for reasons not attributable to the taxpayer.

Motivation: the interruption is considered a priority for three years, the periods provided for in the Income Tax Act and Regulations for investment in residence, and to make contributions to a savings account for affected housing by an earthquake in Lorca purely formal matter (of time) are not prevented from deducting the investments and contributions made in order to initiate or continue the work to build his residence.

Application to be victims of tax incentives that were in effect until 31/12/2010.

9: Priority programs of patronage: income tax and corporation tax:

Proposal: the donations are considered a result of the earthquake in Lorca, as priority programs for sponsorship so that donations granted the right to deduct provided for in the personal income tax and corporation tax with a percentage increase in 5 points in a particular way that encourages private initiative in the recovery of the municipality.

Motivation: Matching donations from individuals or legal entities that are considered to avoid non-deductible expense and, therefore, imposing a tax burden to their generosity.

Especially encourage donations for the recovery of Lorca and you can look in the private sector an essential complement to public initiative.

This should also match the municipality of Lorca as an exception to the non-profit entities to recipients of this sponsorship.

10: Tax Deduction for developers.

- VAT: Proposal: Do not limit the right to full deduction of input tax to housing developers who surrender to lease the same to those affected by the earthquake in Lorca.

That such leases do not involve the loss of transmission to consider first the VAT made upon completion of the rental.

- Motivation: Avoid the harm that these rents, which in the case of Lorca after the earthquake have a social character, which is home to the promoters of the provision of such rents in solitary.

11: Implementation of LVA 4% to reconstruction:

VAT: Proposal: Application of the VAT rate.

of 4%, equal to the VPO, the delivery of housing obtained in the reconstruction of demolished buildings after an earthquake in Lorca.

Motivation: Cheaper housing for the earthquake affected whereas the reconstruction of their homes demolished to restore the property has already had before the earthquake.

And considering that the amounts of compensation and assistance to those who finance the reconstruction of the buildings has been obtained by applying a maximum cost modules applicable to the VPO and the effect of super-reduced rate for the majority of housing is very limited in time, we must say that there are no material time for reconstruction and housing delivery so we can implement such super.

12: Reduction in tax taxable donations:

Proposal: 99% reduction in the tax base of Taxes Donations, ITP and AJD for all legal transactions made on properties affected by the earthquake in Lorca.

Motivation: To facilitate such operations on the affected properties so that they do not pose obstacles to recovery, reconstruction and operation thereof and affected economic activity, and facilitate the mobility of these goods and pitch them to companies or individuals in all areas for development.

13: tax exemptions for donations.

Proposal: Exemption for donations made by relatives of second degree of money, business or shares in companies on behalf of people affected by the earthquake in Lorca.

Motivation: To provide family support, so disinterested, is occurring between family members and that is allowing, in some cases, survival and all, maintaining decent living conditions and facilitate the reactivation of businesses and partnerships with economic activity whose current owners after the earthquake, they can not maintain.

14: Bonus Social Security:

Proposal: 99% Bonus on Social Security contributions for businesses affected by the earthquake in Lorca both their employees as covered by the Special Scheme for Self-Employed (RETA).

Motivation: Avoid the massive destruction of employment in Lorca after the earthquake and facilitate economic recovery.

Source: Ayuntamiento de Lorca