Prado, Arranz, Dávila and Rodríguez were on the panel at the SUR forum.
Entrepreneurs in the residential tourism industry have this week called for bold fiscal reforms in order to attract more foreign investors.
Speaking at Marbella’s exhibition centre during a forum, organised as one of the events marking SUR in English’s 30th anniversary, representatives from the sector claimed, on behalf of themselves and others in their field, their stake in the wider tourism industry and underscored that the market has begun in earnest its journey to recovery.
However, they warned that the current fiscal system could prove to be a hindrance to sustainable growth and demanded that changes be made.
Those calling for an overhaul at Wednesday’s summit, entitled ‘Fiscalidad de Residentes Extranjeros y Turismo’ and organised by SUR in collaboration with Garrigues, included figures from three of the primary associations within the residential tourism sector: Malaga’s Provincial Association of Builders and Developers, the National Association of Developers and Residential Tourism and Sport (Promotur), and the construction group, Sierra Blanca.
More than 50 professionals attended the event that was divided into two distinct parts. The first demonstrated the impact of residential tourism on society and the economy; the second analysed the current Spanish fiscal system and compared it with other similar markets competing in the same industry.
The statistics that José Antonio Múñoz López, economist and member of the Economic Analysts of Andalucía organisation, had to share surprised many of the delegates. He affirmed that 14.4 per cent of the GDP in Malaga province is attributable to foreign residents and that the same group is responsible for 6.1 per cent of the province’s employment.
In addition, he presented a report in which he highlighted not only the impact of foreign residents on the local economy, but the way in which they had impacted society and specific sectors, such as real estate.
The forum’s guest speakers also set out the untapped potential of the Costa del Sol as a residential tourism destination, making special reference to the local infrastructure, and said that the investment incentive models currently adopted by the UK and Portugal should be used here to increase the sector’s long-term competitiveness.
Industry leaders including José Prado, president of the Provincial Association of Constructors and Promoters; Ricardo Arranz, president of the National Association of Developers and Residential Tourism and Sport; Pedro Rodríguez, president of the Sierra Blanca Group, and Ramón Dávila, also of Promotur, expressed their agreement that one of the main brakes on overseas investment on the Costa del Sol is the recently introduced obligation on foreign nationals to report all worldwide assets to the Spanish tax authorities. This controversial measure, they insist, is beginning to, and will further, impede the inflow of foreign investment at the very time it was starting to show signs of an upward trend.
In the second half of the event, tax experts including Pedro Fernández, from the law firm Garrigues; José Manuel Domínguez, professor of Applied Economics at Malaga University; and Jesús Rodríguez, sub-director of Tax Studies at the Institute of Fiscal Studies, discussed their analyses of the current Spanish tax system and compared it to that of other similar markets.
Pedro Fernández, an expert in International Fiscal Law, stressed that the sector currently attracts investors whose profile is totally different from that of the British and German pensioners who came here in previous years.
“Internet and good air connections mean that this area attracts foreign professionals who choose to live here and who could benefit us financially,” he pointed out.
He explained that these investors cannot understand how the Impuesto de Patrimonio can be applied without taking into account generated income. He proposed limited taxation for certain residents. He admitted, though, that marking out these limits would be a “significant challenge”.
Jesús Rodríguez compared the Spanish system with the more advanced models used in the UK and Portugal, the latter being the main rival of the Costa del Sol in attracting foreign investors.
Rodríguez explained that the commission created by the Ministry to address fiscal reform would produce an initial report in February.
“It’s time for a fiscal reform with a general approach that paves the way towards a harmonious, and simpler system,” he said.