TWO expat-run charities on the Costa Blanca have launched a campaign to end the Spanish government’s 21% VAT taxation on goods sold through second-hand shops.
David Young, newly-elected president of Torrevieja-based Reach Out, said the government was ‘raping’ charities through ‘ridiculous’ taxation laws.
Along with Carmen Perez from Help at Home, he is asking for ‘all charities’ to join their campaign for change.
David said: “The situation is ridiculous. When a garment or sale item is originally made, IVA is paid on it.
“Then IVA is paid again when a retailer sells that item to a customer. The customer donates the item to a charity shop which again has to pay IVA on that very same item, which means that
the government has collected tax on that item three times. It’s ridiculous.
“The Spanish government either doesn’t understand what charity is, or choose not to.
“What they are doing is raping charities, taking money out of our bank accounts, forcing us to pay money which otherwise could be spent helping people in need.
“People donating their unwanted items to us do not expect that a quarter of the money we raise from the items is syphoned off for the government to fritter away.”
He said that both charities paid nearly €20,000 each last year alone on value added tax (IVA in Spanish) – despite charities in other countries in Europe being ‘tax exempt’.
David added that charity work saves local town halls money by performing social services, and that without taxation they would be able to do ‘much more’ work.
Carmen said: “Although we are not providing a service on behalf of local councils, we are helping many people in need, taking them to and from hospitals and doctors, doing shopping and numerous chores when they have no help from another source.
It’s so sad that we had to give almost 20,000 euros to the government last year for no good reason.
“We are not a business; we are not doing work to make a profit but to help others and the
the government needs to understand that.”
It comes after the Olive Press was the first English newspaper in Spain to report on IVA taxation laws back in January.
A gestor working with charities on the Costa Blanca, who asked not to be named, said the government had began ramping up inspections on charities and was even fining them ‘up to €24,000’ for unpaid IVA.
He warned that, in the eyes of the law, charity shops are viewed as any other high-street business following recent law changes to crackdown on fraudulent operations.
“It’s not fair that a legitimate business is charging IVA on its clothing sales while next door a charity shop can slash its prices,” the asesor told the Olive Press.
“A lot of British expats open charity shops thinking they don’t need to charge IVA on their sales.
“People should be aware, however, this is not a tax clampdown but a collaboration in collecting funds for the government to do its job properly.”