Every year, before December 31st, all Non Residents in Spain must complete a Non Resident Income Tax Form.
Who does the Spanish Non Resident Tax apply to?
This tax applies to anybody who is not legally a resident in Spain, but who has assets in Spain, such as property, income from the rental of property, income from bank deposits when applicable, royalties from intellectual property, etc. These non-residents, thus, have to lodge this Spanish Tax Return because of this income, and probably pay because of the tax.
What do I need to do to lodge my Spanish Non Resident Tax?
If you are one of these non-residents, you will need to fill out a 210 form with all of your personal details, bank account number, and the details of any assets you have in Spain. If there is more than one owner of your property, each owner must complete their own Spanish Non Resident Tax form every year.
You will require the following information in order to lodge your Non Resident Tax return in Spain:
- Address of your Spanish property, and your address in your country of residence.
- The date of purchase of the Spanish property.
- The valour catastral of your property.
- Name, date, place of birth and tax number of each owner of the property.
- Any other information regarding the above-mentioned items of income.
What happens if I don't do a Non Resident Tax return?
When you sell your Spanish property, 3% of the sale value will be automatically withheld by the tax office. In most cases, the 3% sales value will be more than the capital gains tax due, so you may be able to claim back a substantial amount. This process is slow and if you have not summited your annual tax returns from earlier years, the process will become much slower.
What’s more, the tax office may subject you to pay fines for not presenting your annual income tax returns or for late submission in the current year.
How much am I likely to pay?
If you have had tenants in your Spanish property and you are tax resident in any other Member State of the European Union, in Iceland or in Norway, then you will have to pay 19% of your rental income. Please bear in mind that all of your rental expenditure, including your mortgage interest, is tax deductible every year. If you are tax resident in other country not mentioned above, it will be taxed 24% and the expenses incurred can´t be deducted.
The taxpayer is obliged to file a quarterly tax return (form 210) in respect of the income received.
If you have had no tenants, then the income tax is calculated on on a ficticious income (normally 1.1% of the cadastral value). EU citizens currently pay 19% and non-EU citizens 24%. In this case, the declaration is made annually. You will have to pay these taxes every year, before December 31st. Please note that this Spanish tax does not coincide with resident’s tax return dates.
For more information on this particular tax issue or any other legal matter, do not hesitate to contact a Law Firm which is specialized in Spanish Taxes and Law, for residents and non-residents. This way, they can help you do your Non Resident Tax Return, quickly and easily. If you’re not in Spain at the moment, maybe because you are in your home country, you can be represented so that your Tax Advisors do all the paperwork on your behalf and you can lodge your Tax Return and pay the pertinent taxes.