All individuals or legal entities not resident in Spanish territory are subject to tax in Spain for the income obtained in Spain, whether property or property, thru the Non-Resident Income Tax.
INCOME TAX FOR NON-RESIDENTS IN SPAIN:
This is a tax established by the Spanish legal system, directly levied on income obtained in Spanish territory by individuals or legal entities not resident in Spain, whether for the development of an economic activity, possession of a second residence, pensions or income from real estate capital located in Spain.
For tax purposes, an individual or legal entity is considered to be a non-resident in Spain when they spend less than 183 days a year in Spanish territory.
It should be borne in mind that non-residents of Spain have two different ways of obtaining some form of income:
- With a permanent establishment: These are companies or individual companies which, being resident abroad, carry out all or part of their activities in Spanish territory thru a permanent establishment located in Spain.
- Without a permanent establishment: This is income derived from economic activities without intermingling with a permanent establishment located in Spain.
In this article, we will focus on the procedure for declaring income obtained by individuals or entities not resident in Spain without a permanent establishment, and whose obligation arises in the following cases:
- Income derived from work, economic activities or artistic activities obtained in Spain.
- Income from “movable capital”.
- Income derived from urban property located in Spanish territory not used for economic activities.
- Capital Gains in Spain.
- In the case of losses arising from the transfer of real estate, a tax return must also be filed if you wish to exercise your right to a refund against the non-resident withholding tax (3%) levied by the purchaser at the time of the sale of the property.
The aforementioned income must be declared to the Spanish State Tax Administration Agency by filing the corresponding 210 forms for each type of income separately and individually.Depending on the type of income to be declared, the applicable tax rates are as follows:
- Generally, 24%, reduced to 19% for residents of another Member State of the European Union or the European Economic Area.
- In the case of pensions and similar, the following scale applies:
- 8% (up to €12,000)
- 30% (from 12.000 € to 18.700 €)
- 40% (from €18,700)
- In the case of income from movable capital (dividends and interest) and capital gains, 19% would be applied.
The deadline for presentation this forms varies depending on the type of income to be declared:
- Income attributed from urban property: During the calendar year (from 1st January to 31st December) following the date of accrual.
- Income derived from the transfer of real estate: Three months after the expiry of a period of one month from the date of transfer of the property.
- Other income: The first twenty calendar days of the months of April, July, October and January, in relation to income for which the accrual date falls within the previous calendar quarter.
It is important to note that the non-presentation or extemporaneous filing of this return by taxpayers leads to the imposition of surcharges or tax infringement charges in specific cases.
In the event of late filing of the tax return, without notification to the Administration, there will be a surcharge of 5% in the following 3 months; 10% between 3 and 6 months; 15% between 6 and 12 months; and from 12 months onwards, the surcharge will be 20%, and in this last case, late payment interest (3.75%) will also be charged for the period from the day following the end of the 12 months until the filing of the tax return.
In the case of late filing of the tax return, with a notification to the Administration, there will be an infraction that carries a penalty ranging from 50% to 150% of the total debt, depending on the “economic damage” caused to the Tax Office.
It is essential to be up to date with your tax obligations in order to avoid future tax sanctions and issues.
JLCA & AS. – Lawyers are pleased to offer our legal services to ensure timely presentation on your behalf.
Please do not hesitate to contact us for any further questions or clarifications you may have on your tax matters.
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JLCA & AS.- Abogados is a Spanish law firm offering legal services nationally and internationally, with offices in Spain, United Kingdom, United States, France and Belgium. We cover the whole of Spain, including the Balearic and Canary Islands.
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