So, here we are in Spring. If you live on the Costa Blanca or have spent much of the past few months out here, you will perhaps feel that winter passed us by this year. Now, we have the promise of all the spring and summer to come but aren’t yet wilting under the intense July and August heat. It’s a time to make decisions and, without putting a damper on it, it’s time to take a fresh look at your Spanish paperwork too.
However, we would like to remind you that taxes in Spain can be complicated and you could be subject to fines or penalties if you miss a deadline or don’t do your taxes properly. Advisably, you should seek fiscal advice from an expert to avoid possible complications.
Many of you are doing just that. We were delighted to play host to so many British residents who attended our recent event, ‘Tax, Tea and Travel,’ at La Zenia Hotel, last week. Their questions were a timely reminder about just how much confusion there still is surrounding tax and legal issues in Spain and also just how keen the majority of people are to do it right.
Not everyone is interested in or able to come to one of our events, so here are a selection of questions that we have found that expats are asking:
I live in Spain for seven months of the year – am I a resident?
Yes, you are, if you live in Spain for more than 183 days a year.
I only draw a small pension, do I really need to make a resident tax declaration?
People are often surprised at the threshold above which residents are required to make an annual resident tax declaration. For example, if you receive one or more pensions from abroad that total more than 11,200€ a year then you are required to make one (other conditions also apply).
If I have no tax to pay what’s the point in making an annual declaration?
We do recommend that all residents make an annual tax declaration whether or not they have to pay taxes. Doing so makes it easier to show that you are a fiscal resident which is particularly beneficial when it comes to either selling or bequeathing your home. It means that usually, a much lower rate of inheritance tax applies and that you won’t have 3% retained on the sale of your house.
When, where and how should I make a declaration and is it complicated?
The resident annual tax declaration must be made before the 30th June every year to take into account the previous year’s income. A good fiscal representative will help you through the process and ensure that it is kept as simple as possible with explanations delivered in your native tongue.
The declaration is simple, useful and required in the vast majority of cases. The spring is a good time of year for clearing out the winter woollies (if you needed them in the first place) and clearing up your pending paperwork too.
To help navigate the bureaucracy of the Spanish tax system, our dedicated advisers are on hand to help at every step of the way. Fill out this short form and we will offer you a free consultation without obligation.