Spain Explained

Did you miss the non-resident tax declaration deadline?

December 31st was the deadline for the non-resident tax declaration. This is the form that every non-resident is required to complete annually. It’s a busy time of year and so it isn’t surprising that it can fall off the list of To-Dos.

If this applies to you there’s no need to panic. It is possible to submit a late declaration but just be aware that you will need to pay a small fine. However, don’t delay. The longer you leave it then the more the fine will be and, when you do come to sell your property or bequeath it, outstanding bills, like this, will need to be settled.

In this article we will go through some relevant information regarding the non-resident tax declaration. However, we would like to remind you that taxes in Spain can be complicated. Advisably, you should seek fiscal advice from an expert to avoid possible complications.

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What is the non-resident tax declaration?

The declaration covers the previous year and is the means by which any income of interest to Spain is declared. This includes, for example, rental income tax or imputed income tax if you do not rent out your property.

Non-residents with property in Spain must pay two taxes:

  • IBI (Impuesto Sobre Bienes Inmuebles) or council tax
  • Imputed income tax or rental tax (in some cases a combination of the two)

IBI

The IBI is paid directly to the town hall or the SUMA office and is collected annually. The exact timing of this will depend upon the tax calendar of the area in which the property is located. IBI is calculated according to the rateable value of your property or valor catastral.

Imputed income tax

This is a tax you pay because your property is a second home but you do not rent it out. If you do rent it out, then you pay rental income tax instead. Imputed income tax needs to be declared as part of your non-resident annual tax declaration and is paid to the Spanish Tax Authority.

Rental income tax

If you do rent out your property then you must pay rental income tax instead. This is collected quarterly:

  • 20th April
  • 20th July
  • 20th October
  • 20th January

Residents of the EU, Norway and Iceland can deduct certain costs incurred and that correspond directly to the rental income receive.The period the property was rented there are also some adjustments in the Property Owners’ Imputed Income Tax for the period of time the property was rented in the annual tax return presented corresponding to that fiscal Year.

How much is the fine?

If you did miss the deadline then the sooner you present the declaration the better if you want to avoid heavy charges. The following table shows what the extra tax and interest are for late payment:

January 1st – March 31stExtra 5% in tax
April 1st – June 31stExtra 10% in tax
July 1st – December 31stExtra 15% in tax
After one yearExtra 20% in tax plus interest

As you can see, there are real incentives for making sure that if you missed the 31st December deadline you are able to present your declaration within the following three months. In other words, you have until 31st March after which the extra percentage you must pay in tax will double.

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Better late than never

You may be a little late now but making your declaration at this time will still be much better than experiencing some of the other courses that unpaid tax can take. For example, late payment interest can also be accompanied by sanctions such as the embargoing of your bank account. This is something that takes many people by surprise but is quite a common procedure for the tax office when they identify that a tax bill remains unpaid.

One difficulty that non-residents often have is that of receiving communications from the Tax Office in Spain. Because they are not here (by definition!) all year round, letters might not be received and signed for and so are returned to the Spanish Tax Authority. A notification might be placed in the BOE (Boletín Official del Estado) but this long Spanish list of notifications is not generally on most people’s reading lists.

However, once it has been posted in the BOE then you’re considered to have been informed. This is one of the reasons why embargoes so frequently take people by surprise.

So, take the opportunity, let us put your tax affairs in order and make sure that 2019 has no unpleasant Spanish tax surprises waiting for you.

To help navigate the bureaucracy of the Spanish tax system, our dedicated advisers are on hand to help at every step of the way. Contact us and we will offer you a free consultation without obligation.

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14 comments

Bernie Allan

28 January, 2018 7:17 pm

Am I correct in thinking that
Am I correct in thinking that the imputed rental income tax does not apply if the property is owned by a foreign (UK) registered company and is not rented out.
Kind Regards
Bernie Allan

Suzanne O'Connell

5 February, 2018 8:53 pm

Yes. Companies are taxed

Yes. Companies are taxed differently and this tax does not apply. 

YM Smit

29 January, 2018 9:24 am

Goodday,
Goodday,
I have just read on your site about the fines for when you pay the non-resident tax too late. I have been too late in the past (once several years) but have never received a fine even though I have also given my permanent address in the Netherlands on the form. Is there a number of years after which they cannot request the fine anymore? And does the maximum fine remain 20%? Thank you in advance for your answer

Suzanne O'Connell

5 February, 2018 8:56 pm

Hi 

Hi 

The tax office can take up to four years to issue the fines. The maximum fine is 20% with interest.

John

6 March, 2018 9:14 pm

Hi, the Agency Tributaria
Hi, the Agency Tributaria have withdrawn €72.00 from our account. It says Diligencia de Embargo?? We do not understand what this is for?? Have tried to contact our Spanish bank for assistance but they are not being very helpful!, Have looked on their website but don’t know how to contact them to find out what it is about but that’s even more confusing. We have a property and are non residents. Haven’t received any letters but haven’t been out for some time. Don’t know what to do! We do not speak Spanish so it makes this more difficult. IBI bills are up to date but I fear we maybe amiss with imputed tax after reading you article? Any help would be greatly appreciated. Thank you

Suzanne O'Connell

9 March, 2018 1:06 pm

Hi John

Hi John

This is the Catastro revision for the rateable value of the property which has been passed over to the tax office to collect. There should have been some form of notification from both the Catastro office and the Tax office prior to the embargo. The original sum for the revision would be €60. 

Terry

1 February, 2019 3:59 pm

How far back can the taxman
How far back can the taxman go back to collect unpaid imouted taxes?

Suzanne O'Connell

1 February, 2019 8:15 pm

Hi Terry

Hi Terry

The tax man can go back four years. 

Norah Dean

16 February, 2019 9:27 pm

Am I allowed to earn €1000
Am I allowed to earn €1000 per year by letting out my flat over some of the high season without paying tax ? I am a pensioner.

Suzanne O'Connell

18 February, 2019 2:13 pm

Hi Norah

Hi Norah

I'm afraid you have to pay whatever your income

Bernie Allan

26 February, 2019 3:31 pm

Hi, you mentioned earlier in
Hi, you mentioned earlier in the comments that if a property is owned by a foreign company(UK) then the property would be taxed differently. Can you point me to the tax laws that would apply in this instance. The property is not rented out.

Suzanne O'Connell

4 March, 2019 12:38 pm

Hi Bernie

Hi Bernie

This information might help:

1st January 2013. As a non-resident company, you are no longer required to present the form 213 which we normally complete on your behalf in the month of January.  

For the tax year 2013, income tax will only be payable by those companies:

*        which are resident in countries that are considered to be tax havens and/ or

*        that have business here in Spain

Companies and their shareholders that are now exempt from presenting the 213 tax declaration and certificate of fiscal residency include those who are resident in countries:

*        that have double taxation treaties

*        have an agreement with the Freedom of Information Clause

Fiscal representative obligation

However, it is also important that you are aware that you are still obliged as a non-resident company to maintain a fiscal representative in Spain. Your representative must be registered with the Tax Authorities in order to receive electronic notifications on your behalf. We have already registered you in the system ‘Dirección Electrónica Habilitada’ or DEH according to article 4 of the Royal decree 1363/ 2010.

Richie

14 February, 2020 9:59 am

Hello,

I have a friend that purchased a property in Spain over 20 years ago. They were never aware that an Income tax for non-residents who do not rent out their property (standard declaration) existed and hence it has never been paid. From reading the below it seems the tax authorities only go back 4 years. Does that mean that if my friend were to make a declaration to bring their affairs up to date they would only owe the last 4 years tax plus interest and penalties?

Oscar Paoli

17 February, 2020 3:23 pm

Hi Richie,
That is correct.
Should your friend need any assistance in the matter please contact us at +34 966 703 748 or by email at info@abacoadvisers.com
Kind regards,
Ábaco Advisers