Last updated on March 19th, 2020 at 09:57 am.
It’s October and already in some countries, there is the tentative onset of Christmas preparations. The early heralding of the Christmas season is something that some of our native countries are renowned for. In Spain, however, the coming of Christmas is a much more low-key affair. Its equal positioning alongside other Christian festivals is, personally, something that I welcome.
To give even more of a Scrooge feel to the first hint of Christmas, dare I mention ‘taxes’. In Spain, it’s not only Christmas that is ushered in at this time of year, it’s also the time of the non-resident tax declaration. It might seem a little early to be preparing in October for the 31st December tax declaration deadline. However, just as some of us like to get our homes decked out early, so in a firm that deals with taxes, we must prepare in good time too.
Non-resident tax confusion
It still takes us by surprise just how many non-resident Spanish property owners are unaware of their Spanish tax obligations. By and large they expect to pay the Spanish council tax (IBI) but do not seem to know that there are more taxes they should be paying. It’s doubly surprising because we have been telling people about them for years!
The one that often causes confusion is the imputed income tax in Spain. This is a tax on property that must be paid by non-residents who do not rent out their Spanish property. The thinking behind this tax is that your property in Spain is a second home. As such, if you don’t pay rental income tax, then you must pay this tax instead. It might be the reference to ‘income’ that non-residents find confusing. However, the imputed income tax is nothing to do with your income in your home country. It is purely a tax on property.
The deadline for paying the tax is December 31st. Collecting taxes at this time of year might be a rather unseasonal activity but then the tax man doesn’t have a reputation for fun and festivity. So, as you’re sifting through last year’s Christmas trimmings spare a thought for us in Spain, sorting through your non-resident taxes, ‘Season’s Greetings!’
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.