Spain Explained

The effect of coronavirus on Spanish tax regulations

Last updated on May 9th, 2020 at 04:26 pm.

Everybody around the world is facing difficulties due to the ongoing COVID-19 pandemic. Spain has been among some of the worst-hit countries. Therefore, the government has been keen to publicise some of its measures to alleviate the crisis. To help those concerned, this article sets out to clear up some of the details of coronavirus Spanish tax agreements the government has made. These regulations may affect foreigners that own property in Spain, whether they are residents or non-residents.

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.

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Extensions on the time limit for declarations

The first piece of news that may appease non-residents’ worries is about tax declarations. On holiday rental properties, Suma have extended these by one month until the 20th of May

ISD (Inheritance Tax), ITP (Tax on Property Transfer and Rentals) and AJD (Tax on the realisation of documented acts, such as mortgages) are all subject to extensions on the time limit for submission and payment. If payments have been due since the beginning of the outbreak, then these taxes can now be submitted later. The deadline for payments is now one month after the day on which the government declare the end of emergency procedures. If the last day of COVID-19 related restrictions falls on a weekend or national holiday, then the important date will officially end on the next working day. The deadline for payments will, therefore, be precisely a month after that working day.

Changes to the way you make payments

There is also a change for those who declare periodically, as declarations will be submitted in line with calendar quarterlies. All of the government’s new guidelines affect any resident or non-resident. This includes those who have bought, inherited or donated property in Spain within the last few months

Suma Gestión Tributaria has suspended the period for voluntary payment of taxes. This is in response to the Royal Decree 463/2020 that declares the State of Emergency throughout the whole country. This measure that the government adopted to deal with the coronavirus crisis includes the suspension and interruption of normal deadlines that public sector procedures would ordinarily follow.

Therefore, Suma’s period of voluntary tax collection that began on the 5th of March and was due to end on the 5th of June has been suspended. Furthermore, pending compliance with hearing procedures and administrative notifications, administrative management procedures are hereby suspended.

The Provincial Council have announced further measures. One of these was the alleviation of the tax burden on vulnerable families for the duration of the COVID-19 crisis. The effect of Coronavirus on Spanish taxes means that the country’s tax authority will allow people affected by the crisis to pay the IBI (Spanish property tax) in instalments of up to 12 months without interest. 

Residents of Spain

Spain’s laws on right to housing mean that there will be a temporary freeze on mortgage payments. This is for those who have suffered a reduced income or are unemployed due to COVID-19. For more information, please see pages 7 and 8 of this government announcement (in Spanish).

The same rights to housing extend to the rights for access to utilities. For the duration of this crisis, the most vulnerable families will not lose access to electricity, water and natural gas if they are unable to pay their bills. Further information can be found on pages 10 and 11 of the same report.

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Information is constantly changing, so please keep up to date and stay safe

In this unprecedented time, government policy around tax is subject to change. We hope that this article proves to be helpful and explains the current taxation situation. If you know of anyone who might find this information useful, please feel free to share this article. If you have any further doubts or questions we are available at all times so please do not hesitate to contact us. We will always be happy to help. 

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Ed Schneiderman

8 May, 2020 3:53 pm

How does lockdown affect tax residence for those U.K. tax residents stuck in Spain and asa result, likely to go over 183 days in the country in 2020? I understand that for non U.K. tax payers who are stuck in the U.K. involuntarily, HMRC has indicated this may count as an exceptional circumstance enabling up to 60 days to be disregarded. Is the Spanish Government likely to take a similar line?

Oscar Paoli

17 May, 2020 9:01 pm

Hello there,

Honestly we do not have a straight and correct answer, but as the HMRC indicate this may count as an exceptional circumstance, we are seeing the same scenario here in Spain with expired ID cards, MOT for cars, etc. So we assume it most likely will be an exceptional case.

With best regards,

Ábaco Advisers