Non Residents Income Tax

Non Residents Income Tax

AS we do every summer, we wish to remind readers who are regarded as Non Tax Residents in Spain (even if they just visit their property on a regular basis for holidays) that they are still obliged to pay Income Tax in Spain, even if they do not have any Spanish income but own a property here.

Wealth Tax

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If you are Non Tax Resident in Spain, or even if you live in Spain but are not registered as a tax resident or you do not submit taxes as tax residents,  you could still  be legally considered as a Non Tax Resident if no notice has been given to the Tax Authority.

Non Tax Residents could be liable to pay Wealth Tax, but only if the value of their assets in Spain (after deducting debts, such as mortgage, etc) is in excess of €700,000.

Income Tax

If you are Non Tax Resident in Spain (or you are not legally tax resident in Spain), you will need to pay tax for income earned in Spain to the Spanish authorities (Income Tax for Non Residents, IRNR): eg rents from letting out a property, interest on bank accounts, etc.

If you do not have any income but you own a property or a share on a property, your tax bill will be based on a calculation based on the Cadastral Value (the value that appears on your Spanish local rates receipt from the town hall, the SUMA office or the equivalent).

Even now it is quite common for people who are Non Fiscal Residents in Spain (or not legally Tax Resident in Spain) to simply not pay this tax; usually due to ignorance or neglect and especially when they have no income in Spain and only own a house.

Please note that if you rent out your property in Spain, you are obliged to pay these taxes every three months and not just once a year.

If you are not sure if you are legally or officially Tax Resident or are considered a Non Tax Resident and want to know what is most appropriate for your position, we can assist you by studying your personal situation.

However if you are Non Tax Resident, do not forget to meet your tax obligation if you want to avoid a possible tax inspection or suffer financial penalties. Contact us and we will help you.

The information provided in this article is not intended to be legal advice, but merely conveys general information related to legal issues.

Carlos Baos (Lawyer) 

C/Diana 19, 2º D, 03700 Denia (Alicante) Spain
Tel. +34 966-426-185 Fax +34 965-784-471

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