Yes, not being resident in Spain no implies that the person doesn’t have top pay any taxes in its territory if this person have some connection with the country, for example being the owner of a property in Spain.
Today, in the article we will talk again about non- residents and specifically, tax obligations that they have to face when they have properties in Spain.
Suppose that Maria resides in Paris (France) but she has a flat in Barcelona (Spain). What are Marta’s tax obligations because of having this flat?
1. Tax on the Income of Non-Residents (IRNR)
Marta because of not being a resident in Spain has to face the tax on the income of non-residents (IRNR) as it taxes the obtaining of rents in Spain by physical persons and entities non-residents. Specifically the article 13.1 sectors g) and h) of the LIRNR establishes the case of properties:
- g) Monetary or in-kind income derived directly or indirectly from immovable property situated in Spain or rights relating thereto.
- h) Income attributed to physical persons who are holders of properties located in Spanish territory not engaged in economic activities respectively.
As you can see although Marta goes very far, she doesn’t release to take out the wallet and tax by IRNR if she has a property in Spain.
In this point, a question that appears is:
How are the persons taxed by IRNR in this case?
Through the form 210.
Form 210? How works this form?
First of all, this form is where the rents derived by these properties are recorded and the deadline for submission, which corresponds with the calendar year following the date of accrual, i.e. filing form 210 for the year 2016 may be made voluntarily until 31 December 2017.
Regarding the determination of the tax base is calculated according to the IRPF regulations, which is means, computing as income the result of applying the corresponding % on cadastral value specified in IBI. But BE CAREFUL because the things are not as simple because depending if the cadastral values are modified or revised during the last 10 years, the % are different:
- No modified/revised: 1,1%.
- Modified/ revised: 2%.
It doesn’t seem so complex but this is like that since 2015 because before 2015 the percentages are different depending if the cadastral values are modified or revised since the since 1994:
- No modified/revised: 1,1%.
- Modified/revised: 2% since January 1994.
WAIT because the things don’t finish here, it’s more complicated because there is a distinction between residents and non residents in the UE regarding the tax rate:
- Residents in UE: 19%. This is our case because we have assumed that Marta resides in France.
- Non-residents in UE: 24%.
As you can see it is important to have some checks to avoid erroneous taxation.
But we have not reached to the end yet.
2. Wealth tax (IP)
It is not enough to pay for non-residents, but Marta must also face wealth tax (IP) because of ownership at the time of accrual of assets in Spain. But BE CAREFUL because there is a minimum exemption € 500,000 in Catalonia (€700,000 in state-wide) and IMPORTANT to face the obligation of non-residents to appoint a physical or legal person resident in Spain in order to represent them in front of Tax Agency, constituting a very serious offense not comply with this obligation.
At this point as before, a question appears:
How are the persons taxed by IP?
Through the form 714.
What are the main characteristics of this form 714?
The deadlinefor submission whatever the result (positive or negative) will be between April 6 and June 30 both included of the year after the accrual, so the presentation of 714 form for the financial year 2016 can be done voluntarily between 6 April and 30 June 2017 or 25 June 2017 in the case of direct debit.
The determination of the tax base iscomprised by the value of each property and rights less the charges, liens, debts and obligations of which, the taxpayer will have to respond.
Finally, the quota will get applied on taxable income rate the progressive tariff of CCAA or default, set the LIP (art 30).
Conlusion
Many people think that leaving a country to live in another implies not paying taxes in it but this though is wrong, there are tax obligations to be faced, we have seen in the Marta’s example where however she lives in París because of having a flat in Spain, she have to pay 2 taxes: IRNR (model 210) and IP (model 714).
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