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Modelo 210: tax for non-residents with Spanish property

Obligation to declare

All non-residents with Spanish property which is not rented out for every quarter during the year, are obliged to submit annual tax declarations. The deadline is 31st December following the end of each tax year.

For example, if you purchased a property in 2022, your first tax return will be due by 31st December 2023.

What are the repercussions if I do not declare ?

When you eventually sell your property as a non-resident, 3% of the sales value is automatically withheld from you. Because in many cases this will be more than the actual capital gains tax due, you could be due a substantial refund.

The refund process is slow and the authorities may make a detailed review of the tax history of your property. If you have not submitted annual tax declarations, this could lead to delays in issuing the refund.

In addition, you may be subject to Tax Office fines for late- or non-submission of the annual tax returns.

How is the annual tax calculated ?

Deemed income tax for non-rented properties

This is income tax on the “imaginary” rental income that you have on the property, and is calculated in reference to the rateable value (valor catastral) of the property.

The tax rate for non residents is 19% for residents of EU, Norway and Iceland and 24% for residents of other countries. The taxable amount is, in general, 1.1% of the rateable value of your property.

So for instance, if your property has a rateable value is 50,000 Euros then the annual tax payable for the tax year 2020 is 105 Euros for EU, Norway and Iceland residents and 132 Euros for others.

How does the situation change if I rent out my property ?

If your property is also rented out, you are required to make a tax declaration for each quarter in which you have rental income.

The tax rate is 19% for residents of the EU, Norway and Iceland, with all rental expenses (including mortgage interest) being deductible for tax purposes. For residents of other countries, the tax rate is 24% with the rental income received being fully taxable with no deductions.

The taxable amount is, in general, 1.1% of the rateable value of your property.

In the case of joint ownership, do we need to submit more than one tax declaration ?

Yes, each joint owner of the property is required to submit a separate return.

Do I need to be registered for Spanish tax in order to submit tax declarations ?

Yes, property owners do need to obtain a Spanish tax code (NIF).

When you purchased your property, you will have been assigned a foreigners’ ID number (NIE). The NIF will be the same number, but it is necessary to physically go into the Tax Office to register.

In the majority of cases, property owners will already be registered for tax. We will carry out an initial online check on the Tax Office database to verify this.

What are your charges to submit my tax declaration ?

Our current charges (2023 rates) for all clients, before 21% VAT, for each declaration (quarterly or annual) are as follows:

Single property owner: 79 Euros

Reduced rate for joint ownership: 100 Euros

This includes:

  1. Drawing up your draft tax calculation and submitting to you for approval.
  2. Online submission of the declaration and order for the payment of the tax due directly from your Spanish bank account.

Please note that the reduced rate for joint ownership is for those who are married in which both spouses are non-residents. Otherwise, you will be charged to file two separate single tax declarations.

What information do I need to supply for you to prepare my tax declarations ?

  1. NIE of each owner of your property;
  2. The full address the property;
  3. The date and cost of purchase;
  4. The rateable value (valor catastral). This will be on your latest rates (IBI) bill; for recently purchased properties, the lawyer/ agency who dealt with the sale may also be able to provide you with this information.
  5. Name, nationality, date and place of birth, and current home address of each owner of the property.

If you have rental income in any quarter, please provide a schedule of the income and expenditure for the quarter. Expenditure is deductible for tax purposes for residents of the EU.

The IBAN of your Spanish bank account, for the purposes of direct debit payment of the tax due.

If you have any further questions, please do not hesitate to contact us on admin@europeaccountants.com . You will also find informative articles on non-residents’ tax on our blog and website www.spainaccountants.com .

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How to obtain a personal FNMT Digital Certificate in Spain- 2023 guide

  1. Go to the FNMT website at the following link: https://www.sede.fnmt.gob.es/certificados/persona-fisica/obtener-certificado-software/solicitar-certificado
  1. Click on Configuración previa. To request the certificate it is necessary to install the software indicated in this section.
  1. Download and install FNMT Configurator by clicking on “Área de Descarga de Configurador FNMT”, at the bottom of the page. Select the option according to your operating system, download and install it. The software will run when the browser requires it.
  1. Go back to https://www.sede.fnmt.gob.es/certificados/persona-fisica/obtener-certificado-software/solicitar-certificado and enter the personal details requested (NIE/NIF, first surname, e-mail).
  1. Click on “Pulse aquí para consultar y aceptar las condiciones de expedición del certificado”, scroll down to the bottom, check the box “Acepto las condiciones de expedición”, then click on “Enviar petición”.
  1. Write down or print the application code (código de solicitud) provided by the web. You must take this along to the Tax Office appointment.
  1. Make an appointment to visit your local Agencia Tributaria:
https://www2.agenciatributaria.gob.es/wlpl/TOCP-MUTE/Identificacion

Enter your NIE;

Enter your first name, surname.

Click on “Siguiente”.

Select the button “Otras gestiones”; Identificación Electronica; Certificado Electronico FNMT.

Click on “Siguiente”.

In “Dónde ir” Enter your postcode or province;

Select a date and time for the appointment and click on “Confirmar Cita”

Enter your phone number and email twice and click on “Confirmar”.

  1. When you go along to the appointment, take your passport and NIE (and a copy of both just in case), and the application code obtained in (6) above.

Check in and get a ticket from the machine. If the machine asks you to choose a procedure it will be something like “Acreditación Certificado Digital FNMT Personas Físicas”. The Tax Office employee will activate your digital certificate.

  1. Approximately 1 hour later you can download your Digital Certificate. Go to https://www.sede.fnmt.gob.es/certificados/persona-fisica/obtener-certificado-software/descargar-certificado and enter the details requested (NIE/NIF, surname, and Código de Solicitud).
  1. Before downloading your Digital Certificate, you must accept the conditions of use of the certificate by clicking on “Pulse aquí para consultar y aceptar las condiciones de uso del certificado”, scroll down to the bottom, check the box “Acepto los términos y condiciones de uso”, then click on “Descargar Certificado”.
  1. The key generator application will ask you to enter a password and will ask you if you want to make a backup (recommended). Once the copy is made (only if you have marked “Si”), the certificate will be installed.
  1. If in the process of downloading the certificate you did not make a backup because you checked “No”, it is recommended that you access the certificate store of your browser and make a backup (export). You will need this if you need to recover your certificate at any time or use it on another computer. If you do not have this, the only alternative will be to request a new certificate.

If you have any further questions, please do not hesitate to contact us on admin@europeaccountants.com or to visit our website www.spainaccountants.com .

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Our Spanish tax / VAT registration for foreign companies- update

VAT compliance for non-resident companies

Spanish VAT registration of a foreign company involves registering the company with the Spanish Tax Office (Agencia Tributaria), and obtaining a Spanish tax code (NIF).

Documentation required

It is necessary to supply the following documents.

  1. A certificate produced by the Company Registry in the country where your company was incorporated. This document should state the registered address of the company, and a list of directors.
  2. A Power of Attorney document, the draft provided by us, to be signed by your company director before a Notary. This allows us to obtain your Spanish tax code (NIF) on your behalf and request your VAT registration with the Tax Office.

All documents should be legalised in your country with the Hague Apostille and translated into Spanish by a sworn translator if necessary. We will provide the Power of Attorney documents in both Spanish and English so in the event that you can find a local Spanish-speaking Notary, there will be no translation necessary for these.

We can also provide a sworn Spanish translation service at this end for a reasonable charge. We offer this service for several source languages including English and French.

Our charges

Our current charge for the VAT registration of your company is 350 Euros.

This includes the following:

  1. Drawing up the draft Power of Attorney and tax representation documents;
  2. Obtaining a tax code (NIF) for your company;
  3. Obtaining a personal Spanish tax code (NIF) for the non-resident Spanish director;
  4. Registering your company’s business activity with the Spanish Tax Office (Form 036).

Timescale

On receipt of the above documentation from you, we will normally obtain your Spanish tax number within approximately two weeks..

When we receive your go-ahead, we will invoice you for a payment on account of 175 Euros to proceed.

Digital Certificates

Once your company is registered for VAT in Spain, you might consider also obtaining a Spanish Digital Certificate. It is a actually compulsary but is widely ignored because up to recently, it has been been extremely difficult to obtain unless the company director can physically travel to Spain.

Having a Digital Certificate has certain advantages such as:

  1. Being able to receive notificacions from the Spanish Tax Office. All Tax Office correspondence is sent electronically directly to the foreign company and not to us, their registered representatives. So without a Digital Certificate, important communications will be missed.
  2. The possibility of applying for further registrations such as VIES, EORI and Social Security (to hire Spain-based employees).

We now have a licence to issue Spanish Digital Certificates directly, using videoconferencing to verify the company director’s identity, so no travel to Spain is required.

Our current charge to obtain and issue your company’s Digital Certificate varies between approximately 100 Euros for a 2 year certificate and 150 Euros for a 5 year certificate.

One Stop shop

If you would like to consolidate your VAT on sales in other EU countries into your Spanish VAT declaration, know as One Stop Stop, then this is possible. We can register your company for One Stop Shop in Spain and our current charge for this is 150 Euros, within approximately 10 days after your Spanish tax registration is complete.

Ongoing VAT compliance

If after registration you require our services to prepare and present your quarterly and annual Spanish VAT declarations, then we will also be happy to assist. Our current charge per quarter for VAT compliance is 179 Euros, on the assumption that you send us your VAT data quarterly in the attached spreadsheet format.

If you have any further questions, please do not hesitate to contact us on admin@europeaccountants.com or to visit our website www.spainaccountants.com .

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Obtaining a Digital Certificate in Spain- very useful !

Spain’s famously difficult bureaucracy still exists, but if you have a Digital Certificate your stress levels will be cut down a lot by not having to deal with those bureaucrats face to face !

With a Digital Certificate, many of the formal proceedings that you need to carry out with the Tax Office, Social Security office and local authorities can now be done online, without the necessity to go into their office.

For an individual resident in Spain, it is quite an easy process to obtain a standard 2 year Digital Certificate issue by the official emitter, FNMT. The Tax Office, Agencia Tributaria, acts as an agent for the FNMT and you can book an appointment online to go there to accredit your identity. Normally you won’t need to wait too long for an appointment but it could be longer during busy periods such as just before the annual residents’ tax declaration (Renta) is due in June. So it is best to plan in advance if you can.

We have prepared a detailed guide on how to obtain a Digital Certificate for Spanish residents. Please contact us at admin@europeaccountants.com and we will be delighted to send you one free of charge,

For non-resident companies who have business in Spain without a permanent establishment (for instance VATable sales in Spain) then it is also very useful to be able to obtain a Spanish Digital Certificate. We will be covering this in further detail very soon in our next blog post.

For further information and assistance, feel free to drop by at our web page www.spainaccountants.com .

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Finally the system for autónomo contributions has been reformed ! But it’s not going to make many people happy ….

The fixed Social Security contribution system applied in Spain drew much criticism and rightly so. Contributions were fixed regardless of actual income. To pay 250+ Euros a month for a new autónomo who was starting a small business and looking for customers was an incentive not to register and operate their business unofficially. A few years ago the tarifa plana system was introduced which allowed a lower monthly contribution for the first couple of years, which was very welcome to new businesses. But after this initial period, the autónomo was required to pay rate which are very high in relation to most European countries, particularly given the low rates of pay in Spain, and the system in place was still a disincentive for potential new entrepreneurs to start their own business.

From 1st January 2023, the system has been totally reformed and now the monthly Social Security contribution increases in relation to income (non-linear).

The monthly contribution falls in the following range:

Lowest earners (taxable income 670 Euros per month): contribution 230 Euros per month in 2023 falling to 200 Euros in 2025.

Highest earners (taxable income more than 6,000 Euros per month): contribution 500 Euros per month rising to 590 Euros per month in 2025.

The figure of income used for these purposes is the autónomo’s net profit after adding back their Social Security contributions, less a general deduction of 7%.

Previous incentives for newly registered autonomos are still in place but more limited. The monthly contribution is now 80 Euros per month on commencement and lasts for the first year only. After that, the autónomo must switch to the regular contribution regime, unless their income is less than the national minimum wage (SMI), in which case they can make reduced contributions for the second year.

So obviously this is not going to be a very popular reform because pretty much everyone will end up paying more than before !

For more information and assistance in registering as an autónomo and ongoing tax compliance, please visit our website.

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2022 Declaration des Revenus for the tax year 2021

The annual tax filing system for the French income tax returns (Declaration des Revenus) is due to open on 7th April.

Both residents of France, and non-residents with French income such as from property rental, are obliged to submit an annual income tax return.

The French tax year is equal to the calendar year. The presentation deadlines this year are as follows:

Non-residents

Manual returns: 19th May

Returns filed by internet: 24th May

For furnished properties: The full disclosure tax regime (Regime Réel) is generally favourable and economically viable to register if you have significant rental income, and your rental expenditure is more than 75% of your rental income. Registration for this regime is not simple or straightforward- processing times by the Tax Office are currently around 3 months or more. Also unfortunately it is quite common that online filing passwords sent to the taxpayer by the Tax Office do not arrive, which causes complications.

For the more simplified Micro Regime, in order to benefit from the increased tax allowance available, yourfurnished property should be registered as a tourist rental (Meublée de Tourisme) at the local Town Hall (Mairie).

For assistance with preparing and filing your annual French tax declaration, please visit our website or contact us.

Residents

For manual returns, the deadline is 19th May.

For returns filed by internet;

24th May: Départements 01 to 19;

31st May: Départements 20 to 54; 8th June: Départements 55 to 976.

Returns can be submitted from the following dates:

Online filing: 7th April

Manual filing: The manual returns are normally released by the first week of May.

After we file your Tax Return, the Tax Office will calculate the tax due and send you a payment notice, avis d’imposition. The date of issue is by late September.

In France there are monthly payments on account of income tax which are based on the income tax bill in the previous year. Any balance of tax due is paid in August / September in your final tax assessment, and this will also be debited directly to your French bank account.

Wealth Tax (Impôt de solidarité sur la fortune)

Residents of France are subject to Wealth Tax on their worldwide net assets, although there are now exemptions available for the first five years of residence, please contact us for details.

Non-residents only pay Wealth Tax on their French net assets.

Eligible assets include property; cash in deposit accounts and other financial investments. Business assets are generally exempt.

You need to declare if the net value of your owned real estate is over € 1,300,000. The deadlines are the same as for the income tax returns.

Wealth Tax is now declared as part of the income tax declaration (2042C).

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Renta 2021- the time has almost arrived !

The Spanish Tax Office (Agencia Tributaria) online filing system for the annual residents’ income tax returns (Renta) for the tax year 2021 is due to open on 6th April.

In order to file, you need to obtain a reference number for online filing, which can be done by clicking on this link on the Agencia Tributaria website. You can access this with a Digital Certificate if you have one or by supplying the details on your residence card.

Last year we found with several clients that the system, due to programming errors, was not recognising details from their residence cards. If this is the case for you please let us know and we will suggest ways for you to resolve the situation such as giving you instructions to obtain a Digital Certificate.

Residents of Spain are taxable on their worldwide income, according to the provisions of the tax treaty between Spain and the country in which the income arises. If any of your income is taxable in both Spain and the country of source, then you can claim the corresponding international double tax credit in your Renta.

As Agencia Tributaria inspections, especially for foreign residents, are getting more common nowadays, you should ensure that you keep documental proof of foreign income and foreign tax paid for 5 years.

The very last possible date of filing is 30th June, but if you have tax due then you should file your Renta by 23rd June so you can pay the tax by direct debit and not have to go in person to your bank.

If you need help in preparing and filing your Renta for the tax year 2021 then we will be happy to assist you. Our website is europeaccountants.com/spain and our contact page here.

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Becoming a Spanish Resident: Tax obligations

Am I a Spanish tax resident?

If you live in Spain for more than 183 days a year then you are classified as a tax resident here. Note that the number of days does not have to be consecutive, it is the total days stayed during the Spanish tax year, which is the 1st of January to the 31st of December.

If you also potentially hold tax residence in another country then you will be considered resident in Spain for tax purposes if your primary interests are in Spain, such as your professional and business activities, or if your spouse and/or children live in Spain.

How do I register for tax in Spain?

You are required to register as a taxpayer with the Agencia Tributaria (Spanish Tax Authority), this is required in order to file your very first resident tax return. To do this, you must have an NIE number. If you have a full residence card (TIE) then normally you will be registered for tax automatically and you do not need to take any further action. If you just have an NIE document then you can register for tax either online if possible in your case, or at the Tax Office in person by presenting the form Modelo 030. This form is also used whenever you need to inform Hacienda of any changes in your personal details.

Resident Tax Returns

Below is a summary of the forms you may need to file with the tax office as a Spanish resident:

Annual Income Tax Return – Modelo 100
Due by 30th june, or 25th June to pay tax by direct debit to your bank account

Personal income tax is Spain is known as Impuesto sobre la Renta de Personas Fisicas or IRPF. An annual declaration must be filed via the Form 100, also referred to as ‘La Renta’ to declare your Spanish and worldwide income. This means that any income you make from foreign assets, businesses, or savings has to be reported to the Spanish Tax Authorities.

The filing deadline to submit this form is at the end of June, and the online filing system usually opens at the beginning of April. It’s also worth noting that the taxpayer’s personal digital certificate is often required to file this return, because over the last couple of years the Tax Office’s new system has been having problems recognising the details on the taxpayer’s identification documents in order to register for online filing.

The tax rates are progressive ranging from 19% – 45%. More info can be found here.

Double taxation
To ensure that people do not pay double tax on their income, Spain has dual tax agreements with many countries. If you have already paid tax on the income earned in a country, depending on the type of income this amounts may be exempt from tax in Spain, or, the tax paid is deducted from the tax to pay in Spain on the same income. 

Wealth tax return, statement of worldwide assets – modelo 714
DUE BY 30TH JUNE, OR 25TH JUNE TO PAY TAX BY DIRECT DEBIT TO YOUR BANK ACCOUNT

Residents and non-residents of Spain who own any Spanish and foreign assets that exceed a certain net value are obliged to file this return. The tax is applied over an individual’s assets/acquired wealth, not on their income earned from the assets.

This specific tax varies per region or Comunidad Autónoma. Typically the tax applies to anyone who has acquired assets that have a net value of over 700,000 euros, though in some regions it is lower such as Catalonia and Valencia. In Madrid, there is currently an exemption from Wealth Tax.

If you think that Wealth Tax may apply to you this year, please let us know and we will send you further details. The filing deadlines are the same as for the Renta.

The scale varies from one region to the next – for instance in Andalusia it’s: 0.2% – 3.5%.

Beckham Law – A tax regime for expats – Modelo 151
Due by 25th June

The “Beckham Law” is a special regime that can be used by expats to reduce their taxes in Spain. Under this regime, individuals will be considered as a non-resident for tax purposes and will be liable for tax only on the income earned in Spain, not worldwide. They can also benefit from a lower tax rate of 24% (up to 600,000 Euros of annual salary) instead of the standard resident’s tax rate, which ranges between 19-45%.

To opt for this regime, you will need to be employed by a Spanish company and you must not have resided in Spain during the last 10 years.  Generally speaking, this regime is beneficial for those earning an annual salary above around 60,000 Euros. 

Declaration of Foreign Assets – Modelo 720
Due by 31st March

Tax residents are also obliged to report any foreign assets within the categories of deposits, investments and life assurance and property where the total amount is at least 50,000 euros. Although submission of this form is for informative purposes only, and not tax collection, Hacienda can charge extortionate fines if you fail to submit, file late, or declare incorrect information.

Find out more about the Modelo 720 by clicking here.

Self-employed?

If you’re self-employed, registered as an autónomo in Spain, your income tax will be paid on a quarterly basis by submitting a Modelo 130 However, you still need to include this income on your Modelo 100, which will calculate whether you have paid enough tax throughout the year.

Read more on autónomo tax obligations here.

We can help you

This blog post seeks to give a simple overview of what to expect when it comes to resident taxes in Spain, however, exact calculations will depend on your personal circumstances. If you require some assistance with your Resident tax returns, please email admin@europeaccountants.com or contact us here. We provide an English-speaking service online to prepare and submit all of the Spanish tax forms listed below:

– Modelo 030 – Registering for tax
– Modelo 100 – Annual Income tax declaration
– Modelo 151 –  Income Tax Return for individuals under the special regime 
– Modelo 714 – Wealth Tax
– Modelo 720 – Declaration of Foreign Assets
– Modelo 130 and Modelo 303 – quarterly income tax and VAT returns for autonomos/self-employed in Spain

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Autonomo deregistration

You may decide to deregister as an autónomo/self-employed in Spain for various reasons, for example, if you are now employed by a company and taxed at source, or if you’re moving abroad, or if you no longer want to make social security contributions.

The process for deregistering as an autónomo/self-employed in Spain is relatively simple. As with the registration, there are two submissions required, the ‘baja en RETA’ (Social Security) and filing a Modelo 036/037 (tax) with Hacienda. Note that you must have a digital certificate if you are looking to do this online via the Agencia tributaria and Seguridad Social websites. Please feel free to contact us if you need our assistance.

As a Spanish resident, you are still obliged to submit an annual income tax return (IRPF/Modelo 100) and VAT return (Modelo 390) in the year following your last year as an autónomo. If you have any VAT credits on your account, you can also claim a refund by filing a Modelo 303 form for the final quarter of the year.

What happens if I want to reregister as an autónomo?

You can reregister again at any time, however, it’s worth noting that if you wish to do so within two years since you last registered, you will lose the right to ‘Tarifa Plana’ meaning that you cannot benefit from the reduced flat rate for newly self-employed individuals.

We offer an autónomo deregistration service to submit the relevant information with the Tesorería General de la Seguridad Social and Hacienda. Please email us at admin@europeaccountants.com for more details.

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Alternatives to Spanish company formation for non-resident companies

In our last article we looked at the difficulties of forming a limited company in Spain and suggested an alternative to individual business owners who are just starting off in business in Spain.

Non-resident companies who are considering opening a Spanish office face similar administrative and bureaucratic hurdles. If you would like to form a Spanish subsidiary of your company, the requirements are even more stringent. You will need to obtain a Spanish tax number (NIF) for the parent company in order to complete the company incorporation. A company director will need to be physically present in Spain for some days to visit a bank to open and activate the company bank account and attend the Notary signing. After all is completed, your local accountant (gestor) will deliver the paperwork to the Tax Office and Mercantile Registry. After around a month, the company incorporation will be complete.

As well as filing company tax returns (Modelo 200), Spanish companies are required to file annual statutory accounts. Thankfully these can now be filed online with the D2 software, but the Mercantile Registries (each region of Spain has it’s own Registry) can be very picky and reject accounts for technical reasons which should really be controlled in the initial filing. It’s classic Spanish bureaucracy and leads to a lot of extra work and some stress for your accountant who has to deal with it and having to explain to you who are rightly asking “why” ?!

We no longer offer a full Spanish company formation service for non-resident companies but would like to suggest an alternative which achieves exactly the same aims. This is the registration of your company for tax and VAT in Spain. You can find further details on our website. The procedure is much more simple and does not require you to physically come to Spain. A Spanish bank account is recommended so that you can pay your tax due directly, however we do offer a tax payment service for those clients that require it.

If your company opens an office, shop or warehouse in Spain it will have what is known as a Permanent Establishment and will then be required to file annual Spanish company tax returns (Modelo 200). There is no further tax registration required for this and you will file these returns under the same tax number (NIF) that you were originally registered for.

As always, feel free to contact us if you have any queries and we will get back to you as soon as possible.