NON RESIDENT TAXES IN SPAIN.
As the deadline for the filing of non resident tax approaches ( December 31 st ), we would like to remind you that, if you are non resident in Spain – you live in Spain less than 183 days a year and do not have the center of your economic or vital interest in Spain- and own a property in Spain, you are liable to Spanish Non-Resident Income Tax arising as a result of your ownership of the property, as follows:
A ) If you are non-resident without a permanent establishment and your Spanish property is rented to a third party, the amount liable to taxation will be the rental income received by you. In the case of taxpayers ( individual persons or corporate entities resident in another Member State of the EU, Norway or Iceland ), they will be able to deduct certain expenses as referred to in the law relating to Personal Income Tax ( e.g.-insurance, maintenance cost, real estate tax, depreciation, etc...)., provided that such expenses are directly related to the income generated by the property.
B) Where the Spanish property is not rented to a third party and is occupied or available for use and occupation by the owner, the amount liable to taxation in the case of an individual person will be deemed rental income attributable to the property, which is normally calculated as 1.1% of the rateable value – valor catastral- according with the real state tax of the property – assuming the rateable value has been reviewed within last 10 years- or 2% of the rateable value, if such review has not taken place. Note that where the property is owned by a corporate entity and is available for the use and occupation of the owner- connected party – rules may apply and the corporate entity held liable for the deemed market rental income attributable to the property.
The applicable tax rate for taxpayers from the E.U., Norway and Iceland for the tax year 2017 and hereinafter until new change of Non Resident Income Tax Act, is 19%. For all other taxpayers , the tax rate is 24%.
The 31st December is the deadline every year by which time non-residents must have completed and filed their annual non-resident tax declaration with the Spanish Tax Authorities.
