Spanish Tax Clampdown

In the past few weeks we have seen four or five letters in Spanish to clients demanding non resident tax as non payers have been caught. At last it seems the Tax Office has found a definite way to find people not paying non resident tax.

We have previously written about the Spanish Tax Office finding people that were renting out their properties, as electricity companies are now obliged to provide information to the Tax Authorities in Spain.

This started several years ago to locate those who do not declare tax on rental income.

For years, many people have not been paying the non resident tax due on their Spanish property, either through not knowing they have to, or because ‘no one ever pays’. Or the tax on rentals.

It is the responsibility of everyone living in or owning property in Spain to establish what the tax rules are and how they apply to them.

Non residents have to pay tax on absolutely any income generated in Spain (including rental income).

With the government missing out on a valuable source of revenue, it is hardly surprising that it keeps coming up with new ideas to expose those avoiding tax. Now,in the past few weeks we have seen four or five tax letters in Spanish shown to us.

These people had been idenitified as not having paid non resident tax on their property and thus guilty of tax evasion. They were being demanded back tax plus interest and fines.

Important

It is essential that if you own a property in Spain but are a non-resident, you need to make a non-resident tax return. It is not expensive and we can help you with the return each year.

Also a non resident may have been paying the non resident tax by the end of each year, but if the property is let they also pay tax on rental income.

Non resident tax is paid a year in arrears (payable in 2019 for 2018), but rental income has to be declared in the year it is received.

If you now believe that you should have been making a tax return in Spain or declaring rental income, please contact us.

We will help you with the necessary advice and paperwork. We will need a copy of your passports, deeds, IBI or SUMA bill, advice of your tax situation in Spain and the amounts and dates of rental income anticipated, or previously received.