Do you live in Spain for more than 183 days a year?
If so, you may be liable to pay tax on all your global income, according to Spanish law. Many foreigners who live here permanently do not submit annual income tax returns, either out of ignorance or because they are afraid of paying high taxes.
But ignorance of the law is no excuse; a tax return should be submitted annually, and taxes should be paid where applicable by all tax residents. Until now, the Inland Revenue has not been on top of foreigners living permanently in Spain, but due to the financial crisis things have changed . Now the Spanish Government is tightening things up.
So don’t delay, think about becoming a tax resident and submitting an annual return. This should be done during the months of May and June, but we can help you with what you will need early next year.
Tax Returns
Pensioners with low monthly pensions will probably not have to pay any income tax as a result of their tax return. However, if the living here over 183 days applies to you, you may still need to submit one, even if it is a nil return, and even if your pensions or income is taxed in the UK.
Also, please be aware that a green Residencia certificate or TIE card does not mean you are a fiscal resident, only registering properly for this means you are a tax resident of Spain. And not having residency does not mean that you do not have to pay taxes, either non resident or resident. Everyone with a property in Spain should be making a tax return, either a non resident one, or a resident one.