Here at Manzanares Lawyers, we understand that trying to comprehend Spanish tax laws can be a tough task. Spanish tax rates vary depending on whether you are a resident or a non-resident. You are classed as a Spanish resident if you live in the country for more than 183 days a year, any less time than this and you are classed as a non-resident.
Do I still need to pay income tax if I am a non-Spanish resident?
The short answer to this is yes. If you own any property in Spain, or any other assets and investments, then you will be required to pay income tax to the Spanish authorities.
What non-resident taxes in Spain do I have to pay?
If you are required to pay non-resident taxes, this can come in a number of forms:
IBI Tax
This is based on the rateable value of the property that you own. It is paid to a town hall or SUMA office, and is a form of council tax.
NRIIT (Non-Resident Imputed Income Tax)
Spanish authorities believe that even if you are a non-resident and not renting out a property, you are still achieving a financial benefit. This non-resident tax in Spain will have to be paid as a result.
NRIT (Non-Resident Income Tax)
As well as NRIIT, you will also be required to pay income tax. This income tax in Spain is paid on a quarterly basis and will have to be paid if the property is rented out in the short or long term. This means that if you rent out a property for 4 months of the year, you will have to pay NRIT tax for 4 months, and NRIIT tax for the remaining 8 months that the property is not being rented.
Capital Gains Tax
You will be required to pay Capital Gains Tax for any properties, investments or assets that are sold and located in the country. This is based on the price of the original purchase and how much you sell it for.
Inheritance Tax
This is paid irrespective of if you are a resident or non-resident in the country and is incurred if you inherit a property or asset in the country. This tax usually has to be paid within 6 months of the death, however there is an option to request a time extension of up to 6 months, giving you 12 months to pay any outstanding taxes.
If these deadlines are not met, it can result in fines ranging from 5-20%. Making a will helps the process of paying Spanish inheritance tax easier and avoid the stress of worrying about fines.
Wealth Tax
This mainly effects Spanish residents; however, it can also affect non-residents too. It is measured on the assets you own in the country, rather than the income you get. Assets can be a variety of things, including properties, savings, art, jewellery, cars etc. If you are unsure on how, or if, this tax will apply to you then contact a member of our experienced team for assistance.
Contact us
If you are unsure how or why certain taxes apply to you – or even if they apply at all – then get in touch with a member of our team today. You can request a free consultation or call our office directly on +34 952 59 50 42 (Alhaurin) or +34 952 82 41 12 (Marbella). Alternatively, you can email us at clientservices@manzanareslawyers.com.
