In this section may find all the information concerning the tax system in Spain:
NON-RESIDENT TAXES IN SPAIN
The non-resident property tax which must be paid on Spanish properties depending on the residency and tax status of the property owner and his particular situation
The non-resident property tax (Impuesto Sobre la Renta de no Residentes) is a tax on rental income for non-Spanish residents. If a property is rented, then income tax must be paid on the gross amount of rental income received at a rate of 24.75 percent (although since 2010, EU residents have been permitted to deduct allowable expenses).
Another tax applies to anyone who owns a property that is not their main home, and, if not rented out, a notional rental income is deemed to arise. The amount is calculated according to this formula: catastral value of the property (this amount can be found in the IBI council Tax Bill) x 1,1% x 24.75%. So if for example the catastral value of your property is 250.000 euros x 1.1% x 24.75% = 680,62 euros. This should be submitted using tax form 210. The same taxable amount applies to residents of Spain, but this is added to other income, and taxed at the scale rates.
The tax rates scope and reliefs may change. Tax information has been summarised and of course any individual must take pesonalised advice.
You pay this version of income tax in Spain if the following conditions apply:
1.- You do not reside in Spain
2.- You own 1 property or more properties in Spain
3.- The property is exclusively for personal use and you do not renti it out.
4.- You have no other source of taxable income in Spain. Althought ou do not ear and income from the property
Unfortunatelly, Although you do not earn an income from the property, in the eyes of the Spanish tax authorities you still derive a "benefit" from owning a property in Spain and therefore have to pay an imputed income tax.
Many foreigners never pay this taxes, but believe me one day you will receive a letter from the tax office asking this taxes from the last 4 years, plus the interes charges and a strong fine, besides if you sell your property they will retain 3% of the amount and you will never received back this 3% with profit or not, because you supossed to pay this non resident taxes before.
If you rent your property, you have to pay income tax on the rent instead fo the imputed tax described above (if you rent out your property to a Spanish Company the company will deduct tax at source and pay it to the tax authorities.
In our office we offer a full complete legal service and advice for only 500 euros per year, or just only 100 euros per person taking care of this non resident taxes.
Find more in the official web site in english language of the National Spanish Tax Office (Agencia Tributaria) please check here:
INHERITANCE AND DONATION TAXES - NO WIN NO FEE
In September 2014 The European Supreme Court of Justice has ruled that the Spanish authorities cannot charge different rates of inheritance and donation tax for residents and non-residents. So this judgment declaring the Spanish inheritance tax laws and donation tax as discriminatory towards non-residents and against the EU laws.
So please read this information below:
1.- IF YOU ARE IN THE PROCESS OF A PROBATE OR INHERITANCE IN SPAIN RIGHT NOW OR:
2.- IF YOU ARE PLANNING A DONATION TO YOUR CHILDREN NOW, IN LIFE
3.- IF YOU HAVE PAID INHERITANCE TAX OR DONATION TAX IN SPAIN. YOU CAN RECOVER THE EXCESS TAXES PAID ¡¡¡¡
Due to estatute of limitations in Spain to claim, your right can expire, as a result of this sentence, any non-resident who has paid inheritance tax in Spain within the last 4 years, can now file a oficial claim and recover the excess taxes paid.
3.- WE CAN HELP YOU WITH YOUR CLAIM
IMPORTANT: NO WIN NO FEE
In September 2014 The European Court of Justice has ruled that the Spanish authorities cannot charge different rates of inheritance tax and donation tax for residents and non-residents. So this judgment declaring the Spanish inheritance tax laws as discriminatory towards non-residents and against the EU laws.
Non-residents who have been discriminated against by paying more tax than Spaniards for inheritances or donations of property are likely to be due a refund of the difference.
There is a complex range of tax relief options in Spain that can reduce the tax to almost zero for residents, but these have not been available to non-residents. Non-residents may be owners of holiday homes in Spain or expats who split their time between Spain and the UK.
The difference between what residents and non-residents pay can be as much as 80% plus.
In Spain, inheritance tax and donation tax (known in Spain as "impuesto de sucesiones y donaciones") is governed by both the state and the 17 autonomous communities.
Many of these communities have amended the state rules to make them more beneficial, but only for residents. In order to be classed as a resident, you must have lived in Spain for five years. Non-residents have to pay the national rate of tax which is far less favourable.
The court ruled earlier this month that charging other members of the EU different rates to Spanish residents went against the spirit of the European Union. It said the Spanish legislation was discriminatory and there was no reason why inheritance tax should be charged at a higher rate for non-Spaniards than for Spaniards.
The European Commission referred the case to the court in 2012 after considering that the legislation was incompatible with the free circulation of people and money within the EU.
For example, in the Balearic Islands, Vasque Country and Madrid the porcentaje is 99% of the deceased’s assets can be exempt from succession tax where the beneficiaries are children and/or a spouse. In Andalusia, up to €175,000 (£138,000) inherited by a spouse or children can be tax-free, and in Catalonia allowances are a maximum of €650,000 (£512,000) for a spouse and €400,000 (£315,000) for a child.
“Such generous exemptions are in stark contrast to the state rules, where the allowances are very much reduced,”
“Under the state rules, the general allowance is only €16,000 (£12,600) for inheriting spouses or children.”
In 2012 about 60,000 British families had been hit with inheritance tax bills for properties or assets they inherited in Spain. Charges were believed to be in the region of £400 million.
The verdict open the floodgate to thousands of Britons reclaiming their tax. So far the Spanish authorities have not responded to the ruling. Spain has six months to change its law and the changes should come in by January 2016 at the latest.
The refund that non-residents may be able to claim could run into thousands of euros where the differences in the tax rates were significant.
People who have paid more can appeal to have their money paid back now,
But you might even have to go to court to get a refund. There will be a lot of paperwork and it must be perfect. The tax office is going to look at everything because they don’t want to pay it back.
If there are any mistakes, they will have an argument not to pay it back or delay the payment. You can only apply for a refund once, and there are time limits on claims. You need to use people that understand the EU rules.
There is a limit of five years to make a claim from the time of the inheritance. The authorities will have to pay interest between 15% and 20% on the amount due.
PROPERTY TRANSFER TAX IN SPAIN
Stamp duty tax (Impuesto de Transmisiones Patrimoniales y Actos Jurídicos Documentados – ITP / AJD).
Property transfers: this tax must be paid upon the purchase of estate to a private individual, establishing rights in rem (e.g. an usufruct), acquisition of a registered interest in property, etc. The transferee must pay the tax at a rate of 8% of the purchasing price; in case of purchase of Estate; or 4%, in case of purchase of movable or personal property, or 1% of the real value of the right set up.If buy a second hand property and declare its value much lower than the approximate market value, the Spanish Tax inspectors could feel that the purchasing price is too low and you may be applied heavy penalties. SPAIN LEGAL can help you in this matter by asking the tax office what is the market value of the property that you intend to buy.
Corporate transactions: Such as setting up a business, business merger, share capital increase or decrease etc;The corporate shall pay this tax, except when increasing or decreasing share capital, in which case the shareholders must pay this tax.The rate tax will be 0.5 % of the capital increased, share capital of the newly society;
Stamp duty: The tax shall be paid upon signature of a public deed, of notarial documents, registry office documents;The rate applicable differs from one case to another.
2. This tax must be paid at the Treasury office of the corresponding Autonomous Community within 30 working days after signature of the relevant deed or the contract.