GESTAL ADVISERS offers all the services necessary to manage your taxes in Spain:
· Non-resident tax
· Personal Income Tax (IRPF)
· Council taxes (IBI)
Resident and non-resident property owners are required to pay taxes in Spain. If they do not follow the compulsory rules correctly they can be subject to interest payment and penalties.
Spanish tax system is complex and we can help you to understand how taxes in Spain work. Our tax adviser will be glad to have a talk with you and find the solution that best fits your needs to be worry-free in Spain.
Our principal services are:
· Presentation of annual tax returns (with a pre-payment notification)
· Representation to the AEAT (Spanish Tax Authority)
SOME POINTS TO BEAR IN MIND in connection with Spanish taxes:
1. Residency for tax purposes
2. Relations with the AEAT (Spanish Tax Authority): NIE number. Fiscal representative.
3. Non-resident Income Tax. Income derived from economic activities in Spain and notional letting value of your property.
4. Capital Gain Tax
5. Inheritance Tax
RESIDENCY FOR TAX PURPOSES
If a person resides more than 182 days in any calendar year in Spain, then that person will be deemed a resident in Spain for tax purposes.
Persons spending less than this period, will be deemed non-resident for tax purposes.
RELATIONS WITH THE AEAT (SPANISH TAX AUTHORITY)
If you have dealings within Spain – even if you are not full time resident – you are required to have an identification number (NIE) for use by foreigners in Spain that is obtained from your local Police Station at the foreigners’ department.
The authority responsible for the collection of taxes is the “Agencia Estatal de la Administración Tributaria” (AEAT-Hacienda).
In Spain it is a personal responsibility and obligation to complete an annual tax return and submitting the form to the AEAT together with the amount due.
If you are not a full time resident, is advisable to appoint a fiscal representative in Spain (a person who undertakes on behalf of the taxpayer all dealings with the Spanish Tax Authorities) to be sure that the Spanish Tax Authorities, even when you are not in the country, will be able contact you.
NON-RESIDENT INCOME TAX
A non-resident in Spain for tax purposes must submit an annual declaration for personal income tax. Obviously, Spanish Tax Authority is only concerned with income derived from activities in Spain, not your world-wide income. A typical example of this would be the income derived from renting your apartment or house.
In addition, you are required to make a tax return in respect of a sort of imaginary income -the notional letting value of your property- whether you have actually let the property to anybody or not. The amount of tax is calculated by reference to the official rated value (valor catastral) of your property.
CAPITAL GAIN TAX
If a capital gain is made, as a result of the sale of a Spanish property, then this will be subject to taxation in Spain.
A capital gain is determined by calculating the “purchase value” of the property (original purchase price and directly related taxes and costs) and the “sales value” (sales price from which are deducted the directly related taxes and costs). Then, the amount of the “purchase value” is deducted from the “sales value” to give you the capital gain.
This resulting capital gain, can then be reduced even further adjusting the amount by applying an inflationary coefficient that depends on the year of purchase. If the property has been rented, the purchase value could be reduced by the amortization corresponding to the rental period.
Keep in mind that the purchaser, resident or not, is obliged to withhold from the vendor 3% of the sales price and this amount should be deposited, within 30 days of the sale, with the Tax Authority on behalf of the vendor’s capital gains tax liability. The Tax Authorities will deduct this amount automatically from the vendor’s actual capital gains tax liability. However should the amount deposited be more than the tax due, then the seller may apply for a refund of the difference.