How to know when you should carry out the income tax return for non-residents, even understand the requirements by which a person is deemed resident or non resident for tax in Spain, are some of the questions that foreigners, who stay in our Country, often wonder, therefore please find below some concepts in order for you to be able to understand the general main aspects.
INDIVIDUAL RESIDENT IN SPAIN: An individual is considered resident for tax purposes in Spanish territory, when is given any one of the following circumstances:. They have stayed longer than 183 days in Spanish territory over the calendar day. In order to determinate the permanence in Spanish territory, occasional absences are included, except if the taxpayer accredits their residency in another country. In the case of countries or territories labelled as tax havens, the Tax Administration can demand proof of stay in that tax haven over a period of 183 days within the calendar year.. The main base or centre of their activities or economic activities, directly or indirectly, should be situated in Spain.. They have a dependent not legally separated spouse and underage children who are usually resident in Spain. This latter situation accepts evidence to the contrary.Otherwise, where none of the previous situations applies, an individual is considered as non-resident in Spain.
INCOME TAX FOR NON -RESIDENT The Non resident tax intends to record and tax the benefits obtained in Spanish Territory by individuals and by Non Residents entities in Spain. Normally the non residents with no activity in Spain pay this tax for the property owned in Spain. It is advisable to understand that any person is deemed for tax purposes as an individual taxpayer so if a property is owned by one or more persons, each of the individual owners must file a single return for the proportion of the house owned .Depending on what the property is used for, the income subject to taxation is as Property for own use or as property used for rental In general Non Resident must pay taxes also for:. Labour incomes..Capital incomes,.Economic activity incomes.. Capital Gain Tax.Etc.
The Wealth Tax: This tax charges the net value of assets and rights located in Spain that the Non Resident has at the end of each year, as far as the total net value of them is above 700.000 Eur.
The Non-resident Income Tax: Tribute the income / s that have been obtained in the Spanish territory by individuals and non-residents entities.If you are Non Tax Resident in Spain, please remember that if you are owner of a Spanish property or a share of it, even if you do not get any income for it, you will be liable for Income Tax for Non Tax Residents in Spain. In order to proceed with the said Income Tax of Non-Residents, is required to obtain the Property Tax (IBI) for the corresponding year.
PROPERTY TAX. LOCAL RATES. Also popularly known as “contribución”, is an annual municipal tax, depending on the rateable value for the property. Local councils and Town Halls normally share their management with companies like “SUMA GESTIÓN TRIBUTARIA”, etc.
CAPITAL GAINS TAX:Other taxes to be considered are those arising from the sale of a property, therefore if a non-resident tax in Spain proceed with the sale of a property the obtained capital gain will be subject to Capital Gains Tax.Please see below the main aspects as per taxes involved in the purchase of a property.
3% RETENTION: When purchasing a property from a non-resident is required to retain the 3% of the price and deposit it to the tax authorities by the buyer on behalf of the vending party, as a payment in advance of the vendor's Capital Gains Tax return, in order to prevent that the non-resident evade to pay the corresponding taxes on the sale. This payment shall be paid within 1 month from the sale date of the property, normally completion before the notary.
Capital Gains Tax Declaration: The Capital Gain on the sale of property will be the difference between the sale and the purchase value. The purchase value is the price paid plus the expenses and taxes paid inherent to the purchase. The sale value is the amount of the sale minus the expenses and taxes necessary to it ( agent fees, plusvalia tax, etc).The vendor ( Non Tax Resident) must submit the CGT declaration within 4 months from the date of transfer of the property. From the money to pay as CGT the non-resident will deduct the 3% retention made and paid previous by the purchasers, as explained above.For any other information needed regarding the Non-residents Taxes, please contact us, we will contact you as soon as possible in order to try to answer your questions.White & Baos can assist you preparing the declaration, calculation and filing for you, the Income Tax for Non Residents in Spain.