Resident Taxes in Spain

Spanish government and local taxes - are you up-to-date?

Urgent tax update! November 2011

The Spanish Tax Authority have sent out letters to over 300,000 owners of Spanish property who have not made a Spanish tax declaration in 2007, 2008 and 2009.

The letter is notification that residents who do not make the annual tax declaration should rectify this in order to avoid further investigation taking place.

The resident annual tax declaration is due before the end of June. We recommend that it is completed by all residents even when it is likely that they will have no tax to pay on their income.

This fiscal declaration provides more concrete proof of actual residency than the residency certificate which is not always accepted as proof for inheritance and capital gains purposes.

Click here for more information about the Spanish Tax Authority’s Anti Fiscal Fraud Plan.

I am resident in Spain. What should I be paying?

If you are resident in Spain you have to pay two types of taxes each year:

• Local Taxes (Council Tax, IBI)

  These taxes are paid directly to your Town Hall or via the SUMA offices.

• Government Taxes (Income Tax)

  These taxes are paid to the Agencia Tributaria (Tax Authority).

How do I know if I am a tax-resident or not?

When you live in Spain for more than 183 days in one calendar year you become legally liable to be charged Spanish Income Tax as a Resident. The 183 days do not have to be consecutive.

My income is not paid into a Spanish Bank account so do I have to declare it?

As a resident, with or without a residency certificate, Income Tax will be calculated on your worldwide income, including pensions from your home country (with the exception of some civil service pensions) even if your income is not paid into a Spanish bank account.

There are tax allowances and deductions for residents that vary according to the individual’s personal situation.

Four good reasons why not to ignore Resident Income Tax

1. The Spanish Government needs to claw in more income via taxes.
2. They are closing in on non-resident property owners who are not presenting the MANDATORY annual tax return and residents who should pay tax in Spain on their worldwide income and do not.
3. The Tax Authorities have linked up with the Land Registry system and now knows who owns every property.
4. Electric companies are now required to supply data to help identify which homes are continuously occupied by residents or tenants.

The consequences of non-payment

• Late declaration and payment will incur a fine.
• Ignorance of the law or the system is not accepted as a reason for late or non-payment.
• Property and bank accounts can now be embargoed until back taxes and fines are settled in full.
• Worried? Only if you do nothing and mistakenly believe the myth that you are still somehow “below the radar” or that all your tax affairs are “taken care of in my country”.

The Solution

What you should declare and how to declare it can be confusing.

Let us guide you through the Spanish Tax Law to determine if you should pay tax in Spain, in your own country (ex-government employees) or maybe not at all.

The recession has made the Spanish tax authorities extremely vigilant. Let us help you to remove the stress of worrying about your tax situation.

We provide you with 2 solutions:

Or, if you prefer, request a call back from our Customer Care department and they will give you advice in a language you can understand.

Take the first step now to put your Spanish tax affairs in order.