Carlos Baos – The Non Residents Income Tax

As we do every summer, White Baos Lawyers wish to remind readers who are Non Tax Residents in Spain and who are maybe in Spain just for holidays, that they are still obliged to pay Income Taxes in Spain for Non Tax Residents, even if they do not have any income in Spain, just for the fact of owning a property here.

Wealth Tax. If you are a Non Tax Resident in Spain, or even if you live in Spain and are not registered with the taxman as a tax resident, or you do not submit taxes as a tax resident, you could be legally considered as Non Tax Resident, as no notice has been given to the Tax Authority. Non Tax Residents could be liable to pay Wealth Tax, but only if the value of their assets in Spain (after deducting debts, i.e: pending capital of the mortgage, etc.) is above 600.000€. This is in the Valencian Region.

Income Tax. If you are Non Tax Resident in Spain ( or you are not legally tax resident in Spain), you will need to pay tax for income in Spain (Income Tax for Non Residents, IRNR): i.e.: rents from a letting, interest on bank accounts,  etc., If you do not have any income but you own a property or a share on a property,  your tax bill will be based on a calculation as per the Cadastral Value (value that appears on your Spanish Local Rates receipt from the Town Hall, the SUMA office or the equivalent).

Even now it is quite common for people who are Non Fiscal Residents in Spain (or not legally Tax Resident in Spain) to simply not pay this tax; usually due to ignorance or neglect and especially when they have no income in Spain and only own a house.

Please note that if you let your property in Spain, you have an obligation to submit the taxes every 3 months and not only once a year.

If you are not sure if you are legally or officially tax resident or non tax resident, if you want to know what is the most convenient option for you, we can assist you, studying your personal situation.

If you are non tax resident, do not forget to meet your tax obligation if you want to avoid a possible tax inspection, penalties, etc. Contact us and we will help you.

The information provided in this article is not intended to be legal advice, but merely conveys general information related to legal issues.

Carlos Baos (Lawyer)

White & Baos.

Tel: +34 966 426 185

E-mail: info@white-baos.com

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