Did you miss the non-resident tax declaration deadline?

Taxes Wednesday, January 17, 2018
Non Resident tax declaration deadline

December 31st was the deadline for the non-resident tax declaration. This is the form that every non-resident is required to complete annually. It’s a busy time of year and so it isn’t surprising that it can fall off the list of To-Dos.

If this applies to you there’s no need to panic. It is possible to submit a late declaration but just be aware that you will need to pay a small fine. However, don’t delay. The longer you leave it then the more the fine will be and, when you do come to sell your property or bequeath it, outstanding bills, like this, will need to be settled.

What is the non-resident tax declaration?

The declaration covers the previous year and is the means by which any income of interest to Spain is declared. This includes, for example, rental income tax or imputed income tax if you do not rent out your property.

Non-residents with property in Spain must pay two taxes:

  • IBI (Impuesto Sobre Bienes Inmuebles) or council tax
  • Imputed income tax or rental tax (in some cases a combination of the two)

IBI

The IBI is paid directly to the town hall or the SUMA office and is collected annually. The exact timing of this will depend upon the tax calendar of the area in which the property is located. IBI is calculated according to the rateable value of your property or valor catastral.

Imputed income tax

This is a tax you pay because your property is a second home but you do not rent it out. If you do rent it out, then you pay rental income tax instead. Imputed income tax needs to be declared as part of your non-resident annual tax declaration and is paid to the Spanish Tax Authority.

Rental income tax

If you do rent out your property then you must pay rental income tax instead. This is collected quarterly:

  • 20th April
  • 20th July
  • 20th October
  • 20th January

You can claim some types of expenditure against your rental income tax. Rental income tax is also included in your non-resident tax declaration.

How much is the fine?

If you did miss the deadline then the sooner you present the declaration the better if you want to avoid heavy charges. The following table shows what the extra tax and interest are for late payment:

December 31st - December 31st Extra 5% in tax
March 31st - June 31st Extra 10% in tax
June 31st - September 31st Extra 15% in tax
After one year Extra 20% in tax plus interest

As you can see, there are real incentives for making sure that if you missed the 31st December deadline you are able to present your declaration within the following three months. In other words, you have until 31st March after which the extra percentage you must pay in tax will double.

Better late than never

You may be a little late now but making your declaration at this time will still be much better than experiencing some of the other courses that unpaid tax can take. For example, late payment interest can also be accompanied by sanctions such as the embargoing of your bank account. This is something that takes many people by surprise but is quite a common procedure for the tax office when they identify that a tax bill remains unpaid.

One difficulty that non-residents often have is that of receiving communications from the Tax Office in Spain. Because they are not here (by definition!) all year round, letters might not be received and signed for and so are returned to the Spanish Tax Authority. A notification might be placed in the BOE (Boletín Official del Estado) but this long Spanish list of notifications is not generally on most people’s reading lists.

However, once it has been posted in the BOE then you’re considered to have been informed. This is one of the reasons why embargoes so frequently take people by surprise.

So, take the opportunity, let us put your tax affairs in order and make sure that 2018 has no unpleasant Spanish tax surprises waiting for you.

Do you have any questions?

(+34) 96 670 37 48

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Comments

Am I correct in thinking that the imputed rental income tax does not apply if the property is owned by a foreign (UK) registered company and is not rented out.
Kind Regards
Bernie Allan

Yes. Companies are taxed differently and this tax does not apply. 

Goodday,
I have just read on your site about the fines for when you pay the non-resident tax too late. I have been too late in the past (once several years) but have never received a fine even though I have also given my permanent address in the Netherlands on the form. Is there a number of years after which they cannot request the fine anymore? And does the maximum fine remain 20%? Thank you in advance for your answer

Hi 

The tax office can take up to four years to issue the fines. The maximum fine is 20% with interest.

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