Spanish tax: late reporting and fines

People do not like taxes and the tax system has to keep our natural inclination to avoid them in check with strict rules and penalties. This is as true in Spain as anywhere else, and we present this guide for anyone worried that they may have transgressed or are just keen to make sure that they stay on the right side of Spanish tax law.

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1. non resident Spanish tax reporting obligations and deadlines

2. resident Spanish tax reporting obligations and deadlines

3. autonomo Spanish tax reporting obligations and deadlines

4. Late reporting fines and penalties

1. Non residents

Non residents have to do Spanish tax returns if they own property in Spain. In practice this mainly refers to the many people who have holiday homes here but any other Spanish assets can also prompt a reporting obligation.

Reporting obligations: these vary for people who rent out their Spanish properties and those who keep them for their personal use only.

Real rent is to be declared each and every time it is received (form 210) or quarterly (form 215). Deadline is 20 days after quarter end for a form 215 and a month after the receipt of the rent (or when it is due to be received) for a form 210.

Property not rented out attracts income tax on a notional or imputed rent for a calendar year and is reported on a form 210. Deadline for submission is the end of the year following the tax year.

If a non resident sells their property they must report the capital gain on the sale within three months of the sale using a form 212.

For more information click for our non resident tax page.

2. Residents

Most foreign residents of Spain will also be tax resident and as such liable to pay Spanish tax depending on the amount and sources of their income. There is a separate Advoco guide called “Do you need to submit a Spanish tax return?” which covers most of the subtleties and complications around this issue.

Reporting obligations: If you are a resident and do have Spanish taxable income it is declared in May or June of the year following the tax year in question.

This year, taxpayers will be reporting income (and capital gains) earned during the 2009 calendar. The returns have to be in by the end of June.

The Spanish income tax declaration is known as declaracion de la Renta (“Impuesto sobre la Renta de las personas fisicas” to give the tax its full title)

Use form (modelo) 100. There is an option to pay the tax in two stages, one in June the other in November, which is taken using form 102.

The Spanish Tax Office, Agencia Tributaria, has a special section on their website about the Renta 2009. Or click through to our guide to Spanish income tax 2010.

3. Self employed / autonomos

Anyone registered as self-employed (“autonomo”), either carrying on a trade or profession or because they are landlords or have small businesses, has additional reporting requirements through the year besides the annual Renta. See our full Autonomo Guide here.

Reporting obligations: Once registered the autonomo is obliged to submit returns for and pay three kinds of taxes – income tax, IVA (VAT) and retenciones. All autonomos will have income tax and IVA declarations to make but retenciones are only applicable in some cases (see explanation on our Autonomo page). Autonomos who employ staff have various additional reporting obligations.

IVA is reported quarterly using form 303 (form 390 for the annual return). The quarter ends are the December, March, June and September month ends and the forms have to be in within 20 days (or 30 days for the annual return in January).

Autonomos must also make a quarterly estimation of their net income upon which a 20% advance income tax is levied. This is done using form 130 which is due in within 20 days of the quarter end.

Retenciones or retentions of income tax deducted from an autonomo’s paid invoices (e.g. for their rent) are reported quarterly using form 110 which are due in no later than 20 days after the end of each quarter.

4. Late reporting fines and penalties

Anyone missing a Spanish tax deadline risks running up fines and other additional costs besides the tax payable. The system is multi-layered and we have just detailed some of the basics below. In essence though the system punishes the late payer with increasing intensity as time passes and charges additional amounts if the late returns are not made voluntarily.

Basic late reporting fine:

Within 3 months of due date 5% of tax due

Within 3-6 months 10%

Within 6-12 months 15%

Over one year late 20%

Additional interest charge for payments more than 1 year late: 5%

Fines for late reporting where no tax is due: €100 (€200 if the Tax Office has prompted the tax payer to make a return)

Penalties (“sanciones”) payable if a late return is not made voluntarily *

Minor infraction 50% of tax + fine + interest

Serious infraction 50-100% of tax + fine + interest

Very serious infraction 100-150% of tax + fine + interest

The minor penalty is normally applied if there has been no effort on the part of the taxpayer to deliberately conceal income or if the amount of the tax and fines is less than 3.000€. The higher penalties apply when forged documents, false accounting and outright fraud have been used to under declare tax. The higher the proportion of the income fraudulently concealed the higher the penalty.

* Note that taxpayers have 4 years to present returns voluntarily and escape sanction