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Spanish tax services for individuals

Personal tax advice for Spain

There is a lot of information on this website and the idea of this page is to assist Spanish taxpayers, or those Spanish personal tax issue or potential issue, find their way around. Here you will find:

1. Quick links to useful advice and guidance on the site

2. A  description of our non resident tax service

3. A  description of our resident tax service

4. Other tax services for individuals

5. A description of our consultancy services

Looking for business advice? There are similar pages for autonomos/self-employed and for businesses in general.

1. Quick links for individual taxpayers

Articles on the site relevant to Spanish taxpayers:

Do you need to submit a Spanish Tax Return?

Spanish Income Tax

Spanish Income Tax Rates 2010

Late Reporting and Fines

Spanish taxation of married couples

Spanish Gift Tax

And for non resident Spanish property owners:

Spanish Tax Form 210

2. Non resident tax service

Generally reporting of non resident taxes is a very straightforward affair, certainly for the typical holiday home owner that does not earn any income from their Spanish property. Our basic service involves:

- registering the taxpayer with the Tax Office (Agencia Tributaria) if they are not already registered

- preparing their returns based on information they provide to us (normally a copy of their IBI or rates bill will suffice)

- submitting the required Form 210 returns

There can be snags that come up but it is normally simple and can all be done online/by email.  We charge a basic 30€ for the service, with an additional €10 for each additional return on the same property (e.g. in the case of a home owned by a husband and wife).  It's a useful service for those who are not in Spain to do the necessary admin.

There are two types of complication which involve a bit more work and slightly higher fees:

 

Non residents who do rent out their properties or who have other sources of income in Spain(e.g. dividends from Spanish shares).  Non residents who receive income from Spanish assets have to pay tax as the income arises, either filing a form 210 each and every time they receive income or filing a form 215 every quarter.  Depending on the circumstances we charge about 100€ for a year's returns.
Non residents who are behind on their taxes and want our help catching up back years, perhaps because they didn’t know of the requirement to submit Form 210s.  Back year taxes cannot be settled online and this involves a trip to the bank to settle the taxes.  We can arrange this but the additional effort adds a further 20€ to the fee.  It's worth catching up unpaid non resident taxes as they are a ticking timebomb for the unwary.

 

For further information go to our dedicated Spanish Tax Form 210 page.

3. Resident tax service

Anyone resident in Spain is likely to have to file a resident tax return (declaracion de la renta) though there are plenty of exceptions. See our article Do you have to submit a Spanish tax return?

Our service is not for everybody.  Some residents with very simple tax affairs may be better off learning to do their tax returns on their own, perhaps with assistance from their bank or the Spanish tax office (their website has a dedicated Renta area each year). Another option is to go to a local Spanish gestor (a kind of official paperwork specialist) who will file a return relatively cheaply.

The Advoco resident tax service is really for people who need some extra support for any number of reasons but particularly:

- if their tax affairs are more complex and they need things explaining to them

- if they have multiple sources of income

- if they have a high level of income which makes mistakes much more costly

- if they are new to Spain and reorganising their finances (e.g. registering for tax in Spain and de-registering in the UK)

- if they have offshore arrangements or other tax efficient arrangements they wish to protect

- if they have business interests in Spain or abroad

- if they still have assets and income sources outside Spain

- if they are in transition between one tax authority and Spain

- if they have issues they are uncertain about e.g. their residency status or liability to tax

- if they have capital gains issues

Advoco provides these individuals and couples a more comprehensive service than a DIY or gestor approach could, in the form of:

 

> an English chartered accountant to be their personal tax adviser

> advice on the international aspects of their tax affairs with a mixed UK and Spanish accountancy team

> assistance with the resolution of tax affairs outstanding in their home country or the transition between tax systems

> a review of their affairs so that they are structured in a tax efficient way and the maximum allowances and deductions are taken

> being on hand for queries and issues year round not just around the tax reporting season.

 

The annual fee for this service is 120€ for an individual or a couple with relatively straightforward circumstances.

4.  Other tax services for individuals

Capital gains tax advice and filing. Note that capital gains made by resident tax payers are filed as part of their annual income tax declarations. It is an area where taking advice and planning before disposal of an asset can pay dividends. Non residents pay capital gains tax at the same rate but the system of declaring and paying is very different and we can assist.

Inheritance tax advice and filing. A common area of concern for Spanish tax residents and non residents with property in Spain. The Spanish inheritance tax rules are very different to those in the UK for example. A different approach to sucession planning is required to minimise the tax burden of the heirs. If a member of the family has died leaving Spanish assets then we can advise on the best way to proceed with the transfer of assets and extinguishing tax liabilities. Gifts during lifetime are also subject to tax and it may be best to seek advice.

Related articles: Spanish gift tax

5.  Tax consultancy services

Not every client comes to us because they have Spanish taxes to declare. We are also available on a consultancy basis for a broad range of tax issues which may have a Spanish and an international aspect. There are two main types of consultancy work we do for individuals:

Forward planning

Typically a client is weighing up a decision and needs assistance in assessing the options and quantifying the tax implications. Examples of such decisions are:

- moving to or away from Spain

- how to deal with earnings from temporary contracts in Spain

- how to deal with earnings abroad as a Spanish resident

- whether or when to register as Spanish tax resident

- legitimising, establishing, transferring, restructuring business interests

- offshore investing

 

Consultancy – sounds expensive?

It can be expensive to bring in UK and Spanish qualified professionals to work on a problem or project, but it all depends on the nature of the task. For small problems, our advice may not cost anything at all because, as a general rule, a client’s first consultation or query is answered free.

For bigger issues we agree a fee in advance which reflects the complexity and size of the task. We will quite happily to quote for smaller projects with fees from €60 up. Our consultations are carried out by telephone, Skype and email.

 
Services for Spanish autonomos

There is a lot of information on this website and the idea of this page is to assist Spanish self-employed (autonomo), or those thinking about becoming autonomo, to find their way around. Here you will find:

Quick links to useful advice and guidance on the site

A description of our autonomo service

A discussion of charges

Quick Links for autonomos

Articles written specifically for autonomos -

Guide to Spain's Autonomo System This is our main page for autonomos. A comprehensive guide to all things autonomo.

Autonomo expenses guide A look at expenses allowability and claiming.

Subsidies for autonomos There are many different autonomo subsidies and they change by region and over time. This is just one typical example.

Articles relevant to autonomos -

Invoicing to and from Spain - New VAT rules Relevant if you are an autonomo involved with overseas companies either as customers or suppliers.

Late reporting penalties The autonomo section on this page explains reporting requirements and the consequences of being late.

Starting a business in Spain General advice for those starting out in business in Spain.

Why Advoco? Our autonomo service

Without wishing to fill this page with sales talk, there are some good reasons to choose Advoco as your accountant and adviser if you are an autonomo or thinking of becoming one:

We have an all-inclusive accounting, tax and advice package which is competitively priced according to each individual's situation (see next section).

We specialise in English-speaking non-Spanish businesses and thus are very familiar with the issues they face, such as foreign tax considerations and dealing with overseas suppliers and customers.

You will be assigned an English accountant from the outset for all your interaction with Advoco.

Advoco is the English-speaking part of a partnership with a large Spanish asesoria (GECASA S.L.), which means we have access to a wealth of Spanish expertise and contacts.

Because we have clients all over Spain who are serviced from our central office in Granada, our service is built around electronic, paperless communication. This minimises time spent in meetings, visiting offices, and delivering documents.

We have noticed that larger (and Spanish) firms tend to place client service and communication low on their list of priorities. We aim to be the opposite. For example, we aim to normally reply to emails within a day, if not quicker.

We take time to explain what is being done in your name. We do not expect you to simply trust that we are doing the right things for you - we will tell you what is happening at all times, even when the issues are complex.

OK, some of that was sales talk. Here is a list of the services we offer:

Registration both with the tax office (Agencia Tributaria) and social security (Seguridad Social). (If you do not already have a social security number you will need to visit an office in person to obtain one, but we will give you full instructions on how to do this.)

Advice on setup, IVA, retentions, invoicing and other practical requirements, personal tax implications, social security options, international considerations.

Ongoing advice on all day to day tax and business matters that arise.

Quarterly and annual declarations (see requirements list here).

Keeping accounting books and records sufficient to meet legal obligations and produce declarations.

Obtaining IVA (VAT) refunds and other dealings with the Agencia Tributaria (for example in relation to unpaid back taxes or retentions).

Liaison with other accountants overseas who handle the autonomo's interests there.

Personal annual tax returns for the autonomo, and their spouse if appropriate, (charged separately).

Management accounts: analysis of sales, costs and profitability to an individual specification (charged separately).

Autonomo packages & charges

 We charge €85 plus IVA to register an individual for autonomo tax and social security.

We charge from €55 plus IVA a month for our standard package which combines most of the services listed above.

Each autonomo is different - please feel free to apply for a quotation based on your circumstances.

Many of the services listed and others can be quoted for separately.

We welcome queries on all autonomo matters and will answer them free of charge within reason. Contact us to find out more.

 

 
Spanish income tax

Spanish Income Tax Q & A

Here are some commonly asked questions about Spanish income tax which might help you. You may also be interested in our page Spanish income tax rates 2015.

We operate a free query service (contact us) if you are unsure of what to do in your current situation. Note that priority will be given to clients during the busy tax return season, but we will try to answer your query promptly.

Learn more about our fixed fee tax return service here.

Who has to make a Spanish tax declaration?

With very few exceptions, anyone resident in Spain for tax purposes and with any income or capital gains anywhere in the world has to file a tax return. Non-resident property owners are also obliged to file tax returns (see separate page for non-resident tax return information).

What are the exceptions?

In the first year of your tax residency there are no exceptions, even if you have no income you must file a declaration to that effect. Subsequently if your income from all sources is less than €8.000 you can normally avoid having to file but there are other conditions, e.g. no more than €1.600 of investment income and €1.000 of rental income. Also if you are an employee earning less than €22.000 and have no other sources of income, you will not have to file a return (tax will already have been deducted from your salary). Finally if you receive a pension from abroad that has already been taxed then you may be exempt depending on the terms of the tax treaty between Spain and the relevant country.

To clarify your position further take a look at our guide Do you need to do a Spanish tax return?

When do I become tax resident?

The short answer is that living longer than 183 days in Spain (including occasional trips out of the country) during any one calendar year makes you tax resident, but so too can basing your family and/or business interests in Spain even if you yourself are absent. Note that failing to declare that you are resident for tax purposes does not alter the fact that you are in fact tax resident and liable to be taxed accordingly. Do not confuse obtaining a Spanish residency certificate with tax residency; this shows you are on the register of foreigners kept by the Police and does not equate to tax residency, although the tax authorities may see it as evidence that you are tax resident if it is ever a matter of dispute.

When do I file a return?

You should register your tax resident status with the Spanish tax authorities (La Agencia Tributaria) as soon as you become tax resident. Theoretically this is as soon as you are settled with the intention of staying more than 183 days but certainly after this period is up. There is a simple declaration called Modelo 30 (download here) which you complete, sign and take to your local tax office. If you want Advoco or another tax adviser to become your fiscal representative this is the time to appoint them. The fiscal representative will file the declaration on your behalf with their details on the form so that all communications from the Tax Office go directly to them. The first return will be made during May or June of the year following the first year of tax residency.

What gets taxed?

Worldwide income and capital gains. So for the declarations residents are making in May/June 2013 they will need to include, from the 2012 calendar year:

  • - Income from employment and pensions

  • - Gains and losses from assets disposed of, such as property, businesses and shares

  • - Investment income such as dividends and interest

  • - Rents received

What deductions are available?

There are many and varied credits and exemptions but the main ones are:

  • * Tax deducted at source in Spain (e.g. “retenciones” deducted by banks on interest or by employers on salaries), and abroad if there is a tax treaty in force

  • * Payments into the Social Security system

  • * Calculation of rental income and capital gains on property sales

  • * Your main residence (see below)

  • * Pension contributions (subject to limits)

  • * The first €1.500 of dividend income is tax exempt

  • Housing deductions

    Spain has some generous deductions for housing costs. The main ones are:

    - the cost of buying, renovating or extending your main residence

    - the costs of financing your house (mortgage)

    - rent of your main residence if you earn less than 24.020€

    The amount of the deduction can be a fairly complicated calculation but in general a maximum of 9.015€ mortgage costs can be offset against income at a rate of 15% and a similar amount of rent at 10.05%. Each autonomous community can add other deductions (e.g. Andalucia allows under 35 year olds to claim more for their rent than the national allowance).

    What about charity?

    Donations to charity are tax deductible in Spain. If the charity is recognised as an official charitable body then you are allowed to deduct 25% of your total donations from your tax bill i.e. your tax bill is directly reduced - it is not a deduction from taxable income.

    One condition is that you must produce a certificate from the charity concerned showing that the donation was made. Most charitable bodies hand out certificates to regular donors automatically.

    There is also an unusual feature of Spanish tax law that allows you to divert a small proportion (0,7%) of your tax to good causes (fines sociales) or to the Catholic Church. You just tick a box on the tax return and they will benefit from your action without you paying any more tax. In fact you can tick both boxes. Here is an explanation:

    http://www.marcafinessociales.org/informate/detalles/01_que_es.html

What tax rates are payable?

Every taxpayer has a personal allowance of 5,151€ that is not subject to tax. There are additional allowances for dependents, the amounts varying with age, disabilities and other factors.

After this the tax rate begins at 24,75% for income up to €17.707 and rises to 52%.

Do couples submit joint returns?

They can either submit a joint return or file separate returns. Your tax adviser will calculate the most beneficial option by doing two separate calculations of the tax due if necessary.

When is it due?

The declaration must be filed by the 30th June during the year following the relevant tax year. So in 2012 everyone will be filing their 2011 tax returns in May/June. The tax is payable by the 30th June also. Normally the taxpayer’s bank details are included on the declaration and the tax is automatically taken from their account.

What if I don’t pay?

Failure to pay tax can result in penalties of between 50% and 150% of the tax owed, plus interest. Late payment can result in penalties between 5% to 20% of the tax involved, plus interest.  There is a more detailed guide on this here: Spanish Tax late reporting and fines

What should I do if I am behind with my taxes?

If you think you should have been regsitered to pay tax in Spain or are registered but are late with your returns, then contact us for some advice. Depending on the situation you could be able to put things right quite easily and cheaply and it will certainly be better to take the initiative yourself than wait for the tax authorities to come to you.  Note that there is a statute of limitations of four years after which unpaid taxes cannot be collected by the Agencia Tributaria (unless they have already made a claim for the tax).

If you have any further questions or you would like to discuss our services, please contact us

 
Spanish non-resident tax form 210

Non-resident property owners should submit Spanish tax form 210

2014 taxes must be declared and paid before the end of 2015. 

Spanish tax law requires that non-resident owners of property in Spain have to pay Spanish income tax even if they have no Spanish earnings such as rental income. Here we offer our services and some guidance for anyone trying to sort out their tax forms themselves. Tax advice and services for residents are here.

ADVOCO will calculate and submit your 2014 tax return for €50 + IVA

For jointly owned properties, add €10 + IVA for each additional owner or return on the same property.

If you have not registered for tax in Spain before (modelo 30) this will be necessary before you can submit a tax return. There is a one-off charge of €20 + IVA per person for us to complete this for you.

How does the service work?

1. Send an email to us here asking us to do your tax returns or asking for more information

2. We will exchange emails with you to get the information we need to complete the forms

3. You pay our fee and we file the declaration on your behalf

NOTE that you will need a scanner to use this service because we will need copies by email of some documents.

Questions and Answers

I think I may have paid this. How can I tell?

This non-resident tax issue can be confusing. Why should owning a holiday home entail paying income tax? There is no equivalent in the UK, and no one from the tax office informs non-residents of their obligation to pay the tax and submit the form. In fact, a lot of holiday home owners are oblivious to the requirement or think they have already paid.

This is because they have paid local property taxes: Impuestos sobre Bienes Inmeubles ("IBI"). But IBI is another tax that has to be paid by all property owners, residents and non-residents alike. It is set and collected by the town hall, similar to council tax in the UK. It is usually collected every Autumn and you get the amount on an IBI bill through the post. It is generally paid by direct debit from your bank.

So if you are a typical holiday home owner, the question to ask yourself is have I paid both my local (IBI) taxes to the town hall and my income tax to the national government (Form 210)?

What if I don't submit a form and pay the tax?

The government doesn't request payment of income tax and many non-resident owners don't know about it and therefore do not fulfil their obligation to declare and pay it. Initially there may appear to be no adverse consequences, but the tax office (the Agencia Tributaria) know the status of all properties from the IBI and other records and know whether they are owned and occupied. It is a simple task for them to identify which property owners are (a) non-resident and (b) not declaring their taxes. In fact they have recently begun chasing non-payers with letters demanding that non-resident taxes (or resident taxes if applicable) are paid.

That said, many people go years without being caught up in tax office investigations. The problem often only rises to the surface when non-residents come to sell their property. In this case the seller is obliged to pay 3% of the sale price to the tax office, which is only recoverable by the non-resident seller when they are up to date on taxes including capital gains tax on the sale and, increasingly, the form 210 tax. This may then require multiple tax returns to be submitted going back several years with fines and penalties.

What if I have to catch up on earlier years?

You can easily catch up on previous years, but there may be interest costs and penalties (see our report Spanish late reporting fines). On the plus side, there is a statute of limitations that applies to unpaid Spanish tax which means that tax is not collectable after four years from its due date. If you want advice on the costs and implications of unpaid taxes including back years, send us an email. It may not be as painful as you think, although we do charge an extra €20 for overdue years as they cannot be submitted online.

How does the tax get paid?

We include your Spanish bank account details on the tax return so the authorities can deduct the payment automatically. This is done at the end of the year. On the 31st December the tax office will debit the account you have nominated.

Can I do it myself?

You can access the form (in Spanish) and instructions (in English) on the tax office website here:

Agencia Tributaria website - Non-resident Modelo 210

Note that there were some changes to the Form 210 system in 2011 - see here.

How much is the tax?

The tax is calculated as 24.75% of the “income” the Spanish authorities deem you could make renting out the property. This is calculated as 2% of the rateable value (reduced to 1,1% for areas re-rated after 1993). If you only owned the house for part of the year the tax is pro rated to the period of ownership. If there are multiple owners (e.g. husband and wife) they each pay their share of the total tax but must each submit a return. The rateable value is the “valor catastral” found on the IBI (rates) bill you get every year.

When is it payable?

You must make your return for a given year by the end of the following year, so for the 2014 tax year you are required to declare and pay by 31st December 2015.

My lawyer takes care of this. Is that OK?

Most law firms offering conveyancing services to foreign property buyers will then offer to become a “fiscal representative” taking care of all related tax affairs. That is fine except that having a fiscal representative is not really necessary if you have simple tax affairs, and it can be expensive.

What should I do?

If your situation is simple, i.e. you own one property which you do not rent out and have no other complications, then you might want to consider doing the tax return yourself or using Advoco’s €50 + IVA service.

Stick with your fiscal representative if you think they are worth the annual fee, e.g. because they offer valuable advice as well as filing the return or because your affairs are more complicated than the standard holiday property owner. An example of this might be if you rent out your property for part of the year which involves a lot more in the way of reporting (see below). Note that residents of countries without a Spanish tax treaty must have a fiscal representative if they own property in Spain. Most countries, like the UK, have treaties with Spain but tax havens like Gibraltar and some other territories do not.

Am I resident or non-resident?

A pretty easy question to answer for most of us: if you have a holiday home in Spain which you use periodically but actually live in your home country and pay taxes there then you are non-resident for this purpose. If you live in Spain and only occasionally return to your home country where you have cut most ties then you are more than likely tax resident in Spain and should register as such. Note that failing to register as tax resident does not stop you becoming liable for Spanish resident taxes!

Of course there many situations which are not so clearcut, e.g. during a transitional year when you are settling in Spain. The rule of thumb is that spending over half the year in one country makes you tax resident but there are a lot of subtleties and variations. Where your family or business is based can be a factor. If you require clarification contact Advoco.

What if I rent the house out?

This Advoco service only applies to the simplest of returns, where the only income is imputed rent, not actual rental income.

Non-residents who rent out their property declare the income by submitting a Form 210 quarterly and also paying the 24.75% tax (24% in 2015) quarterly. Owners that are tax resident in another EU country can make some deductions for allowable expenses and the tax rate will be reduced to 20% in 2015 (and 19% in 2016). To take advantage of this you must obtain a certificate of fiscal residence in your home country.

Advoco can provide a service to submit these returns so please email us for further information.

If you have any further questions, require clarification on any point or you would like to discuss our services, please contact us

 
Spanish tax advice

Information and services for Spanish tax payers

Advoco is a partnership of Spanish and UK qualified professionals delivering professional advice in English at reasonable rates. Here you will find information about our services for private individuals with Spanish tax requirements. Click through to a similar page for businesses and the self-employed here.

Tax services for individuals

Non-resident tax returns: Model 210 for property owners from €50 (details)

Resident tax returns: We conduct a review of the resident client's tax affairs, advise on ways to minimise tax and prepare and submit tax returns for a fee from €100 for an individual and €150 for a couple.

Special situations include:

- changes of tax residency between countries
- unpaid or undeclared taxes from past years
- ensuring income from overseas is not taxed twice and can be received gross where possible
- offshore assets and income
- individuals who work abroad but live in Spain or who have other business assets and interests
- correct treatment of pension and annuity income

Other income tax information available:

Spanish income tax Q&A - Do you need to submit a Spanish tax return? - Spanish income tax rates

Besides income tax, expert advice and free consultations are offered on all Spanish tax matters including:

- tax residency
- capital gains tax including rebates for excess CGT charged on property disposals prior to 2007.
- unpaid back year taxes
- investigations
- property taxes

Notes: Rates quoted assume relatively simple tax affairs. Quick queries are answered free. Fees for more extensive consultations are agreed in advance. Small projects typically cost €60 to €120. IVA is not included.

 
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