DO YOU OWN PROPERTY IN SPAIN AND HAVE RECEIVED THE LETTER FROM THE TAX OFFICE?
The Tax Office has sent a massive campaign to alert foreign property owners in Spain. You are very likely to have received this letter if you own a holiday home in Spain.
They question your fiscal status and ask you to report and prove either way you are non resident or fiscal resident in Spain in the years 2010 and/or 2011. You will have different liabilities depending on your fiscal status weather you are fiscal resident or non resident in Spain.
The letter must be replied within 10 working days and it is an offence if this is not replied and a fine can be received as a consequence of obstructing the work of the Tax Office.
What should you do?
You must contact your Lawyer immediately for legal advice.
He will assess you about the best way to upgrade your fiscal situation, replying to the letter, filling the forms and declaring the tax non paid. He can also appoint himself as your fiscal legal representative to have your correspondence with the taxman under control and avoid distressing situations that could happen as a lack of notification.
You will be liable to complete either a non resident tax form (Form 210) or an income tax return (form 100) on the four tax years behind.
As a matter of the above non residents are liable to complete a form on the years 2010, 2011, 2012 and 2013. They are also liable to complete a tax form before 31st December this year to pay the tax on the property for the year 2014.
Remember that if the property has been rented taxation changes and a tax return needs to be submitted on a quarterly basis before 20th April, July, October and January each year. In compliance with Article 24.6 Non Resident Tax Law, owners may deduct from incomes all the costs related to the property (i.e. repairs, insurances, loan interest or other allowable property expenses) and therefore you could be making a loss, and no need to complete a quarterly declaration.
If you stay in our country more than 183 days within a year period, this means that you live in Spain on a permanent basis and therefore you can be considered Spanish Fiscal Resident. Therefore you have tax liabilities as fiscal resident. Tax is calculated on your worldwide income, including pensions from your home country. Bear in mind that there is a Double Taxation Treaty with the UK (like with many other countries), to avoid paying tax double in two countries on the same income.
You are liable to complete a tax return on the tax years 2011, 2012, 2013 and 2014.
Spanish fiscal residents are also liable to report assets abroad, completing the tax form no. 720, on the following assets held with a value of more than 50,000 Euros:
- Accounts in foreign banks.
- Properties and property rights owned in any other country.
- Shares, rights, life insurances and incomes deposited, handled or obtained abroad.