Fiscal Representation for Non-Residents

The laws relating to taxation in Spain are different from those in other countries, even other countries within the EU – and can be very complicated, especially if your grasp of Spanish is pretty basic. In the past, Spain was notorious for tax evasion but the Government is clamping down hard on this now and, unless you want to get in hot water, it’s best to seek out expert advice about tax laws in Spain.

Tax is based on residency. Property owners who stay in Spain for more than six months within a year will be classified as residents. It would, however, be advisable to obtain a fiscal certificate from the Hacienda or the tax office to confirm residency for tax purposes.

If you own a property (or properties) for holiday purposes in Spain you will be classified as non-resident.

Non-Resident Tax

Non-resident tax has two elements:

1. Tax on wealth assets, which is commonly applied to the property’s deed price, multiplied by a gradual tax rate.
2. Tax on the Imputed Income of the Property. This tax is calculated by multiplying the Cadastral Value of the property by a percentage and the number of days the property is owned. Cadastral Value is a value on a property, based on a number of factors, which is derived mainly for tax purposes.

Combining these two elements makes up the non-resident tax.

Property Related Taxes

Another form of tax that must be paid by a non-resident property owner in Spain is the IBI or SUMA tax (similar to the UK’s council tax). The Tax Office does not send correspondence relating to IBI or SUMA tax to addresses outside Spain so, if you don’t plan to live in Spain permanently, it’s prudent to appoint a Fiscal Representative as a point of contact for the Spanish Tax Office – they will send all notifications directly to them.

Finco Financial Services can provide you with expert advice on tax laws in Spain as well as experienced Fiscal Representation for Non-Residents – a wise move for anyone who doesn’t want to be hit by a hefty fine for non payment of taxes

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