INCOME TAX FOR NON-RESIDENTS IN SPAIN (IRNR)
Like citizens residing in Spain who pay their income taxes with personal income tax, non-residents are also obliged to pay for the income obtained in Spain.
If, in the case of residents, most of the income is obtained from work, in the case of non-residents, the income is usually related to the properties they own in this country.
The non-resident natural person in Spain who owns a home, a commercial premises and another property must make the annual declaration if this property is only used for their personal enjoyment (spend the holidays in their apartment, store their things in a storage room, have your parking space etc.). In this case, each year between January 1 and December 31, you can file the income tax return for non-residents from the previous year.T
he amount to be paid depends on the Cadastral Value of the property, the year of review of said cadastral value and the country of origin of the Non-Resident. Being many the possible combinations of calculation to pay the final amount are usually between 0.2% and 0.48%
In cases when the owner rents his home, he is required to submit the IRNR quarterly. Lease earnings are determined by deducting the expenses corresponding to the property during the rental period (improvement work, furniture renovation, property taxes, etc.). The result will be the rental income that is taxed between 19% and 24% depending on the country of origin of the Non-Resident (the rate is 19% for citizens of the European Union + Iceland + Norway).
The submission deadline for the quarterly model is the first 15 days of April, July, October and January of each year.
In IRNR it is also paid when the non-resident person sells his property as property, so the buyer always retains 3% of the Sale Value on account of the payment of the tax. In this case, the tax is only paid if there was a profit on the sale of the property (Sales value exceeded the purchase value), so that, if a loss occurred, not only is nothing additional paid, but it is returned to the seller the 3% withheld, presenting the corresponding tax model.
Not only is the Non-Resident Tax paid for income related to real estate. The tax must be paid for any capital gain obtained in Spain by a Non-Resident person.
For example, if a foreigner owns shares in Spanish companies that he bought, or owns the public or private debt securities that produce periodic profits.
Income from work or business activity carried out by a non-resident natural person in Spain is also taxed.
We recommend that all our non-resident clients consult our team of tax professionals to find out which taxes they should file at any given time, avoiding possible future difficulties with the tax authorities.
Do not hesitate to contact AJ Forsman Abogados