HomeResident Taxes in Spain
Resident Taxes in Spain
Spanish government and local taxes - are you up-to-date?
Urgent tax update! October 2014
In 2012, letters were issued to Spanish property owners warning them that there was no record of any tax declaration being made. This was followed in 2014 by a series of tax demands to those who had not responded. Now, some owners of Spanish property have found that outstanding taxes have been removed directly from their bank accounts. To find out if this might happen to you, click here.
I am resident in Spain. What should I be paying?
If you are resident in Spain you have to pay two types of taxes each year:
Local Taxes (Council Tax, IBI)
These taxes are paid directly to your Town Hall or via the SUMA offices.
Government Taxes (Income Tax)
These taxes are paid to the Agencia Tributaria (Tax Authority).
How do I know if I am a tax-resident or not?
When you live in Spain for more than 183 days in one calendar year you become legally liable to be charged Spanish Income Tax as a Resident. The 183 days do not have to be consecutive.
My income is not paid into a Spanish Bank account so do I have to declare it?
As a resident, with or without a residency certificate, Income Tax will be calculated on your worldwide income, including pensions from your home country (with the exception of some civil service pensions) even if your income is not paid into a Spanish bank account.
There are tax allowances and deductions for residents that vary according to the individual’s personal situation.
Four good reasons why not to ignore Resident Income Tax
- The Spanish Government needs to claw in more income via taxes.
- They are closing in on non-resident property owners who are not presenting the MANDATORY annual tax return and residents who should pay tax in Spain on their worldwide income and do not.
- The Tax Authorities have linked up with the Land Registry system and now knows who owns every property.
- Electric companies are now required to supply data to help identify which homes are continuously occupied by residents or tenants.
The consequences of non-payment
- Late declaration and payment will incur a fine.
- Ignorance of the law or the system is not accepted as a reason for late or non-payment.
- Property and bank accounts can now be embargoed until back taxes and fines are settled in full.
- Worried? Only if you do nothing and mistakenly believe the myth that you are still somehow “below the radar” or that all your tax affairs are “taken care of in my country”.
What you should declare and how to declare it can be confusing.
Let us guide you through the Spanish Tax Law to determine if you should pay tax in Spain, in your own country (ex-government employees) or maybe not at all.
The recession has made the Spanish tax authorities extremely vigilant. Let us help you to remove the stress of worrying about your tax situation.
We provide you with 2 solutions:
Or, if you prefer, request a call back from our Customer Care department and they will give you advice in a language you can understand.
Take the first step now to put your Spanish tax affairs in order.