taxes for non residents Spain

TAX DEADLINES WITHIN THE STATE OF ALARM IN SPAIN

Written by Gustavo Calero Monereo on 7 April, 2020. Posted in Andalusian, annual tax, conveyancing, coronavirus, costa del sol, COVID-19, english speaking solicitor, Income tax for non residents, lawyer, legal advice, nerja, solicitors Nerja, Spain, taxes for non residents Spain.

Due to the actual crisis that has been declared in the whole world by the World Health Organization because of the Coronavirus (also known as Covid-19), almost every country has put into force different measures.

*This document has been written according to the law and Decrees in force until 4th April 2020.

In Spain, the 14^th March 2020, the government declared the “state of alarm” (regulated in Art. 116.1 of the Spanish constitution and the organic law 4/1981), for 15 days, (until the 29^th March), through the Real Decree 463/2020, closing museums, monuments, restaurants and almost every business open to the public. Nevertheless, concerning the increase of the infections, the state of alarm has been extended for another 15 days until the 12^th April 2020, after the approval of the Parliament ( Congreso de los Diputados, Decree 11/2020), and pending for another extension until the 26^th April.

The main goal of these decrees is to prohibit free movement of people in order to prevent further increase of infection among the Spanish population. Nevertheless, all these measures have economical, fiscal and, of course, social consequences.

Extension of the payment dates for self-employed and small entrepreneurs (PYME) (Deferral and split payments).

Self-employed and small entrepreneurs with a turnover of less than € 6.010.121,04, are allowed to defer payment of the tax debt (less than 30,000 euros) without the need to provide a guarantee for a 6-month term. The first three of these months will not accrue default interest, with the consequent. Said deferral only refers to settlements or self-assessments that had to be presented or entered from March 13th to May 20th of 2020 (article 14 Decree 7/2020).
A postponement of tax debts that previously could not be postponed is now allowed (article 65 LGT):

Those that the person is required to make payments on account for (art. 65.2 b), such as the quarterly model 111 or the 3% model Modell 211.
Those derived from taxes that must be passed on by law having been collected (art. 65.2 f), such as model 303 of VAT
Fractional payments of Corporation Tax. (art. 65.2 g), such as IS model 202

Suspension of legal terms not concluded before March 14 (Decree 8/2020 and 11/2020)

Article 33 of Royal Decree-Law 8/2020 and its clarification with Decree 11/2020 applies to all taxpayers, extending the deadlines not concluded before March 14, 2020, until April 30 2020 for:

The payments of tax debt for liquidations in the voluntary period and those that, in the executive period, have been notified of the enforcement order. For example: if you have been notified of a settlement for the payment of a tax debt on March 12 you would have to pay it no later than April 20 (according to the General Tax Law in its article 65.2), however, with this decree the payment can be postponed until April 30.
Deadlines and fractions of deferrals already granted (prior to March 14, 2020 without prejudice to the deadlines reflected in art. 14 of the previous Decree 7/2020), as well as the deadlines on auctions and adjudication of goods made by the Treasury state.
Deadline to meet the state agency requirements, embargo proceedings, requests for information or to make allegations in tax procedures (regarding nullity, rectification of errors, requesting returns).
If there was doubt as to whether or not these tax procedures initiated by the corresponding autonomous and local Administration, the new Decree 11/2020, in its article 53, establishes that the suspension of the aforementioned period also applies to local and autonomous administration (in the art.33 of decree 8/2020).
Deadlines to meet requirements and requests of the cadastre.
No proceedings to execute the guarantees already seized which fall on real estate in the administrative procedures of constraint

What happens with the procedures communicated as of March 14?

For all the aforementioned procedures communicated as of that date, they are extended until May 20 of 2020 (unless the one granted by another tax rule is higher).

For example: if a settlement for the payment of a tax debt was notified on March 19, in normal cases you would have to pay it no later than May 5, however, with this decree, payment can be deferred until May 20.

However, in any of the above assumptions, if the taxpayer complied with the requirement, paid the tax debt or presented allegations despite the deferment granted, they will be understood to have been carried out for all purposes, procedure completed.

What happens with self-assessments such as the payment of Property Transfer Tax in the sale of a home?

When a person buys a home in Andalusia, they have 30 days to pay the Property Transfer Tax, which is currently 8% of the purchase price. The payment of the same is done through a self-assessment. In other words, the buyer or his/her representative prepares this tax model and presents it voluntarily for payment within that period.

The decree regarding the state of Alarm does not include self-assessments as deferrable, according to Royal Decree 465/2020, of 17 March, amending Royal Decree 463/2020 of 14 March, declaring a state of alarm, so for example, neither the quarterly settlements of VAT nor personal income tax (models 130 and 303) are postponed and maintains their deadline for April 20 for the third quarter.

What happens during the state of alarm with the legal term of actions that tax authorities can exercise against someone and the deadlines for filing appeals?

Royal Decree 11/2020 establishes that the period from March 14 to April 30, will not count for the purposes of prescription in the actions that the tax administration may exercise against the administered.

Let’s take an example, if the administration had a maximum period until March 19 to demand payment of a tax, and it has not been demanded by March 13 the administration automatically has until April 30 to request payment.

There would neither be a deadline for the expiration of the procedures initiated by the administration.

On the other hand, the deadlines for the filing of administrative economic appeals against tax acts or in the economic-administrative procedures not notified before March 14, 2020, do not start until after April 30, 2020.

What happens with the income declaration from rentals or the annual IRNR declaration for non-residents?

These deadlines do not vary, meaning that all non-residents in Spain receiving an income from rentals of a property here in Spain must declare said profit quarterly within the corresponding period.

Author: Guillermo Arenere Ruiz, lawyer at C&D Solicitors, Torrox (Málaga, Andalusia)

RTA, andalusian, taxes, occupation licence

RTA FOR HOLIDAY RENTALS IN MALAGA: FINES, TAXES, FIRST OCCUPATION LICENCE AND RURAL PROPERTIES

Written by Gustavo Calero Monereo on 21 May, 2018. Posted in Andalusian, costa del sol, english speaking solicitor, form 210, Occupation licence, Property Tax, RTA, taxes for non residents Spain, Tourism Registry of Andalusia.

It’s been two years since the entry into force of Decree 28/2016 regulating RTA FOR HOLIDAY RENTALS for properties in Andalusia.Half of all holiday rental properties in Andalusia registered before the Tourism Registry of Andalusia are located in the province of Malaga, according to the information published by Diario Sur in February 2018. This means that, in Malaga, there are over 18,000 tourist apartments registered.

It is important to remember that property rentals are subject to taxation

RTA FOR HOLIDAY RENTALS: inspections and penalties

The same newspaper has published that, in Malaga alone, there have been 1,354 inspections and 250 properties have been fined.

One of the most important requirements to be met by these properties is that they must have an initial-occupation licence as well as cooling and heating equipment. Once an RTA / VTAR number has been obtained, the property owner is required to include the registration number in advertising as well as in the promotional page on AirBNB or similar platforms offering these properties as holiday rentals.

Initial-occupation licence requirement

If the property does not have an initial-occupation licence, it should not be registered before them. I use the word “should” because the registration form is an affidavit, for which reason the property owners submitting it declare, under their responsibility, that the property meets all the legal requirements and the Andalusia Council will register the property automatically, without performing any prior inspections. However, if an inspection later finds that the legal requirements are not met, the owners will be fined.

There are many properties without an initial-occupation licence, due to different reasons, such as the age of such buildings, problems with the housing development, etc. This has driven some municipal councils to implement a specific procedure to obtain an initial-occupation licence solely to register the property before the Tourism Registry of Andalusia. Some of these councils are Málaga, Mijas and Benalmádena.

Nerja Council

The situation of holiday rentals in Nerja deserves a special mention. Nerja Council has paralysed the granting of initial-occupation licences since the entry into force of the Tourism Decree.

A month and a half ago, the council also established a procedure to grant such initial-occupation licences only for the purposes of registering properties before the Registry of the Andalusia Council (RTA). The website of the municipal council now includes the form necessary to file this application.

Over one year ago, our firm requested a copy of the initial-occupation licences of different properties in Nerja and, two weeks ago, we started receiving responses from Nerja Council.

Fortunately, the situation of these holiday rentals in Nerja seems to be in the process of being brought in line. This is definitely good news for all interested property owners as well as potential property buyers who will have the ability to obtain the initial-occupation licence necessary for registration.

Properties located in towns with fewer than 20,000 inhabitants

Another significant change that took place recently in the regulations set down by the Andalusia Council is that affecting holiday rentals located in towns with fewer than 20,000 inhabitants. These are towns such as Torrox, Viñuela, Alcaucin, Frigiliana, Competa, as well as most towns in La Axarquía.

Properties in these municipalities are not eligible for the 2016 Decree due to the properties being located in towns with fewer than 20,000 inhabitants. However, since February of this year, it is possible for them to be eligible for the 2016 Decree as they will no longer be considered rural properties, which, until now, was the only way to register these properties as holiday rentals.

RTA list of holiday rentals registered in Malaga

Due to the boom in holiday rentals in certain cities, such as Malaga, the Council has published a list of the registered holiday rentals.

This tool seeks to inform tourists about accommodation possibilities in the city and is also a tool to control the tourism boom affecting the city.

It should be noted that Malaga city is currently experiencing a significant boom in tourism, especially around the historic city centre. This has led to the emergence of plenty of tourist accommodation options, which has resulted in price rises for long-term lettings due to the low property supply as owners opt to offer the properties to tourists instead.

Over the last year, the historic centre has lost residents to holidaymakers. The Malaga Council is already debating the measures that should be taken to limit or regulate holiday rentals and make residential and tourist use compatible, so that residents are not lost and it is possible for people in the community to access rental homes, taking into account the average income in Malaga.

You can see the case of Palma de Mallorca, a city that recently approved a norm prohibiting holiday rentals.

Tax payable on the profits obtained

It is important to remember that property rentals are subject to taxation, for which reason owners –whether resident or not (IRNR)– must declare the profits obtained from such rentals.

Non-resident owners must declare such profits through form 210, which is submitted quarterly. Fortunately, since January of this year, the procedure has been simplified to make it possible to declare, in form 210, all the earnings obtained from renting the existing or new build property as a holiday rental over the quarter, even if they come from different occupants.

If the non-resident property owner owns several properties, a separate form 210 must be submitted quarterly for each one, and 19% of the total earnings obtained will be paid as tax, with the ability to deduct certain expenses according to the period of rental during that quarter.

It is interesting to note that, if you are tax resident in Spain, holiday rentals are taxed at a higher rate than rentals of usual residences –residential rentals–. This is the case because the Tax Agency allows these residential rentals used as the tenant’s usual residence to apply a reduction of 60% over the positive net return obtained from the rental. However, this deduction is not allowed for holiday rentals offered by tax residents.

Currently, there are still many property owners who do not declare rent but, if the Tax Agency devoted some attention to this matter, it could start inspection proceedings ex officio, by simply visiting a few websites and comparing them to the list of properties registered in the Tourism Registry of Andalusia.

Author: Gustavo Calero Monereo, lawyer at C&D Solicitors Torrox (Málaga, Andalusia)

SPANISH INCOME TAX RETURN FOR NON TAX RESIDENTS (IRNR)

Written by Gustavo Calero Monereo on 17 November, 2016. Posted in annual tax, costa del sol, form 210, Income tax for non residents, IRNR 2016, NON RESIDENT, Non residents income tax, non tax resident, taxes for non residents Spain.

Time for payment your income tax for non residents in Spain (IRNR)

If you are a non-resident in Spain and own a property there, you are liable to Spanish Income Tax for Non-Residents payment (Spanish IRNR). This issue was already considered in former article on our website.

You would have to pay this year the IRNR income tax for non-residents of 2015. This means if you owned, bought, sold or inherited a Spanish property in 2015 and you are NOT a fiscal resident in Spain, then you are obliged to pay your yearly IRNR income tax for non-residents this year (Impuestos sobre la Renta de No Residentes). As a service to our customers C&D offers to take care of this tax application and its payment through direct debit before the end of this year.

When a property is owned by a married couple or several persons, each of them becomes an independent taxpayer, so that they should file tax returns separately according to the ownership interest they have on this property.

This tax duty needs to be done before the 31^st of December 2016. If you want to pay through direct debit, though, it needs to be submitted before the 22^nd of December 2016. The tax liability will be calculated with the tax information of your property following the cadastre registry, usually the tax payment it isn’t going to be so much. If you miss this obligation you could be fined by the Tax Authorities.

Tax form 210 is used to pay this tax and it can be downloaded from the official web of the Spanish Tax Authority (A.E.A.T.). It is worthy mentioning that it is not easy to understand them.

Our office is currently dealing with the IRNR season 2015. The deadline to file this tax return expires on the 31st of December of this year. Although if you want to place the payment as a direct debit in your bank account the form must be filled before the 22nd of December.

If you want to hire our services for this tax duty, we will be pleased to help you.

Author: Francisco Delgado Montilla, lawyer at C&D Solicitors Torrox (Malaga / Andalucia)