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Non resident taxes in Spain

Serapeum Expert System provides an efficient, cost-effective service for property owners that are non-resident in Spain to enable them to pay their Spanish property taxes online.

If you live in Spain for less than six months (Find out for free whether you’re a fiscal resident in Spain with Júlia Basic), you are classed as a non-resident and will only be taxed on the income earned in Spain. Your income is taxed at flat rates with no allowances or deductions. If you are a non-resident and own a property in Spain, whether or not you rent it out, you will need to submit a tax return and pay ‘imputed’ income tax on your property as well as local property taxes.

Collection of terraqueous balloons in shelf

Tax for Non Resident Property Owners

All non-Spanish tax residents (those who pay taxes to another country’s tax authorities) have to pay a tax on the property they own to the Spanish Inland Revenue. This tax is in addition to the annual rates payable to your local Town hall.

Income tax for non-residents

With permanent establishment

What is the tax base and how is it determined?

The tax base of Corporation Tax will be the amount of income obtained in the tax period by the taxpayer, whatever its source or origin, reduced by the offsetting of negative tax bases of previous tax periods, on which the tax rate is applied to obtain the total tax liability.

The tax base will be determined by the direct estimation method, by the objective estimation method when Corporation Tax Act (LIS) determines its application, and, subsidiarily, by the indirect estimation method, in accordance with the terms of the General Taxation Act.

In the direct estimation method, the tax base will be calculated, correcting, by applying the precepts established in the Corporation Tax Act, the book result determined in accordance with the rules laid down in the Commercial Code, in the other laws regarding this determination and any provisions which may be decreed in the development of the said rules.

In the objective estimation method, the taxable base may be totally or partially determined by applying the signs, indices or modules to the activity sectors as determined by the tax law.

Income obtained through permanent establishment. Tax rate

Applicable tax rates until 2014:

In general, the tax rate of 35% will apply (32.5% for periods starting from 1 January 2007 and 30% for those starting from 1 January 2008).


Applicable tax rates from 2015
:

For tax periods starting from 1 January 2015, the applicable tax rate is the corresponding rate of those set out in the Corporation Tax regulations (article 29 LIS):

The general tax rate will be 25%. However, 28% in the tax period 2015 will be applicable as a temporary measure.

  • Complementary deposit (at the tax rate shown in the attached table) required from permanent establishments of non-resident companies when they transfer earnings abroad. The complementary deposit will not apply in the case of incomes obtained in Spanish territory via permanent establishments by companies with tax residence in another member state of the European Union, unless it is a country or territory classified as a tax haven, or in a State which has signed a double taxation agreement with Spain which does not rule otherwise, provided that there is reciprocal treatment.
Year of return 2007-2009 2010-2011 2012-2014 2015 2016 and following
Tax rate 18% 19% 21% Until 11-07-2015:
20%
From 12-07-2015:
19.50%
19%

Without permanent establishment

Taxation of urban buildings owned by non-resident individuals

Taxation of urban buildings

Capital gains tax

Capital Gains Tax has been re-established temporarily for tax years 2011, 2012, 2013, 2014 and 2015, accruing on 31 December of each of these years.

Tax base:
The tax base will be reduced, as exempt minimum, by 700,000 euros.

Obligation to declare:
All taxpayers with a positive tax liability are obliged to file a tax return. Those taxpayers whose assets and rights have values greater than 2,000,000 euros are also obliged to file a tax return, even when their liability proves negative.

Which forms should the people with the status of withholders use for depositing the withheld amounts, or for filling negative returns if applicable?

  • Form 211

    Tax return template for withholding at source or payments on account when acquiring real estate assets from non-residents without permanent establishment.

  • Form 216

    Tax return form/payment document for withholdings and payments on account for certain income subject to Non-Resident Income Tax, where this income is earned by payers of said tax.

  • Form 117

    Tax return template-document for depositing tax withheld at source and payments on account made for non-residents income tax in relation to income or capital gains obtained as a result of transfers or reimbursement of shares and participations representing Unit Trust Institution capital or assets.

  • Form 230

    Personal Income Tax Return and Non-Resident Income Tax: Special tax withholdings and on-account deposits for certain gambling and lottery winnings; Corporation tax: Withholdings and on-account deposits for certain gambling and lottery winnings. Self-assessment.


The following annual summary returns should also be filled:

  • Form 296

    Full annual summary return listing recipients of income subject to tax paid or deposited by the withholder including income declared exempt by virtue of the application of Spanish internal regulations, agreement or because the tax has already been paid.

  • Form 187

    Informative return, including information such as details of partners or shareholders without permanent establishment who obtain income subject to non-resident income tax derived from the transfer or reimbursement of shares or participations in unit trust institutions.
    This return should include income on which tax has been withheld at source and income that is exempt through application of Spanish internal regulations, double tax agreement or because the tax has already been paid.

  • Form 270

    Annual summary of tax withholdings and advance payments. Special tax for certain gambling and lottery winnings.

Incomes obtained without a permanent establishment. Tax rates

  • In general (see chart).

    Year of return Until 31-12-2006 2007-2011 2012-2014 2015 2016 and following
    Tax rate 25% 24% 24.75% Residents in the EU, Iceland and Norway Other taxpayers Residents in the EU, Iceland and Norway Other taxpayers

    Until 11-07-2015:

    20%

    From 12-07-2015:

    19.50%

    24% 19% 24%
  • Earned incomes of non-resident individuals in Spanish territory by virtue of a fixed-term contract for seasonal workers, under the provisions of the employment regulations, 2% (with effects from 1 January 2002).
  • Dividends and other revenues deriving from holdings in the equity of a company. The tax rate varies according to the year of accrual (see chart).

    Year of return 2003-2006 2007-2009 2010-2011 2012-2014 2015 2016 and following
    Tax rate 15% 18% 19% 21%

    Until 11-07-2015:

    20%

    From 12-07-2015:

    19.50%

    19%
  • Interest and other revenues obtained by the assignment of equity capitals to third parties. The tax rate varies according to the year of accrual (see chart).

    Year of return 2003-2006 2007-2009 2010-2011 2012-2014 2015 2016 and following
    Tax rate 15% 18% 19% 21%

    Until 11-07-2015:

    20%

    From 12-07-2015:

    19.50%

    19%
  • Pensions and other similar provisions received by non-resident individuals in Spanish territory, whoever the person who has generated the right to its receipt. They will be taxed in accordance with the following scale.

    (Until 31-12-2006) Annual amount of pension

    ---

    Up to euros

    Instalment

    ---

    euros

    Rest of pension

    ---

    Up to euros

    Applicable rate

    ---

    Percentage

    0.00    0.00  9,616.19   8%    
    9,616.19    769.30  5,409.11   30%    
    15,025.30    2,392.03  hereinafter   40%    

    (From 1-1-2007) Annual amount of pension

    ---

    Up to euros

    Instalment

    ---

    euros

    Rest of pension

    ---

    Up to euros

    Applicable rate

    ---

    Percentage

    0.00     0.00   12,000  8%    
    12,000     960  6,700  30%    
    18,700     2,970  hereinafter  40%    
  • Earned incomes of non-resident individuals in Spanish territory, provided that they are not payers of Personal Income Tax, who provide their services in Diplomatic Missions and Consular Representations of Spain abroad, when specific rules deriving from International Treaties to which Spain is a party are not applicable. Will be taxed at 8%.
  • Income deriving from reinsurance operations: 1.5%.
  • Airline or shipping companies resident abroad whose ships or aircraft touch Spanish territory: 4%.
  • Capital gains deriving from the transfer or redemption of shares or holdings representing the capital or equity of collective investment institutions, at the rate in force in the year in which the income has accrued (see chart).

    Year of return 2003-2006 2007-2009 2010-2011 2012-2014 2015 2016 and following
    Tax rate 15% 18% 19% 21%

    Until 11-07-2015:

    20%

    From 12-07-2015:

    19.50%

    19%
  • For other capital gains manifested via transfers of equity elements, the tax rate varies according to the year of accrual (see chart).

    Year of return 2003-2006 2007-2009 2010-2011 2012-2014 2015 2016 and following
    Tax rate 15% 18% 19% 21%

    Until 11-07-2015:

    20%

    From 12-07-2015:

    19.50%

    19%
  • Fees between associated companies paid to a company resident in an EU member state or to a permanent establishment of this company in another EU member state: 10%, provided that certain requirements are fulfilled (with effects from 1 January 2005 and until 30 June 2011, from 1 July 2011 is now a case of exemption).

Below are actual sample queries, about taxation and taxes of non-residents in Spain

Need I to declare income from my hm forces pension payable by Paymaster UK on my anual income tax return to the spanish tax authorities?

In accordance with the second article , the PENSION PERCEIVED by a Public Servent of UK, isn't submited to imposition in the Spanish personal income tax, except if this person possesses Spanish nationality.

With rules/doctrine ARTS. 18 AND 19. AP. 3 CONVENTION; DGT 21.10.93.

I live in Spain but work for a UK based company. I am their only presence in Spain. I get paid in £sterling and currently pay tax in the UK. I do not pay national insurance. I wish to pay tax and national insurance contributions in Spain but am not sure of the best way of doing this. I earn approximately £27000 per annum. I would prefer to pay my tax at source rather than have to deal with my own tax returns, but this needs to be simple and inexpensive to do or my employer will not do it. I need to know how much tax I would pay if I paid through my employer and also whether it would be any different if I paid it myself. If I pay it myself, is there a way of doing this monthly rather than annually?

An individual is resident in Spanish territory when any one of the following circumstances apply:

  • They have stayed longer than 183 days in Spanish territory over the calendar year. In order to determine the permanence in Spanish territory, occasional absences are included, except if the taxpayer accredits their residency in another country. In the case of countries or territories labelled as tax haven, the Tax Administration can demand proof of stay in that tax haven over a period of 183 days within the calendar year.
  • They situate the main base or centre of their activities or economic activities, directly or indirectly, in Spain.
  • They have dependent not legally separated spouse and/or underage children who are usually residents in Spain.
  • This latter situation accepts evidence to the contrary.

So, you are an individual resident in Spain. You can't choose, you must pay taxes in Spain.
With the information you have given, annual income of 27000, it is impossible to give a sure answer.
If you need to specify other data it's necessary more information.

I am a US + Romanian dual citizen If I register as a spanish resident, then as I understand it I will need to pay tax on my worldwide income.In the US there is an entity called an "S Corporation". This is a pass-through entity meaning, any profits it has for the year 'pass through' to my personal income for the year. However this is *not* a salary - no payroll tax is paid in the US - and it is *not* a dividend. My question is, what would the tax rate for this type of income be in Spain? It doesn't seem to apply as a "savings income" as it's not interest or divident, but it's also not "employment income" because it is not a salary, and it's also not "capital gains" as it is not from transfer or sale of an asset. I would like to know if it falls into the "~20% maximal rate" bucket or the "45% maximal rate" bucket.

These are "Pass-Through Entities", i.e., they do not pay taxes independently, but their partners or participants pay taxes in proportion to their participation. They are similar to our former transparent companies; they are governed by Corporate Tax rules, but the results are imputed to the partners or participants. Their requirements are:

  • Must be resident in the U.S. (incorporated under the rules of a state).
  • Its shareholders can only be individuals, estates, some types of trusts, banks and some exempt entities. Never Partnerships or Corporations.
  • Resident shareholders or U.S. citizens.
  • You can only have one class of shares or holdings.
  • No more than 100 shareholders.

When deciding on one form of organisation or another, resident shareholders are well aware that in the United States there is no mechanism to eliminate double taxation of dividends received from legal entities; this double taxation is somewhat mitigated by applying to dividends meeting certain requirements the long-term capital gains regime, the tax rate of which will normally be 15 % and with a partial exemption from corporation tax on dividends received from other companies that have paid the tax.

The lack of a comprehensive double taxation avoidance system has led to an exponential growth of Pass-Through Entities, in the form of Partnerships or Limited Liability Companies or S Corporations, to avoid adopting the form of C Corporations.

If you tax in Spain you would have a problem to be a member of an S CORPORATION, because one of the requirements is:

All members or owners of an S-Corporation are required to be tax residents in the United States. Foreign residents are not allowed to be members.

In any case, the Spanish tax system has a figure for these cases which is the Income Allocation System.

Income attribution regime (arts. 86 to 90 LIRPF)

The income attribution regime consists of the income obtained by certain entities that are not IRPF taxpayers, corporate income tax (IS) taxpayers or IRNR taxpayers, being attributed to the members of these entities (partners, heirs, co-proprietors or participants) who must declare them in their personal tax (IRPF, IS or Non-Resident Income Tax -IRNR-).

Entities subject to the income attribution regime (arts. 85, 86 and 87 LIRPF)

These are those entities classified in article 35.4 of the General Tax Law (LGT) as lacking legal personality, which constitute an economic unit or a separate patrimony susceptible to taxation, such as, for example, civil societies without legal personality, lying inheritances or communities of goods.

Qualification of attributed income (art. 88 LIRPF)

The income obtained by entities in the system of attribution of income will have the nature derived from the activity or source from which they come, so that they will be integrated into the taxable base of each of the partners, heirs, co-proprietors... depending on whether it is income from economic activities, furniture or real estate capital, capital gains or losses or imputations.

In principle the taxation would be to have an activity of income from economic activities.

Calculation of attributable income (art. 89 LIRPF)

General rule

The attributed income shall be determined or calculated applying the LIRPF rules corresponding to each income modality according to its origin or source, and the reductions foreseen in Articles 23.2, 23.3, 26.2 and 32.1 of the LIRPF may be applied.

Rule Income from Economic Activities

In general, the net return is calculated as the difference between computable income and deductible expenses, applying, with nuances, the IS regulations (incentives and stimuli are applied to the investment of the IS).

My girlfriend is in Spain on a 1-year student visa. I understand that she is *not* a tax resident.She has registered and will receive her residency card... does she need to file any tax paperwork with the Spanish government - for example registering as a non-resident for tax purposes, and filing a tax return that says she received no income in Spain?

No registration or presentation of any kind is required before the Spanish tax office.

She should not be taxed either by the non-resident tax (because as a non-resident she also has no income in Spain of any kind, such as a rent), or by the Spanish income tax (she does not generate income from work in Spain, or any other kind).

If the Spanish tax administration requests her to prove her non-resident status. She must follow these steps:

An individual or legal entity will accredit its tax residence in a certain country by means of a certificate issued by the Tax Authority. These certificates are valid for one year. However, the validity will be indefinite when the taxpayer is a foreign State, any of its political or administrative subdivisions or its local entities.

In the case of your girlfriend, the certificate must be requested from the U.S. tax authorities.

Only if the Spanish authorities requested it. Very unlikely case.

SII