If you’re a non-resident earning income in Spain, such as rental income from property, it’s crucial to comply with Spanish tax laws. However, if you weren’t aware of this obligation and haven’t been declaring your taxes, don’t worry. You can still regularize your situation with the Agencia Tributaria (Spanish Tax Agency). Here’s how non-residents can get back on track.
Step 1: Understand Your Tax Obligations as a Non-Resident
Non-residents are required to declare and pay taxes on income generated in Spain. Common obligations include:
Rental Income.
Imputed Rents for the periods the property was NOT rented.
Capital Gains from selling a property.
All three types of income for non-residents are declared using the Modelo 210 tax form.
Step 2: Identify the Filing Deadlines
Different types of taxes have distinct filing deadlines. Here are the key timelines to keep in mind:
Rental Income Tax: Declarations for rental income must be submitted online between January 1 and January 15 of the year following the tax year to which the rental income pertains.
Imputed Rents: Declarations can be submitted at any time during the year following the relevant tax year but no later than December 23 of that year.
Capital Gains Tax: Declarations must be submitted within three months after the end of the one-month period following the sale.
If you missed these deadlines, you can still submit late declarations and pay any outstanding amounts, provided they fall within the four-year statute of limitations.
The general statute of limitations for tax debts is four years, counted from the day following the deadline for declaring the income.
Step 3: Submit Complementary Tax Declarations
To regularize your situation, you’ll need to submit complementary tax declarations for each year you did not declare income. This involves filling out the Modelo 210 for each of the relevant periods.
Step 4: Pay Outstanding Taxes and Interest
When declaring late, you’ll need to pay:
The original tax owed: The amount you should have paid for the undeclared income.
Interest on late payments: Known as intereses de demora, this accrues from the original deadline until the date of payment.
By acting voluntarily, you may avoid additional penalties or benefit from reduced fines:
Voluntary Disclosures: Declaring income before the Tax Agency contacts you may help you avoid significant penalties. If penalties apply, they may be reduced depending on the circumstances.
Prompt Payment Reductions: If a penalty is imposed, paying the assessed amount quickly can lead to a 25% reduction in the penalty. This reduction requires agreement with the Tax Agency's assessment and timely payment.
Step 5: Instruct Your Tax Adviser or Tax Preparer to Declare Your Taxes
Work with a qualified tax adviser or preparer to ensure your complementary tax declarations are accurate and submitted on your behalf.
Benefits of Regularizing Your Situation
Regularizing your taxes as a non-resident provides several advantages:
Avoid legal or financial complications with the Tax Agency.
Maintain compliance, making future property transactions (e.g., selling your property) smoother.
Demonstrate goodwill by voluntarily addressing the issue, which can lead to more lenient treatment.
Conclusion
If you’ve neglected to declare taxes as a non-resident in Spain, it’s not too late to take corrective action. By submitting complementary declarations, paying any outstanding amounts, and consulting with a tax professional, you can regularize your situation and avoid further complications.
Taking the initiative now is the best way to ensure compliance and peace of mind.