Spanish Non-Resident Tax (Impuesto sobre la Renta de No Residentes) is an income tax payable by non-fiscal residents regardless if they live in Spain or elsewhere.
It applies to Spaniards and foreigners alike.
There are believed to be around 3 million Spaniards who live outside Spain and around a million non-residents foreigners who own property, particularly from the UK and other northern European countries.
To many foreign property owners the tax can come as a surprise and is known as the “Non Letting Tax”.
In all cases, the tax is self-assessed through Model 210, a declaration which brings together the different codes for the various options for asset and income categories which some find bewildering at best.
As a general rule individuals pay taxes in the country where they are resident – except for American citizens who are required to declare their worldwide income in the United States.
The Spanish Tax Law obliges non-residents, who have assets or income in Spain to pay taxes here regardless of their nationality or where they live.
On one hand, there is the income from working in Spain of a non-resident who pay a flat rate of 24%.
This for example could be foreign teachers who arrive to work at the start of the academic year in September but for the calendar year are considered non-fiscal-residents.
If in the case of assets such as owning a property, ( for personal use or to rent) – the owner is required to pay tax.
If the home is for personal use, they must declare an annual imputed or deemed income of 2% (1.1% if the cadastral value has been reviewed in the last ten years) of the Cadastral Value at a rate of 24% (19% for residents of the EU), an annual payment is made.
UK property owners are now assessed on the 24% band.
If the property is rented, non-residents must declare the gross income obtained on a quarterly basis, at a tax rate of 24%, and no expenses can be deducted.
The form must be submitted through the online through the Tax Agency website.