|Fiscal Representation

FISCAL REPRESENTATION SERVICES FOR NON RESIDENT OWNERS AND FOR RESIDENT EXPATS.

 

Our fiscal representation department focuses on both foreign property owners who do not reside in Spain but who own properties on Spanish soil and also on foreign resident owners. Both of them are therefore subject to a series of inescapable fiscal obligations towards the Spanish Tax Department.

 

Appointing a legal representative in Spain to handle their applicable tax obligations has proved to be a wise and useful decision for most non resident property owners and resident expats.

 

Additionally, we feel that it is important for our clients have a direct and quick access to a solicitor in the event of requiring assistance regarding any aspect of Spanish Law.

 

Our services INCLUDE:

 

FISCAL PACK:

• Free advice on all questions relating to taxation in Spain.
• Keeping you fully up-to-date with the latest developments in the laws relating to non-resident & resident taxation, especially which deem applicable to you.
• Calendar and notice of your tax obligations in Spain.
• Calculation, presentation and payment (upon receipt of the corresponding funds) of your yearly tax return.
• Setting up the standing order for the direct payment of local taxes (IBI).
• Sorting out any queries regarding local rates and taxes.

 

LEGAL PACK:

• Basic assistance in case you have problems with your utilities.
• Checking of legal documents and explanation on any questions you do not understand.
• Free legal consultation and orientation about any legal steps which may be taken (i.e. divorce, car accidents, criminal offences, insurance claims, complex legal contracts, etc).
Any other services, which are not specified in the above list, will be eligible for separate invoicing (i.e. non resident capital gains tax, recourse against reassessment of value of the property, drawing up contracts, litigation etc). Therefore, as a valued and existing customer to this firm, please feel free to ask for an estimation of costs for the services you require and we promise to:
• Give priority to matters raised by existing fiscal representation clients.
• Apply our most advantageous fees.
All our services will be based on the documentation and information provided to us by the customer. MAM solicitors will not be responsible for any failures due to a lack of information or wrongfully given data.

 

OUR FEES ARE REALLY COMPETITIVE SO PLEASE CONTACT US TO GET A QUOTATION.

 

|Residents

TAX OBLIGATIONS EXPAT RESIDENTS IN SPAIN

If you live in Spain more than 183 days a year you are considered Spanish Resident for tax purposes.

If this is so, you are obliged to declare all your income –regardless of the place where it is generated or paid- in Spain.

A wrong idea is often spread out among expat residents: “my pension is already taxed at home so I do not need to serve any tax return in Spain”.

Nothing further from truth! The obligation is to pay income tax in the country of residency.

This matter is regulated in deep by DOUBLE TAXATION AGREEMENTS signed between Spain and different countries (United Kingdom, Ireland etc).

Therefore, it is clearly established that income tax must be paid in the state of residence. There is an exception: if the pension received is from local or central government (Armed Services, Police, Firemen, teachers…) it can only be taxed in the country of origin.

So are you going to pay twice on the same income? No at all. Expats must submit an application for relief at source in the country of origin income tax or for claiming a repayment of any income tax paid in the country of origin. This form is called FD9.

UK citizens can download it on www.hmrc.gov.uk/cnr/spain-individual.pdf

Irish citizens can download it on www.revenue.ie/en/practitioner/.../double/spain

In Spain, the fiscal year is the same as the calendar year and the tax is paid in arrears. The income tax return campaign is from May to June and unlike other countries, individuals must fill and serve their tax returns.

It is very important you ask your solicitor to check if you are obliged to serve your income tax return or if your income is too low you are exempt to do it.

|Non-residents

TAX OBLIGATIONS NON-RESIDENT OWNERS OF REAL ESTATE

As non resident owner of a property in Spain you must be aware that you are obliged to pay certain taxes in this country.

 

1.- STATE TAX:

The taxes are due in any case irrespective of the property being used very often or kept empty.

Personal Income Tax (I.R.P.F.)

Irrespective of whether the real estate assets are rented or not, the income derived from them is subject to non-resident income tax. However the tax treatment is different depending on whether or not they are rented.

 

• URBAN BUILDINGS NOT RENTED.

• Non resident taxpayers titleholders of urban buildings, which they use for themselves or are left empty, are subject to non-resident income tax. In general terms, the income is calculated taking into account the building’s assessed value or “valor catrastral” (by applying different rates depending on revisions made by the Town Hall). The tax rate on the income thus calculated is 24%.
• This tax is prorated for the days you are owning the property during the accrued year.
• Tax is paid on arrears on a yearly basis.
• Taking into account all these facts, your solicitor will be able to determine which are the accurate values which must be applied.
• The term for the payment goes from the 1st of January to the 31st of December every year, and the tax paid corresponds to the previous calendar year.
• Payment must be made direct to the Tax Office. There is no possibility of setting up a direct debit for the payment of this tax. It is the owner's obligation, through his solicitor, to fill in the tax return and take it to the Spanish Treasury.

 

• RENTED BUILDINGS.

The earnings are calculated by taking the GROSS INCOME that is received from the tenant. SOME EXPENSES COULD BE DEDUCTED (mortgage interests, local rates, community fees etc).ASK FOR INFORMATION.

The applicable rate is 24%.

If the property has been part year only then, it is needed to make a prorate to calculate which part corresponds to income generated from rentals and which parts corresponds to income generated from “the owner’s direct use”.

2.- LOCAL TAXES:

Tax on real estate.

This is a direct tax based on the value of the house. It is known as LOCAL RATES, COUNCIL TAX or IBI (and SUMA BILL in Alicante Area). All names mean the same.
Each Town Hall Council determines the percentage to be applied to the cadaster value of the property. Every year, Town Halls increase the value of the tax by applying the percentage given by the Government in the Nation Budget act.

This is also a yearly tax and there is the possibility –strongly recommended- of setting up a direct debit.

The person who is the owner of the property on the 1st of January is liable for the payment of this tax. So, as an example, even though you sell your property on the 5th February you will still be liable for the total payment of the local rates.

PLEASE NOTE THAT IT IS VERY IMPORTANT YOU ARE UP TO DATE WITH THE PAYMENT OF BOTH STATE & LOCAL TAXES OTHERWISE YOU CAN FIND YOURSELF WITH YOUR BANK ACCOUNT FROZEN IN CASE THERE ARE UNPAID TAX BILLS.